New EU anti-fraud prosecutor starts hunt

“We are the first really sharp tool to defend the rule of law in the EU. Our success is a matter of credibility for our union,” she told press in Luxembourg.

In a testament to how difficult the creation of the office has been, in the end only 22 countries decided to join EPPO – out of the 27 EU countries.

Denmark, Ireland, Hungary, Poland and Sweden chose not to take part, but the EU Commission said Sweden might join next year.

The EPPO is made up of 15 permanent chambers, with different formations of the 22 European prosecutors, plus Kövesi, who will have an estimated 3,000 cases to work on annually.

At national level, EPPO can call on a network of 140 delegated prosecutors across the 22 member states to investigate cases.

“We are a single office operating under 22 different criminal procedural regimes. This has never been attempted before,” Kövesi said.

Kövesi, who had been the face in her country of an anti-corruption push, said that her office already registered a few cases, with the first ones coming from Germany and Italy.

EPPO will be able to investigate cross-border crime more effectively, which has been difficult to prosecute.

Cross-border VAT fraud is estimated to cost the EU between €30bn and €60bn per year, while there were around 1,000 incidents of reported fraudulent irregularities in 2019, with an estimated value of €460m.

The office could also tackle the discrepancies among EU member states with regards to investigating cases.

Kövesi said some EU countries have only five to six cases per year, while others have hundreds.

If the EPPO takes up an investigation, national authorities stand back from the case, reporting any relevant matters to the Luxembourg office. The EPPO will then prosecute cases in the relevant national courts.

It will also be able to investigate persons and companies of the non-participating countries – if those are implicated in a cross-border crime.

Kövesi hopes that her office’s work will convince non-participating states to join, although she admitted that at the end of the day, it will be a “political decision”. The office had already signed a working agreement with Hungary.

Healthcare, agriculture and public procurement

The office becomes operational just as the rollout of the €800bn Covid-19 recovery fund and the new seven-year budget begins.

“Our target [is] economic and financial criminality. Make no mistake, this is the most common threat to any democratic society,” Kövesi said.

“It is clear with the new package there will be a lot of money, more flexibility, this means a higher risk to have more crimes for EPPO,” she added.

The unprecedented package, which aims to help EU countries bounce back from the recession caused by the pandemic, will be priority for EPPO, Kövesi said.

“Our expectation is to have some crimes in all the fields, especially in healthcare systems, in agriculture, investment and public procurement,” the chief prosecutor warned.

Slovenian holdup

Slovenia, which will take over the EU’s presidency next month, caused a stir last month after prime minister Janez Janša cancelled the process of formalising the appointment of the two Slovenian prosecutors, making it difficult for EPPO to investigate cases in his country.

“We haven’t been set up to allow anyone to put the Slovenian cases on the shelf,” Kövesi said of Slovenia, adding that nevertheless it will be “almost impossible” to tackle all the cases in the country.

Justice commissioner Didier Reynders told reporters in Luxembourg that the commission expected an explanation from Slovenia and how it will ensure a new transparent process for selecting the prosecutors.

When asked about a possible EU probe, Reynders said that if Slovenia does not act soon, the commission will analyse how to “force Slovenia to fulfil its obligations”.

Finland has also been dragging its feet in nominating delegated prosecutors, over the issue of pensions and whether the prosecutors can take on other jobs domestically, but an agreement is expected to be reached.