Fraud costs EU millions each year

VILNIUS - The budget of the European Union (EU) loses about 280 million euros per year because of fraud affecting the Union’s financial interests, reports ELTA. If the proposal to establish the European Public Prosecutor’s Office is approved, this body shall be given the mandate to effectively stamp out the illegal use of EU budget funds and further fraud.
At present, the member states have an exclusive competence to prosecute fraud affecting financial interests of the EU. Unfortunately, now there is no body in the EU with sufficient competence in this sphere.

“As a result of damage caused by such crimes, the EU annually loses hundreds of millions of euros. Because of limited resources of the national law enforcement authorities such crimes are not always investigated. Sometimes fraudsters are not punished for the crimes committed against the budget of the EU, in particular when such crimes are committed in several member states. Therefore, it is necessary to ensure maximum efficiency of the protection of the EU taxpayer money,” said the Minister of Justice Juozas Bernatonis.

The existing EU bodies - OLAF (European Anti-Fraud Office), Eurojust (EU Judicial Cooperation Unit) and Europol (EU crime intelligence agency) - do not have the mandate for the investigation and prosecution of fraud. OLAF can only approach the competent national bodies with the results of administrative investigations conducted by it, but the national bodies decide on their own whether to initiate a criminal case on the basis of such conclusions.
Moreover, now the investigation of such crimes is complicated because of still existing differences in the definitions of the concept of ‘EU fraud’ in different EU member states.

The proposal to establish the European Public Prosecutor’s Office was submitted by the European Commission (EC) on July 17. The competence of the newly set up European Public Prosecutor’s Office shall cover the investigation of crimes against the EU budget, prosecution of their perpetrators and abettors and support for the prosecution in national courts.
The European Public Prosecutor’s Office shall have the right to request or, if necessary, to order the investigative actions that are clearly defined in the proposed Regulation: with regard to interrogations of witnesses and suspects, appointment of experts, when there is a need for special know-how, and imposition of enforcement measures (seizure of property, search in premises and computer systems, listening to phone calls, freezing of financial transactions).

The proposed Regulation on the European Public Prosecutor’s Office establishes that all measures of investigation must be sanctioned by a court or other competent national judicial body, as specified in national legal acts or required in the Regulation on European Public Prosecutor’s Office.

With a view to ensuring the effectiveness of investigations carried out by the European Public Prosecutor’s Office, the evidence legitimately collected in one member state should be admissible in courts of all member states.
According to the proposal by the EC, the European Public Prosecutor’s Office shall have a decentralized structure consisting of the European Public Prosecutor, 4 Deputy European Public Prosecutors and the European Delegated Prosecutors in each member state, and will be integrated with the national court systems.

“The European Delegated Prosecutors shall have the mandate of investigations and prosecution in the respective member states involving national experts and applying national law. They shall continue exercising their functions as national prosecutors, but when acting for the European Public Prosecutor’s Office they shall be completely independent from the national prosecution bodies,” maintains the Minister of Justice.

The European Public Prosecutor shall be appointed by the Council with the consent of the European Parliament from the list submitted by the EC. Four Deputy European Public Prosecutors shall also be appointed by the Council with the consent of the European Parliament. The European Delegated Prosecutors shall be appointed by the European Public Prosecutor from a list of at least three candidates submitted by the member state concerned.

The proposal to establish the European Public Prosecutor’s Office is one of the priority issues of Lithuania’s Presidency of the EU Council in the sphere of criminal law. According to the Minister of Justice, new and effective methods of fighting crimes affecting EU financial interests are absolutely necessary, but they should be appropriately discussed by the member states with sufficient time devoted for such discussions.

“Lithuania, as the member state holding the Presidency of the EU Council, aims at ensuring that negotiations on this particularly relevant matter are accompanied by an in-depth analysis of the proposal and seeking maximum support from other member states,” noted Juozas Bernatonis.

The proposal to establish the European Public Prosecutor’s Office is closely related to the Proposal for Directive on the fight against fraud against the Union’s financial interests by means of criminal law. By virtue of this Directive, member states shall be required to punish both natural and legal persons for criminal acts (fraud and related illegal activities) affecting the Union’s financial interests, and for abetting and attempting to commit such crimes.

The Directive also establishes that maximum punishments for such crimes should be imprisonment and, in aggravated cases, imprisonment of not less than 4 years. Member states shall be allowed to provide for other than criminal penalties when gains from such crimes are less than 10,000.