Starting from these three concepts, an analysis is required to outline the conceptual boundary between criminal behavior and behavior which, although falling within the scope of criminal law, does not seek to harm the financial interests of the European Union. In this context, irregularity is an intermediate element, situated at the intersection between misconduct and fraud.

The irregularity, as defined in national legislation in the provisions of Article 2(1)(a) of Government Emergency Ordinance No. 66/2011 as “any deviation,” highlights a slight difference from the concept initially envisaged by the legislator in Government Ordinance No. 79/2003, which referred to “deviations that caused damage.” The subsequent amendment led to the extension of the concept of irregularity to include not only irregularities that have caused damage, but also those that may damage the budget of the European Union/the budgets of international public donors and/or the related national public funds by making an undue payment.

Thus, the irregularity can be considered not only an act of result, but also an act of danger, having the potential to cause possible damage. By reference from genus to species, any irregularity represents a deviation, but not every deviation can be classified as an irregularity.

It can therefore be said that the irregularity acquires the legal nature of a breach in the presence of actual or potential damage, i.e. when there is a concrete or possible financial impact that has led or could lead to the undue receipt of European funds. In this sense, the irregularity can be seen more as a formal error, not necessarily attributable to bad faith or mismanagement.

 

 

1  Government Emergency Ordinance No. 66/2011 on the prevention, detection, and sanctioning of irregularities in the acquisition and use of European funds and/or related national public funds, published in the Official Gazette of Romania No. 461 of June 30, 2011.

 

 

 

2  “Any irregularity in the use of European funds is a deviation, but not every deviation is an irregularity.” As emphasized by the High Court of Cassation, the distinction is made by the specific differentiation between the seriousness of the violation of the rule and the financial impact, showing that not every irregularity in the process of using European funds is fraud, as fraud can only be considered if there is an intentional irregularity.

 

The expansion of the concept of irregularity can also be interpreted from the perspective of criminal policy, as an expression of the state’s response to develop a preventive strategy aimed at ensuring the achievement of the objective of stability and reduction of antisocial behavior, in the spirit of the premise “better to prevent than to treat.”

Most of the time, what seems immoral is perceived as criminal. These automatic responses by the judicial authorities seem to ignore the constitutional principle of proportionality, according to which criminal liability should be considered a last resort. This principle must address the need for criminal law to intervene in relation to the offense in question, which is classified as a crime.

Ultimately, it is up to the courts to distinguish between different forms of violations of European fund regulations that can be classified as simple offenses (irrelevant in terms of sanctions), irregularities (offenses involving actual or potential damage, depending on when they are detected), and fraud (conduct involving elements of intent and bad faith).

A first indication of the existence of an irregularity may be the result of negligence or ignorance of specific funding requirements. Another relevant indicator is the absence of hidden benefits for the beneficiary. The error does not generate undue financial advantages, and these aspects lead to the conclusion that the intention necessary for fraud to exist is lacking.

Before extending the analysis to the criminal sphere, it is necessary to examine the provisions of Article 17 of GEO 66/2011, which enshrines the principle of proportional repair of the damage caused by irregularities, including from a civil law perspective. The incidence of the principle was settled by HP Decision No. 190/2025 in response to the referral made by the Constanța Court of Appeal in case No. 8208/118/2017*4  regarding the need to reimburse the amounts corresponding to the areas for which irregularities were found or, conversely, for all areas covered by subsidy applications.

3  See the reasoning of the High Court of Cassation, Decision No. 170/A/2024 “But is every intentional irregularity fraud?” To clarify this issue, two aspects are essential: the beneficiary’s intention to defraud (mislead) the financier, and the aspect of proportionality, in relation to the overall elements of the case and the ability to achieve the intended purpose of preventing/recovering the damage.

 

 

 

4  See Decision No. 190 of May 19, 2025, on the principle of proportional repair of damage caused by irregularities in relation to European funds, published in the Official Journal No. 504 of May 29, 2025.

 

Although the question seems to allow for an immediate answer, in the absence of uniform practice and established case law at national level, solutions may vary from case to case.

The intention is not to highlight any “irregularity” in the reasoning of certain courts that do not align themselves with the majority opinion, but to emphasize that the approach was necessary precisely because those courts, undoubtedly familiar with the European regulations transposed by GEO No. 66/2011 and the relevant case law of the CJEU, found differences from European regulations. This, they say, and we can only agree with them, beyond the possibility of full compensation for the damage, also allows for the adoption of administrative measures, which may lead to the recovery of amounts greater than those representing the actual damage.

In this regulatory and jurisprudential context, it can be concluded that, in the event of an irregularity being found, in addition to the obligation to reimburse or withdraw the unjustified advantages obtained, in whole or in part, depending on the nature and severity of the non-compliance (“administrative measures” within the meaning of Article 4 of Regulation No. 2988/1995)(5)  ,“administrative sanctions” specifically provided for in regulatory or legal rules may also be imposed.

As is clear from the provisions of Article 5 of the same Regulation, administrative penalties are additional to the amounts established as administrative measures (administrative penalties: payment of an administrative fine; payment of an amount greater than the amounts unduly received or withheld, plus interest, where applicable; total or partial withdrawal of an advantage granted, even where the beneficiary has only unjustifiably benefited from part of that advantage)(6)  .

Thus, qui dicit uno, negat de altero, the High Court of Cassation limited itself to ruling that compensation for damages would cover only those undeclared areas, without imposing an additional penalty that would exceed the principle of proportionality, reasoning as follows:

The criminalization of an act as an offense must be a last resort. It should also be noted that the offense provided for in Article 18(1) of Law 78/2000 is of a

5  Idem.

 

 

6  See paragraph 127 of Decision No. 190 of May 19, 2025, referred to above.

 

result-based offenses. Consequently, in order to satisfy the elements of the offense, it is necessary to prove the existence of the damage as well as the causal link between the material element (the use of false, inaccurate, or incomplete documents or statements) and the damage caused.

The limits of tort liability are circumscribed by the amounts established following the resolution of the criminal action, and the person responsible is obliged to cover only the amounts related to the irregularities found, in accordance with the provisions of Article 19 of the Code of Criminal Procedure and Article 1.349(1) of the Civil Code. Furthermore, Article 1.357(1) of the Civil Code provides that a person who causes damage to another through a wrongful act committed with intent is obliged to repair it. It follows from these provisions that civil liability is strictly limited to the damage caused by the wrongful act.

A contrary interpretation would violate the limits of the court’s jurisdiction. The judgment is limited to the facts and persons indicated in the complaint, and the civil action seeks compensation for the damage caused by the act that is the subject of the criminal action. Where the referral to court concerns the use of false, inaccurate, or incomplete documents only for certain areas, the civil action cannot be extended to the amounts relating to the areas for which no irregularities have been found, as there is no referral to court in relation to them.

In conclusion, fraud is at the top of the pyramid of seriousness.

According to the definition given in Article 18(1)(1) of Law 78/2000, fraud consists in the use or presentation of false, inaccurate, or incomplete documents or statements, when the act results in the wrongful obtaining or wrongful retention of funds or assets from the EU budget or budgets administered by it or on its behalf.

From the legal text, we can see that not all inaccurate documents automatically constitute forgery; it is essential to prove, beyond any doubt, the existence of intent (both in the form of eventual intent and direct intent) to mislead the authorities in order to obtain funds unjustifiably. The Constitutional Court has emphasized that, from the perspective of the ultima ratio principle in criminal matters, it is not sufficient to find that the incriminated acts undermine the protected social value, but that this undermining must be of a certain degree of intensity and seriousness to justify the application of criminal sanctions.

Thus, even if a certain act is criminally incriminated, not every action or inaction of the person, which falls within the qualities required of the active subject, must automatically be included in the scope of the incrimination rule, regardless of the severity of the effects produced.

In this context, the courts have the role of distinguishing between behavior that is criminally relevant and behavior that falls within the scope of administrative or civil law, i.e., those offenses which, although contrary to the law and regulations, do not have a financial impact on the European Union.

 

By reading Article 18(1), we find that the perpetrator of the crime is the person who directly requests and obtains European funds. It is wrong to consider, for example, company X, which, having contracted with institution Y following a tender procedure, receives sums from institution Y on the basis of false or incomplete documents, and subsequently institution Y requests reimbursement of the sums from the competent authorities, to be the active subject of the offense.

This example is also relevant from the perspective of the statute of limitations for criminal liability, since determining the moment when the crime was committed depends on the actual moment when the funds were issued: there is a difference between considering the crime to have been committed at the time the sums were issued by institution Y to company X and considering it in relation to the actual access and issuance of European funds.

The issue of courts adopting a pragmatic approach, a delicate matter that requires efforts to develop and consolidate uniform case law, was also discussed and analyzed in detail in relation to the differences between the three elements mentioned above.

The High Court of Cassation and Justice, in the grounds for Decision No. 170/A, clarifies the distinction between irregularity and fraud, concluding that, in addition to the typical elements of the offense, the principle of proportionality, provided for in both Article 2 of GEO No. 66/2011 and Article 17 analyzed above, must be respected. This principle emphasizes that any measure taken following the detection of an irregularity or fraud must be proportionate to the seriousness of the act, confirming that not every error justifies classification as fraud and that the application of sanctions must be proportionate to the level of culpability of the perpetrator.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7  See About offenses/irregularities/fraud in relation to crimes against the financial interests of the European Union. A landmark decision of the High Court of Cassation and Justice – JURIDICE.ro

More from Bradu Neagu & Associates