Background

1.  The European Defence Fund (‘the Fund’)[1] is an EU funding programme that provides support for collaborative defence research and capability development projects that complement national contributions. The financial support is offered primarily through grants of up to 100% of eligible costs to companies for projects aimed at developing technologies and equipment, contingent on activities involved. Since the beginning of the Russian war of aggression on Ukraine, and the shift in approach to defence and security funding by the EU, the Fund has come under even greater public scrutiny.

2. The European Commission manages the Fund, which aims to complement EU Member States’ efforts in the area of research and development regarding security and defence. In this context, the EU committed to spending approximately EUR 8 billion between 2021 and 2027. The Commission is responsible for deciding how to allocate this funding. In doing so, it is assisted by external experts, who contribute to the evaluation, ‘ethics review’[2] and budget estimate assessment of proposals. To date, the Commission has taken decisions on three ‘annual spending rounds’.[3]

3. According to the European Defence Fund Regulation (‘the Regulation’)[4], the Commission must establish a list of external experts, who are selected based on their skills, experience and knowledge, taking account of the tasks to be assigned to them. It must also ensure a sufficient rotation of the experts and an appropriate public-private sector balance.

4. Normally, when the Commission selects and remunerates external experts to assist in the evaluation of proposals, lists of selected experts are published on the ‘Funding & Tenders portal’ of the Commission,^[5] thus allowing for some public scrutiny. The European Defence Fund Regulation explicitly derogates from this general rule.^[6]

5. In December 2022, in the context of a previous strategic initiative, the Ombudsman wrote to the Commission asking what measures are in place to ensure that the involvement of external experts in the ethics review and the evaluation of proposals for the Fund does not give rise to risks of conflicts of interest.[7] The Commission replied,[8] saying that its approach to managing potential conflicts of interest requires experts to (i) acknowledge the code of conduct in the contract that they sign, before starting to work, and (ii) confirm, by signing a declaration for each individual proposal that they evaluate, that they have no conflicts of interest.[9] The Commission also informs experts about potential conflicts of interest and several checks are carried out at subsequent stages of the evaluation process.

6. The European Defence Fund Regulation requires the Commission to prepare an interim evaluation for the European Parliament and the Council on its experience with the external experts and the related aspects of conflicts of interest, covering the period until 31 July 2024.[10]

The inquiry

7. The Ombudsman opened an inquiry to examine how the Commission ensures that there are no conflicts of interest with external experts who assist it in project proposal evaluations, ethics review and cost estimations under the European Defence Fund.

8. In the course of the inquiry, the Ombudsman received the reply[11] of the Commission on the Ombudsman’s questions[12]. The Ombudsman inquiry team also inspected the Commission's file on this case, which was shared with the Ombudsman on a confidential basis.[13]

Arguments presented by the Commission

9. Candidate experts with relevant expertise are asked to complete a survey about their thematic and general experience, in which they also must declare that they do not expect to be in a situation of conflict of interest in relation to any proposal. Of the approximately 300 expressions of interest received, 52 candidate experts indicated in the survey that they had a (potential) conflict of interest. The survey includes a link to the EU Experts Code of Conduct^[14].

10. Candidate experts also submit information to a Commission database that includes their personal data, education, areas of expertise and professional experience with current and former employers, key words and publications.

11. The relevant Commission staff members assess any (potential) conflict of interest raised in the survey on a case-by-case basis. These assessments are then confirmed by the ‘call coordination team’^[15], which reviews the potential conflicts of interest by cross-checking the CV and the list of entities forming the project consortiums. Candidate experts can be asked to submit additional details on their CVs, if necessary. Publicly available material (for example on LinkedIn) may be used to verify relations between experts and entities, or between entities in such cases. Personal contacts of Commission staff members in entities and ministries of defence may also be consulted to clarify potential conflicts of interest, while some references about the quality of the expert are requested. The preselection of experts is documented in internal notes, which are confirmed by the manager responsible. These notes detail the rules and principles that the Commission staff members followed for the selection of the experts, individually and as a whole (for example in terms of ensuring sufficiently diverse evaluation panels as regards nationality).

12. Selected experts sign a contract with the Commission, which includes the applicable EU Experts Code of Conduct (see footnote 14). Experts then receive a targeted briefing on the rules that apply to conflicts of interest and the procedure to follow if they consider they have a potential conflict of interest after receiving the proposal(s) and carrying out an initial review of the content, notably the subject of the proposal and the composition of the consortium(s). Experts are required to verify that they are not in conflict of interest situations that would prevent them from participating in the evaluation of the call topic or proposal. Experts have to sign a declaration on conflicts of interest and non-disclosure[16] for all the proposals they evaluate under the same panel. These declarations are filed.

13. The software used for managing the evaluation of proposals further requires the experts to reaffirm the absence of conflicts of interest before they can begin to complete their online assessment.

14. Commission staff members involved use a reference document[17] that details the above checks, as well as all the steps in how the Commission selects and uses experts that assist it under the Fund (see the annex).

15. If an expert declares a potential conflict of interest after receiving the proposals, the relevant project officer, in consultation with the ‘call coordination team’, assesses the matter based on all elements provided by the experts and drafts a note detailing the conclusions of the assessment.^[18] Commission guidance to raise awareness and to promote a uniform interpretation and application of the rules on avoidance of conflicts of interest forms the basis of the assessment of experts’ self-declared conflicts of interest.[19]

16. In relation to the 2021 calls for proposals, two evaluation experts included in the pool were considered to be in conflict of interest situations, after having declared a potential conflict at the opening of the proposals. They were not retained for that topic. A further two experts were considered to have a conflict of interest for the ethics review and were subsequently reallocated. In relation to the 2022 calls, four evaluation experts included in the pool were considered to have a conflict of interest, after having declared a potential conflict at the opening of the proposals. They were not retained for that topic.

17. The contracts signed with experts allow the Commission to perform checks and audits, for example in case of doubt regarding their impartiality during the evaluation. At the time of replying, the Commission had not conducted such audits.

The Ombudsman's assessment

18. The Commission’s preliminary assessments of conflicts of interest that are conducted before experts receive the proposals are based on the information that experts supply in a survey, a Commission database and by cross-checking the experts’ CVs. The Ombudsman’s inquiry clarified that the Commission asks for additional information in relation to the candidate experts’ situation where a need arises. The Commission also indicated that its information requests may be based on publicly available information, for example via professional networks such as ‘LinkedIn’, or through personal contacts in third parties and ministries of defence.

19. It is clear that the Commission should not limit itself to the information that is supplied by the candidate experts themselves, but it should request additional details if necessary and should consult publicly available information, or contacts in entities or in Member States’ administrations, in case of doubt.

20. The Ombudsman inspected three examples of cases where the Commission had requested additional information. These requests were based on indications that the candidate experts’ employers were involved in the proposals. This information was, in all likelihood, available to the Commission based on the information that the candidate experts provided, including in their CVs. It is not clear if the Commission’s attempts to identify and mitigate risks in less obvious cases are effective, especially when the information submitted by candidate experts is incomplete or insufficient.

21. While the Commission stated that, in identifying and assessing potential conflicts of interest, it does go beyond the information provided by candidates, it is not clear how systematic and thoroughly it does so. The Ombudsman encourages the Commission to be diligent in proactively looking for additional information that may indicate risks of conflict of interest, rather than relying on the information submitted by experts alone.

22. A conflict of interest exists where the impartial and objective exercise of the functions of a financial actor or other person, such as the experts concerned in this inquiry, is compromised for reasons involving family, emotional life, political or national affinity, economic interest or any other direct or indirect personal interest.[20]

23. The Commission’s approach to identifying and avoiding conflicts of interest relies largely on information that is submitted by the experts themselves, most importantly in relation to economic and career interests. While important, these are not the only categories of interests that fall under the definition of what could constitute a conflict of interest.

24. The Ombudsman is concerned that some situations of conflict of interest may currently go undetected, unless they are self-declared by the expert. For example, it is conceivable that an employer listed on the CV of an expert is a linked third party to one or more of the applicants and is not declared, or that a third party close to the expert, such as a close family member or friend, has an interest in a proposal. However, if the expert has not declared this potential conflict of interest, there is no mechanism by which it could be identified and mitigating measures be put in place.

25. In order to ensure the highest level of integrity of experts, as well as public confidence in the Commission's activities in relation to the Fund, individuals applying to be appointed as external expert under the Fund should disclose any circumstances that could give rise to a conflict of interest. However, the Commission’s approach does not currently require experts to complete and sign a detailed declaration of interests, including family and financial interests. The Ombudsman notes that the Commission makes use of such declarations when involving external experts in other areas of its work. For example, this is the case for experts that are appointed in their personal capacity in Commission expert groups[21], for external members of the Commission Regulatory Scrutiny Board[22] and for external experts who advice the Commission’s Scientific Advice Mechanism.[23]

26. Including a detailed declaration of interest, along with the information that is requested on the Funding & Tenders portal and their CV, could improve the Commission’s capacity to identify and avoid conflicts of interest with experts. Where risks are identified, the Commission could then put in place appropriate mitigation measures. The Ombudsman will make a corresponding suggestion for improvement below.

27. After experts are shortlisted, they are briefed on the rules that apply to conflicts of interest and the procedure to follow if they consider they have a potential conflict of interest upon receipt of the proposals. The briefing includes a summary of the categories of conflicts of interest stemming from the EU Experts Code of Conduct, illustrations of cases of conflict of interest that the Commission would investigate, and information on when to inform the Commission of a potential conflict, the consequences and how it is treated by the Commission. The Commission thus prompts experts to declare any information that could indicate risks of conflicts of interest in relation to the proposals that they assess.  

28. As regards the Commission’s assessment of potential conflicts of interest that experts declare, the Ombudsman inspected nine internal notes recording such assessments within the scope of this inquiry. The Ombudsman notes that these internal notes do not consistently address all the elements related to conflict of interest that are included in the applicable EU Experts Code of Conduct. Only in two of the nine internal notes did the Commission systematically assess whether there were direct, indirect or potential conflicts of interest, and whether exceptional circumstances existed. The other seven cases failed to provide a record of such a detailed assessment. It is thus not clear whether a detailed assessment was performed but not recorded, or whether it was not consistently performed in all cases. Notwithstanding this, in all nine of the examples reviewed by the Ombudsman inquiry team, the Commission did decide to recuse the experts concerned, at least from the proposal(s) that gave rise to risk of (potential) conflicts of interest and, in one case, from the entire call. These mitigating measures are reasonable. However, going forward, the Ombudsman is of the view that a structured, complete record of the assessment in all situations is preferable. To address this, the Ombudsman will make a suggestion for improvement.

29. The Ombudsman appreciates that the relationship between the Commission and experts is based on trust, and that the Commission can instigate audits, also after the experts have done their work, and especially in case of doubt as to the impartiality of the evaluations. The Ombudsman sees such possible audits as a useful deterrent.

Conclusion

Based on the inquiry, the Ombudsman closes this case with the following conclusion:

There are no further inquiries justified.

The Commission will be informed of this decision.

Suggestions for improvement

1. The Commission should require the candidate experts to submit a completed and signed declaration of interest, with a view to improving its capacity to identify and mitigate risks of conflicts of interest.

2. The Commission should use a template for assessing potential conflicts of interest that experts declare, which would ensure that it systematically assess all relevant aspects related to direct, indirect and potential conflicts of interest that the applicable code of conduct provides for.

 

Emily O'Reilly
European Ombudsman

Strasbourg, 09/12/2024

 

Annex

Steps followed by the Commission in the process of selecting, recruiting, and using the independent experts that assist with the ethics reviews and evaluation of proposals under the European Defence Fund

1. Call for expression of interest

There is an open call for expression of interest for experts with skills, experience and knowledge relevant to the calls for proposals. In order to be eligible, candidates must have a personal security clearance from their Member State. Candidates must register by filling in detailed information in the Commission’s Funding & Tenders portal[24], which includes the relevant rules on conflicts of interest (‘EU Experts Code of Conduct’[25]).

2. Submission of the survey

Candidate experts with relevant expertise are then invited, by e-mail, to complete a survey about their thematic and general experience, in which they also must declare that they do not expect to be in a situation of conflict of interest in relation to any proposal. The survey includes a link to the EU Experts Code of Conduct.

3. Assessment of the survey

The Commission’s project and legal officers assess any (potential) conflict of interest raised in the survey on a case-by-case basis. These assessments are then validated by the ‘call coordination team’^[26]. At this stage, the Commission may ask experts for further clarifications on their CV if necessary to clarify possible conflicts of interest[27]. Certain categories of experts are directly excluded either from all calls or certain topics. These categories include the Fund’s ‘programme committee’ members[28]; national focal points[29]; former Commission staff members within three years after their departure; and experts that have too many vested interests in the calls, like industry representatives, or staff members of defence companies that are involved in the Fund’s coordination. Finally, individuals involved in setting the topics of the Fund’s work programme are excluded from evaluating the topics they were involved in.

4. Selection of experts in the list

Project officers in charge of specific proposals preselect experts from the list of candidate experts with profiles best suited to evaluate these proposals. Such preselected experts constitute the “pool of experts”. In determining whether to allocate a call or topic to an expert, the project officers responsible ascertain the lack of conflicts of interest by cross-checking the CV and the list of entities forming the project consortia (in order to ensure the experts do not or have not had the same employer) and may ask the experts for further clarifications on their CVs if necessary. Publicly available material (for example on LinkedIn) is used to verify relations between experts and entities, or between entities in such cases, as can personal contacts in entities and Ministries of Defence, to clarify potential conflicts of interest while some references about the quality of the expert are requested. Project officers document the preselection of experts in internal notes validated by the head of unit responsible. The notes detail the rules and principles (which create additional requirements to address bias based on nationality)^[30] the project officer followed for the selection of the experts, individually and as a whole. If necessary, the expert can be reassigned by the call coordination team to another call or topic, or the team may determine that the expert should evaluate only certain proposals.

5. Signature of the contract

The experts allocated to evaluate a proposal sign a contract with the Commission that includes the EU Experts Code of Conduct which the experts commit to abide by. Only after signing the contract, do the experts get access to the proposals.

6. Briefing and opening of proposals

After signature of the contract, the Commission provides the selected experts with a targeted briefing on the rules that apply to conflicts of interest and the procedure to follow if they consider they have a potential conflict of interest after receiving the proposal(s) and carrying out an initial review of the content, notably the subject of the proposal and the composition of the consortium(s). The experts are required to verify that they are not in conflict of interest situations that would prevent them from participating in the evaluation of the call topic or proposal. Experts have to sign a declaration on conflicts of interest and non-disclosure for all the proposals they evaluate under the same panel. These declarations are recorded by the Commission in a register. If an expert declares a potential conflict of interest after receiving the proposals, the project officer, in consultation with the call coordination team, assesses the matter based on all elements provided by the experts and drafts a note detailing the conclusions of the assessment.^[31] The software used for managing the evaluation of proposals further requires the experts to reaffirm the lack of conflicts of interest before they can begin to complete their online assessment.

7. Continuous monitoring of potential conflicts of interest during the evaluation

Project officers are instructed to monitor, during the evaluation, any signs of potential conflicts of interest or any other external aspect that could bias the evaluation, and to take immediate action if they detect any. Experts are also encouraged to bring to the attention of project officers where they suspect another expert may have a conflict of interest. In such situations, the call coordination team would be informed and would investigate the matter. For the 2021 and 2022 calls, the Commission did not receive any alerts from other experts, aside from self-declarations of the experts concerned.

8. Reviewing potential conflicts of interest after experts have completed their work

The contracts signed with experts allow the Commission to verify, after the experts have concluded their review of proposals, whether there were potential conflicts of interest, including conducting audits. To date this has not happened.

 

[1] See: https://defence-industry-space.ec.europa.eu/eu-defence-industry/european-defence-fund-edf-official-webpage-european-commission_en.

[2] In order to avoid funding of ethically problematic activities, some funding programmes require an ethics review procedure to clear the proposals. The details and the scope of the ethics review depend on each programme.

[3] See the results of respectively the EDF 2021, 2022 and 2023 calls for proposals and results: https://defence-industry-space.ec.europa.eu/funding-and-grants/calls-proposals/european-defence-fund-2021-calls-proposals-results_en, https://defence-industry-space.ec.europa.eu/funding-and-grants/calls-proposals/result-edf-2022-calls-proposals_en#:~:text=Following%20the%20second%20calls%20for,Million%20are%20selected%20for%20funding, and https://defence-industry-space.ec.europa.eu/funding-opportunities-0/calls-proposals/results-edf-2023-calls-proposals_en#details

[4] Regulation 2021/697 establishing the European Defence Fund and repealing Regulation (EU) 2018/1092, which is available here: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R0697&from=EN

[5] In line with Article 237 of the EU Financial Regulation.

[6] See Article 26(2) of Regulation 2021/697, which provides in its relevant parts that “[b]y way of derogation from Article 237 of the Financial Regulation, the list of independent experts shall not be made public”. The Commission said that the list of EDF experts is not disclosed to protect the experts, including from possible pressures, to safeguard their independence, and to avoid exposing the experts’ specific defence industry expertise, which otherwise could undermine their security credentials.

[7] See: https://www.ombudsman.europa.eu/en/opening-summary/en/163874.

[8] See: https://www.ombudsman.europa.eu/en/doc/correspondence/en/169355.

[9] These declarations are submitted in the in the ‘Funding & Tenders Portal’, an application provided by the Commission for applicants, experts and contractors in the context of EU funding programmes: https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/home.

[10] Idem, see Article 29.

[11] See: https://www.ombudsman.europa.eu/en/doc/correspondence/en/185435.

[12] See: https://www.ombudsman.europa.eu/en/opening-summary/en/177626.

[13] See: https://www.ombudsman.europa.eu/doc/inspection-report/196801.

[14] The code of conduct, provided in Annex 1 to the contracts of experts, is “EVALUATORS — ALL (except observers)”, which is available here: https://ec.europa.eu/research/participants/data/ref/h2020/experts_manual/h2020-experts-mono-contract_en.pdf.

[15] The call coordination team, which consists of call coordinator, assistant call coordinator and the management of the Commission’s implementing units.

[16] The declaration that experts sign is as follows: "I declare that I am not involved in any proposal submitted for evaluation under the EDF indicated call(s) for proposal(s) and that I am in possession of a valid personal security clearance at the minimum equivalent to ‘EU Confidential’ validated by my country of nationality."

[17] The ‘EDF evaluation methodology’.

[18] The outcome of the assessment may be:
a) no conflict of interests and the expert is maintained,
b) exclusion from the evaluation for a proposal,
c) exclusion from the evaluation for a proposal and for all proposals competing for the same call budget-split, and
d) exclusion from the evaluation (termination of the contract).

[19] See: https://commission.europa.eu/document/d2bd9c0d-6486-45ab-be49-984844946c17_en.

[20] European Commission: Directorate-General for Budget, Financial regulation applicable to the general budget of the Union (recast), Publications Office of the European Union, 2024, see: https://data.europa.eu/doi/10.2761/686790.

[21] See: https://ec.europa.eu/transparency/expert-groups-register/screen/expert-groups-explained?lang=en.

[22] See paragraph 20 of the Ombudsman Decision in case 439/2023/KR into the composition of the Regulatory Scrutiny Board and how it interacts with interest representatives, which is available here: https://www.ombudsman.europa.eu/en/decision/en/192464.

[23] See paragraph 1 of the Ombudsman Decision in case 560/2019/KR on alleged conflicts of interest of experts who participate in the European Commission’s Scientific Advice Mechanism, available here: https://www.ombudsman.europa.eu/en/decision/en/126307.

[24] The information that experts must provide includes their personal data, education, areas of expertise and professional experience with actual and former employers, key words and publications.

[25] The code of conduct, provided in Annex 1 to the contracts of experts, is “EVALUATORS — ALL (except observers)”, which is available here: https://ec.europa.eu/research/participants/data/ref/h2020/experts_manual/h2020-experts-mono-contract_en.pdf.

[26] The call coordination team, which consists of call coordinator, assistant call coordinator and the management of the implementing units, compares the proposals to the pool of experts, for example by searching for matches in expert employers and proposals, or expert email-endings and proposals.

[27] Information requests from the Commission may be based on publicly-available information, for example information on LinkedIn, or through personal contacts in entities and ministries of defence to clarify potential conflict of interest while some references about the expert are requested.

[28] Programme committee defines the EDF annual work programmes with the Commission and include Member State representatives, the European Defence Agency (EDA) and the European External Action Service (EEAS).

[29] National focal points are EDF points of contact in the administrations of EU Member States and Norway.

[30] These rules and principles are defined in the EDF evaluation methodology:

• Proven and documented expertise in the technical fields related to the topic of the calls;

• Availability to perform the task and (prima facie) absence of conflict of interests;

• Diversity of background(s) to maximise the coverage of the overall value-chain and relevant area of the call/topic;

Minimum of 3 experts per proposal (4 in case of complex projects) and panels ensuring geographical and gender balance;

• Out of the independent experts involved in the evaluation of the proposal no two experts have the same nationality;

• None of the experts should have the same nationality as the project coordinator.

The last two rules are in addition to the requirements established in the EDF Regulation and aim to further ensure that there is no (unconscious) bias based on nationality.

[31] The outcome of the assessment may be:
a) no conflict of interests and the expert is maintained,
b) exclusion from the evaluation for a proposal,
c) exclusion from the evaluation for a proposal and for all proposals competing for the same call budget-split, and
d) exclusion from the evaluation (termination of the contract).