Laura Codruta Kovesi on Tackling EU Fraud and Corruption – IMF F&D
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Bibliographic details
- Authors: Rahim Kanani
- Published: December 1, 2020
Background and mandate
- Laura Codruta Kövesi is the European Union’s first anti-fraud prosecutor and heads the European Public Prosecutor’s Office (EPPO), based in Luxembourg.
- EPPO’s remit: investigate, prosecute, and bring judgment for crimes against the EU budget, including fraud, corruption, organized crime, and cross-border value-added tax (VAT) crimes exceeding €10 million.
- Previously, national prosecutors lacked jurisdiction beyond their borders; institutions such as Europol or OLAF had no legal authority to prosecute.
Scale of the problem and context
- The European Commission reports that €140 billion in VAT revenue was lost in 2018 to fraud and evasion, predicting that number to increase to €164 billion in 2020 as a result of the pandemic.
- EPPO expects 3,000 cases to land on its desks when it starts.
Main challenges to establishing an effective EU prosecutor’s office
- Building the office from scratch: need to establish administrative, budget, and legislative guidelines.
- Harmonizing prosecutors from 22 different member states working under different judiciaries and procedural rules.
- Once operational, the need to be efficient, act independently, and win citizens’ trust through demonstrable effectiveness and equal application of the law.
Resources, staffing, and operational needs
- Funding secured for 140 European delegated prosecutors.
- Gap in Luxembourg-based staff critical to mission: need financial investigators and case analysts to aggregate and analyze information for cross-border crime investigations.
- Specific budget request versus allocation:
- Requested budget: €55 million.
- Current funding: €37.7 million.
- Emphasis on the importance of specialized headquarters staff to identify goods and bank accounts that can be seized to recover damages.
Case selection, legal principles, and cooperation
- Guiding principle: the principle of legality rather than the principle of opportunity.
- Possible prioritization criteria: the amount of damages at stake, the statute of limitations, and the position of those suspected (e.g., public office holders).
- Reliance on national authorities is necessary—cooperation with national police, tax administrations, and other domestic agencies is required.
Role of investigative journalism
- Investigative journalists can be a valuable source of information and partner: they have helped open investigations and provided documents, recordings, and other materials.
- Tension: journalists seek information about investigations; prosecutors sometimes must withhold details to protect cases.
- Example from Romania: journalists played a key role in mobilizing public opposition when legislative proposals threatened the rule of law.
- Journalists sometimes delayed publication to avoid impeding active investigations.
Building public trust and expectations on timelines
- Trust is earned by investigating based on solid proof, obtaining convictions in court, and acting efficiently and independently.
- Credible results require definitive court decisions for convictions; this takes time—"two or three years, not two or three days."
- In Romania, complaints from private citizens increased by more than 60 percent in one year, indicating rising public trust when institutions demonstrate effectiveness.
- Emphasis on equal application of the law: "nobody is above the law" and demonstrating that institutions can work efficiently and legally to defeat corruption.
Notable figures and numeric details
- Threshold for EPPO cross-border VAT crimes: €10 million.
- VAT revenue lost to fraud and evasion: €140 billion (2018), predicted €164 billion (2020).
- Expected initial caseload: 3,000 cases.
- European delegated prosecutors funded: 140.
- Budget requested: €55 million.
- Budget allocated: €37.7 million.
- Journalist–prosecutor alignment: 90 percent of cases.
- Proposed decriminalization threshold mentioned in Romanian context: 200,000 lei ($47,800).
- Proposed time limit to close investigations in that Romanian episode: one year.
- Reported increase in citizen complaints in Romania: more than 60 percent in one year.
Laura Codruta Kovesi on Tackling EU Fraud and Corruption – IMF F&D
Content in this bundle
- En las trincheras La lucha contra la corrupción ● Finanzas y Desarrollo ● Diciembre de 2020
- Interview with Laura Codruta Kovesi on Tackling Eu Corruption
- Laura Codruta Kovesi on Tackling EU Fraud and Corruption – IMF F&D
- Формирование экономики данных – Финансы и развитие – декабрь 2020 года
- في خندق العمل