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1. The Commission shall ensure that, where actions financed under this Decision are implemented, the financial interests of the Union are protected by the application of preventive measures against fraud, corruption and any other illegal activities, by effective checks and by the recovery of the amounts unduly paid and, if irregularities are detected, by effective, proportionate and dissuasive penalties. The Commission may carry out checks and verifications in situ under this Decision, in compliance with Regulation (Euratom, EC) No 2185/96. If need be, investigations shall be carried out by the European Anti-Fraud Office in accordance with Regulation (EC) No 1073/1999.

2. For the Union actions financed under this Decision, the notion of irregularity referred to in Article 1(2) of Regulation (EC, Euratom) No 2988/95 shall mean any infringement of a provision of Union law or any breach of a contractual obligation resulting from an act or omission by an economic operator which has, or would have, the effect of prejudicing the general budget of the Union by an unjustified item of expenditure.

3. The Commission shall reduce, suspend or recover the amount of financial assistance granted for an action if it finds irregularities, particularly non-compliance with the provisions of this Decision or of the individual decision or contract granting the financial support in question, or if it transpires that, without Commission approval having being sought, the action has undergone significant change that conflicts with its nature or with its implementing conditions.

4. If the time limits have not been observed or if only part of the allocated financial assistance is justified by the progress made with implementing an action, the Commission shall request the beneficiary to submit observations within a specified period. If the beneficiary does not give a satisfactory answer, the Commission may cancel the remaining financial assistance and demand repayment of sums already paid.

5. Any amount unduly paid shall be repaid to the Commission. Interest shall be added to any sums not repaid in due time under the conditions laid down in the Financial Regulation.