The audit started three days ago. The team is asking for a services contract that no one can find any more, and the consultant who wrote the project is no longer answering the phone. Someone in the company proposes the “logical” solution: redo the document, date it as it should have been dated, and put it in the file. From that moment on, the discussion is no longer about money to be repaid; it is about a criminal file.
This is the line on which the whole subject of European funds is played out. The two are not the same thing, however often they are confused in practice. A beneficiary lives, at the same time, under two separate legal regimes.
The first is administrative: Ordonanța de urgență a Guvernului nr. 66/2011 on preventing, establishing and penalising irregularities arising in the obtaining and use of European funds. Its outcome is a finding report, a financial correction, a budgetary claim to be repaid. It hurts financially, but it remains a matter of money.
The second is criminal: Articles 18¹ to 18⁵ of Legea nr. 78/2000, the section dedicated to offences against the financial interests of the European Union, carrying prison sentences and the deprivation of certain rights. It is triggered by criminal investigation bodies, usually the DNA (Romania's National Anti-Corruption Directorate) or, since 2021, the European Public Prosecutor's Office (EPPO).
The two can run in parallel, on the same set of facts, with different outcomes: a beneficiary can lose a financial correction for good in the administrative courts and still be acquitted on the criminal side, because the legal tests are not the same. This asymmetry is not a theoretical curiosity; it is precisely the ground on which the defence is built.
A departure with no impact and, often, no loss: an unfilled field, a wrong date on a form. It is corrected.
A departure plus a loss. It is established by the managing authority and triggers a financial correction. It remains a matter of money.
An irregularity committed intentionally. This is where a criminal file, and a wholly different legal test, comes in.
The subjective element (intent), which the prosecution must prove. It is not inferred from the existence of the financial correction, and it is not presumed from the size of the amount.
This is the single most important point in this article, so it deserves to be stated without qualification. Error is a departure with no impact and, often, no loss: an unfilled field, a wrong date on a form. It is corrected.
Irregularity, as defined in OUG nr. 66/2011, is any departure from legality, regularity and conformity in relation to national and/or European provisions, as well as to the terms of contracts or other legally concluded commitments made under them. National case law has rightly refined this: the mere finding of a departure does not automatically lead to the conclusion that a loss exists, and in the absence of a loss there is no irregularity. An irregularity is established by the managing authorities and triggers financial corrections, administrative measures consisting of the total or partial exclusion from funding of the expenditure for which the irregularity was found.
Fraud is an irregularity committed intentionally. This is where the element that changes everything appears: the subjective element. The criminal provisions of Legea nr. 78/2000 do not criminalise a mistake, administrative carelessness or a mistaken reading of an eligibility condition. They require bad faith, the knowing use or presentation of false, inaccurate or incomplete documents or statements.
The practical consequence: there is a distance, which the prosecution must cover with evidence, not with presumptions drawn from the existence of the financial correction, between “you spent ineligibly” and “you committed fraud”. A finding report that has become final does not prove fraudulent intent; at most it proves that an item of expenditure was not eligible.
The typical procedure: a report or a planned inspection → a finding exercise by the authority with competence in managing the funds → the report finding the irregularities and setting the financial corrections. The document is not a mere opinion: it constitutes a title of claim and is issued precisely for the purpose of enforcing it.
Financial corrections and the logic of the scales. For departures in the field of public procurement, corrections are not calculated on the actual loss, but by applying standard percentages from a scale annexed to the ordinance, differentiated by type of departure, a scale amended several times, whose figures should be checked against the version in force on the date of the finding. The rationale for this mechanism: in many situations the precise financial impact cannot be quantified. The Court of Justice of the European Union has confirmed the logic; it is not necessary to demonstrate a precise financial impact, since even departures with no quantifiable impact can affect the Union's financial interests (Case C-406/14, Wrocław, Miasto na prawach powiatu, judgment of 14 July 2016, delivered precisely in a dispute over a subcontracting restriction and the resulting correction).
The scale is not, however, an automatic mechanism. The principle of proportionality, expressly enshrined in the ordinance, requires that the measure be adequate, necessary and proportionate to the aim pursued, having regard to the nature and frequency of the irregularities found and to their financial impact. The administrative courts have judicially reassessed this relationship and have reduced corrections where the gravity of the departure did not justify the percentage applied. This is a real avenue, not a theoretical one.
Challenging it. An administrative appeal within a maximum of 30 days of communication may be lodged against the title of claim represented by the finding report. The decision issued on that appeal is challenged before the competent administrative court, under Legea nr. 554/2004.
Using or presenting, in bad faith, false, inaccurate or incomplete documents or statements, where the act results in the wrongful obtaining of European funds: imprisonment from 2 to 7 years and deprivation of certain rights, with the complementary penalty being mandatory. The same penalty applies to the knowing failure to provide data required by law, with the same result.
Changing, without complying with the legal provisions, the intended use of funds obtained or of a benefit lawfully obtained, where this results in the unlawful reduction of EU resources: imprisonment from 1 to 5 years and deprivation of certain rights.
Using false, inaccurate or incomplete documents that result in the unlawful reduction of resources due to be transferred to the Union's budget.
It is punishable. A project that has not been reimbursed is not, in itself, a safe zone.
The act of a director, manager or other person with decision-making or control duties within an economic operator who, through the non-performance or defective performance of a service duty, allowed a subordinate to commit one of the offences above. This is the provision that turns “I did not know, I was not the one dealing with the project” from a defence into a separate charge.
If the acts have produced them, the special limits are increased. For the purposes of Article 183 of the Criminal Code, particularly serious consequences means exclusively material damage exceeding 2,000,000 lei, a strictly value-based criterion, with no subjective elements.
The European Public Prosecutor's Office has been operational since 1 June 2021 and investigates, through European Delegated Prosecutors based in Romania who apply Romanian procedural law, offences affecting the Union's financial interests. The jurisdictional thresholds: fraud involving EU funds above EUR 10,000 and, for cross-border VAT fraud, acts involving at least two member states and a total loss of at least EUR 10 million. Files with smaller losses can be left to the national authorities.
The figures on Romania, from the EPPO's 2025 report, explain why this subject is not marginal: 535 active files at the end of 2025, with an estimated loss of over EUR 6.05 billion, of which around EUR 5.03 billion relating to EU-funds fraud; 303 new investigations in 2025, with an estimated loss of around EUR 3.91 billion; 20 indictments targeting 83 individuals, plus 36 simplified procedures; freezing orders for EUR 120.83 million, of which assets actually seized amounted to EUR 10.83 million. Romania is consistently among the states with the most EPPO files, concentrated in regional development and agriculture.
A European Delegated Prosecutor works with Romanian procedural tools, but under the coordination of the EPPO's Permanent Chambers. In practice: the same procedural rights for the defence, access to the file, challenging precautionary measures, complaints against the prosecutor's acts, but markedly stronger cross-border coordination. At the end of the process, the financial discussion also includes special and extended confiscation.
Purchases outside the object of the project, expenditure incurred outside the eligibility period, non-deductible VAT claimed as eligible.
The winning tenderer linked, through individuals or capital, to the beneficiary or to the evaluator. The area where an irregularity most quickly turns into a criminal matter, and where it meets conflicts of interest and corruption in private procurement.
Result targets not achieved. In principle, a matter of irregularity and correction, not fraud, unless the reporting itself was falsified.
The same expenditure claimed from two sources. Automatically detectable, through systems such as Arachne.
Inflated cost estimates, “market prices” obtained from accommodating quotes. Manufacturing evidence moves the case into the criminal sphere.
Performance by an undeclared third party, with cost statements presented as if the work had been carried out in-house.
The single worst thing you can do during an audit is to “reconstruct” a missing document. An incomplete eligibility file produces a financial correction. A document that has been redone and backdated additionally produces a charge of forgery of records and turns a dispute about money into a criminal file with a known author, and you create the evidence of the act yourself, with your own hand.
The rule is simple: if the document does not exist, say so. The absence of evidence can be defended. Manufacturing it cannot.
They go up and down the chain: the beneficiary and its legal representative, under Article 18¹, possibly Article 18², and, separately, under Article 18⁵ for the director who “did not look after it”; the consultant who drafted the funding application and entered the inaccurate data, sometimes an accomplice, sometimes a principal; the evaluator or expert who certified a reality that did not exist; the staff of the managing authority, under the provisions on abuse of office or corruption, where verification was merely formal or complicit.
For each link in the chain, the question is identical and must be asked separately: what did this person actually know, at the time of signing? And if the funds obtained were transferred onward, another layer is added: transferring funds obtained through fraud can attract a separate charge of money laundering.
The PNRR: why the pressure increased in 2026. The National Recovery and Resilience Plan (PNRR) runs on milestones and targets, with rigid deadlines; Romania must complete them by 31 August 2026, and by the summer of 2026 a significant part remained outstanding. The calendar pressure produces two effects at once: beneficiaries rushing their claims and authorities checking more aggressively. The mandatory checks expressly cover public procurement, serious irregularities, conflicts of interest, the risk of fraud and double funding, and the data is uploaded to the European Arachne system. Crucial detail: the European Commission retains the right to carry out checks, controls and audits for up to 5 years after the final payment. A project “closed” in 2026 remains open to verification for many years afterwards.
On the administrative side, Regulation (EC, Euratom) No 2988/95 provides, in Article 3(1), for a limitation period for proceedings of 4 years from the commission of the irregularity, with the possibility of shorter sectoral periods, but not less than 3 years. The period is interrupted by any act of the competent authority brought to the person's knowledge, relating to the investigation or the prosecution of the irregularity, which is why, in practice, it is frequently extended.
On the criminal side, the time limits are those under the Criminal Code, calculated according to the penalty provided by law for the offence found. These are two independent clocks: the lapsing of the administrative recovery does not bar the criminal prosecution, and vice versa.
30 days from communication. A missed deadline cannot be recovered with arguments on the merits, however good they are.
Not just the amount. Without a loss there is no irregularity; the departure alone is not enough.
A missing document does not mean fictitious expenditure. Economic reality can be proven in other ways too: deliveries, bank payments, witnesses, correspondence, the physical existence of the goods or the works.
For works, an independent expert report confirming the execution and the quantities is the central piece of evidence, both administratively and criminally.
Ask the court to reassess the relationship between the departure and the percentage applied. The scale is not an automatic mechanism.
A final correction is not evidence of intent. This is the argument that must be repeated before the prosecutor and the criminal court, and it is the starting point for the defence during the criminal investigation stage.
Under Article 18⁵, attack the causal chain: for the director, the question is not “what happened on the project”, but what specific service duty was not performed and how it actually allowed the subordinate's act.
Checklist before an audit. The complete procurement file (justification note, offers, criteria, communications, contract, addenda); conflict-of-interest declarations, signed and dated at the actual time; the payment trail: invoice → bank payment → statement → accounting entry; proof of reality: acceptance reports, minutes, photographs, works logs, deliverables; a check for double funding; correspondence with the managing authority, kept in full, including approvals for any changes; accurate reporting of the actual status of the indicators, even where it falls short of the target; a single person designated to respond to the auditors, with written answers; what is missing, listed honestly and in advance, with the real explanation for the gap; legal assistance from day one of the audit, not after the first criminal complaint.
Not automatically. Repaying the amount extinguishes the budgetary claim and can be used in sentencing or in the discussion about the loss, but it does not, by itself, remove criminal liability for an act committed intentionally. The two procedures have different subject matters.
No. The correction is applied for a departure from the rules, often through a standard percentage, without demonstrating a precise financial impact and without any analysis of intent. Fraud requires bad faith, proven by the prosecution, beyond any reasonable doubt. These are entirely separate legal tests.
Potentially both, but on different grounds and with different evidence. Your signature commits you, but criminal liability requires proof of what you actually knew about the inaccuracy of the data. Conversely, a consultant who deliberately entered false data cannot hide behind the client's signature. The analysis is done person by person, not project by project.
Procedurally, almost none for your rights: the European Delegated Prosecutor applies Romanian procedural law, and the defence has the same tools. In practice, what differs is the capacity for cross-border cooperation, the resources and the pace of the investigation. The presumption of innocence remains identical in both situations.
Yes. The European Commission retains the right to carry out checks, controls and audits for up to 5 years after the final payment, and on the criminal side the limitation periods are calculated separately, according to the penalty provided by law. The administrative closure of a project does not, by itself, stop either of the two clocks.
Informative material, updated on 18 July 2026. It does not constitute legal or tax advice; individual situations must be assessed on their own facts. Every person under investigation is presumed innocent until the conviction becomes final.
If the matter involves a criminal complaint or an open file, the related analyses are grouped under economic criminal law. For how such charges are handled, see defence in corruption and EU-funds cases.
Time limits run from the date of communication. A first conversation clarifies what is being alleged, what you need to substantiate and how the defence is built, before an estimate becomes a tax assessment decision.