New kid on the block: the European Public Prosecutor’s Office
Several EU bodies are involved in the fight against fraud and corruption, with acronyms such as OLAF, Eurojust, Europol, the CJEU and ECA. Another one has only recently been created: The EPPO, the European Public Prosecutor’s Office. Many experts consider this office to be the missing link in stepping up action against fraud and corruption in the EU. Oliver Salles, as the interim Administrative Director of the EPPO, presents some key issues related to the process of setting up the EPPO and where they stand from an operational point of view.
By Oliver Salles, European Public Prosecutor’s Office
22 Member States pushed the start button
On 12 October 2017, after four years of negotiations on the proposal of the European Commission , the Council adopted the Regulation implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (EPPO) as an independent EU prosecution body competent to investigate and prosecute fraud, corruption and other crimes affecting the Union’s financial interests. At the time, twenty Member States agreed to start a paradigm shift in the way the European Union protects its financial interests by setting up this new office. Two more Member States (the Netherlands and Malta) have since joined them, and the Swedish Prime minister has recently announced his government’s intention to submit the decision to join the EPPO to the Riksdagen, the Swedish parliament. Only the United Kingdom, Ireland, Hungary and Poland are not participating in the EPPO, for the time being, and nor is Denmark, which has a Treaty opt-out on judicial cooperation.
Fraud affecting the financial interests of the EU is complex, often involving criminals in several Member States. National authorities have to deal with criminal law systems which differ from one state to the next, lengthy procedures for judicial cooperation, language barriers, a lack of resources and the different priorities of public prosecutors. In order to be successful in such investigations, the relevant national authorities would need to have a robust understanding of the judicial and administrative frameworks in all of the Member States involved and the ability to act swiftly. In practice, this is not always the case.
It has become obvious that the previous EU framework comprising Eurojust, Europol and OLAF — the EU’s anti-fraud office — could not overcome these difficulties effectively. Currently, only national authorities can conduct criminal investigations and also prosecute cases of fraud affecting the financial interests of the EU. However, their competence stops at their respective borders.
Eurojust and Europol, as judicial and police cooperation bodies, mainly support the Member States in their actions against serious cross-border crime and terrorism. However, they cannot carry out investigations or prosecutions themselves. OLAF carries out administrative investigations and sends recommendations to the competent authorities at EU or Member State level to recover any defrauded funds or to prevent money from being unduly spent, as well as to national judicial authorities, which can decide to open criminal proceedings on this basis (or not). Currently, only 50% of the recommendations issued by OLAF to national judicial authorities result in indictments. This is an average, hiding considerable national disparities. The lack of a consistent level of judicial oversight across the EU creates loopholes: cross-border VAT fraud being a case in point.
This is where the EPPO will make a difference. It will operate as a single office with a decentralised structure across the participating Member States. Its Central Office will be in Luxembourg but it will work together with European Delegated Prosecutors embedded in the judicial systems of all the participating Member States. The Central Office will consist of a European Chief Prosecutor and one European Prosecutor from each participating Member State, as well as support staff. By 2023, when it has reached cruising speed, it is planned that the EPPO will have a total of 117 staff at its Central Office.
In addition, there will be European Delegated Prosecutors — national prosecutors working for the EPPO under the supervision and guidance of the Central Office — who will carry out the bulk of the EPPO’s investigative work. Member States will provide both the legal and material means for the European Delegated Prosecutors to be able to act effectively within their national systems. The Central Office will provide the information and legal tools for the European Delegated Prosecutors to be able to cooperate effectively across borders.
Where necessary, criminal procedural systems will have to be adapted to allow the EPPO to carry out its investigation and prosecution work properly. Furthermore, the European Prosecutors in the EPPO’s Central Office will act as prosecuting authorities in each national system, with the power to supervise investigations in their Member State of origin and, in exceptional cases, to conduct them personally.
The EPPO is meant to become the depository of unique expertise and a provider of strategic data in the fight against fraud and corruption at EU level, and hence will have both the ability and the means to lead complex, cross-border criminal investigations, allowing it to overcome the current fragmented national approach. To do so, the EPPO will define its own European investigation and prosecution policy, and work closely with national judicial and law enforcement agencies (e.g. police, tax and finance authorities, customs, etc.). It will also need to establish close cooperative relationships with its Union partners; in the area of PIF investigations (protection of financial interests), synergies between the EPPO and OLAF will enable them to protect the budget through a combination of criminal and administrative investigations. Comprehensive reporting requirements imposed upon national authorities as well as EU institutions, bodies, offices and agencies will ensure that the EPPO can exercise its competence effectively.
Competence
The EPPO will have powers to deal with criminal offences affecting the financial interests of the Union, as defined in the PIF Directive [1]. In accordance with Articles 22 and 25 of its founding regulation, the EPPO will in principle [2] only deal with cases where the damage to the EU’s financial interests is more than 10 000 euros. In addition, the EPPO will be competent for serious cross-border VAT fraud involving total damage of at least 10 million euros.
Moreover, the EPPO’s competence will cover offences relating to participation in a criminal organisation as defined in the EU’s Framework Decision 2008/841/JHA, if the focus of the criminal activity of such a criminal organisation is committing the offences defined in the PIF Directive. In addition, the EPPO will also be competent for any other criminal offence that is inextricably linked to an offence affecting the Union’s financial interests.
The EPPO may, under certain circumstances, investigate and prosecute cases even if they were committed outside the territory of the participating Member States, i.e. in the territory of non-participating Member States or third states.
The EPPO’s actions will be guided by high standards with regard to the protection of the rights of the persons involved in its investigations through the guarantees provided in national procedural law systems and in the relevant EU instruments (directives on procedural rights of persons suspected or accused in criminal proceedings).The EPPO’s action will be guided by high standards of protection of the rights of the persons involved in its investigations, through the guarantees provided for in national procedural law systems and in the relevant EU instruments (Directives on procedural rights of persons suspected or accused in criminal proceedings).
Organisation
TThe Commission is responsible for the establishment and initial administrative operation of the EPPO, with the objective of the EPPO starting to work on actual cases as from November 2020. As interim Administrative Director, I am in charge of coordinating several lines of work to that effect . Allow me to mention a few of them.
The general public has focused its attention mainly on the negotiations between the Council and the European Parliament concerning the first European Chief Prosecutor. Unfortunately, the Council and Parliament have not been able to come to a ‘common accord’ so far, so the appointment of the first European Chief Prosecutor has been delayed.
In the meantime, the Member States have started to nominate their three respective candidates for European Prosecutor positions. At least 66 candidates will be interviewed in the coming months by the selection panel, so that 22 of them can be appointed around the summer and possibly take up their duties towards the end of this year.
A dozen posts have or will be published this year to start recruiting EPPO staff. This first wave will fill key central support functions, such as HR, the legal service, IT, security and administration.
Another main focus of work is the preparation of the EPPO headquarters in Luxembourg. All the preparatory and technical specification work is well underway, in close cooperation with the Luxembourg authorities, so that work on the selected building can start in January 2020 at the very latest. In the meantime, transitional accommodation solutions are being arranged.
The EPPO is also designing and building its future IT infrastructure, which includes the development of an unprecedented Case Management System, connected to the case management systems in each of the participating Member States — the backbone of the EPPO’s future operations.
Cooperation with the ECA
Apart from cooperation with Eurojust, Europol and OLAF, as defined in its founding Regulation, the EPPO will also have a natural interest in developing strong and fruitful relations with the ECA. After all, though acting from different angles and with different tools, they share a common objective — protecting the financial interests of the EU, in particular through fighting fraud.
The ECA’s focus on sound financial management and the efficiency and effectiveness of EU spending could inform the EPPO’s strategic policy orientation. The ECA’s reports and findings will be extremely useful in this context. In addition, the ECA will be able to transmit its relevant findings and cases of suspected fraud to the EPPO, as it currently does to OLAF.
From a practical point of view, the challenge will be to find the right ways to make good use of the ECA’s expertise and knowledge: we could explore information exchange modalities, share best practices, organise joint or reciprocal training. Such cooperation would probably have to be embedded in a Memorandum of Understanding or administrative agreement at some point, designing an approach which will be mutually beneficial.
We welcome the prospect of further reflection and discussions in this regard. There is no doubt that this will be among the priorities of the first European Chief Prosecutor and that the ECA will contribute to making the EPPO a great success. This being said, each body will keep its power to exercise its respective legal and institutional role. The ECA will be able to audit the EPPO, and theoretically the EPPO might lead investigations involving the ECA.
Getting into gear
In the years to come, the challenge for the EPPO will be to demonstrate its added-value by solving conflicts of jurisdiction, stepping up prosecution rates and achieving tangible results. In other words, by bringing cases to judgement in a swift and conclusive way. This is quite a task in the area of criminal law where national jurisdictions have set the tone and pace for centuries. A crucial element for the success of the EPPO will be support and input from the Member States who have to prove they are serious about protecting the financial interests of the EU.
[1] Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law.
[2] The EPPO will be able to deal with cases below the threshold of 10 000 euros under the conditions set out in Article 25(2) of the EPPO Regulation if the case has repercussions at Union level or if officials or other servants of the Union or members of the institutions of the Union could be suspected of having committed the offence.
This article was first published on the 2/2019 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.
