EU Fraud Keeps Rising as Prosecutors Investigate 38% More Cases in 2024
Source: Balkan Insight
The true scale of EU fraud is becoming more apparent as the European Public Prosecutor’s Office (EPPO) revealed on Monday that it had 2,666 active investigations at the end of last year with an estimated damage to the EU budget of 24.8 billion euros, which was up 38 per cent from the previous year, with VAT fraud proving a particular problem.
“The rise in criminal investigations has been a constant since the EPPO began operations in June 2021, proving that the prevalence of crime against the financial interests of the EU has long been underestimated,” the EPPO, a Luxembourg-based collection of member state-assigned prosecutors charged with investigating serious financial crimes against the EU, said in the report.
The EPPO opened 1,504 new investigations in 2024, up 9.7 per cent from the year before. About 18 per cent of the 2,666 active investigations (488) were linked to VAT fraud, though they account for 53 per cent of the overall estimated damage to the EU budget at 13.15 billion euros.
In November, the EPPO announced it had detained 43 suspects in connection with a 520-million-euro VAT “carousel” fraud case involving EU states including Bulgaria, Croatia, Czechia and Slovakia. The suspects are alleged to have been engaging in missing trader intra-community VAT fraud, where criminals declare zero VAT rating on sales of goods across EU borders on a B2B basis when in fact they have been sold with VAT charged. The criminals then disappear without declaring this VAT.
By the end of 2024, the EPPO was handling 311 active cases with an estimated damage to the EU budget of 2.8 billion euros related to the almost 700-billion-euro NextGenerationEU – a stimulus package to transform the EU into a clean, innovative and inclusive economy and digital and tech sovereignty. The majority of these cases (307) stemmed from fraud related to the package’s pandemic recovery fund, the Recovery and Resilience Facility.
Topping the list of Central and Southeast European member states that have joined the EPPO was Romania, where there were 380 active investigations as of December 31 with an estimated total damage to the EU budget of 2.57 billion euros. This was second only to Italy, which had 764 active investigations (almost a third of the total) with an estimated damage of 7.05 billion euros.
A recent investigation by BIRN, for example, uncovered troubling patterns in how local military units in Romania have handled public contracts since the outbreak of the war in Ukraine. Significant sums have been funnelled to companies with questionable qualifications, ties to military personnel or even those previously implicated in criminal investigations.
Romania was followed by Bulgaria with 254 active investigations as of December 31 for an estimated damage of 1.13 billion euros. In Czechia, there were 105 active investigations for an estimated damage of 779 million euros. In Slovakia, there were 98 active investigations for an estimated damage of 681.2 million euros. In Greece, there 84 active investigations for an estimated damage of 1.71 billion euros. In Croatia, there were 80 active investigations for an estimated damage of 373 million euros. And in Slovenia, there were 37 active investigations for an estimated damage of 60.6 million euros.
Not all member states joined the EPPO at the outset, with Hungary and Poland being notable exceptions. Though Poland has since joined during last year, the Hungarian government claims its decision to stay out is “a matter of national sovereignty”, though critics claim the real reason is related to the fact that Hungary has consistently found itself as one of the EU countries subject to the most investigations by the European Anti-Fraud Office (OLAF).
The EPPO chief prosecutor Laura Kovesi, who hails from Romania, argued that the scale of financial crime against the EU’s budget means that the capacity of her office needs to be adapted to the reality that is becoming more apparent as each year passes.
“For us, at the EPPO, these are the key questions: is EPPO well equipped? Is Europol well equipped? Are there dedicated and specialised investigators from police, tax administrations and customs assigned to support EPPO’s investigations in all the participating member states? Currently, the answer to each of these questions is ‘no’. If we want the ‘EU antifraud architecture’ to improve, we need each of the answers to be ‘yes’,” she said.
The original article: belongs to Balkan Insight .
