EU still deadlocked on new European anti-corruption legislation

Carl Dolan
21 October, 2015
Press Release

Transparency International EU welcomes progress achieved on setting up a European Public Prosecutor’s Office during the Latvian Presidency but urges the EU to overcome a disagreement on the legislative proposal defining the scope for its work.

This is one of the main findings of the EU Presidency Anti-Corruption Scorecard released today by Transparency International.

“Almost half of EU cases that are investigated for fraud and corruption never see the inside of a courtroom,” says Carl Dolan, Director of the Transparency International EU. “Too often cases that involve misuse of EU funds slip through the cracks. The need for a fully independent European Public Prosecutor is clear and the delays we are seeing do not serve the interests of the European taxpayer”.

The scorecard launched today is a joint effort of Transparency International EU and Transparency International Latvia aimed to evaluate the Council’s commitment to the anti-corruption and transparency agenda under the Latvian leadership in the first half of 2015.

The Presidency achieved a substantial progress on the text of the regulation on the establishment of the European Public Prosecutor’s Office (EPPO) securing broad support for the first 16 articles which include provisions on the rules and the functioning of the office. [1]

This progress however is overshadowed by the Council’s inability to resolve an existing disagreement with the European Commission and the European Parliament around a Directive on the fight against fraud to the Union’s financial interests by means of criminal law (PIF Directive).

The EPPO will handle offences as defined by the PIF Directive which intends to harmonise diverging legal definitions of offences against the EU budget across member states and sanctions for those offences. [2] The Council continues to fundamentally disagree with the Parliament on the inclusion of VAT-related fraud in the scope of the Directive delaying its adoption and therefore the implementation of the EPPO.

The scorecard released today aims to shed light on decision-making in the EU Council. It is the result of a joint assessment conducted by Transparency International EU and TI Latvia between January and June 2015. The summary of the scorecard can be found here and a detailed version here. [3]

This scorecard concludes a two-year project that Transparency International EU undertook jointly with four national chapters in Lithuania, Greece, Italy and Latvia. [4] Scorecards for the Lithuanian, Greek and Italian Presidencies can be found here.

Editor’s notes:

[1] Currently only national authorities can investigate and bring to trial EU fraud-related cases. These competences are restricted by national borders, legal complexities of investigations, inadequate resources, competing priorities of national prosecutors as well as differences in enforcement measures. A proposed European Public Prosecutor’s Office would fill this gap by combining European and national law-enforcement efforts in a unified approach.

[2] A proposal for a PIF Directive, submitted by the European Commission in 2012, would provide a legal basis for the EU to legislate on fraud and other crimes affecting its financial interests. The current deadlock in negotiations is due to the disagreement of the European Commission and the European Parliament on one side and the EU Council on the other on whether VAT-related offences should be included in the scope of the Directive. The former insist that VAT fraud affects the member states’ contributions to the EU budget and should therefore be included in the scope of the Directive, while the Council considers it being strictly a domestic issue.

[3] The assessment is divided into three Pillars: Pillar I evaluates the transparency of the preparations for the Presidency by the government and administration of the country that holds the rotating EU Presidency. Pillar II evaluates the accountability of these actors during the Presidency. Pillar III evaluates how the Presidency prioritised key anti-corruption issues and how much progress member states made with regard to the selected issue in the EU Council. The Scorecard is based on research by the TI EU Office and Latvia and on-going monitoring of developments in the EU Council.

[4] Over the past two years TI EU monitored how EU member states conduct their presidencies and how they promote crucial anti-corruption legislation. TI EU published its findings every six months in the format of a Presidency Scorecard.

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