Fraudsters manipulating EU procurement procedures, or engaging in cross-border VAT schemes, would be easier to punish once the new criminal law provisions come into force.

  • Common definitions of offences in national criminal laws
  • Maximum penalty of at least 4 years of imprisonment when damage at least € 100 000
  • Prescription periods and deadlines for enforcement set at 5 years
  • Cross-border VAT fraud included at the behest of Parliament

The Budgetary Control and Civil Liberties committees endorsed on Thursday a draft directive, already agreed with the Council, with 56 votes to 12 and no abstentions.

 

The text provides 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, as requested by EP negotiators.

 

It also sets:

 

  • the minimum prescription period at 5 years, within which the case must be investigated and prosecuted, and
  • minimum sanctions with a maximum penalty of at least 4 years of imprisonment when damage is at least € 100 000.

 

The agreed EU-wide definition of offences affecting the EU budget sets 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 bring to justice those committing crimes against the EU budget.

 

The provisions of this directive will be applied also by national law enforcement agencies.

 

Next steps

 

The full house will vote on the proposal in July. After the adoption, Member States will have two years to apply its measures. Denmark and the United Kingdom have opted out of the application of the directive.

 

Quick facts

 

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.

“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.”

Budgetary Control committee rapporteur Ingeborg Gräßle (EPP, DE) 

“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.”

Civil Liberties committee rapporteur Juan Fernando Lopez Aguilar (S&D, ES)