FCPA Blog Report: New ‘European Public Prosecutor’s Office’ tackles Covid-19 fraud

FCPA write…

Most of the globe has put itself into debt, taking out huge loans to pay for the costs of fighting Covid-19 and protecting employment infrastructures. With the flood of cash, fraud is running rampant. The EU is preparing to battle this fraud and corruption by setting up a new European Public Prosecutor’s Office. This new body will be charged with fighting the proliferation of corruption, money laundering, and value added tax (VAT) crimes to which Covid-19 has given rise.

See https://www.euronews.com/2021/06/01/brussels-launches-new-public-prosecutor-to-target-misuse-of-eu-cash

Any effort to combat these crimes must be welcomed, especially where the actions of fraud-promoting charlatans have jeopardized people’s lives. The size of the problem the EU faces is significant. It is estimated that the losses are in the region of $562 million across the continent. These sorts of losses cannot go unchallenged.

Going forward, the body will also oversee the use and distribution of the EU recovery fund, Next Generation EU. This fund is intended to help member states to rebuild post-pandemic. The new body will open its doors with 3,000 cases already awaiting it, with projected estimates of 2,000 cases per year. The agency will be known as the EPPO and will also prosecute another long-standing thorn in the EU side: VAT fraud.

In this instance, the VAT fraud (unless directly linked to the pandemic) should take a back seat. The corruption and criminality linked to Covid-19 is much more serious, even if the sums may be dwarfed in some instances by the frauds related to VAT.

The crimes linked to the virus are so much more sinister. They have had (and will continue to have) detrimental effects on EU citizens and their health moving forward, as state and medical budgets try to absorb the losses made in securing vaccines and PPE. In effect, the fraudsters have committed acts that have directly led to the incapacitation and deaths of innocent casualties. Fraud, in this instance, is definitively not a victimless crime.  

As such, the EPPO should focus its attention on bringing these thieves to justice. VAT tax-dodgers are a blight on society and inflict significant damage on state budgets. Sven Giegold, a German member of the European Parliament and representative of their Green party, said, “Today is a big day for tax justice,” at the press briefing for EPPO’s launch. But he totally missed the point. 

This is not a political issue. Trying to force home your political perspective concerning tax injustice is unbecoming of the problem at hand. This is not a tax issue: it is instead a well-intentioned countermeasure to the corruption and fraud arising from the pandemic. 

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New ‘European Public Prosecutor’s Office’ tackles Covid-19 fraud