A European FBI? Not quite

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While it it is not a European FBI, EPPO will be an independent EU body which can investigate and prosecute cases of EU fraud. [Shutterstock]

The European Commission’s proposal for an independent body to investigate fraudulent use of EU funds and VAT crimes is long overdue. While not as fully-fledged as an EU version of the FBI, all member states should sign up to it – especially those who have currently opted out, writes Carl Dolan.

Carl Dolan is director of the Transparency International EU office in Brussels.

This article is part of our series of opinion pieces on transparency in the EU.

Imagine FBI agent Jonny Utah chasing bank robbers across the beaches and surf of Portugal, or a cagey Donnie Brasco undercover on the mean streets of Milan, or countless other Hollywood incarnations of the FBI set on European shores. Perhaps a little tricky given that we currently don’t have anything remotely close to the FBI at the EU level, at least not yet.

However, European cinema fans hoping for more crime thrillers closer to home should be buoyed by the news that the EU has finally agreed to establish the European Public Prosecutor’s Office (EPPO). An EU FBI it is not, but the EPPO will be an independent EU body which can investigate and prosecute cases of EU fraud and other crimes against the Union’s financial interests.

The EPPO is long overdue. The idea first appeared in the Lisbon Treaty back in 2007, but there has not been much political appetite to actually implement it until now. At Transparency International EU we have been calling for an EPPO for almost as long, led by the conviction that this will strengthen the fight against corruption through increasing the number of corruption cases in domestic courts.

While only 20 EU member states have agreed to join this initiative, it is not an all-EU body, but it’s a step in the right direction. The EPPO will help the EU more effectively fight corruption, not only by directly prosecuting cases, but also through a stronger deterrence effect. It should further strengthen the fight against corruption in EU member states and increase the accountability of EU governments.

The EPPO will be a good compliment to the body in charge of investigating fraud in the EU budget, the European Anti-Fraud Office (OLAF), which is unable to follow up on its investigations, rather it can only make recommendations to relevant national authorities.

Only around half of OLAF’s recommendations have led to actual indictments in the period between 2008 and 2015. The over-dependence on national jurisdictions means that transnational crime is not being adequately addressed, leaving an institutional gap which will now finally be filled by the EPPO, which will be able to prosecute criminals directly in national courts.

However, so far, eight EU member states have not signed up to the initiative. These are the UK, Denmark and Ireland (which have an opt-out from the EPPO), the Netherlands, Sweden, Malta, Hungary and Poland. This is worrying because some of these are in dire need of an EPPO as they struggle with corruption in the management of EU funds and threats to the rule of law.

The ruling parties in Hungary and Poland, for example, have recently come under fire for destroying constitutional checks and balances. Their lack of political will to join the EPPO is made worse by the fact that, according to a recent OLAF report, nearly a fifth of all recommendations regarding financial irregularities in EU Structural and Agricultural Funds were addressed at Hungary and Poland for the period from 2013 to 2016. This also indicates that the EPPO could be linked to the disbursement of structural funds or alternatively, countries which have not signed up to it could be subject to more stringent check and controls as compensation.

Malta has likewise been under increased pressure to address corruption since the tragic murder of investigative journalist Daphne Caruana Galizia reporting on corruption in the country and the Prime Minister’s appearance in the Panama Papers. The Maltese public is clearly dissatisfied with the executive which has a disproportional amount of discretion over police and judicial appointments.

These trends all reinforce the need for an EU prosecutor that’s independent of national administrations. Threats to the rule of law and corruption, coupled with the rise in cross-border crime in Europe mean that a patchy approach without these key countries will not be effective enough.

At present, the EPPO’s main role will be to investigate and subsequently prosecute crimes against the EU budget and serious VAT fraud, but its competencies could be expanded to include all cross-border corruption. The possibility for the EPPO to investigate such crimes is explicitly allowed for under the current EU treaties.

However, to make the European Public Prosecutor’s Office a truly effective body, issues related to its structure, independence and ethics will have to be addressed. The current proposal stipulates that the delegated prosecutors at the national level will simultaneously continue to exercise their functions as national prosecutors, even though “they will be fully independent of the national prosecution bodies” when wearing their EPPO hat.

Conflicts of interest may persist. After all, the prestige and career prospects of delegated prosecutors will still depend to a large extent on their peers. Their accountability to the EPPO may conflict with the allegiance they feel to national colleagues

These prosecutors will also be dependent on national law enforcement agencies for gathering evidence and other procedures. In situations where there are widespread doubts about the integrity and independence of the police and national prosecution services, this may blunt the European prosecutor’s edge.

Nevertheless, this is marked difference to the accountability void has existed to date. And while it’s not quite the FBI, the EPPO is welcome response from the EU to the scale of transnational corruption and the threat of state capture that exists in countries like Hungary. Now all Member States need to sign up to EPPO so that no pockets of impunity are left in the EU.