Tuesday

4th Oct 2022

EU keen to see budget cheats in jail

The European Commission on Wednesday (11 July) proposed a directive to criminalise the fraudulent use of EU funds, with a minimum sentence of six months' jail for serious offenders.

"EU money must not be pocketed by criminals. It is crucial to put in place criminal law rules of the highest standard, in order to protect our taxpayers’ money," EU justice commissioner Viviane Reding told reporters in Brussels.

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  • European Commission wants to criminalise fraud of EU funds (Photo: OLAF)

EU member states have different legal frameworks and definitions of fraud.

Some do not criminalise it or offer impunity to public officials, while others hand out 12-year jail sentences.

Police, prosecutors and judges decide on the basis of their own national laws on whether or not to intervene to protect EU funds. But even in countries where the legal framework exists, prosecution rates on EU-fraud-related crimes vary between 14 percent and 80 percent.

Some only prosecute cases when the fraud on EU funds has been exclusively committed in their country.

The commission proposal would create uniform legislation across the EU and aims to prevent criminals from carrying out their activities in member states which currently do not prosecute it.

"Fraudsters should not escape prosecution and sanctions simply because of their geographical location," said taxation commissioner Algirdas Semeta.

The directive also defines fraud as corruption, the misappropriation of funds, money laundering or obstruction of public procurement procedures to the detriment of the EU budget.

National and regional authorities manage some 90 percent of the EU budget without much oversight.

Olaf, the EU's anti-fraud office, told reporters on 3 July that the manner in which EU funds are managed by national and regional authorities is also where they find the most problems.

Olaf's investigations recovered €691 million to the EU budget in 2011, of which €524.7 million had been siphoned off from structural funds alone. Around €113.7 million was drawn from customs and another €34 million from EU agricultural subsidies.

The commission identified 600 suspected fraud cases involving EU expenditure and revenue in 2010.

Applicants for EU funds had provided false information to receive funding. In some case, national officials had accepted money in return for awarding a public contract.

"Our aim is clear: to ensure that EU budget fraud does not go unpunished, in turn saving taxpayers' money," said the justice commissioner.

EU adding Bahamas to tax-haven blacklist

The EU is adding Anguilla, the Bahamas, and Turks and Caicos Islands to its blacklist of tax-havens, in what some have called a "fig-leaf" exercise.

'No decision expected' for EU decision on unanimous decisions

Swedish minister for European affairs Hans Dahlgren told EUobserver no decision can be expected on majority vote next year. Mikuláš Bek, the Czech minister for European affairs, said enlargement and changes to the decision-making are politically interlinked.

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