2024-04-17 19:40:25
The European Public Prosecutor’s Office (EPPO), which tracks down major fraudsters and watches over the financial interests of the EU, has not been idle in 2023. The latest annual report from the structure, established since June 2021 in Kirchberg, indicates that At the end of 2023, a total of 1,927 investigations were underway, with overall damage estimated at 19.2 billion euros. 59% of this colossal sum, or 11.5 billion euros for 339 investigations, was linked to serious cross-border VAT fraud. “This type of fraud often involves sophisticated criminal organizations and is virtually impossible to uncover from a purely domestic perspective,” explains the Prosecutor’s Office.
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But that’s not all since we learned that European aid was also the target of fraudsters. At the end of 2023, the EPPO was investigating 206 cases linked to the 2020 European recovery plan “Next Generation EU”, with damage estimated at more than 1.8 billion euros. As a reminder, 750 billion euros should enable Member States to face the challenges represented by the green and digital transition, but also the post-covid-19 recovery.
© PHOTO: European Public Prosecutor’s Office
Luxembourg being a particularly important financial center, money acquired fraudulently circulates there in abundance. That said, the country is one of those with the lowest number of estimated financial damages. We are talking here about a total of 13 ongoing investigations for a total of 35 million euros at the end of 2023. Furthermore, during the past year, only five investigations were opened for damage estimated at 1.2 million euros.
European funds victims of fraud
Furthermore, it is not VAT fraud which represents most of the specific investigations in the Grand Duchy but rather “fraud outside public procurement”. The European Public Prosecutor’s Office defines this type of fraud by, in particular, the presentation of false, incorrect or incomplete declarations or documents. ‘It has the effect of diverting or unduly withholding funds or goods from the Union budget or budgets managed by or on behalf of the Union.’ The other important part of the ongoing investigations concerns cases of money laundering.
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In Luxembourg, VAT fraud concerns only two investigations. Remember that this fraud consists of using several shell companies to carry out exchanges of goods. The criminals thus manage to get the VAT refunded, but which they never paid. These frauds are specific to a certain number of products, especially electronic equipment such as wireless headphones, telephones, etc.
Behind these colossal sums acquired illegally, there are particularly well-organized fraudsters. In 2023, the EPPO says it has started to identify the different criminal groups involved in this type of fraudulent activity. “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 strong involvement of organized criminal groups,” warns European Attorney General Laura Kövesi in particular. “Groups that finance these VAT fraud operations with money from other criminal activities.”
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The European Public Prosecutor’s Office therefore wishes, in the long term, to paralyze the financial capacity of these major criminal groups. “They also operate in the field of fraud against European funds, whether it concerns fraud outside public markets, organized fraud against agricultural funds for example. But also in public procurement fraud, such as illegal participation in multiple large-scale procurement procedures.”
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