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20th Jul 2018

Eight EU states to face extra anti-fraud scrutiny

  • Olaf is likely to step up its probes into EU states that refuse to participate in the EPPO (Photo: European Commission)

Member states that refuse to join the future European Public Prosecutors Office (EPPO) can expect more probes by the EU's anti-fraud office, Olaf.

"Those who do not have the EPPO will have more Olaf, Olaf will focus on them," Olaf chief Giovanni Kessler told reporters on Wednesday (31 May) in Brussels.

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Kessler followed with a statement saying it was not a threat but noted the importance of a level playing field in terms of stopping fraud across all EU states.

Unlike Olaf, the EPPO will have the power to conduct criminal investigations and prosecute offenders, including cases of cross-border VAT fraud worth at least €10 million or more.

Olaf is only able to conduct administrative probes on EU money and pass on its findings to national authorities who do not always act on its reports.

Some 20 EU states have backed the EPPO.

Hungary, Malta, Poland and Sweden

Hungary, Malta, Poland and Sweden refused to participate, with the Netherlands yet to declare to its intention. The UK, Ireland, and Denmark have also opted out.

As the EU presidency, Malta has often found itself in an awkward position on the file.

Earlier this year, its justice minister Owen Bonnici told reporters that the Maltese EU presidency supported EPPO but that Malta as a country did not.

"Malta believes that tax issues should be a full competence of the member states but that doesn't mean as the presidency, keep in mind that I am wearing the hat of the presidency of the Council now, will act as an honest broker to make sure that this office is born," he said in late January.

Bonnici appears to have kept to his word, as ministers are set to vote on the EPPO next week.

But dubious tax regimes in Malta, uncovered by recent media revelations known as the Malta Files, and the country's refusal take part in the EPPO, are also likely to cast an even longer tax-haven shadow over the island nation.

The EU parliament is expected to also vote and endorse the EPPO in a plenary vote sometime in September.

The EPPO will be composed of an EU chief prosecutor with two deputies and college of prosecutors, one from each EU state that takes part, and an European delegated prosecutor. It means there will be at least two prosecutors per participating country.

The plan is to have the EPPO up and running sometime in early 2019.

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