New EU Agency To Pursue VAT Fraudsters

by Ulrika Lomas, Tax-news.com, Brussels

09 June 2017

Twenty EU member states have reached a deal on the establishment of a new European Public Prosecutor's Office that will have the power to investigate and prosecute criminal cases affecting the EU budget.

The Public Prosecutor's Office will be an independent and decentralized prosecution office of the EU. It will be responsible for investigating, prosecuting, and bringing to justice crimes against the EU budget, such as fraud involving EU funds over EUR10,000 (USD11,182), corruption, or cross-border VAT fraud above EUR10m.

The European Commission estimates that at least EUR50bn of VAT revenues are lost each year through cross-border fraud. Outside the area of VAT, in 2015 EU member states detected and reported to the Commission fraudulent irregularities for an amount totalling around EUR638m.

The existing EU bodies – the European Anti-Fraud Office, Eurojust, and Europol – cannot conduct criminal investigations or prosecute fraud cases. The new Public Prosecutor's Office will pool expertise in areas such as crime analysis, tax, accounting, or IT, and provide smooth communication channels without any language barriers.

The new office will operate on two levels: central and national. The central level will consist of the European Chief Prosecutor, 20 European Prosecutors (one per participating member state), two of whom as Deputies for the European Chief Prosecutor, the Administrative Director, and a dedicated technical and investigative staff. The decentralized level will consist of European Delegated Prosecutors, who will be located in the participating member states.

The 20 member states which agreed to the initiative are: Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Portugal, Romania, Slovakia, Spain, and Slovenia. Other member states may join later.

The EU Parliament must now consent to the initiative.

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