Monday

5th Dec 2022

EU anti-fraud agency cracked down on fake pandemic supplies

  • EU imports of Chinese healthcare products grew by 900 percent in the second quarter of 2020, compared with 2019, the report found (Photo: Ian Sane)

The EU's anti-fraud agency helped seized millions of counterfeit masks, testing-kits, and hand-sanitisers over the past year, as the pandemic opened up a major business opportunity for fraudsters, the agency, OLAF's report published on Thursday (10 June) said.

EU imports of Chinese healthcare products grew by 900 percent in the second quarter of 2020, compared with 2019, the report found.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The EU decided to accelerate the certification process for much of the medical gear that was suddenly in extremely high demand across the bloc.

"It soon became clear that while relaxing the rules did indeed help speed up the supplies of legitimate, safe products to the EU, it also made it easier for millions of substandard or fake medical products, with invalid EU conformity certificates, to be imported into the EU," OLAF's report noted.

The agency opened an investigation on 19 March last year, which is still ongoing.

Not all cases are fraudulent, the report adds. Some are just opportunistic and move into a line of business trying to profit from the pandemic with little control over their supply chain - and thus susceptible to fraudsters, who pass off fake products.

Up until the end of last year, OLAF's investigation has seized 31,500 fake Covid-19 test kits, 2,416,000 face masks, 140,000 litres of hand sanitisers, 105,000 spray cans and 3,636 litres of counterfeit Dettol (antiseptic disinfectants) products.

In one case, the OLAF investigation led to the seizure of 140,000 litres of counterfeit hand-sanitiser from Turkey that contained dangerously high-levels of methanol, which has a direct toxic effect on the optic nerve.

OLAF was first tipped off by Danish authorities in August 2020, who seized 6,000 litres of hand sanitiser from Turkey.

A month later, OLAF identified a suspicious shipment heading for Ireland and alerted Irish customs authorities, who intercepted the cargo with unacceptably high levels of methanol.

The pandemic meanwhile also made it more difficult for OLAF agents themselves to investigate, but they continued to visit countries during the lockdowns, even if travelling has been more tedious and unpredictable.

Hungary and Italy top list

On the whole, last year OLAF concluded 230 investigations, issuing 375 recommendations to the relevant national and EU authorities. It opened 290 new investigations.

The agency recommended the recovery of €293.4m to the EU budget.

It recommended to the EU Commission that it recover some 2.2-percent of payments made to Hungary under the bloc's structural and independent funds and agriculture funds between 2016-20.

Hungary has been leading the rate of financial recommendations - with the EU-27 average being 0.29 percent - in previous reports as well.

OLAF last year closed the most number of cases in Italy (13) and sent recommendations in nine of those cases. Bulgaria comes second with eight cases closed and seven recommendations, with Hungary getting third place with eight closed cases and four recommendations in 2020.

OLAF cannot prosecute inside member states - it can only make legal recommendations to national authorities and prosecutions if they find misuse of EU funds.

It is, however, up to the national authorities themselves whether to then investigate and prosecute the cases.

Between 2016 and 2020, around 37 percent of the cases which OLAF sent to national judicial authorities, and on which these authorities have already taken a decision, led to indictments.

In Bulgaria the rate is 25 percent, in Hungary 67 percent. In Italy, the indictment rate is also 67 percent.

The newly launched European Prosecutor's Office (EPPO) will have prosecutors in 22 member states to indict possible criminals.

New EU anti-fraud prosecutor starts hunt

With 22 participating EU countries, the EU chief prosecutor's office begins its operations by keeping a close eye on the €800bn recovery fund - considered to be a "high risk" in terms of corruption and fraud.

Fraud against EU dropped 20% last year

There were a total of 1,056 fraudulent irregularities in 2020, with a combined financial impact of €371m. Currently, Cyprus, Denmark, Finland, Germany, Ireland, Netherlands, Slovenia and Spain do not have domestic anti-fraud plans.

Agenda

Biden in Brussels, recovery package underway This WEEK

The EU Commission is expected to approve the first recovery plans submitted by national capitals on how they will use funds available from the EU's €800bn recovery fund. Spain, Portugal, Greece, Denmark, Luxembourg seem to be first crossing the line.

Opinion

How EU banks underwrote the Qatar World Cup

European banks and investors have invested heavily in Qatari sovereign bonds, and construction and hospitality companies — with scant attention to well-documented human rights violations.

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  4. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  5. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  6. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos

Latest News

  1. EU countries struggle to crack Hungary's vetos
  2. Frontex expanding migrant route-busting mission in Balkans
  3. EU ministers in fresh battle on joint debt, after Biden subsidies
  4. EU: 'We'll see' if Moscow actually stops selling oil over price-cap
  5. Bad Karma
  6. Serbia now has no choice but to join EU sanctions on Russia
  7. Hungary's funds showdown in focus This WEEK
  8. EU must break Orbán's veto on a tax rate for multinationals

Stakeholders' Highlights

  1. European Committee of the RegionsRe-Watch EURegions Week 2022
  2. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  3. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  4. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  5. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  6. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022

Join EUobserver

Support quality EU news

Join us