Early Detection and Exclusion System (EDES)

The EDES is the system established by the Commission to reinforce the protection of the Union's financial interests and to ensure sound financial management.

The EDES rules are found in the Financial Regulation and have been applicable since 2016 to all contracts, grant agreements, prizes, financial instruments and remunerated experts, as well as for the implementation of the budget under indirect management.

The purpose

The purpose of EDES is the protection of the Union's financial interests against unreliable persons and entities. In particular, EDES covers:

• the early detection of persons or entities representing risks threatening the Union's financial interests;
• the exclusion of persons or entities from participating in award procedures governed by the Financial Regulation or from implementing Union funds (Article 138(1) of the Financial Regulation);
• the imposition of a financial penalty on a person or entity (Article 140 of the Financial Regulation);
• the publication, in the most severe cases, on the Commission's internet site of information related to the exclusion and where applicable the financial penalty, in order to reinforce their deterrent effect (Articles 142 of the Financial Regulation).

The information on early detection/exclusion/financial penalty may stem from:

• (non-)final judgment and administrative decisions;
• facts and findings from the European Anti-fraud office (OLAF), the European Public Prosecutor's Office (EPPO), the Court of Auditors, audits or any other check, audit or control performed under the responsibility of the competent authorising officer;
• decisions of the European Central Bank (ECB), the European Investment Bank (EIB), the European Investment Fund or international organisations;
• cases of fraud and/or irregularity reported by national authorities managing the budget under shared management;
• cases of fraud and/or irregularity reported by entities implementing the budget under indirect management.

The grounds for exclusion are listed under article 138(1) of the Financial Regulation. They include:

• bankruptcy and insolvency situations;
• non-payment of taxes or social security contributions;
• grave professional misconduct, including breach of conflict of interest and incitement to violence, hatred, and discrimination;
• fraud, corruption, participation in a criminal organisation and other criminal offences.;
• significant deficiencies in complying with the main obligations in the performance of the contract;
• irregularity;
• entities created with the intent to circumvent fiscal, social or other legal obligations (creation of shell companies);
• failure to cooperate with EU investigative bodies.

The Panel

A Panel, led by a high-standing independent Chair and Vice-Chair, is set-up to centrally assess the exclusion situations referred to in Article 138(1) of the Financial Regulation and for adopting recommendations on on the need to impose an administrative measure. Where a person or entity is in an exclusion situation that has not been established by a final judgment or final administrative decision, the responsible authorising officer that has become aware of an exclusion situation must refer a case to the Panel on the need to adopt an EDES measure, on the basis of a preliminary classification in law of the relevant facts and findings. .

Authorising officers must also request a recommendation from the Panel in cases where a final judgment or final administrative decision has established the existence of an exclusion situation but has not determined the exclusion period.

The Panel will  be competent to ensure the rights of defence of the person or entity concerned.

It is then the responsible authorising officer that takes the decision, having regard to the Panel recommendation.

The system retains the possibility to assess the remedial measures taken by the person or entity to demonstrate its reliability. In this case, the person or entity should not be excluded (except in case of criminal offences, e.g. fraud, corruption).

The Panel is composed of:

• a high-level independent chair;
• a high-level independent vice-chair
• two representatives of the Commission as owner of the system;
• one representative of the responsible authorising officer of the Commission or of the relevant Institution, body, office, or agency.

The database

The above information on early detection or exclusion and/or financial penalty will be registered in a database (the EDES Database).

The database is set up and operated by the Commission (Article 144(1) of the Financial Regulation).Finally, the Panel may suggest the publication of the administrative measure on the European Commission website (see below) to reinforce its deterrent effect.

Data protection

The EDES shall comply with Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC.

You may find below the privacy statement for the EDES Database.

EDES – 10 years of successful mechanism

Discover how the Early Detection and Exclusion System (EDES) has strengthened EU financial protection over the past decade. This milestone report highlights key achievements, challenges, and the system’s evolving role.