This editorial by European Chief Prosecutor Laura Kövesi was published in German in Welt am Sonntag on 5 June 2022.
On 23 May, we commemorated thirty years since the assassination of Giovanni Falcone in Palermo. A lot has already been said and written about this brave man and outstanding prosecutor. He came to symbolise the many other magistrates, police officers, civil servants, journalists and activists who did not give in to fear, and who lost their lives in the fight against organised crime.
To me, this anniversary is also an occasion for us all to contemplate what happens when criminal organisations are not fought with the utmost determination at all times: they grow. If we do not fight them efficiently, they not only poison local communities, they end up capturing the State. Their power is proportionate to the profits we let them accumulate over time. They distort the economy and corrupt our institutions only to the extent that we allow them to do so.
When you look at the competence of the European Public Prosecutor’s Office, particularly when it comes to cross-border VAT fraud, it is evident that our main adversaries are organised crime groups. The gap between what the tax authorities in the EU should collect, and what they actually collect, is estimated at more than €130 billion. How much of this is the result of fraud? Probably between €30 and €60 billion every year, year after year, for decades.
This money should have been paid into the budgets of the Member States, and instead has been simply stolen from them. If I were a finance minister, I would probably be losing sleep over it. Especially in the current economic context, when inflation is high – in particular for essential goods.
And yet, the reality is that, somehow, we still have to convince – if not outright prove – that combatting these organised crime groups is necessary. Too often, we are confronted with a rather limited understanding of the implications, for any economy and society, of the existence of criminal organisations capable of inflicting such damages using VAT fraud alone.
But it is not only about these cases. I was in Slovakia recently and met the parents of investigative journalist Ján Kuciak. When he was murdered, he was about to publish an investigation about ‘Ndrangheta’s use of EU agricultural funds to launder money. This scheme had been going on for years. Whether undetected or not properly investigated, one thing is certain: mutual legal assistance was a total failure in this case.
It was only once the article was published, and – due to the tragic circumstances surrounding its publication – its content known to the whole world, that the national authorities accelerated their cooperation.
The murder of Ján Kuciak was also eye-opening for another reason. Just like Daphne Caruana Galizia, he was an investigative journalist. He was detecting economic and financial crime, and corruption. And he was killed because he was damn good at it.
It all starts with detection. If there is no detection, there can be no investigation, no prosecution, no judgment, no recovery of damages.
Our main findings, as the EPPO finishes its first year of operations, is that we need to increase the level of detection of EU fraud.
As soon as the EPPO receives a viable crime report, we bring about a tangible improvement. Take a recent example: Operation ‘Platinum Rush’. In July 2019, German authorities began an investigation into a VAT fraud scheme.
In Germany, for this type of fraud, the expectation is to obtain first convictions within three years, on average, of the start of invesigations. Indeed, national authorities brought the first suspects to court accordingly.
When the EPPO took over this case in June 2021, it enlarged the scope of the investigation to three other Member States. We identified new suspects and assets. In November 2021, we made the first arrests and seized assets worth €3 million. Five months later, we have a list of 30 suspects, as well as the first definitive conviction and confiscation. Three other suspects will stand trial in a few weeks.
We have been a spectacular accelerator. More importantly: we are the only ones in a position to wipe out the entire organised crime group that we have discovered behind this scheme.
With 35 offices in 22 Member States, our European Delegated Prosecutors cooperate directly, outside the cumbersome and slow regime of mutual legal assistance.
Not only are we faster when it comes to individual cases, we are also in a position to discover new criminal activities and open new investigations, based on information accessible to no one else. No one is currently better placed than the EPPO to investigate all the possible ramifications of a cross-border case. Our immediate access to all the information in the cases registered in the participating Member States allows us to establish connections, and to find assets, that could not otherwise be identified.
With the establishment of the EPPO, we have created what I call the ‘EPPO zone’. A zone where, by implementing a prosecutorial policy, we are unifying the approach to EU fraud investigations.
It is not only about having the same objective, a shared set of tools and simplified procedures. In the EPPO zone, we think and act functionally, rather than internationally. We no longer think, for example, in terms of a case initiated in Germany, to which we associate relevant national authorities in Italy and Bulgaria. We think in terms of a strike against a particular criminal organisation, via EPPO offices in Munich, Milan and Sofia.
In this context, I call on all the relevant national authorities to adopt the well-proven best practice and set up dedicated specialised investigative units to support our investigations, combining financial, tax and customs investigators. I propose we constitute an elite corps of highly qualified financial fraud investigators within the EU, working transnationally via the EPPO. You do not need to change any law; it is a mere organisational decision of the relevant national authorities. It can be done tomorrow.