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Ares(2022)2456394 - 01/04/2022

Annual Activity Report

2021
DG JUST
Table of Contents

THE DG IN BRIEF................................................................................................................................................................3

EXECUTIVE SUMMARY ....................................................................................................................................................5

A) Key results and progress towards achieving the Commission’s general objectives
and DG's specific objectives (executive summary of section 1) ...............................................6
B) Key Performance Indicators (KPIs) ........................................................................................................ 10
C) Key conclusions on Financial management and Internal control (executive
summary of section 2.1)............................................................................................................................. 15
D) Provision of information to the Commissioner(s) .......................................................................... 16

1. KEY RESULTS and progress towards achieving the Commission’s general objectives
and DG's specific objectives () ......................................................................................................................... 17

2. MODERN AND EFFICIENT ADMINISTRATION AND INTERNAL CONTROL ..................................... 36

2.1. Financial management and internal control ................................................................................. 36
2.1.1. Control results .............................................................................................................................. 37
2.1.2. Audit observations and recommendations .................................................................... 55
2.1.3. Assessment of the effectiveness of internal control systems ............................ 56
2.1.4. Conclusions on the assurance .............................................................................................. 58
2.1.5. Declaration of Assurance [and reservations] ............................................................... 60
2.2. Modern and efficient administration – other aspects ............................................................. 61
2.2.1. Human resource management ............................................................................................ 61
2.2.2. Digital transformation and information management ........................................... 62
2.2.3. Sound environmental management ................................................................................. 64
2.2.4. Example of initiative to improve economy and efficiency of financial and
non-financial activities of the DG ...................................................................................... 65

just_aar_2021_final Page 2 of 66
THE DG IN BRIEF
The mission of DG Justice and Consumers (DG JUST) is to uphold and strengthen the rights
of people living across the European Union, whether they are acting as citizens,
entrepreneurs, consumers or workers. To do this, DG JUST aims to strengthen the respect of
the core EU values – democracy, fundamental rights and the rule of law, the respect of
equality, to deepen European cooperation in the area of justice, and to support the
development of a dynamic single market for consumers, workers and businesses,
contributing to European growth.

DG JUST manages a substantial set of EU laws in its competence areas. To achieve EU

objectives in these areas, DG JUST uses a wide range of tools, like targeted legislative
actions, non-legislative actions and enforcement tools aimed at ensuring effective
application of EU laws. DG JUST is organised in five directorates, responsible for:

The directorates are supported by four horizontal units (01, 02, 03 and 04) that work to
ensure communication, strategic planning, interinstitutional and international relations, and
economic analysis to support and implement all DG JUST policies and priorities.

Unit 04 ("Programme and financial management") is responsible for the budgetary cycle of
DG JUST. It is also responsible for the negotiations, management and execution of two DG
JUST funding programmes: 1) Citizens, Equality, Rights & Values (CERV) and 2) Justice
programmes. In addition to supervising the four DG JUST agencies and the executive
agency EACEA, the Unit also executes part of the procurement activities related to
Consumer Protection and Company Law components of the “Single Market Programme”
(SMP). In cooperation with other parent DGs, DG JUST participates in the operational
supervision and in the governance of the executive agency EISMEA implementing delegated
parts of the Consumer Protection activities. In this way, in 2021 DG JUST managed EUR

just_aar_2021_final Page 3 of 66
235.96 million1 in financial resources to facilitate the implementation of its policies and
promote justice, rights and values on the ground.

DG JUST policies are implemented through:

 direct management mode by the Commission via grants and procurement, and by
the European Innovation Council and SMEs Executive Agency (EISMEA), and
 indirect management mode through EU established agencies and Union body in
the area of Justice and Consumers to support EU Member States and their citizens
in coping with new tasks of a specific nature: the European Institute for Gender
Equality (EIGE), the European Union Agency for Fundamental Rights (FRA), European
Union Agency for Criminal Justice Cooperation (EUROJUST) and European Public
Prosecutor's Office (EPPO).

1
Found here.

just_aar_2021_final Page 4 of 66
EXECUTIVE SUMMARY
This Annual Activity Report is a management report of the Director-General of DG JUST to
the College of Commissioners. Annual Activity Reports are the main instrument of
management accountability within the Commission and constitute the basis on which the
College takes political responsibility for the decisions it takes as well as for the
coordinating, executive and management functions it exercises, as laid down in the
Treaties 2.

The executive summary has four subsections:

A) Key results and progress towards the achievement of the Commission’s general
objectives and DG's specific objectives (executive summary of section 1; what we
have delivered), including achievements in burden reduction, simplification,
shortcomings encountered where relevant, and COVID-19 actions performed.
B) The most relevant Key Performance Indicators (KPIs) to illustrate the policy
highlights identified in the DGs 2020-2024 Strategic Plan.3
C) Key conclusions on Financial management and Internal control (executive
summary of section 2.1; how we have delivered).
D) Informing the Commissioner: confirmation that the main elements of the AAR
have been brought to the attention of the responsible Commissioners.

2
Article 17(1) of the Treaty on European Union.
3
Strategic_plan_just_2020-2024_revised.pdf (europa.eu).

just_aar_2021_final Page 5 of 66
 A) Key results and progress towards achieving the Commission’s
general objectives and DG's specific objectives (executive
summary of section 1)

This executive summary recaps major results towards achieving the objectives of DG JUST
in 2021, in particular contributing to four headline ambitions set out by President von der
Leyen. As reflected below, DG JUST made a considerable contribution to the 2021
Commission Work Programme (CWP); indeed, no less than fifteen items in the CWP
(thirteen in Annex I and two in Annex II) were DG JUST intitiatives. These include, for
example, an EU strategy on the rights of the child, fitness checks of EU legislation on
violence against women and domestic violence, and the revision of Directive 2011/24/EU
on the protection of the environment through criminal law.

1) A new push for European Democracy

In 2021, DG JUST continued its efforts to strengthen the rule of law in the European Union.
As part of the comprehensive European Rule of Law Mechanism, the Commission published
the the second annual report on the rule of law, which was co-chaired by DG JUST
alongside the SG. The report that covers national justice systems, the anti-corruption
framework, media pluralism and freedom, and other institutional checks and balances.

DG JUST also prepared, through financial support from the Justice Programme, the 2021
EU Justice Scoreboard, to assist Member States to achieve more effective justice.

DG JUST, as lead service, prepared and negotiated the EU Digital Covid Certificate (EU
DCC) in record time. The EU DCC allowed people across the EU to exercise their free
movement rights from the summer period and onwards. With more than 1 billion
certificates issued, the EU DCC is one of the EU's great successes in the fight against
COVID-19. In addition, DG JUST ensured a coordinated approach to the restrictions of
free movement through a constant monitoring of the epidemiological situation and
several adaptations of the respective Council Recommendation.

In the field of improving the framework for democracy, DG JUST presented as lead service
a package of measures including new proposals on transparency and targeting of
political advertising. DG JUST also proposed to update the current rules on European
elections and municipal elections for EU citizens who reside in a different Member State to
their state of nationality (“mobile EU citizens”) as well as non legislative interventions.

In March, the Commission adopted the first-ever comprehensive EU Strategy on the

rights of the child. This strategy aims to bring all new and existing EU legislative, policy
and funding instruments within one coherent framework, both from the internal and
external policy. Extensive consultations were carried out, including consultations with more
than 10000 children. In October, the Commission adopted its first EU Strategy on
combating antisemitism and fostering Jewish life, marking its political engagement
for a European Union free from antisemitism and any form of discrimination, for an open,
inclusive and equal society in the EU. Moreover, in December, the Commission adopted a

just_aar_2021_final Page 6 of 66
Communication, inviting the Council to adopt a decision to extend the current list of ‘EU
crimes’ in Article 83(1) TFEU to hate crimes and hate speech. This initiative will pave the
way for putting in place, in a second stage, a strong common legal framework to tackle
hate speech and hate crime across the EU. Also in December, the Commission adopted its
2021 report on the application of the Charter of fundamental rights in the EU,
which focusses on protecting fundamental rights in the digital age. It presents some of the
key aspects where challenges to fundamental rights arise due to the use of digital
technology. It shows which rights are affected in these contexts, how the situation in the EU
Member States is developing, and how the Member States and the European Commission
use the Charter to overcome the different challenges and safeguard and promote people’s
rights.

In the field of promoting equality for all, DG JUST ensured the effective implementation of
the ambitious EU Anti-racism Action Plan 2020-2025, which covers a set of
comprehensive measures in a range of policy areas combined with the mainstreaming of
the fight against racism into all EU policies. DG JUST also started to implement the
renewed and strengthened EU Roma Strategic Framework for Equality, Inclusion and
Participation, which sets out EU Roma policy for 2021-2030. DG JUST also ensured the
effective implementation of the EU LGBTIQ Equality Strategy 2020-2025, which is
built on four pillars: (1) fighting LGBTIQ discrimination; (2) ensuring LGBTIQ people's safety;
(3) building inclusive societies; and (4) leading the fight for LGBTIQ equality around the
world. As a deliverable of these equality strategies, in 2021, DG JUST kicked off the
preparatory work for a new initiative, to be adopted in 2022, to strengthen the role and
independence of bodies for the promotion of equal treatment (equality bodies). The
Commission followed-up on its commitment set out in the Gender Equality Strategy 2020-
2025 and proposed, in March 2021, a Directive to strengthen the application of the
principle of equal pay for equal work or work of equal value between men and women
through pay transparency and enforcement mechanisms. Following intensive negotiations,
the Council reached a general approach on the text already in December 2021. Also in
March 2021, DG JUST adopted its Annual Report on Gender Equality in the EU.

In 2021, DG JUST ensured an exceptional implementation of the Justice and Citizens,

Equality, Rights and Values (CERV) programmes adopted in April 2021, shifting from
yearly to biennial work programmes - thus ensuring better continuity and facilitating the
preparation and application process for beneficiaries - launching 17 calls for proposals to
finance grass-root organisations, EU networks, the judiciary, and to fund several key
activities in support of policy and legislative developments in the field of justice, rights and
values. At the end of May, the first CERV dialogue week reached out 1000 stakeholders,
providing them a platform for networking and information sharing on new funding
opportunities.

2) A European Green Deal

DG JUST continued working on the preparation of an initiative aimed at empowering
consumers for the green transition, as announced in the Circular Economy Action Plan
and in the New Consumer Agenda. The work towards the adoption of the proposal on

just_aar_2021_final Page 7 of 66
sustainable corporate governance, which will foster long-term sustainable and
responsible corporate behaviour, further intensified in 2021.

3) A Europe fit for the digital age

In the area of data protection, DG JUST continued its work on ensuring the effective
implementation of the General Data Protection Regulation (GDPR) and transposition of the
Data Protection Law Enforcement Directive (LED). At international level, DG JUST intensified
its dialogue with important partners aimed at upward convergence of data protection rules
to facilitate data transfers with appropriate safeguards.

DG JUST continued working on implementing the EU company law rules adopted in 2019
on cross-border mobility of companies and on digital tools and processes in company law.
DG JUST also started preparing a new proposal for an initiative on upgrading digital
company law.

In the area of consumers, the Commission adopted a new proposal for a Directive on
consumer credits to adapt the current legislative framework to the challenges brought by
digitalisation and by the COVID-19 crisis. It aims to offer better protection to consumers
while creating more harmonised conditions for businesses offering credit. DG JUST
launched the preparation for a legislative proposal to review the existing Directive on the
distance marketing of consumer financial services.

In June 2021, the Commission adopted a proposal for a general product safety
regulation, which would replace the current General Product Safety Directive, as part of
the regulatory fitness-check programme (REFIT). The proposal seeks to address the
challenges of product safety of emerging technologies, including use of artificial
intelligence (AI) and connected devices, and to establish clear obligations for online
marketplaces, which consumers increasingly use for their online purchases. The proposal
would create a single set of market surveillance rules for both harmonised and non-
harmonised products, including by aligning the provisions with the Market Surveillance
Regulation, and would improve the effectiveness of product recalls.

In the area of consumers policy, the new version of the public rapid alert system Safety
Gate, with an improved usability and better overall user experience, has been launched on
2 March 2021. A new system, called eSurveillance, meant for monitoring whether
dangerous products notified by the SafetyGate system are indeed not sold anymore on
online markets, has entered its execution phase.

DG JUST strengthened its coordination of consumer law enforcement activities by

national authorities working under the Consumer Protection Cooperation (CPC)
Regulation. In particular, it facilitated the biggest and fastest CPC action ever, which
concerned cancellation practices of 16 major airlines. This action permitted a return to
compliant cancellation practices and the reimbursement of unused vouchers worth millions
of euros. Other CPC activities converned large market places and social networks which
were asked to improve the transparency of their commercial activities. DG JUST also

just_aar_2021_final Page 8 of 66
organised an assembly of more than 400 Alternative Dispute Resolution (ADR)
bodies to exchange on the barriers hindering a better updake of ADR in the EU.

When tabling new legislative proposals, DG JUST endeavours to identify any potential for
implification and/or burden reduction. In 2021, three legislative proposals were adopted in
the area of digitalisation of exhanges of information and documents between Member
States.

4) Promoting our European way of life

In the field of improved cross-border cooperation, DG JUST finalised together with other
services, the establishment of the European Public Prosecutor's Office (EPPO), which
started its operational activities on 1 June 2021. Cooperation in the field of civil justice was
further enhanced at international level with 5 proposals adopted authorizing EU Member
States to accept the accession of third countries to the Hague 1980 Convention on
international child abduction as well as with the proposal for the EU accession to
the Hague Judgments Convention.

In December, the Commission adopted three legislative proposals on the Digitalisation

of cross-border judicial cooperation. These measures constitute a major step forward
for the modernisation of the area of freedom, security and justice that would lead to
increased efficiency and resilience of judicial authorities, reduced costs and administrative
burden, and easier access to justice. As part of this package, the Commission adopted a
proposal on the digital information exchange in terrorism cases and a proposal
establishing a collaboration platform to support the functioning of Joint
Investigation Teams (JITs).

The Commission adopted a proposal for a new Directive on the protection of the
environment through criminal law in December. It defines new environmental crime
categories, includes more precision on types and levels for sanctions, for both natural and
legal persons, and strengthens the effectiveness of law enforcement chain in the Member
States and in cross-border investigations.

just_aar_2021_final Page 9 of 66
 B) Key Performance Indicators (KPIs)

Degree of establishment of Baseline: Preparation of the first Annual Rule of Law Report
the new European Rule of Target: Fully functioning European Rule of Law
Law Mechanism in line with Mechanism. Yearly publication of the Annual Rule of Law
the Political Guidelines Report. Rule of Law Report is used as a basis in the discussions
at the Council, Parliament and at national level.
Latest known result: Publication of the second annual Rule of
Law Report in July 2021. In the General Affairs Council a general
follow-up discussion and two sets of country-specific discussions
covering 10 Member States took place. This in addition to
presentations in the European Parliament and 20 discussions in
national Parliaments (related to the 2020 Rule of Law Report in
the first half of 2021 and the 2021 Rule of Law Report in the
second half of 2021). The Rule of Law Report fed the preparation
of the high-level conference on Rule of Law in Europe co-
organised by the Portuguese Presidency of the Council, European
Commission and the University of Coimbra.
Degree of implementation Baseline: Strategy adopted
of Gender Equality Strategy Target: All measures within DG JUST competence due by 2024
implemented.
Latest known result: In March 2021, the Commission adopted
a proposal for a Directive to strengthen the application of the
principle of equal pay for equal work or work of equal value
between men and women through pay transparency and
enforcement mechanisms; in December 2021, the Council
reached a general approach on the text. The legislative proposal
on violence against women and domestic violence was adopted
on 8 March 2022. In December 2021, The Commission adopted
an initiative to add hate crime and hate speech, including on
misogynistic grounds, to the list of EU-crimes in Article 83 TFEU.

just_aar_2021_final Page 10 of 66
 Citizens perception on My voice counts in the EU
democratic participation Baseline adjusted to EU27 (2019): 48%
“my voice counts” Target: Increase
Latest known results (2021): 43% (EB95)

Source:
https://europa.eu/eurobarometer/api/deliverable/download/file?deliverableId=7
9220
Explanation :
A majority of Europeans (53%) believe that their voice does not
count in the European Union. This negative opinion has remained
unchanged since summer 2020, the last time that this question
was asked. On the contrary, a minority of respondents consider
that their voice counts in the EU (43%). Positive opinions have
increased slightly by one percentage point since summer 2020.
Since 2004, when this indicator was introduced, positive opinions
have outweighed negative opinions only twice, namely in autumn
2018 and in spring 2019.

In summer 2020, the view that personal interests are taken into
account at the level of the European Union was preponderant in
the non-euro area countries (49% vs 45%), but the respondents
who hold that opinion are now the minority in this spring 2021
survey: 47% vs 48%.

As regards the euro area, despite a small increase (+2),

respondents who believe that their voice counts in the EU remain
in the minority in this group of countries: 42% who “agree” vs
54% who “disagree”.

My voice counts in my country

Baseline adjusted to EU27: 61%
Target: Increase
Latest known results (2021): 58% (EB95)

Source:
just_aar_2021_final Page 11 of 66
https://europa.eu/eurobarometer/api/deliverable/download/file?deliverableId=7
9220 .

Explanation :
 58% of Europeans (+1 percentage point since summer 2020) say
that their voice counts in their country, while exactly four in ten
respondents (40%, unchanged since summer 2020) disagree
with this statement. The proportion of respondents who think that
their voice is taken into account in their country has increased for
the first time after two consecutive decreases between autumn
2019 and summer 2020. After a sharp decrease, the proportion
of respondents who agree with this statement in the non-euro
area countries (58%, -5 percentage points since summer 2020)
is now almost identical to that of the euro area countries (57%,
+1).

just_aar_2021_final Page 12 of 66
 Percentage of consumers Baseline: 71.3% (for EU27 in 2018)
who think that in general Target: Increase
retailers/providers respect Latest known result (2020): 80%
their rights as consumers Next available result: 2022

Number of exchanges via Baseline (2020): 4.1 million

the European Criminal Target (2024): 5 million
Records Information System Latest known result (2021): 4.1 million4
(ECRIS)

Explanation:
The above chart demonstrates the ever-growing degree to which
Member States have been taking advantage of the European
Criminal Records Information System. This represents a doubling
of the system’s use in 2016, when 2 million messages were
exchanged by all interconnected Member States.

4
No increase in the number of exchanges was noted in 2021 due to the Covid-19 pandemic as well
as because of the United Kingdom’s departure from ECRIS.

just_aar_2021_final Page 13 of 66
Estimated residual error Direct management: grant
rate
Target 2020: below 2%
Latest known result: 1,83%
Error rates are measured separately for each distinct control
system. The residual error rate for grants is below the materiality
criteria of 2%, resulting in a lifting of reservation for the direct
management grants.

just_aar_2021_final Page 14 of 66
 C) Key conclusions on Financial management and Internal control
(executive summary of section 2.1)

In line with the Commission’s Internal Control Framework, DG Justice and Consumers has
assessed its internal control systems during the reporting year and has concluded that it is
effective and the components and principles are present and functioning well overall, but
some improvements are needed as minor deficiencies were identified related to the
principles 10 and 13. Please refer to AAR section 2.1.3 for further details.

In addition, DG JUST has systematically examined the available control results and
indicators (including those for supervising entities to which it has entrusted budget
implementation tasks), as well as the observations and recommendations issued by the
internal auditor and the European Court of Auditors. These elements have been assessed to
determine their impact on management's assurance about the achievement of the control
objectives. Please refer to Section 2.1.3 for further details.

In conclusion, management has reasonable assurance that, overall, suitable controls are in
place and working as intended; risks are being appropriately monitored and mitigated; and
necessary improvements and reinforcements are being implemented. The Director-General,
in his capacity as Authorising Officer by Delegation has signed the Declaration of
Assurance.

just_aar_2021_final Page 15 of 66
 D) Provision of information to the Commissioner(s)

In the context of the regular meetings during the year between the DG and the
Commissioners on management matters, the main elements of this report and assurance
declaration have been brought to the attention of Commissioner Didier Reynders,
responsible for Justice and Commissioner Helena Dalli, responsible for Equality.

just_aar_2021_final Page 16 of 66
1. KEY RESULTS and progress towards achieving the
Commission’s general objectives and DG's specific
objectives (5)

Specific objectives 1. Strengthened rule of law in the Union

DG JUST continued providing support to the Commission’s policy on upholding the rule of
law in the Union. DG JUST continued to actively monitor developments related to systemic
threats to the rule of law in Member States, and contributed to the preparation of the
Commission's position in two Article 7 TEU procedures, currently pending before the
Council, against Poland and Hungary. DG JUST also prepared three infringement
proceedings against Poland: (1) infringement concerning the new Polish law on the
judiciary of December 2019 and the continued functioning of the Disciplinary Chamber of
the Supreme Court with respect to cases concerning judges; (2) infringement concerning the
Polish Constitutional Tribunal and its case law adversely affecting fundamental tenets of
the EU legal order; and (3) a letter of formal notice under Article 260 TFEU as regards the
lack of implementation by Poland of the judgment of the Court of Justice of 15 July 2021
issued in the case C-791/19. In relation to the first of those cases, DG JUST furthermore
contributed to the preparation of a request for interim measures, granted by the Court of
Justice on 14 July 2021, requesting Poland to suspend a number of contested provisions
affecting judicial independence and the functioning of the Disciplinary Chamber of the
Supreme Court as regards notably cases concerning judicial immunities.

As part of the Rule of Law Mechanism, in 2021 the Commission published the second
Annual Rule of Law Report. Exchanges based on the report were held in the Council, the
European Parliament, the Economic and Social Committee, in many national Parliaments,
with Member States governments, stakeholders, civil society organisations and citizens. DG
JUST also prepared, through financial support from the Justice Programme, the 2021 EU
Justice Scoreboard, to assist Member States to achieve more effective justice by
providing objective, reliable and comparable data on the efficiency, quality and
independence of justice systems in all Member States. The monitoring of the justice
systems and the assessment of the progress made by Member States in addressing
justice-related country-specific recommendations issued in the context of the European

5
An Executive Agency uses as heading: "Implementation of the Agency's Annual Work
programme - Highlights of the year".

just_aar_2021_final Page 17 of 66
Semester informed the assessment of the Member States’ Recovery and Resilience Plans
and DG JUST contributions to the draft Council Implementing Decisions and Operational
Arrangements (under the Recovery and Resilience Facility) signed with the Member States.

The Commission launched a request for service for an awareness raising campaign on
the rule of law. The objective of the campaign is to raise awareness about the importance
of the rule of law in everyday life. The contract with a communication agency was signed at
the end of 2021, with a launch of the campaign planned for 2022.

Specific objective 2: Strengthened application of fundamental rights

On 10 December 2021, Human Rights Day, the Commission adopted its 2021 report on
the application of the Charter of fundamental rights in the EU6, following a new
thematic approach. The 2021 report focusses on protecting fundamental rights in the
digital age. It looks at: tackling the challenges of online moderation; safeguarding
fundamental rights where artificial intelligence is used; addressing the digital divide;
protecting people working through platforms and supervising digital surveillance. On the
same day, the Commission launched an awareness raising campaign on people’s rights
under the Charter and on where to turn in case their rights have been breached7 and
updated information on the application of the Charter on the Europa website8. A call for
proposals was also launched under the CERV programme for capacity building on the
Charter and strategic litigation9. Both initiatives are complementary: the awareness
raising campaign aims to improve the public’s awareness of their rights and where to turn
to get support, while the CERV call aims to strengthen the knowledge on the application of
the Charter of those who enforce it.

In December, the Commission also launched on the European e-Justice Portal a new
page on Member States’ best practices on the use and awareness of the Charter.10

6
https://ec.europa.eu/info/aid-development-cooperation-fundamental-rights/your-rights-eu/eu-
charter-fundamental-rights/application-charter/annual-reports-application-charter_en
7
https://europa.eu/right-here-right-now
8
https://ec.europa.eu/info/aid-development-cooperation-fundamental-rights/your-rights-eu/eu-
charter-fundamental-rights_en
9
https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/opportunities/topic-
search;callCode=null;freeTextSearchKeyword=;matchWholeText=true;typeCodes=1,0;statusCode
s=31094501,31094502,31094503;programmePeriod=2021%20-
%202027;programCcm2Id=43251589;programDivisionCode=43603671;focusAreaCode=null;d
estination=null;mission=null;geographicalZonesCode=null;programmeDivisionProspect=null;star
tDateLte=null;startDateGte=null;crossCuttingPriorityCode=null;cpvCode=null;performanceOfDeli
very=null;sortQuery=sortStatus;orderBy=asc;onlyTenders=false;topicListKey=topicSearchTableP
ageState
10
https://e-justice.europa.eu/37134/EN/member_states_best_practices_on_the_charter

just_aar_2021_final Page 18 of 66
The Commission also opened a call for proposals for an amount of EUR 51 million to
promote and protect Union values11 under the CERV programme. This call will support
civil society organisations in all EU Member States in their crucial work of protecting and
promoting fundamental rights and values in the EU, as underlined in the Charter strategy. It
illustrates how EU funding supports key EU policy priorities.

These are key deliverables of the Commission’s strategy to strengthen the

application of the Charter in the EU,12 adopted on 2 December 202013. The Commission
informed about these deliverables at the Justice and Home Affairs Council of 10 December
2021.

On 24 March 2021, the Commission adopted the EU Strategy on the rights of the child,
an intiative in the Commission Work Programme to which DG JUST contributed. 14. The
Strategy brings together all new and existing EU legislative, policy and funding instruments
contributing to the protection and promotion of children’s rights within one comprehensive
and coherent framework. It is articulated around six thematic priorities, covering a wide
range of policy areas, including participation in democratic and political life, social inclusion,
health and education, combating violence against children and child protection, child-
friendly justice, the digital world and the global dimension. The Strategy has been
developed with the input of children, and was translated into easy to read versions for
children of different age groups and reading abilities15.

On 5 October 2021 the European Commission presented the first-ever EU Strategy on

combating antisemitism and fostering Jewish life (CWP initiative). With
antisemitism worryingly on the rise, in Europe and beyond, the Strategy sets out a series of
measures articulated around three pillars: to prevent all forms of antisemitism; to protect
and foster Jewish life; and to promote research, education and Holocaust remembrance.
The Strategy proposes measures to step up cooperation with online companies to curb
antisemitism online, better protect public spaces and places of worship, set up a European

11
https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/opportunities/topic-
details/cerv-2022-citizens-
values;callCode=null;freeTextSearchKeyword=;matchWholeText=true;typeCodes=1,0;statusCode
s=31094502;programmePeriod=2021%20-
%202027;programCcm2Id=43251589;programDivisionCode=null;focusAreaCode=null;destinati
on=null;mission=null;geographicalZonesCode=null;programmeDivisionProspect=null;startDateLt
e=null;startDateGte=null;crossCuttingPriorityCode=null;cpvCode=null;performanceOfDelivery=n
ull;sortQuery=sortStatus;orderBy=asc;onlyTenders=false;topicListKey=topicSearchTablePageSta
te
12
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6699
13
https://ec.europa.eu/info/aid-development-cooperation-fundamental-rights/your-rights-eu/eu-
charter-fundamental-rights/application-charter/eu-strategy-strengthen-application-charter_en
14
https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A52021DC0142
15
https://ec.europa.eu/info/policies/justice-and-fundamental-rights/rights-child/eu-strategy-rights-
child-and-european-child-guarantee_en

just_aar_2021_final Page 19 of 66
research hub on contemporary antisemitism and create a network of sites where the
Holocaust happened. These measures will be reinforced by the EU's international efforts to
lead the global fight against antisemitism. The Strategy will be implemented over the
period 2021-2030. Member States have already committed to preventing and fighting all
forms of antisemitism through new national strategies or measures under existing national
strategies and/or action plans on preventing racism, xenophobia, radicalisation and violent
extremism. National strategies should be adopted by the end of 2022 and will be assessed
by the Commission by the end of 2023.

On 9 December 2021, the Commission adopted a Communication on 'A more inclusive

and protective Europe: extending the list of EU crimes to hate speech and hate
crime’ (CWP initiative). The Communication invites the Council to adopt a decision
extending the ‘EU crimes’ in Article 83(1) TFEU to hate speech and hate crime and thus to
create a legal basis for the Commission to propose minimum rules on the definitions and
sanctions of hate speech and hate crime in a second stage.

DG JUST also continued to monitor the implementation of the 2016 Code of conduct on
countering illegal hate speech online agreed with major IT platforms. The results of the
sixth monitoring exercise published in October 2021 confirmed a good performance by IT
platforms on the review and removal of hate speech content. The Code of conduct
continued to attract new companies with LinkedIn announcing its joining the Code in June
2021. The work on the implementation of the Code of conduct will feed into the Digital
Services Act, currently under negotiation between the European Parliament and the
Council.

On 31 March 2021, the Commission published its implementation report on the

Presumption of innocence Directive, one of the six Directives protecting procedural
rights in criminal proceedings. Overall, the Directive has provided the EU added value by
raising the level of protection of citizens involved in criminal proceedings, especially in
some Member States where certain aspects of the presumption of innocence were not
protected, such as the right not to incriminate oneself. However, this report highlights that
there are still difficulties related to key provisions of the Directive in some Member States.
This is particularly true in relation to public references to guilt.

Specific objective 3: Improved framework to protect democracy in the European

Union

Democracy needs to be nurtured and protected. Both the democratic system and the rights
of individual voters face threats. DG JUST was the main service responsible for the
Commission’s 2021 package of measures on protecting election integrity and promoting
democratic participation with a number of initiatives. DG JUST presented a brand new
proposal on transparency and targeting of political advertising (CWP initiative).
The proposed rules would require any political advert to be clearly labelled as such and
include information such as who paid for it and how much. Political targeting and
amplification techniques would need to be explained publicly in unprecedented detail and
would be banned when using sensitive personal data without explicit consent of the
individual. DG JUST also proposed to introduce specific rules on the transparency of political
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adverts issued by European Political Parties and to update the current EU rules
concerning EU “mobile citizens” and their right to vote in European and municipal
elections. Among others, in order to ensure inclusive participation ahead of European
elections in 2024, the targeted amendments to the existing Directives on electoral
rights include, obligation to inform such citizens proactively of their electoral rights, use
standardised templates for registration as voters or candidates as well as use of language
broadly spoken by the mobile EU citizens residing at the territory. The political
Communication accompanying these legal proposals also contains some non-legislative
measures making best use of the European Cooperation Network on Elections.

In 2021, DG JUST started working on an initiative to protect journalists and rights

defenders against SLAPP (strategic lawsuits against public participation). This initiative is
part of broader efforts under the European Democracy Action Plan to promote public
participation and support free and independent media. The Commission concluded that the
most efficient way to fight against SLAPP and prevent it from growing roots in the EU
would be a combination of legislative and non-legislative measures. For this, in 2021, DG
JUST organised a public consultation on EU action against SLAPP targeting journalists and
rights defenders and a targeted consultation of national judges. In addition, the
Commission created an expert group to advise on matters relating to the fight against
SLAPP or the support to their targets, which met four times in 2021. Subgroup meetings
also took place. Moreover, DG JUST organised several meetings with stakeholders and
Member States to gather views on the anti-SLAPP initiative. The Commission’s initiative on
SLAPP is planned to be adopted in Q2 2022.

Specific objective 4. Increased perception of the status and the rights conferred by
European citizenship

2021 was the second year of the Covid pandemic which had a tremendous influence on the
free movement of persons. DG JUST (as lead service) prepared and negotiated the EU
Digital Covid Certificate (EU DCC) in record time. The EU DCC allowed citizens to exercise
their free movement rights well in time for the summer period. With more than 1 billion
certificates issued, the EU DCC is one of the EU’s greatest successes in the fight against
Covid-19. It is used widely across the EU, also for domestic purposes, and has set a global
standard, leading to more than 30 third countries being connected.

The implementation of the EU DCC required constant monitoring of the epidemiological

situation and subsequent adaptation of the Council Recommendation on a
coordinated approach to the restrictions of free movement, in light of the evolution
of the epidemiological situation and the roll out of vaccines in the course of 2021. In
addition, DG JUST prepared several implementing acts ensuring the technical
implementation of the EU DCC as well as equivalence decisions with regard to
certificates issued by third countries (next to the EU, EEA and Switzerland, 31 third
countries are now connected to EU DCC). Last but not least, taking into account the latest
scientific evidence, the Commission adopted a delegated act to make the standard
validity period of vaccination certificates of 270 days legally binding.

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The right to equal access to consular protection is one of the specific rights that the
Treaties grant to EU citizens and is a tangible example of European solidarity. A number of
global events requiring common EU action to ensure the effective use of this right have
arisen in recent years, including natural disasters and terrorist attacks, but never to the
extent and complexity as during the COVID-19 outbreak. In 2021, DG JUST conducted
preparatory steps for the review of the existing consular protection Directive (CWP
initiative). The aim of the review is to assess the implementation of the current Directive,
draw the lessons to be learned from the consular dimension of the COVID-19 crisis, and
take into account the effects of Brexit (and the corresponding loss of UK consular assets).

Finally, DG JUST pursued infringement in the context of citizenship schemes. As regards EU

citizens’ rights, DG JUST further ensured close monitoring of the implementation of the EU-
UK Withdrawal Agreement.

Specific objective 5. High level of personal data protection achieved throughout the
EU and EU data protection promoted as a global model

DG JUST continued its work on ensuring the effective implementation of the General
Data Protection Regulation (GDPR) and transposition of the Data Protection Law
Enforcement Directive (LED). The Commission opened an infringement proceeding
against Belgium due to the lack of independence of its Data Protection Authority and
followed up on others, including one where CJEU imposed financial penalties on Spain for
its failure to transpose the LED. Schengen evaluations were carried out in six Member
States in order to assess how the data protection requirements of the Schengen acquis are
implemented and applied in practice. DG JUST also contributed actively to the reform of the
Schengen Evaluation Mechanism. In addition, preparations were started for the evaluation
of the LED and for the report on the application of EU Data Protection Regulation (the
“GDPR” for EU institutions and bodies), both due in the second quarter of 2022.

The work on mainstreaming the GDPR and LED rules into key EU sectoral policies
was continued with a focus on Data Strategy initiatives including common European data
spaces, law enforcement, financial services and employment. In the area of health, the
Covid-19 pandemic has shown the importance of innovative digital solutions which
embrace the right to data protection and foster trust. It was in particular the case for the
Regulation on the EU Digital Covid Certificate and the Implementing Decision on the
Passenger Locator Forms Exchange Platform that fully comply with data protection
principles, such as data minimization and security.

To facilitate the implementation of EU data protection rules at national level, DG JUST

continued exchanges with national authorities and stakeholders, including through
the Member States’ expert group on GDPR and LED, the Multistakeholder expert group on
GDPR and the launch of the network of police data protection officers. Throughout the year,
DG JUST actively contributed to the work of the European Data Protection Board, including
the preparation of guidelines aimed at stakeholders. The Commission also continued to
financially support national data protection authorities in reaching out to citizens and small
and medium-sized enterprises.

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At international level, DG JUST intensified its dialogue with important partners aimed at
upward convergence of data protection rules to facilitate data transfers with appropriate
safeguards. Aside from written and oral submissions (e.g. in parliamentary hearings) on the
draft data protection bills of a number of third countries, and the cooperation with regional
organisations such as ASEAN or the Ibero-American Data Protection Network, DG JUST led
the negotiations on data protection safeguards included in several international
agreements on law enforcement cooperation (e.g. the Second Additional Protocol to
the Budapest Convention, Europol cooperation agreements with New Zealand and Israel). It
also finalised the adequacy talks and adopted adequacy decisions for the UK and
South Korea. In addition, following the US elections, the negotiations on a possible
successor arrangement to the EU-US Privacy Shield (following the invalidation of the earlier
adequacy decision in 2020) entered into a more intensive phase. Beyond this work aimed at
new adequacy decisions, DG JUST also continued, and to a large extent finalised, the
review of the 11 existing adequacy decisions (adopted under former Directive 95/46),
as well as the first joint review of the EU-Japan mutual adequacy arrangement concluded
in early 2019. With a view to helping European businesses comply with GDPR requirements,
the Commission adopted in June 2021 Standard Contractual Clauses (SCCs) for
controllers and processors located in the EU and modernised SCCs for transferring personal
data to non-EU countries.

In 2021, DG JUST also further developed its cooperation with a number of

international organizations (e.g. IOM, FAO, OECD) with a view to facilitate data
exchanges in support of their public interest missions, including through possible adequacy
findings. Among other things, this led to the development of a model data protection
contract with the International Organization for Migration for data transfers by Member
States authorities in the context of IOM return operations. DG JUST also participated in the
OECD work on the development of global principles for government access.

Following the negotiations on the EU-UK Trade and Cooperation Agreement (TCA), DG
JUST also played an active role in its implementation in the justice and consumers areas.
This notably involved working closely with Member States to ensure they correctly apply the
relevant provisions of the TCA. DG JUST was also responsible for co-chairing (on behalf of
the EU), and ensuring the secretariat of, the EU-UK Specialised Committee on law
enforcement and judicial cooperation. Finally, DG JUST took part in the negotiations of a
possible agreement with the UK on Gibraltar.

Specific objective 6. Eliminate inequalities and discrimination, and promote equality

for all

The Commission followed-up on its commitment set out in the Gender Equality Strategy
2020-2025 and proposed, in March 2021, a Directive to strengthen the application of
the principle of equal pay for equal work or work of equal value between men and
women through pay transparency and enforcement mechanisms. Following intensive
negotiations, the Council reached a general approach on the text already in December
2021.

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On 8 March 2022, a proposal for a draft Directive on violence against women and
domestic violence (CWP initiative) was finalised. The proposal has the same objectives
as the Istanbul Convention, namely to ensure that EU Member States have effective
measures in place to prevent such violence, protect victims and punish offenders on a
common basis. In line with the principle of burden reduction, the proposal aims to simply
the law in this area by compiling relevant EU rules in a single instrument in a transparent
manner. This will benefit both professionals and the victims concerned. In line with the
principle of proportionality and necessity of EU action, this proposal will establish minimum
rules enhancing the actions taken by Member States in the areas of prevention, victim
protection and support, access to justice and coordination. For the first time, this proposal
draws up a targeted and coordinated EU approach to tackle violence against women and
domestic violence.The Commission monitored closely the correct enforcement and
application of the Racial Equality Directive with specific focus on Roma segregation in
education, continued to work on existing infringement cases and opened an investigation
against Hungary On 19 March 2021 Commission adopted the Application report on the
Racial Equality Directive and Employment Equality Directive.16 The Commission also
pursued its efforts to unblock the negotiations on the proposed Horizontal Equal
Treatment Directive (CWP initiative)17, which aims to extend protection against
discrimination on grounds of religion or belief, disability, age and sexual orientation to
areas outside employment (social protection, education and access to and supply of goods
and services, including housing).

The Commission organised two meetings of the High-Level Group on Non-

discrimination, Equality and Diversity to ensure policy coordination with Member
States and other stakeholders on equality policy and non-discrimination on the grounds of
racial or ethnic origin, age, disability and sexual orientation, two meetings of the Equality
data subgroup and a high level Roundtable aiming to step up the collection of equality
data. Finally, the Commission organised a legal seminar with the European network of
legal experts in gender equality and non-discrimination and supported several
trainings to raise awareness among judges and legal practitioners on EU equality
legislation.

The Commission ensured the effective implementation of its ambitious EU Anti-racism

Action Plan 2020-2025 that covers a set of comprehensive measures in a range of policy
areas combined with the mainstreaming of the fight against racism into all EU policies. The
Commission appointed the first European Commission Coordinator against racism and
organized the first EU Anti-racism Summit on 19 March 2021. To support Member States in
their efforts to develop and adopt national action plans against racism and racial
discrimination, the Commission established a Subgroup on the national implementation of

16
COM(2021) 139 final
17
Proposal for a Council Directive on implementing the principle of equal treatment between
persons irrespective of religion or belief, disability, age or sexual orientation (COM(2008) 426
final, 2.7.2008)

just_aar_2021_final Page 24 of 66
the EU Anti-Racism Action Plan and developed guidelines on the main principles and
elements required to produce effective national action plans. The Commission has also set
up a Permanent Forum of Civil Society Organisations (CSO’s) to participate in the
consultative processes and support the Commission in the implementation of the action
plan and the Commission awarded grants under the Citizens, Equality, Rights and Values
programme. The Commission continued its work towards ensuring the correct and complete
transposition of the Framework Decision on combating racism and xenophobia by means of
criminal law, and in 2021 has sent letters of formal notice to 11 Member States.

In 2021, the Commission started to implement the renewed and strengthened EU Roma
Strategic Framework for Equality, Inclusion and Participation, which sets out EU
Roma policy for the period from 2021 to 2030. The new Framework consists of a
Commission Communication, providing guidelines for national Roma strategic frameworks
and a portfolio of indicators, as well as a the Council recommendation, adopted
unanimously by the Member States on 15 March 2021. The recommendation establishes a
comprehensive approach complementing the social-economic inclusion of marginalised
Roma communities with actions to fight and prevent antigypsyism and discrimination, and
promoting participation through empowerment, cooperation and trust. The Commission
further organised several meetings with civil society and national Roma contact points as
well as the 14th meeting of the European Platform for Roma Inclusion organised in
cooperation with the Slovenian Presidency which focused among other on assessing the
National Roma Strategic Frameworks and on mitigating the impact of the COVID 19
pandemic.

The Commission ensured the effective implementation of its first-ever EU LGBTIQ

Equality Strategy 2020-2025 built on four pillars: (1) fighting LGBTIQ discrimination; (2)
ensuring LGBTIQ people’s safety; (3) building inclusive societies; and (4) leading the fight
for LGBTIQ equality around the world. To support and monitor progress in the Member
States, including on the national action plans, the Commission set up an LGBTIQ equality
subgroup which aims to develop a set of Guidelines to assist Member States in their efforts
and strategic work to enhance LGBTIQ Equality. The Commission also awarded grants to
LGBTIQ civil society organisations, under the Citizens, Equality, Rights and Values
programme and maintained an open dialogue and consultation with civil society in law and
policy-making under the Civil Society Roundtable. The Commission further launched a study
focusing on the challenges intersex people face in their everyday lives. In July 2021, the
Commission took action to ensure the respect of the rights to freedom of expression and of
non-discrimination, enshrined in Articles 11 and 21 of the Charter of Fundamental Rights in
the context of the implementation of the Unfair Commercial Practices Directive in Hungary.
The Commission launched an infringement procedure against Hungary related to the
adoption of a law which prohibits or limits access to content that promotes or portrays the
so-called ‘divergence from self-identity corresponding to sex at birth, sex change or
homosexuality' for individuals under 18, and to a disclaimer imposed on a childrens’ book
presenting LGBTIQ people.

The Commission further continued to actively promote diversity management through

an EU-level platform to support Diversity Charters in 26 EU Member States covering more

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than 12 000 organisations, including companies, NGOs and public bodies with over 16
million employees. In May 2021, the European Commission celebrated the second European
Diversity Charters Month. In November 2021, the Commission launched the new European
Capitals of Inclusion and Diversity Award aiming to recognise Inclusion and Diversity work
of local authorities in several categories.

Specific objective : Improved sustainable consumption by empowering consumers

and improved integration of sustainability considerations into companies’ and
companies’ behaviour through an upgraded corporate governance framework

In 2021, DG JUST continued working on the preparation of an initiative aimed at

empowering consumers for the green transition, as announced in the Circular
Economy Action Plan and in the New Consumer Agenda. The initiative was adopted on 30
March 2022. DG JUST worked in close cooperation with other DGs on related initiatives,
specifically with DG ENV on green claims initiative and with DG ENV, DG ENER and DG
GROW on sustainable products initiative.

As announced in the New Consumer Agenda, DG JUST launched, as the Agenda’s first
action, the pilot phase of a non-legislative initiative, the Green Pledge. The Pledge invites
businesses to undertake concrete, public and verifiable commitments that go beyond legal
obligations, in order to raise awareness of their consumers about the impact of their
consumption choices. Eleven companies pledged to make impactful changes, such as
reduction in CO2 emissions at the organisational and product level. After the pilot phase,
based on lessons learned and received stakeholders feedback, DG JUST engaged in
preparation of an enhanced Pledge to be rolled out in 2022.

Consumer law enforcement authorities published a sweep on misleading green claims

which showed that for 42% of the websites examined and which contained green claims,
there were reasons to believe such claims were false or misleading. Authorities also worked
together in the Consumer Protection Cooperation (CPC) network to exchange best practices
on enforcement challenges in the area of sustainability information and started a first
coordinated action on early obsolescence concerning a large game manufacturer.

DG JUST started the preparatory work, carrying out studies and preparing the call for
evidence for a new initiative promoting a more sustainable use of goods throughout their
useful life by amending the Sale of Goods Directive and introducing a new right to
repair. The initiative, planned for adoption in 2022, will aim to encourage consumers to
make more sustainable choices by providing incentives and tools to use goods for a longer

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time. It will also encourage producers to design goods that last longer and are easily
reparable.

In line with the overall Commission’s objective of a just transition to a sustainable economy
and a sustainable recovery after the Covid-19 crisis, DG JUST, in 2021, in co-lead with DG
GROW, worked towards the adoption of a proposal on sustainable corporate
governance (CWP initiative), carrying out the necessary preparatory work, including
broad consultations and impact assessment work. The proposal will foster long-term
sustainable and responsible corporate behaviour in green transition and beyond,
contributing also to the headline ambition of “an Economy that works for people”. The
proposal was adopted on 23 February 2022.

Specific objective 1: Consumers are empowered and better protected

On 30 June 2021, the Commission adopted a new proposal for a Directive on

consumer credits to adapt the current legislative framework to the challenges brought by
digitalisation and by the Covid-19 crisis. It aims to offer better protection to consumers
while creating more harmonised conditions for businesses offering credit. In particular, it
extends the scope of application of the current directive, improves rules on information
disclosure – especially online – and responsible lending, and it includes new provisions to
tackle practices exploiting consumer behavior online and support over-indebted consumers.
A progress report on this proposal was published on 19 November 2021.

In 2021, DG JUST launched the preparation for a legislative proposal to review the
existing Directive on the distance marketing of consumer financial services. The
objective of the legislative proposal is to modernise the current legal act to ensure a high
level of consumer protection and the fostering of the cross-border provision of financial
services (e.g. consumer loans, mortgages, insurance products) bought at a distance (e.g.
online, via telephone or postal services).

The Project on Debt-Advice, started in 2020, continued in 2021 with events for the
exchange of best practices among debt-advice providers and two sets of events aimed at
the capacity building of future debt-advisers of six EU Member States (Italy, Spain, Greece,
Hungary, Romania, and Poland), i.e. countries where debt-advice is not well developed yet
or may improve. The final Report of the whole Project will be published in January 2022
summarising the outcome of the initiative and collected best practices.

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In 2021, DG JUST updated its guidance on Directive 2011/83/EU on consumer rights,
Directive 2005/29/EC on unfair commercial practices and Directive 98/6/EC on
price indication to facilitate their effective application, in particular in the digital
environment and in view of the recent amendments of these Directives. In preparation of
further work to ensure digital fairness for consumers, DG JUST also started gathering
evidence on the prevalence and effects of new unfair practices in the digital environment,
so-called ‘dark patterns’.

Furthermore, DG JUST assisted Member States in transposition of the Directive on

better enforcement and modernisation, the Directive on representative actions for the
protection of the collective interests of consumers, the Directive on contracts for the supply
of digital content and digital services and the Directive on the sale of goods.

As required by Directive (EU) 2015/2302 on package travel and linked travel

arrangements, the Commission adopted a report on the application of the Directive in
February 2021. The report covers the protection of consumers when booking travel services
online and prepared the ground for a back-to-back evaluation and impact assessment of
the Directive following the Thomas Cook bankruptcy and the Covid-19 crisis.

In June 2021, the Commission adopted a proposal for a general product safety
regulation, which would replace the current General Product Safety Directive, as part of
the regulatory fitness-check programme (REFIT). The proposal seeks to address the
challenges of product safety of emerging technologies, including use of artificial
intelligence (AI) and connected devices, and to establish clear obligations for online
marketplaces, which consumers increasingly use for their online purchases. The proposal
would create a single set of market surveillance rules for both harmonised and non-
harmonised products, including by aligning the provisions with the Market Surveillance
Regulation, and would improve the effectiveness of product recalls.

In 2021, CPC authorities continued to address the challenges linked to the Covid-19 crisis.
The dialogue on consumer scams with 11 major online platforms (market places, search
engines and social media) continued. A dialogue with 16 airlines started in relation to
cancellation practices that took place during the early stages of the pandemic. This was the
biggest CPC action carried out so far and the fastest one. As a result, airlines proposed a
reimbursement in cash to all consumers on whom vouchers had been imposed and who
could not use them. Cancellation practices were back to compliance by September 2021.
The CPC network also worked on accomodation booking sites, subscription traps and their
link to wrongly designed payment windows. It started a dialogue with Tiktok and with
Google on their lack of transparency regarding certain commercial information. CPC
authorities and data protection authorities cooperated regarding consumer information on
targeted advertising. A new platform supporting e-investigation by national authorities was
sucessfully tested (eLab).

DG JUST organised a large assembly of Alternative Dispute Resolution (ADR) bodies

which discussed how consumers and businesses could make better use of ADR schemes,
especially in view of the acceleration of the use of online shopping. European Consumer

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Centres continued to support consumers who faced a problem with a cross border
purchase. A new grant model, following the adoption of the new financing instrument was
implemented to support them with biennial grants.

In cooperation with BEUC (The European Consumer Organisation), DG JUST continued with
the second phase of ConsumerPro training and other capacity-building activities for the
consumer organisations and other stakeholders domiciled in the EU, Iceland and Norway.
The project shall offer sector-specific training topics, such as digital rights, consumer law
and collective redress and full roll out in 2022, building up operational skills in consumer
education, advice, communication and media. While ConsumerPRO targets organisations,
consumers benefitted from a campaign on knowing their rights better in the realm of
financial literacy, data protection, internet safety and sustainability.18

Specific objective 2. A human-centric legal framework for Artificial intelligence that

protects citizens and promotes cross-border trade

DG JUST advanced on three main work strands concerning Artificial Intelligence (AI): (i)
ensuring a coordinated European approach on the human and ethical implications of AI; (ii)
that all consumer products, including the ones incorporating AI, are safe; and (iii) clarifying
the liability regime in the context of AI.

More specifically, DG JUST further accelerated preparatory work, undertaking studies and
analytical activities, in view of the legislative proposal on harmonised liability rules for
Artificial Intelligence, planned for adoption in 2022. The initiative will aim to create legal
certainty, avoid fragmentation in the EU and build an adapted framework, which ensures
that victims of damage caused by AI-equipped products/services have the same level of
protection as victims of traditional technologies.

In 2021, DG JUST contributed to the preparation of the Data Act (CWP initiative),
steered by DG CNECT under the specific objective of creating a European Single market for
data in which data can flow for the benefit of all and whose rules concerning access and
the use of data are practical and clear. DG JUST covered the specific issues related to
fairness in B2B data sharing and access to data co-generated by the use of products and
services. Measures include the development of voluntary model contract terms to facilitate
the design and use by start-ups and SMEs of balanced B2B data sharing contracts, a
contractual fairness test and horizontal modalities. The Data Act is planned for adoption
early 2022.

DG JUST also worked together with DGs CNECT, GROW, SG, LS, JRC, and HOME on the
legislative proposal that was adopted on 21 April 2021, notably contributing on aspects

18
https://ec.europa.eu/info/live-work-travel-eu/consumer-rights-and-complaints/video-resources-
consumers_en

just_aar_2021_final Page 29 of 66
related to AI technology and fundamental rights aspects. Ensuring legal compliance of
AI use is also expected to have a positive impact on the uptake of the technologies in
sectors that are subject to high regulatory compliance standards, such as law enforcement
or the judiciary.

Specific objective 3. Company law improves conditions for companies, including

SMEs, in particular to operate and expand cross-border and to use digital tools

DG JUST continued working in 2021 on implementing the EU company law rules adopted in
2019 on cross-border mobility of companies and on digital tools and processes in company
law (Directives (EU) 2019/2121 and (EU) 2019/1151). In particular, to ensure the efficient
transposition of the rules on cross-border mobility of companies, the Commission adopted
an implementing regulation (Implementing Regulation (EU) 2021/1042) that sets out
technical specifications and procedures required to further expand the functionalities of the
Business Register Interconnection System (BRIS).

Furthermore, in 2021 DG JUST started preparing a new proposal for an initiative on

upgrading digital company law. The aim of this initiative is to improve transparency of
EU companies by making more information available on a cross-border basis, to enable the
cross-border use of trustworthy company data in administrative or judicial procedures, and
to further modernise EU company law rules to make them fit for the digital age. An open
public consultation was launched in December following the publication of an Inception
Impact Assessment in July 2021.

General Objective:

An economy that works for people

In 2021, under the headline ambition “An Economy that works for people”, DG JUST also
worked closely with DG FISMA on the review of the banking framework (CWP
initiative), to ensure that EU banks become more resilient to potential future economic
shocks, while contributing to Europe’s recovery from the Covid-19 pandemic and the
transition to climate neutrality. DG JUST particularly contributed by putting forward a
robust fit-and-proper framework about members of management bodies and influential
managers. This will ensure sound management of EU banks and better protect financial
stability. This is particularly important in the context of the Banking Union. The review of
the EU banking rules (the Capital Requirements Regulation and the Capital Requirements
Directive) was adopted in October 2021.

In addition, DG JUST’s work led to the adoption in 2021 of several delegated regulations
on remuneration enabling the complete and consistent implementation of the Capital
Requirements Directive V and of the Investment Firms Directive.

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Specific objectives 1. Improved cross-border cooperation in civil and criminal
matters

In the field of civil justice, after three years of complex negotiations the Council reached, in
June 2021, a general approach on the proposed regulation on the law applicable to
the third-party effects of assignments of claims. Trilogues started in December 2021
with the aim of reaching a political agreement during the first half of 2022. The proposal is
one of the measures to deliver on the Capital Markets Union.

In the international fora, a major step forward was the adoption, in July 2021, of the
Commission’s proposal for the EU accession to the Hague Judgments Convention,
an international treaty that facilitates the recognition and enforcement of judgements in
civil and commercial matters in foreign jurisdictions. This improves legal certainty and
saves citizens and companies time and money. After swift negotiations, the Council reached
the political agreement on the proposal on 10 December 2021. The European Parliament
will then need to give its consent, in 2022, before the formal adoption by the Council.

The Commission also adopted on 4 May 2021 a Communication providing its

assessment on the United Kingdom’s application to join the 2007 Lugano
Convention (on jurisdiction and recognition and enforcement of judgments), concluding
that the European Union should not give its agreement to United Kingdom’s accession.

In July 2021, five proposals authorizing EU Member States to accept the accession of
five third countries (Tunisia, Jamaica, Bolivia, Pakistan and Philippines) to the Hague
1980 Convention on international child abduction were adopted by the Commission.
Two of them have been already formally adopted by the Council. This initiative contributes
to extend worldwide the guarantees provided by the 1980 Convention to safeguard
children’s rights in case of wrongful removal or retention across borders.

In December 2021, the Commission proposal was adopted for a Council Decision on the
signing, on behalf of the European Union, of the Protocol to the Convention on
International Interests in Mobile Equipment on Matters specific to Agricultural,
Construction and Mining Equipment (MAC Protocol). This initiative is the first step to
ensure that Member States could take advantage of the system established by the Protocol
to secure international transactions concerning agriculture, mining and construction
machines.

The European Judicial Network in civil and commercial matters, which is a core tool for
effective implementation of EU law in civil and commercial matters, continued its work in

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2021 under challenging Covid-19 circumstances, with most of the meetings taking place
online. However, in the field of judicial cooperation, as a positive effect, the prolonged crisis
continued to increase the use of digital means of communication.

In 2021, DG JUST also kicked off the preparatory work on three new initiatives, to be
adopted in 2022 and 2023, on harmonising certain aspects of substantive law on
insolvency proceedings, on recognition of parenthood between Member States, and
the cross-border protection of vulnerable adults. In this context, a number of expert
groups were convened and studies and public consultations launched.

In the field of criminal justice, in 2021, DG JUST took, with the support of other DGs and
services, the necessary measures to finalise the establishment of the European Public
Prosecutor’s Office (EPPO), which started its operational activities on 1 June 2021. On 6
September 2021, the Commission issued its 1st Report on the implementation of the
Directive on the fight against fraud to the Union's financial interests by means of criminal
law (‘PIF Directive’), which DG JUST prepared together with OLAF19. In December 2021,
letters of formal notice were issued concerning eight Member States.

On 1 March 2021, the Council adopted the Decision authorising the opening of negotiations
for Agreements between the European Union and Algeria, Argentina, Armenia, Bosnia and
Herzegovina, Brazil, Colombia, Egypt, Israel, Jordan, Lebanon, Morocco, Tunisia and Turkey
on cooperation between the European Union Agency for Criminal Justice
Cooperation (Eurojust) and the competent authorities for judicial cooperation in
criminal matters of those third States. Preliminary meetings have been held with some of
them, and it is expected to open formal negotiations with at least 4 countries during the
first semester of 2022.

The Commission continued overseeing Eurojust’s management and strategic issues through
involvement in Eurojust’s governance bodies. During 2021, DG JUST participated in 24
meetings of the College of Eurojust and 25 meetings of the Executive Board. This
involvement allowed to include the vision of the different Commission services in the
reports and decisions approved in both governance bodies of Eurojust. This collaboration
has also helped to define the technical requirements of the two legislative proposals on the
Digitalisation of cross-border judicial cooperation.

As part of the Digitalisation of Justice package, the Commission adopted on 1 December

2021 two proposals on the digital information exchange in terrorism cases (CWP
initiative). While one of these proposals aligns an old third pillar instrument, Council
Decision 2005/671/JHA, with the EU data protection acquis, the other proposal amends the
Eurojust Regulation with the aim to improve the digital information exchange between
Member States’ competent authorities and Eurojust as well as the processing of
information at Eurojust. This shall improve the effectiveness of the European Judicial

19
Report from the Commission to the European Parliament and the Council on the implementation of
Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight
against fraud to the Union's financial interests by means of criminal law, COM(2021) 536 final, 6.9.2021.

just_aar_2021_final Page 32 of 66
Counter Terrorism Register, enabling Eurojust to identify cross-border links with terrorism
cases better.

Based on a thorough evaluation in 2019 and 2020 of the 2008 Directive on environmental
crime (2008/99/EC) and a detailed impact assessment, the Commission adopted a
proposal for a new Directive on the protection of the environment through
criminal law (CWP initiative) on 15 December 2021. The proposal is accompanied by a
Commission Communication setting out the broader policy context of environmental
protection in the Union. The proposal intends to make protection of the environment more
effective by obliging Member States to take effective criminal law measures. It defines new
environmental crime categories, includes more precision on types and sanctions, for both
natural and legal persons, and strengthens the effectiveness of law enforcement chain in
the Member States and in cross-border investigations. It also obliges the Member States to
support and assist people who report environmental offences and cooperate with the
enforcement authorities.

On 20 July 2021, the Commission issued its report on the implementation of the
Directive regarding the European Investigation Order in criminal matters. It
concluded that overall, the Directive provided EU added value by streamlining the process
of evidence collection, and, in particular, by imposing concrete time limits. However, it also
showed that there are still difficulties regarding certain key provisions of the Directive, such
as with respect to the grounds for refusal. The Commission will continue to assess Member
States’ compliance with the Directive and will take appropriate measures to ensure
conformity with its provisions throughout the Union. In August 2021, the Commission
issued a report ‘Statistics on the practical operation of the European arrest
warrant (EAW) – 2019’, which sets out quantitative information on the practical
operation of the EAW in 2019. The report covers information from Member States acting
both as issuing States and as executing States. It consists of data related to, inter alia, the
number of EAWs issued and executed, the number of persons arrested, the types of
offences covered, the grounds for refusal and the duration of the surrender proceedings. In
2021, the Commission also launched 15 infringement procedures concerning the
Framework Decision on EAW (7 infringement procedures were launched in 2020).

In order to ensure an effective exchange of criminal records information between the

Member States, DG JUST regularly monitors the functioning of the European Criminal
Records Information System (ECRIS) and the implementation of its constitutive
instruments. Following the publication of the second Report concerning the exchange of
information extracted from the criminal records between the Member States through ECRIS
(COM(2020)778), DG JUST organised in January 2021 an ECRIS Expert Group meeting,
where the findings of the report were discussed. Subsequently, DG JUST engaged in a
dialogue with the Member States concerned to address any irregularities. This screening
process resulted in launching infringement procedures against five Member States
(Bulgaria, Cyprus, Greece, Malta, Portugal).

In 2021, DG JUST worked closely with eu-LISA and the Member States in the framework of
the ECRIS-TCN Advisory Group and Programme Management Board towards

just_aar_2021_final Page 33 of 66
developing the future centralised system for the identification of Member States holding
conviction information on third-country nationals (ECRIS-TCN). DG JUST also prepared and
agreed with the Member States all the implementing acts required by Regulation (EU)
2019/816 and necessary for the development and implementation of the system.

The Commission launched a request for service for an awareness raising campaign on
victims’ rights. The objective of the campaign is to raise awareness about victims’ rights
in general and to promote specialist support and protection for victims with specific needs.
Though the request for service was launched in 2021, it was not awarded. A new call for
tender will be launched in Q1 2022.

In 2021, the Commission continued the work on the alignment of legal acts which
require a legislative intervention in order to align them with the new EU data protection
acquis. In January 2021, the Commission published two legislative proposals (Directives)
amending the Framework Decision on joint investigation teams and the Directive on the
European Investigation Order, as regards their alignment with the Data Law Enforcement
Directive. Moreover, on 1 June the Commission adopted a draft recommendation to the
Council to authorize the re-opening of negotiations of the Agreement between the EU and
Japan on mutual legal assistance in criminal matters.

The Commission and the Portuguese presidency of the Council brought together national-
and European-level training providers and associations of justice professionals in the
high-level digital conference of 6-7 May 2021 on ‘Modernising EU Justice Systems
by boosting training of justice professionals’20. There was a strong sense of
commitment and drive to reach the new ambitious objectives, improving the participation
of justice professionals in training on EU law and the training offered, whether face-to-
face, online or hybrid. Justice professionals should gain the necessary knowledge, skills and
tools to face new challenges, such as a pandemic.

Justice professionals can now benefit from improved features of the European Training
Platform21 and register to be notified of any new training courses and self-learning
materials in the EU law practice areas of their preferences.

Specific objective 2. Improved access to justice for citizens and facilitated cross-
border cooperation for judicial authorities through better use of digital
technologies

As announced in the Commission Work Programme for 2021, on 1 December 2021, the
Commission adopted two legislative proposals on the Digitalisation of cross-border
judicial cooperation. These measures constitute a major step forward for the
modernisation of the area of freedom, security and justice that would lead to increased

20
https://ec.europa.eu/info/sites/default/files/conference_eu_judicial_training_2021_report.pdf
21
https://e-justice.europa.eu/european-training-platform/

just_aar_2021_final Page 34 of 66
efficiency and resilience of judicial authorities, reduced costs and administrative burden,
and easier access to justice.

The proposals aim at the holistic digitalisation of the communication exchanges between
competent national authorities involved in cross-border judicial cooperation in civil,
commercial and criminal matters. The proposals moreover seek to directly facilitate access
to justice and tackle practical barriers faced today by individuals and businesses by obliging
Member States to accept electronically submitted claims and the online payment of
statutory fees. It also lays down rules on the remote participation of parties in cross-border
hearings by videoconferencing.

The third element of the Digitalisation of Justice package adopted on 1 December 2021 is
the proposal establishing a collaboration platform to support the functioning of
Joint Investigation Teams (JITs) (CWP initiative). The objective of the proposal is to
provide a technological tool to support those involved in JITs to increase the efficiency and
effectiveness of their cross-border investigations and prosecutions.

In 2021, DG JUST continued to work with Justice and Home Affairs (JHA) actors in the
context of a task force aiming to establish legal, business and technical requirements for
the implementation of ‘hit/no-hit’ mechanisms between relevant JHA agencies and EU
bodies.

just_aar_2021_final Page 35 of 66
2. MODERN AND EFFICIENT ADMINISTRATION AND
INTERNAL CONTROL

2.1. Financial management and internal control

Assurance is provided on the basis of an objective examination of evidence of the

effectiveness of risk management, control and governance processes.

This examination is carried out by management, who monitors the functioning of

the internal control systems on a continuous basis, and by internal and external
auditors. The results are explicitly documented and reported to the Director-
General. The following reports have been considered:

- the reports from AOSDs, the reports from Authorising Officers in other DGs managing
budget appropriations in cross-delegations;

- the reports on control results from entrusted entities in indirect management, as well as
the results of the DG's supervisory controls on the activities of these bodies;

- the contribution by the Director in charge of Risk Management and Internal Control,
including the results of internal control monitoring at DG level;

- the reports on recorded exceptions, non-compliance events and any cases of

‘confirmation of instructions’ (Art 92.3 FR);

- the reports on ex-post supervision and/or audit results;

- the limited conclusion of the Internal Auditor on the state of internal control, and the
observations and recommendations reported by the Internal Audit Service (IAS);

- the observations and the recommendations reported by the European Court of Auditors
(ECA).

These reports result from a systematic analysis of the available evidence. This
approach provides sufficient guarantees as to the completeness and reliability of
the information reported and results in a complete coverage of the budget
delegated to the Director-General of DG JUST.

This section covers the control results and other relevant elements that support
management's assurance. It is structured into 2.1.1 Control results, 2.1.2 Audit
observations and recommendations, 2.1.3 Effectiveness of internal control
systems, and resulting in 2.1.4 Conclusions on the assurance.

just_aar_2021_final Page 36 of 66
2.1.1. Control results

This section reports and assesses the elements identified by management which
support the assurance on the achievement of the internal control objectives
(ICO) (22). The DG's assurance building and materiality criteria are outlined in AAR
Annex 5. The AAR Annex 6 outlines the main risks together with the control
processes to mitigate them and the indicators used to measure the performance
of the relevant control systems.

DG JUST managed a budget in 2021 of EUR 235,96 million, excluding co-delegation type 2
which amounts to EUR 60.2 million.

Before proceeding with the global commitments to fully consume 2021 credits, the
implementation rate stood at the 20 December at 82% (vs 78% in 2020) which is another
notable achievement. Legal commitments on the remaining budget will be signed in 2022,
once calls for tenders and pending evaluations of the applications received in response to
the calls for proposals have been finalised.

In terms of the use of commitment appropriations, 97% (EUR 228,45 million out of EUR
235,96 million) of the budget available was implemented, including the use of global
commitments, which is in line with previous years’ implementation rates (98%).

As far as payment appropriations are concerned 95% (EUR 195.1 million out of EUR 204.6
million) have been implemented during the year 2021.

During the year 2021 the three Entrusted Agencies (EUROJUST, FRA, EIGE) have together
used nearly all of their commitment appropriations 96%, and 78% of the payment
appropriations. The unused amount for payments will be carried forward and used during
2022. This is a result very similar to 2020 (93% in commitment appropriations and 76% in
payment appropriations). As from June 2021, the EPPO has become operational and
financially independent from the Commission.

Overall, reliable and complete control results are available for each control system. The
analysis and conclusions of each relevant control category in terms of legality and
regularity and cost efficiency is described and explained in further detail below under Part
2.1.1.1 and 2.1.1.2. Key indicators have been defined for each stage of the relevant control

(22) 1) Effectiveness, efficiency and economy of operations; 2) reliability of reporting; 3)

safeguarding of assets and information; 4) prevention, detection, correction and follow-up of
fraud and irregularities; and 5) adequate management of the risks relating to the legality and
regularity of the underlying transactions, taking into account the multiannual character of
programmes as well as the nature of the payments (FR Art 36.2). The 2nd and/or 3rd Internal
Control Objective(s) (ICO) only when applicable, given the DG’s activities.

just_aar_2021_final Page 37 of 66
system and presented in details in Annex 7. The previous reservation regarding the residual
error rate in the non-audited population of grants has been lifted (see details in Part 2.1.4).

Regarding the overall efficiency of controls, a positive conclusion has been reached based
on an overall cost-efficiency indicator of 4.87% which is in line with previous year (4.74%)
(details in Part 2.1.1.2).

DG JUST's management factually concludes that the control results, presented in the
sections that follow are complete and reliable and provide reasonable assurance about the
achievement of the internal control objectives.

Table 2.1 below provides a summary of the payments made by type of activities. It shows
that:
- Based on the main indicator results available, overall suitable controls were in place in
2021 and worked as intended;
- No new reservation is introduced in this AAR as DG JUST has reasonable assurance that
overall suitable controls are in place and work as intended, taking into account also the
multiannual character of the main programmes. The risks are mitigated and/or
monitored; improvements and reinforcements are being implemented.

just_aar_2021_final Page 38 of 66
Overview table (amounts in EUR million)
Grants Contribut
Delegation / NEI, e.g. Revenues,
(e.g. actual Procureme ions
Contribution Other Assets, OBS
Risk-type / costs based, nt and/or Total
agreements (Contribution
or lump (e.g. minor funds to ((in)tangible or
Activities with EE to Executive Expediture
sums, or or major EE (EU financial assets &
(EIB, Int-Org, Agency)
entitlements values) Agency, liabilities)
etc)
) EA, JU)
CERV Programme 26,61 8,12 - 0,43 35,17

Justice Programme 25,31 7,63 - - 32,94

Consumer Programme 0,01 5,59 - 0,79 6,39
Company Law - 0,52 - - 0,52
Other activities for - 0,68 - - 0,68
fundamental rights
Pilot Projects 0,13 1,15 - 0,45 1,73

Descentralised Agencies - 1,88 104,13 1,88 107,89

Administrative - 0,87 5,27 - 5,27 6,16

Expenditure
AMIS&ISF - 0,82 - - 0,82

Connecting Europe Facility - 2,84 - - 2,84

Revenue and income 30,94

recognized
Intangible assets 9,8

Totals (coverage) 52,06 30,1 104,13 3,55 5,27 195,11 40,74

Links to AAR Annex 3 Overall total = 195,11m EUR Table 4 – assets

Dg_just_aar_2021 Page 39 of 66
In line with the 2018 Financial Regulation, DG JUST’s assessment for the new reporting
requirement is as follows:

 No cases of "confirmation of instructions" (new FR art 92.3)

 No cases of financing not linked to costs (new FR art 125.3)
 No financial Framework Partnerships >4 years (new FR art 130.4)
 No cases of flat-rates >7% for indirect costs (new FR art 181.6)
 Among the grants signed in 2021, 7 cases of "Derogations from the principle of
non-retroactivity [of grants] pursuant to Article 193 FR" (new Financial Regulation
Article 193.2) were registered.

just_aar_2020_final Page 40 of 66
 1. Effectiveness of controls

a) Legality and regularity of the transactions

DG JUST uses internal control processes to ensure sound management of risks

relating to the legality and regularity of the underlying transactions it is
responsible for, taking into account the multiannual character of programmes
and the nature of the payments concerned.

The methodology to determine the materiality level for error rate is described in
detail in Annex 5.

DG JUST's portfolio consists of three segments with a relatively low error rate. This is,
respectively, thanks to the inherent risk profile of the programmes and beneficiaries and
the performance of the related control systems

Direct management – grants

As described in the Relevant Control System(s) for budget implementation for direct
management grants (Annex 6), the analysis of the effectiveness with regard to legality and
regularity is built around the three main control processes (stages): 1) programming,
evaluation and selection of proposals; 2) contracting and monitoring and 3) ex-post
controls. Key indicators have been defined for each stage and presented in details in Annex
7. Materiality is assessed in accordance with Annex 5.

Stage 1: Programming, evaluation and selection of proposals

This stage concerns the preparation and adoption of the annual work programmes, as well
as the calls for proposals and their evaluation. The overall control objective of this stage is
to ensure that DG JUST selects the proposals that contribute the most towards the
achievement of the policy or programme objectives in terms of effectiveness and
compliance.

Although the Justice and CERV programme Regulations were adopted late (28 April 2021),
the swift adoption of the CERV and Justice biennial work programmes 2021-2022 in April
and the publication of 17 calls for proposals in summer 2021 allowed to speed up the
implementation of the programme. All calls except 3 calls are fully evaluated: 520 projects
evaluated and 139 selected.

In 2021, 520 project proposals out of 713 proposals received were evaluated compared to
853 evaluated in 2020. 2021 is the first year of a new MFF where part of the CERV calls
(OGs) are implemented by EACEA which was not the case in 2020.

just_aar_2020_final Page 41 of 66
 Stage 1 Number of projects evaluated:  520 (853 in 2020)

Number of projects selected:  139 (196 in 2020)

Control benefits (Stage 1)

The benefits of the Stage 1 – programming, evaluation and selection of proposals are not
identifiable in quantitative or monetary terms.
In qualitative terms, the benefit of the evaluation and selection stages is a higher
performance in reaching the objectives, better quality results of the call, best quality
projects selected.

Stage 2: Contracting and Monitoring

Contracting concerns the grant agreement preparation and signature of the legal
commitment. The overall control objective of this stage is to ensure the optimal translation
of each awarded proposal into a legally binding grant agreement. This is the main tool for
ensuring best value for public money, effectiveness, economy and efficiency of the use of
the budget appropriations.

The value of grant agreements signed in 2021 amounted to EUR 57,99 million compared to
EUR 104,68 million in 2020 and a total of 138 grant agreements signed (vs 268 in 2020).
The decrease compared to 2020 is mainly due to the new MFF and late adoption of the
legal basis.

Monitoring comprises ex-ante checks of beneficiaries’ cost claims and the verification of
the reliability and legality of the underlying financial transactions. The overall control
objective is to ensure that operational results (deliverables) from the projects are of good
value and meet the objectives and that the related financial operations comply with
regulatory and contractual provisions.

The effectiveness of controls for the legality and regularity of transactions is measured
through the number of exceptions and non-compliance events recorded. The recording of
the exceptions and non-compliance events for assessing the effectiveness of controls for
the legality and regularity of transactions showed that in 2021 one exception and no non-
compliance events were recorded in relation to the contracting phase for grants.

Value of final cost claims processed:  EUR 66.5 million (EUR 70.2 million in
Stage 2

2020)

Value of prefinancing recoveries:  EUR 8.99 million (EUR 3.4 million in 2020)

Control benefits (Stage 2)

just_aar_2020_final Page 42 of 66
The controls in place aim to identify and prevent irregularities, allowing for immediate
correction and avoid time-consuming recovery actions. The amount of costs rejected at this
stage is relatively limited, only the most obvious ineligible costs can be detected at this
stage however, these ex ante controls are important as they have an informative effect on
the beneficiaries. This can be considered as a quantifiable benefit of the monitoring phase
in 2021.

Stage 3: Ex-post control

The third stage includes the ex-post audits as well as the correction of any sums being paid
incorrectly. The overall control objective of this stage is to detect and correct any error or
fraud remaining undetected after the implementation of ex-ante controls.

Average amount of a grant audited:  EUR 321.944,3 (420.383,8 in 2020)

Stage 3

Percentage of projects audited that contains errors:  80% (72% in 2020)

The error rate where for 2014-2020 programming period stand at 1.83%.

The total number of final audit reports received in 2021 is 22. Out of this number, 7 audits
are from the Audit Work Programme (AWP) 2020 and 15 from the AWP 2021.
The total number of audits implemented in 2021 is 24. Out of this number, 2 audits are
from the AWP 2019, 9 audits from the AWP 2020, and 15 audits from the AWP 2021.
Control benefits (Stage 3)

There are a number of qualitative benefits resulting from the controls operated during the
different control stages:
Stage 3: Ex-post controls have a deterrent and learning effect for beneficiaries, helping to
reduce errors in future cost declarations. It enhances the beneficiaries’ discipline for
correctly reporting eligible costs by demonstrating that their probability to be audited is not
negligible. It contributes to the improvement of ex-ante controls and clarification of rules
and guidance by feeding back results and findings from ex-post audits.

Direct management – procurement

The control system for direct management procurement is grouped around three core
processes: procurement procedures, financial operations, and supervisory measures.

Stage 1: Procurement procedures

The first stage concerns the calls for and evaluation of tenders, starting from the moment
of planning and needs assessment until the selection of and award to suppliers. The overall
control objective at this stage is to ensure that DG JUST selects the offers that contribute

just_aar_2020_final Page 43 of 66
the most towards the achievement of the policy or programme objectives in terms of
effectiveness and compliance.

In order to reach a conclusion on the adequacy of management of risks relating to the

legality and regularity of its tendering procedures and efficiency and economy of its
controls, DG JUST reviewed:

 Reporting of exceptions and non-compliance events, defined as control overrides or

deviations from policies and procedures: during the reporting year, there were
3 exceptions and 6 non-compliance events registered in the related register (vs. 12
in 2020). The decrease compared to year 2020 (6 exceptions, 7 non-compliance
events) was possible thanks to the mitigating actions undertaken by the units
launching the procedures or initiating financial files. It also shows the effort done by
the ex-ante verification team to help the initiators to prevent exceptions and non-
compliance event. Among the mitigating actions: awareness raising actions between
unit JUST.04 and policy units on the respect of contractual provisions, better follow-
up of running contracts, simplification of internal procedures, improvement of
communication between financial actors.

 Two open procedure contracts with a total value of EUR 3.4 million were awarded by
the relevant Authorising Officer, and two negotiated procedure for middle value
contract with a value of EUR 1.02 million. It should be noted that for these
procedures a second layer of ex-ante verification was ensured.

 As a result of these controls, no tender projects were cancelled, no negative opinions

or rejections were issued and no redress procedures were encountered. This shows
that the controls put in place work correctly.

Value of contracts signed:  EUR 37.9 million (30.2 million in 2020)

Stage 1

Number of contracts:  255 (221 in 2020)

Control benefits (Stage 1)

The benefits of the Stage 1 are partially quantifiable (best offers are selected).
Due to effective selection criteria, enough and good quality offers are received.
Stage 2: Financial transactions/monitoring

The second stage concerns the management of the contracts and payments made. This
stage comprises ex-ante checks of contractors’ invoices and the processing of transactions.
The overall control objective is to ensure that operational results (deliverables) are of good
value and meet the objectives and that the related financial operations comply with
regulatory and contractual provisions.

There were no errors detected, nor penalties applied.

just_aar_2020_final Page 44 of 66
 Value of payments made:  EUR 30.1 million (32.9 million in 2020)
Stage 2
Number of payments:  685 (753 in 2020)

Control benefits (Stage 2)

Due to mitigating controls in place irregularities, errors and overpayments are prevented,
deterrents and systematic weaknesses are corrected.
Stage 3: Supervisory measures

Based on the methodology described in Annex 5, as the ex-post controls on operations are
carried out by the DG’s own controls and/or internal and external audit (Internal Audit
Service or the European Court of Auditors), no ex-post audits are performed for contracts
within DG JUST. Audit findings signalled by the other internal or external auditors are duly
taken into account for the assessment of assurance in relation to procurement transactions.
For a conservative and prudent approach a rate of 0,5% has been used as the best
estimate of the possible amount at risk in chapter 2.1.1.1.d.

Indirect Management- Entrusted Entities

DG JUST acts as partner DG for three agencies and one Union body which received budget
implementation tasks from the legislative authorities: the Institute for Gender Equality
(EIGE), the Fundamental Rights Agency (FRA), the European Agency for Judicial Co-
operation (EUROJUST) and The European Public Prosecutor's Office23 (EPPO) who, as from
June 2021, became operational and financially independent from the Commission.

Commitment and payment appropriations were implemented almost 100%.

DG JUST portfolio consists of segments with a relatively low error rate, such as
procurement, indirect management and grant segment with an error rate of 1.83%

The main remaining cause for error in the grant segment is the absence of supporting
documents. Even, more in 2021 because the audits have been conducted remotely. The
evidence being stored in the IT systemes of beneficiaries or sometimes with intermediaries
processing payments for the account of beneficiaries. This makes sometimes difficult for
beneficiaries to provide the supporting evidence requested by the auditors. As a mitigation
measure DG JUST on the one hand reminded beneficiaries that supporting evidence must
be kept after the completion of the project in case of ex post audit and also contacted the
auditors to make them aware that in view of the circulmstances (COVID and remote audits
and intermediaries processing paymenst for public bodies) it is not always possible to
provide the supporting evidence;

23
However, EPPO is still logistically linked to DG JUST in its handling of certain IT applications, such
as those related to staff management, until it becomes IT independent from the Commission
(planned for end 2022

just_aar_2020_final Page 45 of 66
Management actions taken in 2021 to address these weaknesses were:

- Some simplifications for the eligible rules have been introduced mainly as regards
the centralisation of the guidance - there will be only one Annotated Grant
Agreement for all programmes using the SYGMA/COMPASS tools and the
introduction of the unit costs for travel, accommodation and subsistence . DG JUST
is working on further simplifications for the future for eligibility rules where possible
as allowed by the new MFF and the new MGA.
- ensure a close follow up of the projects with the continuous reporting tool.
- use the reinforced monitoring option available in SYGMA/COMPASS to ensure a
better follow up some of the beneficiaries and that will allow better risk based ex
ante control strategy. Projects are flagged for reinforced monitoring based on a
case-by-case analysis. The projects under reinforced monitoring are reviewed on a
regular basis, during each sector meeting.
- keep organising kick off meetings during which the rules will be explained to
beneficiaries and they will be given the opportunity to raise questions. In 2021 kick
off meetings have been organised during the CERV week. The meeting were held
on-line and with more than 400 registered participants the meetings were a
success. CERV - Civil Dialogue Week 2021 - Home (cerv-civil-dialogue-week.eu) A
FAQ of more than 20 pages has been published subsequently.

With regard to the direct management grants, the cumulative detected error rate is
based on the results of audits carried out by DG JUST (Stage 3). In the case of
procurement, a reliable estimation was used (0.5% see also point 2.1.1.). Other
activities are not considered risk-prone and it is estimated that the error rate is below
the threshold as in the case of payments to Agencies.

For the 2021 reporting year, the operational units signalled no serious control issues.
From the monitoring and supervision work done, which includes regular contacts and
monitoring of relevant management reports and audit reports, there are no indications
that their reporting would not be reliable.

Regarding the EU funds managed directly by the Directorate-General via grants and
procurement, including the administrative related expenditures (direct management),
there were no major control weaknesses affecting assurance.

Regarding indirectly managed expenditure, there are no indications of any element that
would impair the assurance.

Estimated overall amount at risk for both grants and procurement highly decrease
comparing with last year (1,62 M€ vs. 2,64 M€ in 2020) this is a consequence of an
decrease of payments for the grant segment and consequently of relevant expenditure
(+6 %) and the significant decrease of detected error rate in the grant segment. The
decrease in the detected error rate is due to the change of the basis for the calculation
of the error rate where only 2014-2020 programming period was taking into

just_aar_2020_final Page 46 of 66
 consideration. The justification for the changes of the basis for the calculation of the
error rate is based on the following analysis:

• Out of the 24 audits implemented in 2021, only 1 audited project is linked to the
2007-2013 MFF

• Out of the 234 payments closed that composed the auditable population for the
AWP 2021, only 2 relate to the 2007-2013 MFF.

In 2021, there were many time-consuming procurement procedures and exceptional

amendments caused by the Covid-19 pandemic, the programme sector prolonged the
closing date of calls by two weeks, allowing the applicants to have more time to prepare
their application, lots of beneficiaries were closed due to the Covid-19 outbreak and needed
some time to adapt to the new circumstances. In spite of all the Covid-19 effects the
legality and regularity of the financial operations was not impacted.

In the absence of any significant weakness detected which could have a material impact as
regards the legality and regularity of the financial operations it is concluded that the
relevant control objective of effectiveness has been achieved.

Overall the financial indicators remained stable compared with previous year.

Through recoveries and financial corrections, DG JUST has in place an effective mechanism
for correcting errors. During the reporting year the executed corrective capacity amounted
in total to € 0,72 million representing 1,1% of the relevant expenditure. The benefit at ex
ante level control amounts to € 0,57 million, whilst recoveries and financial corrections
following the results of ex post controls amounted to € 0,15 million. (for more details see
Annex 7).

DG JUST's relevant expenditure, its estimated overall risk at payment, estimated

future corrections and risk at closure are set out in Table X: Estimated risk at
payment and at closure.

The estimated overall risk at payment for 2021 expenditure amounts to € 1.62
million, representing 0.94% of the DG’s total relevant expenditure for 2021. This
is the AOD's best, conservative estimate of the amount of relevant expenditure
during the year not in conformity with the contractual and regulatory provisions
applicable at the time the payment was made.

This expenditure will subsequently be subject to ex-post controls and a

proportion of the underlying errors will be detected and corrected in subsequent
years. The conservatively estimated future corrections for 2021 expenditure
amount to € 0.64 million.

The difference between those two amounts results in the estimated overall risk
at closure of € 0.97 million, representing 0.57% of the DG’s total relevant
just_aar_2020_final Page 47 of 66
expenditure for 2021. This is a decrease of 87% mainly due to grant segments
where the detected error rate decrease from 3.54% to 2.24%

For an overview at Commission level, the DGs' estimated overall risk at payment,
estimated future corrections and risk at closure are consolidated in the AMPR.

just_aar_2020_final Page 48 of 66
Table X : Estimated risk at payment and at closure (amounts in EUR million)
The full detailed version of the table is provided in Annex 9

'payments made' minus new plus cleared prefinancing 'relevant Detected error rate or estimated risk at payment Adjusted Average Recoveries estimated future estimated risk at Closure
(2021;MEUR) prefinancing [minus retentions released and expenditure' equivalent estimates (2021;MEUR) and Corrections corrections (2021;MEUR)
DG JUST
[plus retentions made] deductions of expenditure (for 2021;MEUR) (adjusted ARC; %) [and deductions]
(in 2021;MEUR) made by MS] (in 2021;MEUR) (for 2021;MEUR)
-1 -2 -3 -4 -5 -6 -7 -8 -9 -10
Grants 52,06 - 42,01 55,45 65,50 2,24% - 2,24% 1,47 - 1,47 0,98% - 0,98% 0,64 - 0,64 0,82 - 0,82
Procurement 30,10 - 0,59 0,33 29,83 0,50% - 0,50% 0,15 - 0,15 0,00% - 0,00% 0,00 - 0,00 0,15 - 0,15
Subdelegations & service level agrmnts. 3,55 0,00 0,00 3,55 0,00% - 0,00% 0,00 - 0,00 0,00% - 0,00% 0,00 - 0,00 0,00 - 0,00
Indirect Management- Entrusted Entities 104,13 - 104,13 72,47 72,47 0,00% - 0,00% 0,00 - 0,00 0,00% - 0,00% 0,00 - 0,00 0,00 - 0,00
0,00 0,00 0,00 0,00 0,00% - 0,00% 0,00 - 0,00 0,00% - 0,00% 0,00 - 0,00 0,00 - 0,00
0,00 0,00 0,00 0,00 0,00% - 0,00% 0,00 - 0,00 0,00% - 0,00% 0,00 - 0,00 0,00 - 0,00
Total without contribution to EA’s
189,83 - 146,73 128,25 171,35 1,62 - 1,62 0,38% 0,38% 0,64 - 0,64 0,97 - 0,97
operating budget
0,94% - 0,94% 0,57% - 0,57%
Overall risk at Overall risk at
payment in % closure in %
(7) / (5) (10) / (5)

EACEA 5,27 - 5,27 2,23 2,23 0,00% - 0,00% 0,00 - 0,00 0,00% - 0,00% 0,00 - 0,00 0,00 - 0,00
0,00 0,00 0,00 0,00 0,00% - 0,00% 0,00 - 0,00 0,00% - 0,00% 0,00 - 0,00 0,00 - 0,00
0,00 0,00 0,00 0,00 0,00% - 0,00% 0,00 - 0,00 0,00% - 0,00% 0,00 - 0,00 0,00 - 0,00
Sub-total contributions (if more than one) 5,27 - 5,27 2,23 2,23 0,00 0,00 0,00 0,00 0,00 0,00
Total DG (with contributions to EAs) 195,11 - 152,00 130,48 173,59

just_aar_2020_final Page 49 of 66
 b) Fraud prevention, detection and correction

DG JUST has developed and implemented its own anti-fraud strategy since 2012, on the
basis of the methodology provided by OLAF. It is updated every two to three years. It was
last updated on 4 January 202124.. Its implementation is being monitored and reported to
the management twice a year. All necessary actions, except for the dedicated trainings on
anti-fraud to staff (the organisation of which has been delayed because of the added
pressure and workload created by the COVID-19 crisis) have been implemented. The
implementation of the dedicated trainings at DG level is in progress25, thir completion is
expected for 2022.

DG JUST also contributed to the Commission anti-fraud strategy and followed up 100% of
OLAF’s financial recommendations.

The results achieved during the year thanks to the anti-fraud measures in place can be
summarised as follows: one case was referred to OLAF for investigation during 2021. DG
JUST continued to provide as far as possible, upon request of an investigator, all required
information and to assist the investigator in his/her analysis.

DG JUST also contributed to the CAFS’s Action Plan:

- as detailed in the action point 52, DG JUST has provided constant support to the
setting-up of the European Public Prosecutor’s Office (EPPO).
- as detailed in the action point 54, DG JUST has provided support to Member
States’ transposition and implementation of the so-called PIF Directive
concerning fight against fraud26 .

On the basis of the available information, DG JUST has reasonable assurance that the anti-
fraud measures in place are effective overall.

following the entry into force, in April 2019, of the new Commission Anti-Fraud Strategy (CAFS-
24

COM(2019) 196 final of 29.4.2019), where full consideration was given to the possible new
implications of the adoption of the Multiannual Financial Framework 2021-2027
25
during the year the staff has been constantly informed and encouraged to participate in online
trainings and events on anti-fraud matters organized at corporate level.
26
Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight
against fraud to the Union's financial interests by means of criminal law, OJ L 198, 28.7.2017, p. 29.
Transposition deadline: 4 July 2019.

just_aar_2021_final Page 50 of 66
 c) Other control objectives: safeguarding of assets and information, reliability of
reporting (if applicable)

DG JUST manages intangible assets which are IT applications and are cumulated from
2012 (EUR 9.8 million, see Annex 3, table 4).

The key control objectives for the DG are to ensure that these assets are appropriately
accounted for and safeguarded, that information managed by these assets is protected by
implementing appropriate authentication and authorisation mechanisms and that
weaknesses, errors, irregularities and losses are detected and addressed. In the revision
programme on DG JUST accounts, controls are put in place to verify if the cost-centre is
correctly encoded and verify if the applications entered the Production Phase.

Assets owned by DG JUST follow the international accounting rules and the closure
guidelines established by the Commission accounting officer. The control objectives are
fully met.

2. Efficiency of controls

Regarding the efficiency of controls, DG JUST assessed it based on "time-to" indicators,

measuring the time spent to complete a specific procedure. Concerning grants, in DG JUST
an amelioration during 2021 could be observed for the time-to-grant (71 days vs 96 days
in 2020) and a slight one for the time-to-award (117 days vs 118 days in 2020). Regarding
the time-to-pay, the increase in the average TTP in 2021 is the consequence of the
decrease of the number of pre-financing payments. This decrease is a result of the high
number of grants signed in 2020 and of the late adoption of the MMF, preventing us from
signing more grant agreements in 2021. As pre-financing payments are generated
automatically by the system, the average TTP for pre-financing is usually much lower in
comparison to the average TTP for final payments, hence the increase in the average TTP in
2021. The actual TTP performance did not change, the shift from 30 to 42 is only the result
of the relative weight in 2020 of the pre-financings in the calculation of the indicator.

Time-to-inform:  117 days (118 in 2020, limit Art. 194.2 FR is 180)

management
grants
Direct

Time-to-grant:  71 days (96 in 2020, limit Art. 194.2 FR is 90)

Substantial improvement for the late interests paid in 2020 which amount to EUR 303
compared to EUR 1.688,77 in 2020.

just_aar_2021_final Page 51 of 66
 Procurement time-to-pay:  17 days (19 in 2020)

Indirect Management- Entrusted Entities time-to-pay:  11 days (10

All

in 2020)

Grants time-to-pay:  42 days (30 in 2020, Art. Art 116.1FR)

At the level of the payment transactions performed in DG JUST, the efficiency indicators
show that DG's overall average payment time for the year amounted to 23 days (with
suspension) and 99% of all payments in terms of numbers were made on time (vs 90% in
2020). In relation to payment delays in procurement transactions, the average number of
days dedicated to a payment decreased by two days, while the time for payment of
subsidies to Union Agencies increased by one days compared to 2020.

Timely Payments JUST Score EC Score

99% 98%

The good performance for the rate of late payments is kept from the beginning of the
year. In average only 1% of payments were made late (vs. 2% at Commission level).

The overall improvement in control efficiency indicators was mainly due to actions that
were taken to closely monitor the payments and to increase awareness among staff
directly involved in the process. Moreover, the phasing in of the new and complex grant
management H2020 IT system was finalised and the immediate effect was seen in the
decrease in the numbers of days of time-to-grant indicator. Overall the control proved to be
efficiend due to measures put in place.

3. Economy of controls

Following the Commission central services' guidance, the cost of the controls at
Commission level is assessed by the cost of the different control stages. The overall
assessment for each management mode is obtained from the ratio between all those costs
and the total amount paid in the year for the related management mode.

just_aar_2021_final Page 52 of 66
The Full Time Equivalents (FTEs) used for the calculation have been delivered by the
different Directorates of DG JUST and the average FTEs costs used are the average FTEs
costs communicated by DG BUDG which include ‘habillage’ costs.
Costs of controls at DG JUST level

DG JUST has analysed the estimation of the cost of control in relation with the value of the
payments made in 2021 per control system (Annex 6) and over the last two reporting
years, to draw conclusions also on the trend.

As a general overview, the total cost of controls performed in 2021 in DG JUST was
estimated at EUR 9.49 million, representing 4.87% of total payments made in the year and
is in line with the 2020 indicators. It should be noted that even if in terms of cost amount
we are more efficient and this is mainly due a better estimation of the policy staff involved
in monitoring, preparation of files, drafting of terms of reference, participation in evaluation
committees (each Directorate/Unit was asked to provide an accurate number of FTE). In
total, the efficiency indicators decreased compared to 2020 for both grant and
procurement and this is explained by decrease in total payments. This is the result of the
reduced number of payments and the underspending of the projects. These two reasons
can be explained by the continuation of the Covid-19 crisis in 2020. Many projects were
extended, impacting the number of final payments which were thus not processed in 2021.
Moreover, as a result of travel restrictions, travel and subsistence costs, representing a
significant part of the costs in our projects, lowered, which led to underspending. It should
be also noted that in 2021 with the new MFF a part of the CERV calls are
implemented/evaluated and paid by EACEA

For the entrusted entities, the overall cost of control remained nearly stable, a small
increase can be seen in the subsidies paid and this mainly referred to EUROJUST and EPPO.
The subsidies paid by DG JUST to the agencies are for their running costs.

The below table provides exhaustive information on the data analysed by DG JUST to draw
this conclusion.

2021 2020

Payment (M Costs/payment Payment (M Costs/payment

Control System Costs (M EUR) Costs (M EUR)
EUR) (%) EUR) (%)
Direct
Management - 5.07 52.06 9.73% 5.69 94.64 6.02%
Grants
Direct
Management - 3.97 30,2 12.86% 3.55 33.97 10.45%
Procurement
Indirect
Management- 0.55 104,13 0.53% 0.5 72.99 0.74%
Entrusted Entities

Other n/a 8.82 n/a n/a 4.72 n/a

Total 9.49 195.11 4.87% 9.79 206.32 4.75%

just_aar_2021_final Page 53 of 66
 4. Conclusion on the cost-effectiveness of controls

Based on the most relevant key indicators and control results, DG JUST has
assessed the effectiveness, efficiency and economy of its control system and
reached a positive conclusion on the cost-effectiveness of the controls for which
it is responsible.

Regarding the cost-effectiveness of controls, the conclusion was reached on the basis
of an estimation of costs of control over the value of the related funds (value of
payments), in the form of indicators and their evolution over time for each of the distinct
control systems and stages described in Annex 6. Details are presented in Annex 7.

Despite the challenging 2021 year, DG JUST managed to keep almost the same level for
the cost of control indicator and in the same time to register an improvement of almost all
"time-to" indicators. These performances were possible thanks to the motivated and
dedicated team and to further simplifications introduced and the generalisation of IT use.

Furthermore, there is a number of non-quantifiable benefits resulting from the controls

operated during the programming phase in the grant management process, aimed at
ensuring that the financed projects contributed to the achievement of the policy objectives,
and from the deterrent effect of ex post controls. At the same time, procurement
procedures are to a large extent based on regulatory requirements which cannot be
curtailed. DG JUST considers that the necessity of these tasks is undeniable, as shown by
the risks outlined in Annex 6, significant proportions of the appropriations would be at risk
in case they were not in place.

The DG's relative27 level of cost-effectiveness is considered adequate. In 2021 DG JUST

continuous to apply the risk based approach for verification of the final cost claims in view
of different risk profiles of the beneficiaries and completeness and accuracy of the
provided documentation with the aim to re-direct the control resources towards more
stringent controls where needed, while having leaner and less burdensome controls where
appropriate.

There is no Covid impact on the DG JUST cost-effectiveness of controls. On the contrary,

during 2021 there is an improvement on all the other performance indicators. Based on the
most relevant key indicators and control results, DG JUST has assessed the effectiveness,
efficiency and economy of its control system and reached a positive conclusion on the cost-
effectiveness of the controls for which it is responsible.
Overall, DG JUST has good performance indicators and a decrease in the error rates among
all its programmes. The overall cost of control can be considered acceptable given the fact
that no economy of scale can be obtained for the management of direct grants and
procurement.

27
E.g. taking into account the relative labour-intensity of the operations, which may imply (dis)economies of scale due to the
number and value of the transactions

just_aar_2021_final Page 54 of 66
DG JUST is of the opinion that the current control system applied is the best suited to
fulfilling the relevant control objectives efficiently and at a reasonable cost. It represents a
good balance between the invested efforts (internal control costs and remuneration fees),
the obtained error rates (effectiveness of controls) and delivery of objectives (efficiency)

2.1.2. Audit observations and recommendations

This section sets out the observations, opinions and conclusions reported by
auditors – including the limited conclusion of the Internal Auditor on the state of
internal control. Summaries of the management measures taken in response to
the audit recommendations are also included, together with an assessment of the
likely material impact of the findings on the achievement of the internal control
objectives, and therefore on management's assurance.

DG JUST is audited every year by both internal and external independent auditors: the
Commission Internal Audit Service (IAS) and the European Court of Auditors (ECA).

 Summary of the IAS audit works issued during the year

During the reference period based on the follow-up audits by the IAS on the
implementation of action plans the following audits were closed :
- Audit on human resources management and staff allocation in the Directorate-General
for Justice and Consumers (DG JUST)
- Audit on the production process and the quality of statistics not produced by Eurostat”
- Audit on Impact Assessment
In conclusion, the Internal Auditor stated in its contribution to this report (cut-off date
31 January 2022) based on all the work undertaken by the IAS in the period 2019-2021
the internal control systems in place for the audited processes are effective.

 Summary of the ECA audit findings

The European Court of Auditors examined the financial management/legality and regularity
of transactions of DG JUST in Chapter 7 “Security and citizenship” of its Annual Report for
2020 (published in October 2021). The Chapter does not have any reference to DG JUST.

In 2021 ECA started its work on “Free movement in the EU during the COVID-19 pandemic”.
This audit being split in two phases:

Free movement – Phase I: audit to determine whether the Commission took effective
action to protect the right to free movement, including the functioning of the Schengen
accord, in the context of the COVID-19 crisis between February 2020 and September 2021.

just_aar_2021_final Page 55 of 66
Free movement – Phase II: audit to complement the ‘Free movement – Phase I’ audit
assessing the right to free movement in the context of the COVID-19 crisis.

Finalised ECA audits in 2021 for which DG JUST was an associated DG.

- Special Report "Gender mainstreaming in the EU budget: time to turn words into
action”. The report was published in May 2021
- Special Report “Disinformation affecting the EU: tackled but not tamed”. The report
was published in June 2021
- Special Report “Air passenger rights during the COVID-19 pandemic”. The report was
published on 29 June 2021
- Special Report “EU support for reforms in Ukraine: insufficient focus and results in
the fight against grand corruption”. The report was published in September 2021
- Special Report “Sustainable finance: More consistent EU action needed to redirect
finance towards sustainable investment”. The report was published in September
2021
- Special Report “ Europol support to fight migrant smuggling”. The report was
published in September 2021
In conclusion, the findings presented by IAS and ECA do not have any impact on
the assurance provided in this Annual Activity Report.

2.1.3. Assessment of the effectiveness of internal control systems

The Commission has adopted an Internal Control Framework based on
international good practice, to ensure the achievement of its policy and
management objectives. Compliance with the internal control framework is a
compulsory requirement.

DG JUST uses the organisational structure and the internal control systems
suited to achieving its policy and internal control objectives in accordance with
the internal control principles and has due regard to the risks associated with the
environment in which it operates.

The internal control self-assessment exercise was performed between November 2021 and
February 2022 in compliance with the methodology proposed by DG BUDG. It was based on
desk reviews of information from various sources, ad-hoc discussions with specialized
functions (HR, financial management) and the evaluation of monitoring indicators, taking
also into account:

- the authorizing officers by sub-delegation reports

- the results of audits and follow-up engagements performed by IAS and ECA during 2021

- the status of implementation of action plans from previous IAS/ECA audit work

- the results of the risk assessment exercise

just_aar_2021_final Page 56 of 66
- the analysis of the register of exceptions and non-compliances.

The assessment was carried out based on the COSO28 methodology, all five components
and 17 principles being evaluated. The results show that all 17 principles are present and
15 of them are fully functional.

As a result, three of the five components of the internal control system are present and
functioning (component 1 Control Environment, component 2 Risk Assessment, and
component 5 Monitoring Activities), while two of them are present and functioning, but
some minor improvements are needed (component 3 Control Activities and component 4
Information and Communication) such us putting in place a control strategy at the DG level
and organizing fraud training at DG level It is foreseen for 2022 to implement a Control
strategy at DG level and dedicated trainings on anti-fraud to DG staf.are to be resumed in
2022. For the information component the understaffing issue will be solved at the
beginning of 2022.

One weakness was revealed by the analysis of the financial indicators (please see section
2. Efficiency of controls, in relation with the time-to pay for grants indicator), but as
explained in the dedicated section, the situation doesn’t represent a deterioration compared
with 2020 the shift from 30 to 42 is only the result of the relative high weight in 2020 of
the pre-financings in the calculation of the indicator.

The exercise did not result in the identification of any further weaknesses, errors or actions
that could jeopardize the overall effectiveness of DG JUST’s internal control system.

During the annual risk management exercise performed in the context of the management
plan, and the subsequent mid-term review, no critical risks was identified. A targeted risk
assessment exercise related to the COVID-19 crisis was carried out during 2021 at
corporate level, focused on the impact of the crisis and the Commission responses to it on
the control, audit and assurance aspects in relation to the EU budget. No critical risks were
identified by the DG in the course of this exercise and for all three identified risks, proper
action plans have been put in place to mitigate them.

For the analysis of the register of exceptions and non-compliance events, please see
section 2.1.1.

DG JUST has assessed its internal control system during the reporting year and
has concluded that it is effective and the components and principles are present

28
COSO: Committee of Sponsoring Organizations of the Treadway Commission. As explained in the
Internal Control Framework of the Commission, Implementation Guide of 2017, the
Commission follows the international best practice, for which the leader is COSO. As a matter
of fact, the Internal Control Framework published by COSO is recognized as the leading
guidance for designing, implementing and conducting internal control and assessing its
effectiveness.

just_aar_2021_final Page 57 of 66
and functioning well overall, but some improvements are needed as minor
deficiencies were identified related to the principles 10 and 13:

2.1.4. Conclusions on the assurance

The information reported in Section 2.1 stems from the results of management and audit
monitoring, based on the results of the self-assessment, ex-post controls, the observations
of the Internal Audit Service, lessons learnt from the reports of the Court of Auditors as
well as information received from other authorising officers in cases of cross sub-
delegations or delegation agreements.

These reports result from a systematic analysis of the evidence available. This approach
provides sufficient guarantees as to the completeness and reliability of the information
reported and results in a comprehensive coverage of the budget allocated to the Director-
General of DG JUST.

The key arguments for the assurance are listed below:

• Overall our internal control system is present and functioning, well overall, but some
improvements are needed as minor deficiencies were identified related to the principles10
and 13. Nevertheless, positive results were registered in terms of legality and regularity,
cost-effectiveness .

• No critical issues highlighted by internal or external auditors;

• For DG JUST, the estimated overall amount at risk for the 2021 payments made is
estimated as at EUR 1.62 million. This is the AOD’s best conservative estimation of the
amount of expenditure authorised during the year (EUR 195,11 million), not in conformity
with the applicable contractual and regulatory provisions at the time the payment is made.
This expenditure will be subsequently subject to ex-post controls and a sizeable proportion
of the underlying error will be detected and corrected in successive years. The
conservatively estimated future corrections for those 2021 payments made are EUR 0.64
million. This is the amount of errors that the DG conservatively estimates to identify and
correct from controls that it will implement in successive years.

• No other major issues pointed out by the Authorising Officers by Sub –delegations in
their reports.

Methodology for determining materiality level for reservations

The materiality is determined for each relevant distinct internal control system across
various ABB lines (“horizontal” approach). The main distinct internal control systems are (a)
direct management – grants, (b) direct management – procurement and (c) indirect
management (EU subsidies to decentralised agencies). These layers are determined by the
differences in the ex-ante and ex-post control approach put in place in DG JUST to control

just_aar_2021_final Page 58 of 66
and obtain assurance for each type of expenditure – each control approach and results are
described in more detail throughout Chapter 2 and in Annex 6 (Internal Control Templates).

The residual risk was analysed for each distinct control system, as detailed in section 2.1,
and the results of each were analysed separately to determine its impact on assurance and
a need to issue a reservation.

The estimated multiannual residual error rate for the grants directly managed by DG JUST
for 2021 is 1.83% and slightly decrease compared to last year (2.69). Following ECA
observation on the error rates for the Research family, the error rates was recalculated. As
per instructions, the detected error rate is to be calculated based on the following
methodology: final errors detected/audited amount of the grant (as amount declared by the
beneficiary * percentage of audit coverage as indicated in the final audit reports).

Financial Impact
Reservation (in m EUR) Residual error rate
Evolution
Title 2021
2020 2021
Financial risk corresponding 1,87 1,2 1.83% Lifted
to the residual error rate in
the non-audited population
of grants in the programmes
managed by DG JUST

In conclusion, based on the elements reported above, management has

reasonable assurance that, overall, suitable controls are in place and working as
intended; risks are being appropriately monitored and mitigated; and necessary
improvements and reinforcements are being implemented. The Director General,
in his capacity as Authorising Officer by Delegation has signed the Declaration of
Assurance .

just_aar_2021_final Page 59 of 66
2.1.5. Declaration of Assurance [and reservations]

Declaration of Assurance

I, the undersigned,

Director-General of the Directorate General of Justice and Consumers

In my capacity as authorising officer by delegation

Declare that the information contained in this report gives a true and fair
view (29).

State that I have reasonable assurance that the resources assigned to the
activities described in this report have been used for their intended purpose and
in accordance with the principles of sound financial management, and that the
control procedures put in place give the necessary guarantees concerning the
legality and regularity of the underlying transactions.

This reasonable assurance is based on my own judgement and on the information

at my disposal, such as the results of the self-assessment, ex-post controls, the
work of the Internal Audit Service and the lessons learnt from the reports of the
Court of Auditors for years prior to the year of this declaration.

Confirm that I am not aware of anything not reported here which could harm the
interests of the of the Commission.

Place Place Brussels, date 31/03/2022,

(signature)

Ana Gallego

(29) True and fair in this context means a reliable, complete and correct view on the state of affairs
in the DG/Executive Agency.

just_aar_2021_final Page 60 of 66
2.2. Modern and efficient administration – other aspects

2.2.1. Human resource management

In 2021, DG JUST implemented the 2020 – 2021 HR plan, the first annual plan adopted
under the 2020 -2024 JUST HR Strategy in December 2020. The annual HR plans translate
into concrete actions the overarching principles of the HR Strategy.

In 2021, the DG successfully implemented the first HR Plan adopted under the strategy
with few exceptions due to circumstances related to Covid-19 that affected some of the
planned activities (e.g. a job-shadowing scheme, as well as a few team-building events
planned for the last quarter of the year). The JUST AST network was formally launched end
of November.

The HR BC team also stepped up the well-being activities with a new Wellbeing Online
Session Sharing Our Passions (WOSSOP) programme set up during the year with the help of
JUST colleagues who offer free online sessions on mind-fullness and other related themes.
The team plans to continue with these activities in 2022 although the demand was
irregular. Furthermore, taking account of the increasing share of teleworking, a Digital
etiquette was adopted.

An important strand of work in 2021 was the development of a set of indicators to

measure the assessment of unit’s workload (this stems from an IAS audit
recommendation). A working group formed by representatives from all Directorates and
horizontal units elaborate a set of 17 indicators that was endorsed by senior management
in October 2021. The indicators will be tested in 2022 in a two-year pilot.

Throughout the year, the HR BC team has ensured smooth HR processes in the DG whilst
endeavoring to offer assistance and guidance to staff and managers in a changing work
environment. The outreach activities to staff and managers also continued in the form of
weekly DG messages to staff and regular information via the DG’s intranet pages. The
team has also actively contributed to the different consultations on the forthcoming new
corporate HR strategy and related new HR decisions (e.g. informal consultation on the new
flexible working arrangements) launched by DG HR.

The EU Commission’s 2021 Staff Survey was heavily promoted within DG with the aim of
achieving the best possible participation rate of all Directorates-General. This meant that
the survey’s results would be as representative as possible. This push contributed to the
fact the majority of Commission staff contributed to the survey.

In line with previous years, DG JUST is committed to gender equality and has effectively
contributed to the objectives set at corporate level. It had already reached the target for
first time female appointments to middle management positions until 2022, the objective
of gender balance for the newly created role of Deputy to Director positions (60% of

just_aar_2021_final Page 61 of 66
women on this assignment) and maintains a high prevalence of women among its Deputy
Head of Units.

2.2.2. Digital transformation and information management

In 2021, DG JUST maintained and further developed its IT systems in the areas of civil,
commercial and criminal justice, fundamental rights, rule of law, equality, union citizenship
and consumer policy.

In the area of promoting effective access to justice, the e-Justice Portal‘s new user
interface, published previously as Beta version, has fully replaced the old user interface,
providing improved user friendliness, usability and accessibility.

In the area of cooperation in criminal matters, the first version of the e-Evidence system
has been rolled out to additional Member States. In total 25 Member States, plus Eurojust
are now included, and cross-border tests have been carried out between 7 Member States
for the digital exchange of information in the context of the European Investigation Order
(EIO) and Mutual Legal Assistance agreements (MLAs). The system will facilitate the digital
exchange by providing a fast, secure and efficient data exchange platform.

In the area of civil justice, following the adoption of the Regulations for Taking of Evidence
and Service of Documents, there has been important progress in shaping the Implementing
Acts together with Member States, along with definition of requirements for the new IT
system aiming at supporting these Regulations.

In the area of consumers policy, the new version of the public rapid alert system Safety
Gate, with an improved usability and better overall user experience, has been launched
on the 2 March 2021. A new system, called eSurveillance, meant for monitoring whether
dangerous products notified by the SafetyGate system are indeed not sold anymore on
online markets, has entered its execution phase. A new project has been initiated to create
a system for supporting the Directive (EU) 2020/1828 on Representative Actions. This
system will reuse the codebase of the European Migration Network IT system of DG HOME.
Another new project, stemming from DG JUST digital modernisation plan – Consumer Law
Enforcement eLab - has been started. It aims at offering EU and EEA consumer authorities
access to state of the art online investigation tools, that would generate evidence useable
in formal proceedings.

The migration to Drupal 8 technology, started in 2019, has reached the 60% completion
target in 2021 for the systems in scope. DG JUST attains its objectives in the framework of
Coldfusion transformation and the planned milestone on Drupal 8 migration.

Old versions of such systems/websites, along with systems that reached their end of life,
like Consumer Protection Cooperation System and European Consumers Centres Network,
have been totally decommissioned in 2021, while Roma Children Research website is being

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archived. This way, DG JUST addresses its technical debt on legacy systems and
contributes to corporate IT and Web rationalisation initiatives.

The systems mentioned above, and the newly initiated ones contribute to the gradual
achievement of EC Digital Strategy principles, in particular on Digital by default, Once
Only, User-centric, Cross-border, Data-driven and Interoperability. They aim at
reducing the burden on citizens, increasing efficiency of national and European institutions
and bodies, and at their closer cooperation and collaboration in the above mentioned policy
domains.

Following the new methodology on Information Systems Security, security plans of all IT
systems have been further updated and submitted for approval to system owners.

On cybersecurity, staff continued to be encouraged to attend corporate cybersecurity

awareness initiatives, while IT security knowledge and expertise was maintained and
further improved by embedding cybersecurity elements into the IT specific working
methods. New releases of IT systems have benefitted from improved EC central security
services and compliance benchmarks.

As regards data protection compliance, DG JUST’s personal data processing operations

are fully covered in the Data Protection Management System (DPMS). In 2021, the existing
data protection records were reviewed and updated, in the context of a review exercise
initiated by the Data Protection Officer. In terms of awareness raising, DG JUST organised
information sessions for units on data protection, targeted at the practical needs for
colleagues in their everyday work. Staff is also being encouraged to participate in the data
protection trainings organised by the office of the Data Protection Officer. Approximately
60 DG JUST staff took part in such activities during the year.

In 2021 DG JUST has continued the implementation of knowledge management

activities with a view to promote and facilitate collaboration in the hybrid working
environment. Among others, a virtual showroom of collaborative projects was launched as
a living product. Throughout the year, an internal network on collaboration was active and
supported this work; a network of local M365 ‘champions’ was established in October and
has been meeting regularly.

In September 2021, senior management took stock of the achievements and lessons
learned from the implementation of the knowledge management strategy, and discussed a
number of options for the future, eventually deciding to continue the same level of support
in the coming period to assist the transition to the ‘new normal’ (hybrid working post-
Covid).

With regard to data governance, DG JUST determined in 2021 the list of key data assets
through a participatory process led by its Data Governance Board and carried out the first
assessment of compliance with corporate data governance requirements. The result of this
assessment is reflected in Annex 10. Throughout the year, DG JUST participated actively in
the Information Management Steering Board (also representing DG HOME). The DG took

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part, with two of its data assets, in the pilot roll-out of the Reference Quality Framework
for statistics produced by Commission services.

2.2.3. Sound environmental management

DG JUST contributes to the objective of EMAS - The Eco-Management and Audit Scheme, by
which the Commission aims to "lead by example" through the reduction of the direct
environmental impact of its own activities.

As in 2020, DG JUST’s actions to reduce its environmental footprint continued to be very

much influenced by the Covid-19 crisis throughout 2021:

- Teleworking being the default mode for most colleagues, DG JUST made extensive
use of distance communication and teleworking tools. Hybrid meeting rooms
were installed to allow remote participation at onsite meetings. As a result, the need
for transport to and from the workplace and meeting points was considerably
reduced, leading to corresponding reduction in emissions.

- By better acquainting staff with teleworking tools, it is likely that the reduction in
carbon footprint will remain at least to some extent even after the pandemic is
over.

- Similarly, reduced presence in the office meant reduced waste in the DG JUST
buildings

The picture below shows the downward trend in energy consumption, water
consumption and waste production from 2019 to 2020 (figures for 2021 are not yet
available) for one of the DG’s buildings, LX40. However, it is noted that, with the
imtroduction of teleworking, energy and water consumption has shifted from the office
buildings to private households, so that the only absolute reduction in the carbon footprint
would come from 1) decreased use of transport, 2) a reduced number of missions abroad,
and 3) reduced use of printing in the office.

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2.2.4. Example of initiative to improve economy and efficiency of
financial and non-financial activities of the DG

Several initiatives aimed at improving efficiency:

 review of working arrangements and methods as well as guidance to improve and make
more efficient several recurrent routine task, such as handling of briefings, parliamentary
questions, President’s mail and infringements, in active cooperation with the Secretariat
General and Legal Service;
 all grants, including the operating grants, are now managed via the Horizon 2020 tools
(from the application phase and the grant preparation phase to the grant management);
 the Qualified Electronic Signature (QES) technology in Ares will allow services to sign
documents electronically that normally require hand-written signature (this is a corporate
tool that will be used by the procurement sector);
 in the project financial management, the top up of the pre-financing through amendment
and the 2nd pre-financing will be done directly in Compass and no longer manually in
ABAC. So far the second part of the pre-financing was paid directly in ABAC and needed
complicated manual interventions, which required support of the helpdesk. Now the
payment of the second pre-financing is managed in the system via an amendment for
topping up the initial pre-financing with no complicated work and no intervention of the
helpdesk. Furthermore, the additional final payment workflow and the Recovery Order

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payment module are now available in Compass. All these measures are expected to
improve the efficiency of financial activities;
- Audex, audit management system, is planned to be integrated with other Horizon 2020 IT
tools (Sygma and Compass). This will improve efficiency as it will constitute a central
storage database. Also, the communication with the external audit firm will be facilitated.
Reporting and monitoring of the audit process will be possible. The Recovery Order
workflow will also be integrated.

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