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2 Arachne Risk Scoring Tool - Luc MOLEMANS

Arachne is an IT tool developed by the European Commission to help managing authorities identify their most risky projects/contracts and potential risks in all projects/contracts. It uses data mining and enrichment on operational data from member states combined with external databases on companies, people and risk lists. Arachne calculates risk scores across 7 categories and 102 indicators to flag the highest risks to support administrative controls. The tool is used by 19 EU member states and has assessed over 1.2 million projects worth 330 billion euros of EU funds.

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Alexandra Balla
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126 views

2 Arachne Risk Scoring Tool - Luc MOLEMANS

Arachne is an IT tool developed by the European Commission to help managing authorities identify their most risky projects/contracts and potential risks in all projects/contracts. It uses data mining and enrichment on operational data from member states combined with external databases on companies, people and risk lists. Arachne calculates risk scores across 7 categories and 102 indicators to flag the highest risks to support administrative controls. The tool is used by 19 EU member states and has assessed over 1.2 million projects worth 330 billion euros of EU funds.

Uploaded by

Alexandra Balla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Arachne

Risk Scoring Tool

04 March 2022

Luc Molemans (European Commission – DG EMPL)


Arachne IT project Manager
Article 125 (4)(c)
of the Regulation (EU) No 1303/2013 of the European
Parliament and of the Council

Managing authorities have to "put in place effective and


proportionate anti-fraud measures taking into account the risks
identified"

The European Commission wants to provide the managing


authorities with a tool which can help them to comply to this article
125.4(c)
What is Arachne ?

• ARACHNE is an integrated IT tool for data mining and data


enrichment.

• Goal: providing the Member States authorities involved in shared


management of the European Funds with an operational tool to
identify:
1. their most risky projects/contracts
2. potential risks linked to all their projects and contracts

• Objective: support Member States authorities in their


administrative controls and management checks.
Arachne evolution

Arachne major milestones

04/2013 01/2014 01/2015 01/2016 01/2017 01/2018 01/2019 01/2020 01/2021 01/2022

V1.0 V1.12 V1.2.4 V2.0.0 V2.0.1

V1.2.0 V1.4.10 V2.0.2 V2.0.15 V2.n.nn

• Users: +/- 6.300 (1.800 active users per quarter)

• Operational Programmes (ESF – ERDF – ETC) • Operational Programmes (EAFRD)


244 OPs (2014-2020) - 330 billion€ (out of 491 billion€) 9 OPs (2014-2020) - 20 billion€ (out of 150 billion€)
➢ +/- 1.290.000 projects ➢ +/- 47.500 projects
➢ +/- 370.000 beneficiaries ➢ +/- 31.700 beneficiaries
➢ +/- 811.000 contracts ➢ +/- 29.400 contracts
➢ +/- 12.200.000 expenses ➢ +/- 40.700 expenses
Member States Info

For ESF and ERDF (2014-2020)


Mainstream programmes

• 19 MS + UK are currently involved:


IT,PT,CZ,RO,HR,BE,AT,LV,LT,LU,BG,HU,ES,FR,SK,MT,NL,SI, IE (*)
* at least 1 operational programme
• GR is in ‘pilot’ phase
• CY and EE don’t provide feedback
• 5 MS decided not to use Arachne : DE,SE,FI,DK,PL

For EAFRD (2014-2020)

• 9 MS are participating in pilot phase:


EE,HR,IT,LT,RO,SI and SK have uploaded (limited) set of data
ES,GR have not yet uploaded data
• 3 MS attended or requested ‘general introduction to Arachne’ workshop
DE,LU,PL

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Member States Info

For ETC programmes (2014-2020)

• Data for 34 ETC programmes are uploaded on Arachne


• 13 programmes refresh the data regularly
• 8 programmes don’t refresh the data enough
• For 13 programmes the data is old and not up-to-date

• Arachne Users are defined for 35 ETC Programmes


• 20 programmes have users who connected recently to Arachne
• 5 programmes have users who did not connect since more than 3 months
• 10 programmes have users who did not connect since more than 6 months

See details on next slide

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Member States Info

7
Arachne – data sources

ORBIS database World Compliance

Vies
ARACHNE database

Member State
operational data

Next
Arachne – Internal operational data

Project data Contract data Expenses / invoices


• Project ID • Contract ID • Expense ID
• Project description • Contract description • Expense Type
• Status • Date signature • Description
• Beneficiary • Initial end date / Final end date • Amount
• Start date / end date • Contractor / Subcontractors • Contractor
• EC Financial Assistance • Amount • Invoice date
• Total project cost • Nbr Addenda / Amount of addenda • Payment date
• Type of project • Key experts
• Project partners • Procurement information
• Project details • Type

• Related people • Tenders : valid / excluded / Total


• Publication date

Back
Arachne – Orbis database

• Orbis has information on :


Companies : +/- 400 million companies worldwide (active and inactive)
• Ownership information (shareholders, subsidiaries, participation rate, …)
• 41 million companies with detailed financial information (turnover, cash
flow, solvency ratio, …)
• Address information
• Related people (directors, senior management, contact people, …)
• Indicators like credibility and bankruptcy
Persons : +/- 200 million persons
• First name, last name, Age
• Number of affinities, number of companies and role in company
• The data is collected from publicly available information
such as official annual reports or balance sheets submitted
to regulatory bodies
• The level of details available in the database varies by
country and company size
• All data available in Arachne
Back
Arachne – World Compliance database

• World Compliance collects, aggregates and centralizes :


• PEP lists (politically exposed person)
• Sanctions lists (OFAC lists (Office of Foreign Assets Control), World Bank Debarred
Parties List, CBI List (The Central Bureau of Investigation), …)
• Enforcement list (EU Terrorism List, FBI Most Wanted, Interpol Most Wanted, Narcotic &
human traffickers, Money launderers, fraudsters and other criminals, …)
• Adverse media list (company or person that have been linked to illicit activities by news
sources)

• The data is received from regulatory and governmental


authorities (except for adverse media list)

• Information is only accessible through the Arachne alert


details (It won’t be possible for a user to explicitly retrieve
these information for a given company/person)

Back
Arachne – data flow

Member States
DIGIT

Arachne
Arachne Application
database Server

XML
XML

Operational
Data Arachne European Member
Operational database Commission States
Data files

VIES

Orbis
Enrichments and
Risk calculations
World
Compliance
Arachne – Risk categories

102 risk indicators

7 Risk categories

Procurement Contract Mgt Eligibility Performance Concentration Reasonability Reputation & Fraud
6 risks 11 risks 9 risks 18 risks 13 risks 15 risks 30 risks

Some examples

• Lead time • Contractors • Payments • Nbr of people • Beneficiaries • EC Fin. • Propensity of


between with invalid outside trained vs involved in Assistance vs Bankruptcy
publication of VAT Nbr eligibility people to be multiple project cost
tender and period trained projects/OP’s • Link between
contract • Contract • Administration beneficiary and
signature amount versus • Duplicate • Project cost • Contractors cost vs project (sub)contractors
turnover of amounts vs km road involved in cost
• Nbr of valid the contractor within constructed multiple • Involvement in
tenders vs expenses projects/OP’s • Seminars- Saction and
received • Contract • Water waste publishing enforcement lists
tenders addenda cost • Expenses cost vs • Subcontractors costs vs
vs contracted higher population to involved of project cost • Involvement in
• Financial amount than benefit multiple sensitive regions
correction project projects of the
cost same • Change of company
beneficiary name / address/
activity / directors
Arachne – Webpage and documentation

Interface and User Manuals are available in 23 languages

More info on Arachne webpage


https://ec.europa.eu/social/main.jsp?catId=325&i
ntPageId=3587&langId=en

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