Fight against fraud: creating a level playing field across Europe
- Common definitions of offences in national criminal law
- Maximum penalty to be at least 4 years of imprisonment if fraud amounts to€ 100 000 or more
- Prescription periods set at 5 years
- Cross-border VAT fraud included at the behest of Parliament
Fraud occurring in EU procurement procedures or cross-border VAT schemes will be easier to prosecute with new criminal law provisions, adopted on Wednesday.
After years of negotations with the Council, the EP on Wednesday gave the final go-ahead to the directive, which provides for common definitions of several fraud-related crimes against the EU budget, such as:
- active and passive corruption,
- misappropriation of funds, and
- VAT fraud, when there are at least two Member States involved and the damage amounts to at least € 10 million.
It also lays down:
- a minimum prescription period of at least 5 years, within which the case must be investigated and prosecuted, and
- a maximum penalty which must be punishable with at least 4 years of imprisonment when damage is at least € 100 000.
The EU-wide definition of offences against the EU budget lays down the mandate for the new European Public Prosecutor Office (EPPO). EPPO, which is expected to be operational between 2020 and 2021, will be able to prosecute people or organisations committing crimes against the EU budget.
The provisions of this directive will be applied also by national law enforcement agencies.
In line with its rules, the Parliament endorsed the agreement with the Council without holding a vote.
Budgetary Control committee rapporteur Ingeborg Gräßle (EPP, DE) said : “Adopting the directive on the fight against fraud to the EU's financial interests by means of criminal law marks a historic breakthrough for the EU and its taxpayers. We created an EU law enforcement body which may follow up on European criminal cases in Member States. After 20 years of pressure from the Parliament, we made this important step to integrate law enforcement legislation in the EU.”
Civil Liberties committee rapporteur Juan Fernando Lopez Aguilar (S&D, ES) said: “The differences which currently exist between the member states' laws for tackling and prosecuting fraud against the EU's financial interests encourage potential criminals to seek out and take advantage of the most lenient judicial systems. Now we have a strong instrument at hand to combat fraud to the EU budget and to return the defrauded funds to the legal economy.”
After years of negotations, the Council formally adopted its position in April 2017, reflecting the agreement reached with the Commission and Parliament in October 2016. Now that the Parliament has endorsed the agreement, the Member States will have two years to apply the measures stipulated in the directive. Denmark and the United Kingdom have opted out of the application of the directive.
In 2015, fraud affected € 637.6 million of EU budget spending in the Member States, with false or falsified documents and declarations constituting the most common types of fraud, a Commission report shows. On the revenue side, intra-community VAT fraud costs EU taxpayers around € 50 billion per year.
Procedure: Ordinary legislative procedure