The office of the European Public Prosecutor promises a new era has dawned in the EU for fighting financial crime

EPA/DAVID CHANG

The office of the European Public Prosecutor promises a new era has dawned in the EU for fighting financial crime


Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
+

The European Union has set itself the objective of establishing an area of freedom, security and justice. The possibility of setting up the European Public Prosecutor’s Office (EPPO) is foreseen by the Treaty on the Functioning of the European Union (TFEU) in the Title concerning the area of freedom, security and justice.

Both the Union and the Member States of the European Union have an obligation to protect the Union’s financial interests against criminal offences, which generate significant financial damages every year. Yet, these offences are currently not always sufficiently investigated and prosecuted by the national criminal justice authorities. Every year, at least 50 billion euros of revenues from VAT are lost for national budgets all over Europe through cross-border fraud. Transnational organised crime is making billions in profit every year by circumventing national rules and escaping criminal prosecution. Outside the area of VAT, in 2015, the Member States detected and reported to the Commission fraudulent irregularities for an amount of around €638m. National prosecutors’ tools to fight large-scale cross-border financial crime are limited.

On 17 July 2013, the Commission adopted a proposal for a Council Regulation on the establishment of the EPPO. At its meeting of 7 February 2017, the Council registered the absence of unanimity on the draft Regulation. In accordance with the second subparagraph of Article 86(1) TFEU, a group of 17 Member States requested, in a letter of 14 February 2017, that the draft Regulation be referred to the European Council. On 9 March 2017, the European Council discussed the draft Regulation and noted that there was disagreement within the meaning of the beginning of the third subparagraph of Article 86(1) TFEU.

On 3 April 2017, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Finland, France, Germany, Greece, Lithuania, Luxembourg, Portugal, Romania, Slovakia, Slovenia and Spain notified the European Parliament, the Council and the Commission that they wished to establish enhanced cooperation on the establishment of the EPPO. Therefore, the authorisation to proceed with enhanced cooperation is deemed to be granted and the provisions on enhanced cooperation apply as from 3 April 2017. In addition, by letters respectively of 19 April 2017 and 1 June 2017, Latvia and Estonia indicated their wish to participate in the establishment of the enhanced cooperation.

Following the general approach reached in the Justice Council on 8 June 2017 Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Portugal, Romania, Slovakia, Spain and Slovenia, the European Parliament will have to give its consent, before the Regulation can finally be adopted. Other Member States may join the 20 founding members at any time after the adoption of the Regulation.

In accordance with Article 328(1) TFEU, when enhanced cooperation is being established it is to be open to all Member States of the European Union. It is also to be open to them at any other time, including with regard to an enhanced cooperation in progress subject to the compliance with the acts already adopted within that framework. The Commission and the Member States which participate in enhanced cooperation on the establishment of the EPPO should ensure that they promote participation by as many Member States of the European Union as possible. The TFEU provides that the material scope of competence of the EPPO is limited to criminal offences affecting the financial interests of the Union in conformity with this Regulation.

The tasks of the EPPO should thus be to investigate, prosecute and bring to judgment the perpetrators of offences against the Union’s financial interests under PIF Directive 2017 and offences which are inextricably linked to them. The EPPO will operate as a single office across all participating Member States. It will be a highly specialised and independent office, set up outside the existing EU institutions and services. The EPPO will act in the interest of the EU and will not seek nor take instructions from EU institutions or national authorities.

The EPPO will be organised with a central office at EU level and a decentralised level consisting of European Delegated Prosecutors (EDP’s) located in the Member States, who will also continue their function as national prosecutors (“double hat”). The central level will supervise the investigations and prosecutions carried out at national level, to ensure effective coordination and a uniform approach throughout the EU. In this way, it will bring in a wide range of expertise and experience about national legal systems while maintaining independence. If the Office takes up an investigation, national authorities will not exercise their competences for the same criminal activity.

The EPPO will be able to investigate efficiently crimes against EU budget and VAT fraud, such as fraud involving EU funds over €10,000 and cross-border VAT fraud over €10m. It will be able to act quickly across borders without the need for lengthy judicial cooperation proceedings. It will bring actions against criminals directly in front of national courts. This should lead to more successful prosecutions and a better recovery of the defrauded money.

While the EPPO will be responsible for criminal investigations, OLAF will continue its administrative investigations into irregularities and fraud affecting the Union’s financial interests in all Member States of the Union. This approach will ensure the widest possible protection of the EU’s budget by increasing the conviction and recovery rates.

 

Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
+