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The EU has recently established the European Public Prosecutor’s Office (“EPPO”). The EPPO is an independent office in charge of investigating, prosecuting and bringing to judgement crimes against the EU budget, such as subsidy fraud and related corruption, as well as cross-border VAT fraud.
According to calculations by the EU, €485 million of subsidies were misused in 2019 and approximately 3,000 cases have been identified to be prosecuted by the EPPO. Therefore, it can be assumed that the establishment of the EPPO is an important milestone and possibly only a first step on the way to a deeper cooperation between EU Member States in the area of white-collar crime.
The EU has established the EPPO “in order to combat crimes affecting the financial interests of the Union” (cf. art. 86 of the Treaty on the Functioning of the EU). So far, 22 Member States have joined the EPPO while five have decided not to participate (Sweden, Hungary, Poland, Ireland and Denmark). The EPPO’s central office is based in Luxembourg, along with the Chief European Public Prosecutor and a College of European Prosecutors from all participating countries. The European Prosecutors will head the day-to-day criminal investigations carried out by approximately 140 European Delegated Prosecutors in the Member States.
On 23 September 2019, the European Parliament and the European Council agreed on appointing Laura Codruta Kövesi as European Public Prosecutor. Ms Kövesi has had a remarkable career: Born in 1973, she became the first woman and youngest person to be appointed Prosecutor General of Romania in 2006. From 2013 to 2018, she was Chief Prosecutor of Romania’s National Anticorruption Authority. During this period, she prosecuted dozens of high-ranking politicians, including mayors, members of Parliament, several former and current ministers and a former Prime Minister, along with hundreds of judges and prosecutors. In her new role, Ms Kövesi has announced that the EPPO will become a centre of competence in the area of financial investigations and the confiscation of criminally-acquired assets, by implementing advanced standards in forensic accounting and data analysis.
The EPPO is competent to investigate and prosecute criminal offences “affecting the financial interests” of the EU. This includes fraudulent acts which affect the EU’s budget, such as subsidy fraud, and any other criminal offence that is “inextricably linked” thereto, e.g. corruption or money laundering offences. Additionally, the EPPO is empowered to prosecute VAT fraud if there is a link to two or more EU Member States and funds totalling at least €10 million are involved. (For further details on the EPPO’s material competencies, see art. 3 of the Directive 2017/1371 of the European Parliament and of the Council and art. 22 of the EU Council Regulation 2017/1939.) Additionally, EU Council Regulation 2017/1939 outlines the relevant prosecution framework and regulates the relationship of the EPPO and the Delegated European Prosecutors, who undertake investigations in the Member States.
The process of the operational establishment of the EPPO is still ongoing. As many Member States have not yet implemented the relevant regulations into their national law, it seems unlikely that the EPPO will become operational before the end of 2020 as had been planned. However, since the Member States have committed themselves to the EPPO, there can be no doubt that the authority will be able to commence its work in the near future.
Although the powers of the EPPO outlined above may appear limited, there are likely to be at least hundreds of millions of euros, if not billions, which are obtained illegally and cause losses to the budget of the EU every year. According to press reports, no fewer than 3,000 cases have been identified so far to be prosecuted by the EPPO. Against this backdrop, even now, before its operational start, it is planned to increase the EPPO’s budget for 2021 from €11.7 million to €37.7 million - and Ms Kövesi has just recently asked for €55 million.
In the medium and long term, it remains to be seen how far the authority will interpret its competency and whether its powers will be extended by the Legislator. Whatever happens next, the establishment of the EPPO can be considered to be a milestone on the way to further deepening the co-operation between EU Member States in cross-border criminal matters.
19 October 2020
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