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The latest Annual Report of the European Public Prosecutor’s Office (EPPO) shows that at the end of 2023, it had a total of 1 927 active investigations, with an overall estimated damage to the EU budget of €19.2 billion – 59% of which (€11.5 billion, corresponding to 339 investigations) was linked to serious, cross-border VAT fraud. This type of fraud often involves sophisticated criminal organisations, and is nearly impossible to uncover from a purely national perspective.

New sources of EU funding are also being targeted by fraudsters. By the end of 2023, the EPPO had 206 active investigations relating to the first NextGeneration EU funding projects, with an estimated damage of over €1.8 billion. This represents approximately 15% of all cases of expenditure fraud involving EU funds handled by the EPPO during the reporting period, but in terms of estimated damage, it corresponds to almost 25%. This number can only increase, in the context of the accelerated implementation of NextGenerationEU funding. In 2023, the EPPO also began to identify organised crime groups involved in this type of fraudulent activity.

| Organised crime is fuelled by defrauding the EU budget

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European Chief Prosecutor Laura Kövesi © Europa.eu

The scale of fraud affecting the financial interests of the EU, in particular on the revenue side of the budget, can only be explained by the heavy involvement of serious organised crime groups’, warns European Chief Prosecutor Laura Kövesi.

‘In our investigations, we see serious organised crime groups financing VAT fraud operations with money obtained from their other criminal activities. We see the same specialised operators laundering money from VAT fraud and the other criminal activities of these groups. Our strategy should be to cripple the financial capacity of the serious organised crime groups’.

In ongoing EPPO investigations, participation in a criminal organisation is most often found in connection with VAT carousel fraud schemes, or with customs fraud. However, criminal organisations also operate in the field of fraud involving EU funds, both in non-procurement fraud (for example, organised defrauding of agricultural funds), or procurement fraud (such as unlawful participation in multiple large-scale procurement procedures).

| Improved detection and performance 

In 2023, the EPPO received and processed 4 187 crime reports, which is 26% more than in 2022. This increase has been driven mainly by reports from private parties (2 494 – 29% more than in 2022), as well as from national authorities (1 562 – 24% more than in 2022). This evolution proves that the level of detection of fraud affecting the financial interests of the EU in the participating Member States has further improved.

Last year, we opened 1 371 investigations, which is 58% more than in 2022 – corresponding to damage estimated at €12.28 billion. This is mostly the result of the combination of improved cooperation between the EPPO and the relevant national authorities, and the EPPO’s determination to target criminal organisations particularly active in subsidy fraud (non-procurement expenditure fraud) and revenue fraud (VAT and customs).

In 2023, with 139 indictments filed (over 50% more than in 2022), the EPPO started to bring more perpetrators of EU fraud to judgment in front of national courts.

In line with its objective to focus on damage recovery, judges granted European Delegated Prosecutors freezing orders worth €1.5 billion, which is over four times more than in 2022.

However, this is still only a fraction of the vast illicit profits of criminal networks, which could exceed hundreds of billions annually, according to recent estimates. In light of this, the European Chief Prosecutor urges that the performance of the EPPO ‘is not only a matter of elementary economic interest, it is also a matter of internal security’.

| Recovery of the proceeds of criminal activity

n 2023, 475 recovery actions took place in 19 of the participating Member States (Austria, Belgium, Croatia, Czechia, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Romania, Slovakia and Spain). In total, the EPPO requested more than €1.53 billion to be seized, and the seizure of €1.5 billion was granted.

Final confiscations of more than €60 million wereordered by courts in definitively resolved cases.The single highest seizure was more than €9.9 million in monetary instruments. In eight cases, a total of more than €7.5 million was recovered before trial. Extended confiscation was requested in 22 instances, in order to restrain assets towards which some protective measures had been taken by the suspects to avoid confiscation. The EPPO made extensive use of value-based confiscation to enable recovery. The EPPO also made several confiscation requests (41) with the intention of securing possible civil actions.

The main assets seized were bank accounts, followed by real estate properties, vehicles, cash as well as shares, cryptocurrencies, gold and silver bars, paintings and luxury items. Criminal merchandise – such as electronic devices, machinery, equipment, clothing products, household goods, toys or e-bike components – has been seized and removed from the market, effectively depriving the criminals of the benefit of their illicit activities

Photo Credits : (left): © Dutch Fiscal Information and
Investigation Service (FIOD); (upper row, left): © Guardia Civil; (upper row, centre): © Hellenic Police; (upper row, right): © Hellenic Police; (lower row, left): © Hellenic Police; (lower row, centre): © Steuerfahndung Nürnberg; (lower row, right): © Hannover Customs Investigation Office.

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