The European Commission today (17 July) proposed establishing a European Prosecutor’s Office, in an attempt to improve the investigation and conviction of criminals who defraud the EU. British Conservatives immediately said they would opt out of the plan.
The Commission wants to improve Union-wide prosecution of criminals who defraud EU taxpayers by establishing a European Public Prosecutor's Office and by reinforcing the procedural guarantees of the EU anti-fraud office OLAF.
Britain's ruling Conservatives immediately rejected the idea, leaving the remaining 27 EU members with the option of continuing without Britain, using the so-called 'enhanced cooperation' procedure (see background).
The UK announced in October 2012 that it would opt out 'en masse' from EU police and crime laws and cherry pick legislation it wants to adhere to, such as recent EU proposals on cybercrime.
The Commission's move, however, appears long overdue in the light of various scandals involving EU funds, which British eurosceptics were quick to criticise.
It also comes amid warnings by the OLAF chief that the European Union itself would be at stake if it was unable to properly address the issue of corruption.
OLAF head Giovanni Kessler did not appear at today's Commission announcement, as he faced pressure from MEPs over the handling of the case which led to the resignation of former Health Commissioner John Dalli last year.
Recent experience has shown that for the same crime involving EU funds, defendants were acquitted in Bulgaria and given heavy sentences in Germany.
A table produced by the Commission showed that relatively few cases transferred by OLAF to the member states prosecutors' office eventually led to conviction of wrongdoers, although the rate varied significantly among countries. Sweden had the highest rate, with all of the five cases transferred leading to conviction. The lowest was Slovakia, with no convictions for 16 cases transferred.
The record-holder of transferred cases is Romania with a total of 225, and a conviction rate of 23.4%. Second comes Germany with 168 cases and a 57% conviction rate. The average rate of conviction for the EU is 42.3%.
The Commission proposes to further strengthen OLAF's governance and to reinforce procedural guarantees when its representatives are in the field performing their investigations.
OLAF's role is also changed considerably under the Commission proposal, as the EU's anti-fraud office will no longer carry out administrative investigations into EU fraud, leaving full competence to the proposed new European Public Prosecutor's Office. However, OLAF would remain responsible for investigations in areas which don't fall under the authority of the European Public Prosecutor. These include irregularities affecting the EU's financial interests, and serious misconduct or crimes committed by EU staff without a financial impact.
European Commission President José Manuel Barroso said: "As promised in my 2012 address on the State of the Union, the Commission has today proposed to set up a European Public Prosecutor's Office. This initiative confirms the Commission commitment to upholding the rule of law; it will decisively enhance the protection of taxpayers' money and the effective tackling of fraud involving EU funds. The Commission has also delivered on its commitments to reinforce and strengthening OLAF procedures applied to procedural guarantees, in line with the guarantees that the European Public Prosecutor Office will apply."
Commission Vice-President Viviane Reding, in charge of Justice and home affairs, said: “Criminals who exploit legal loopholes to pocket taxpayers' money should not go free because we do not have the right tools to bring them to justice. Let's be clear: If we, the EU, don't protect our federal budget, nobody will do it for us. I call on Member States and the European Parliament to rally behind this important project so that the European Public Prosecutor's Office can assume its functions as of 1 January 2015.”
Algirdas Šemeta, the EU's Tax and Anti-Fraud Commissioner added: "What we are essentially proposing is the best of both worlds. […] The EU budget will undoubtedly be safer with the new European Public Prosecutor's Office - and a better functioning anti-fraud office - as its watchdogs".
Timothy Kirkhope MEP, Conservative Justice and Home Affairs spokesman, slammed the Commission plans. He pledged that Conservative MEPs will seek to halt the plans, unlike Labour and Liberal Democrat MEPs whom, he claimed, have already voted for discussion to begin so that the Prosecutor can be established.
"Just because some EU countries' prosecutors are doing a bad job at stamping out misuse of EU funds, it's not a good reason for the EU to begin taking over all 28 judicial systems. Instead, those countries should be forced to clean up their act and establish a prosecution system that can protect the financial interests of European taxpayers”
French MEP Véronique Mathieu Houillon, spokesperson of the Parliament's centre-right EPP group, welcomed the Commission proposal. “It is time for the EU to retaliate against crime and to recover more than 500 million euro that are diverted each year at the expense of European citizens,” she stated.
The European Public Prosecutor's Office would be responsible for investigating, prosecuting and bringing to justice those who damage assets managed by or on behalf of the EU.
The European Council may adopt a decision extending the powers of the European Public Prosecutor's Office to include serious crime having a cross-border dimension.
The discussion on the European Prosecutor found its way into the European Convention, and ultimately, the Lisbon Treaty. For the first time, Article 86 of the Treaty on the Functioning of the EU allows for the possibility of establishing the European Public Prosecutor's Office.
The Commission has already done preparatory work in this area, starting with the well known 'Corpus Juris' study.
The European Public Prosecutor's Office may be established from Eurojust by adopting a series of regulations following a special legislative procedure. This requires the Council to act unanimously after obtaining the consent of the European Parliament.
In the absence of unanimity, a group of at least nine EU countries can go ahead with the project, by establishing enhanced cooperation.