Laura Kövesi, European Chief Prosecutor of the European Public Prosecutor’s Office (EPPO), highlighted areas for improvement in the fight against VAT fraud during an exchange of views with the European Parliament’s Committee on Economic and Monetary Affairs (ECON) on Tuesday 28 March. In her view, EPPO should have access to the data of the Eurofisc network and Member States should report more VAT fraud. She also calls for a revision of the regulation governing EPPO (see EUROPE 13148/11).
She noted in her introduction that one of EPPO’s tasks is to investigate fraud involving EU funds of more than €10,000 and cross-border VAT fraud of more than €10 million.
According to Europol, VAT carousel fraud or missing trader inside community fraud is the most profitable crime in the EU, costing the EU around €50 billion a year in tax losses. Carousel fraud, organised between several companies, consists of obtaining reimbursement from an EU country of a tax that was never paid upstream or reducing the amount of VAT payable.
“This is not only a huge loss of revenue or a distortion of competition in the single market, but it is a serious security issue for the EU”, Ms Kövesi said. These frauds are in fact practised by organised crime in order to launder money from other criminal activities.
To improve the work of EPPO, Ms Kövesi suggested making better use of tools at EU level. She recommended that EU institutions, bodies, offices and agencies should have a legal obligation to report suspected fraud to EPPO without delay. She has asked to have direct access to the Eurofisc network data without having to go through the Member States, Europol or the European Anti-Fraud Office (OLAF). “The interpretation of the legislation is restrictive, an operational channel must be established with Eurofisc”, she argued.
She also felt that national officers should be put in place to work only on European Public Prosecutor’s Office cases. “Member States have failed to report fraud, the current level of fraud detection in the EU is not satisfactory” she complained.
According to Ms Kövesi, a revision of the regulation is necessary. “The European Commission sees EPPO as an agency, but it is not an executing agency, we exercise judicial power”, she said. She considered that the framework of the agency does not allow it to meet all the specific needs of a transnational prosecutor.
Responding to a question from Claude Gruffat (Greens/EFA, French), she also felt that the financial resources allocated to EPPO were insufficient to carry out its work. (Original version in French by Anne Damiani)