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There’s a new sheriff in town

Although Ireland is one of five member states that don’t participate in the European Public Prosecutor’s Office, the new body will have significant implications for the EU as a whole, writes Joseph Maguire.

On 1 June 2021, a significant milestone in the development of EU criminal law and, in particular, the fight against cross-border fraud was achieved when the European Public Prosecutor’s Office (EPPO) commenced its investigative and prosecutorial tasks.

Operating from new offices in John F Kennedy Avenue in Luxembourg (just around the corner from the Court of Justice and near the European Court of Auditors), EPPO is located in the heart of the EU district for justice that includes the protection of EU finances.

This innovative and independent EU body also operates from the offices of the European Delegated Prosecutors located in the member states that participate in EPPO.

Commission vice-president Vera Jourová welcomed EPPO’s commencement as a “strong signal in the fight against fraud, especially at a moment where Europe invests a lot of money in the recovery”.

A fistful of dollars

Although Ireland is not one of the 22 participating member states of EPPO, Ireland can join at any time and, indeed, has transposed the connected PIF Directive (2017/1371) within the Criminal Justice (Corruption Offences) Act 2018 and the Criminal Justice (Theft and Fraud Offences) (Amendment) Act 2021.

The latter came into force on 14 April 2021 and includes an expanded definition of fraud affecting the Union’s financial interests, encompassing VAT fraud and a new offence of misappropriation.

Anyone can now report a crime to EPPO via the ‘Report a Crime’ form on EPPO’s website, so long as it affects the financial interests of the EU – a so-called ‘PIF’ offence (an acronym from French, ‘La Protection des Intérêts Financiers de l’Union’). EPPO is competent to investigate, prosecute, and bring to judgment the perpetrators of (and accomplices to) such offences committed after 20 November 2017 where committed:

• In whole or in part within the territory of one or several participating member states,
• By a national of a participating EU member state, or
• By a person subject to the EU staff regulations or conditions of employment.

This is provided for in articles 4, 22, 23 and 120 of the EPPO Regulation (2017/1939).

For non-participating member states – Ireland, Denmark, Poland, Hungary and Sweden (although Sweden is expected to join, perhaps next year) – OLAF (Office Européen de Lutte Antifraud, the European Anti-Fraud Office) will continue to play an important role in detecting, investigating, and preventing fraud with EU funds.

However, unlike EPPO, it has no prosecutorial function. It is up to the national authorities to decide what action to take after OLAF completes its administrative investigations, when it may issue judicial recommendations to the national prosecution authorities to pursue indictments.

The searchers

On 5 July 2021, a working arrangement was signed between OLAF and EPPO to establish close cooperation in the exercise of their investigative and prosecutorial mandates, in particular through the exchange of information and mutual support, including personal data. On 23 December 2020, OLAF’s legal framework had already been revised by Regulation 2020/2223 (amending Regulation 883/2013) to facilitate cooperation with EPPO.

Particularly in EPPO’s early years of operation, OLAF is ideally equipped to assist EPPO with its expertise, forensic analyses, and as a privileged source of information for EPPO. Complementary investigations by OLAF will also be possible, provided that they do not duplicate EPPO’s work.

Hence, while EPPO is certainly the most interesting Union office to operate in the criminal law sphere across the EU, with unprecedented prosecutorial powers, EPPO will benefit from partnerships with well-established EU institutions, agencies, and offices – namely the European Court of Auditors (with which it signed a working arrangement on 3 September 2021), Europol (January 2021 working arrangement), Eurojust (February 2021 working arrangement), as well as OLAF.

True grit

In her inaugural speech as the European chief prosecutor, Laura Codruta Kövesi stressed that fraud with public funds is “a serious threat to democracy”. On the commencement of EPPO’s investigative and prosecutorial tasks on 1 June 2021, she pointed out that EPPO’s “decisions will directly affect the fundamental rights of European citizens. We’re the first really sharp tool to defend the rule of law in the EU.”

It is worth highlighting that article 4(g) of Regulation 2020/2092 (on a general regime of conditionality for the protection of the Union budget) specifically provides that breaches of the principles of the rule of law shall concern “effective and timely cooperation with OLAF and, subject to the participation of the member state concerned, with EPPO in their investigations or prosecutions pursuant to the applicable Union acts, in accordance with the principle of sincere cooperation”.

In this regard, the European chief prosecutor has been critical of Slovenia’s delays relating to the appointment of European-delegated prosecutors.

High noon

While Hungary and Poland are not participating in EPPO, rule-of-law issues in those member states are very much in the news. At the time of writing, both countries await a positive assessment of their recovery and resilience plans in order to allow them to obtain substantial EU funds to deal with the consequences of the COVID-19 pandemic.

Hungary, however, signed a working arrangement with EPPO on 6 April 2021 to facilitate the practical implementation of the existing legal framework for judicial cooperation in criminal matters, to exchange strategic information, and to establish other forms of operational and institutional cooperation.

Poland has also taken some preparatory steps to cooperate with EPPO, such as drafting changes to its criminal procedure code that could assist EPPO by availing of various EU instruments for judicial cooperation in criminal matters.

Ireland will certainly need to closely watch any developments in EPPO – and agreeing a working arrangement with EPPO would be a good start. The fine new building in Luxembourg that is home to EPPO has the potential to make a real difference in protecting EU funds against criminality and, at this early stage of EPPO’s operations, it is an opportune time for Ireland to become involved.

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