Home Business European funds fraud hunt brought in 259 million euros

European funds fraud hunt brought in 259 million euros


The newcomer puffs out his chest: at the beginning of June, the European public prosecutor’s office takes stock of its first year of tracking down European fund fraud. The magistrates have launched 929 investigations and have already prevented the embezzlement of 259 million euros.

VAT Fraud

Schematically, there are two ways of embezzling European funds: by dipping into EU revenues, generally via VAT fraud (part of this tax is directly allocated to the Community budget); or by drawing unduly from European subsidies.

The hunt for VAT fraud represents about a third of the cases handled by the prosecution. It should be noted that it only deals with cases where the amounts diverted in this way exceed 10 million euros, the rest falling within the competence of the national authorities.

Funny spare parts

The most popular method? The so-called carousel. Thanks to a tangle of companies in several Member States, companies escape VAT or collect it without remitting it to the tax authorities.

At the beginning of May, the European public prosecutor’s office communicated on an investigation relating to a German network of luxury car sales: thanks to a system of false invoices, issued by fictitious companies which duplicated the (real) commercial activity of the group, the defendants embezzled more than 40 million euros by obtaining a VAT refund from the German authorities.

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Another popular fraud involves customs duties. In question, very often, Chinese imports, as evidenced by this case revealed by the prosecution at the end of April, relating to electric bicycles: a Venetian company, to escape taxes on electric bicycles made in China, had them come in pieces detached distributed in different shipments. Amount of the estimated fraud: 2 million euros.

A recovery plan to watch

On the expenditure side, the most classic frauds are those involving agricultural subsidies or embezzlement by local councilors of subsidies from the Union’s regional development fund. Typical example: in March, the prosecution seized €200,000 in Italy for embezzlement of CAP (common agricultural policy) funds. Two suspects would have received five years of aid corresponding to the operation of a farm of 180 hectares, while they actually owned and cultivated less than one hectare. They had made false declarations to pass, with the national authorities in charge of paying the aid, for the owners of the land of another farmer.

The year promises to be busy. “The funds of the European recovery plan, which are being released, call for particular attention”, explains David Touvet, head of the French delegation of the prosecution. More than 800 billion euros will be poured into the common market in the form of credits or subsidies.

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Lack of means

Which does not fail to question the means of the prosecution. The French branch is currently made up of only four magistrates, for a total of around a hundred members spread over the 22 member countries of the prosecution service (Poland and Hungary, for example, have not joined).

On the occasion of the presentation of its annual report, the European Public Prosecutor’s Office notes that “the level of fraud detection is low” and calls on Member States “to form special units (of magistrates, Editor’s note) to support our investigations”. He points out that “VAT fraud alone probably costs between 30 and 60 billion euros” to the Union each year. Before concluding : “In the current economic climate, it is surprising that it is still necessary to insist on the fact that the fight against these criminal associations with extreme determination is necessary. »

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