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1. Where an award procedure has been subject to irregularities or fraud, the authorising officer responsible shall suspend the procedure and may take any necessary measures, including the cancellation of the procedure. The authorising officer responsible shall inform OLAF immediately of suspected cases of irregularities or fraud.

2. Where, after the award, the award procedure proves to have been subject to irregularities or fraud, the authorising officer responsible shall, except in duly justified cases, take one or more of the following actions:

(a) refuse to enter into the legal commitment or cancel the award of a prize;

(b) suspend payments or delivery;

(c) suspend the implementation of the legal commitment;

(d) where appropriate, terminate the legal commitment in whole or with regard to one or more recipients.

3. The authorising officer responsible may suspend payments or delivery or the implementation of the legal commitment where:

(a) the implementation of the legal commitment proves to have been subject to irregularities, fraud or breach of obligations;

(b) it is necessary to verify whether presumed irregularities, fraud or breach of obligations have actually occurred;

(c) irregularities, fraud or breach of obligations call into question the reliability or effectiveness of the internal control systems of a person or entity implementing Union funds pursuant to Article 62(1), first subparagraph, point (c), or the legality and regularity of the underlying transactions. Where the presumed irregularities, fraud or breach of obligations referred to in the first subparagraph, point (b), are not confirmed, the implementation or payments or delivery shall resume as soon as possible. The authorising officer responsible may terminate the legal commitment in whole or with regard to one or more recipients in the cases referred to in the first subparagraph, points (a) and (c).

4. In addition to measures referred to in paragraph 2 or 3, the authorising officer responsible may reduce the grant, the prize, the contribution under the contribution agreement, the non-financial donation or the price due under a contract in proportion to the seriousness of the irregularities, fraud or of the breach of obligations, including where the activities concerned were not implemented or were implemented poorly, partially or late. In the case of financing referred to in Article 125(1), first subparagraph, point (a), the authorising officer responsible may reduce the contribution proportionally if the results have been achieved poorly, partially or late or the conditions have not been fulfilled.

5. Paragraph 2, points (b), (c) and (d), and paragraph 3 shall not apply to applicants in a contest for prizes.