The early warning system (EWS) is a computerised information system, which provides the Commission service “with information on identified risks related to beneficiaries of centrally managed contracts and grants.” The EWS identifies, therefore, physical or legal persons deemed to pose a threat to the EU’s financial interests. It is based on a system of “flags”, which identifies the level of risk concerned from “W1” (lowest level of flagging) to “W5” (highest level), containing information on the physical or legal person subject to a warning and the type and reasons of the warning. All EU institutions are allowed to block or suspend contracts or payments to entities listed under certain EWS warning levels.
Following several complaints about its operation, the European Ombudsman, P. Nikiforos Diamandouros, has decided to open an investigation into the European Commission's EWS. He has recently called on the European Commission to ensure that the EWS respects fundamental rights, particularly the right to be heard.
Nikiforos Diamandouros is particularly concerned with the fact that physical and legal persons “are not systematically informed that they have been listed in the EWS.” In fact, the European Commission has confirmed that solely entities listed under W5 warning category (entities sanctioned by the UN and by the Council in the framework of the Common Foreign and Security Policy) are informed of this fact, whilst entities listed on other EWS (suspicions of fraud or irregularities) are not.
Nikiforos Diamandouros recalled that under the European Charter of Fundamental Rights every person has the right to be heard, before any individual measure, which would adversely affect him or her is taken. He pointed out that the right to be heard “can only be limited in exceptional circumstances”. He called, therefore, on the Commission “to guarantee the right to be heard before decisions to include persons or companies in the EWS are taken”, so that persons concerned are given the opportunity to comment on the evidence to be used against them. He also called on the Commission to respect the right of access to the file.
Noting that the system has no formal appeals mechanism, he stressed that persons must be able to challenge “their proposed and intended inclusion on the EWS” and called for the creation of “an internal review mechanism (…) separate from the services requesting an EWS warning”.
The European Ombudsman asked the Commission to send a detailed opinion by the end of March 2012.
