European Public Prosecutor Office (EPPO) : too little, too complex but, still, a step in the right direction…

On October 5th the European Parliament consented to the creation of the European Public Prosecutor Office as foreseen by the art. 86 (*) of the Treaty on Functioning of the European Union. Following this vote the Council adopted on October 12th the 200 pages long Regulation  creating this new EU body. It has been adopted following the enhanced cooperation procedure foreseen by art. 86 TFEU and it will not cover  UK, IRL, DK (which have not opted in) and Malta, Nederland, Polonia, Sweden and Hungary.

It has been a rather long and bumpy road before reaching this result.

Itcould had been much better since the original proposals in the so-called “Corpus Juris” debated by the decades ago by the Commission and the EP  but it is a small step in the right direction. Needless to say in the meantime two other complementary initiatives are negotiated : the long awaited revision of Eurojust (which is more a cooperative tool between the Member states than a beginning of a supranational EU Agency such as the European Public Prosecutor should be…) and an upgrade of OLAF the administrative (and not judiciary) body which is already fighting the fraud against European resources.

Bringing all these tools together will not be easy but, as always the EU progresses by making a step in one direction and another on the side… A positive signal is the Commission announcement to empower the EPPO of terrorism and serious offenses as recently requested (?) by French President Macron and endorsed by the European Commission President Juncker. However a new legislative proposal could be on the Institution’s table only next year and this means that it could not be seriously negotiated before 2020 or 2021 by the new European Parliament (if in the meantime there will no be some other “horrific” terrorist attack..). However, be patient, this is how a 28 Member States Union can work..

As far as the current version of the EPPO is concerned the EP Rapporteur Barbara MATERA has made a rather clear abstract of the new text  in her explanatory note to the Recommendation to the Plenary :

The protection and prosecution of offences against the EU budget and the financial interests of the EU is currently within the exclusive competence of Member States. OLAF, Eurojust and Europol do not have the mandate to conduct criminal investigations and the EPPO will fill this institutional gap.

The establishment of the EPPO will bring about substantial change in the way the Union’s financial interests are protected. It will combine European and national law-enforcement efforts in a unified, seamless and efficient approach to counter EU-frauds. Currently, only national authorities can investigate and prosecute EU-fraud and their competences stop at their national borders.

On the 17 July of 2013, the European Commission submitted a proposal for a regulation of the Council to set up the European Public Prosecutor’s Office (EPPO) defining its competences and procedures. Article 86 of the Treaty on the Functioning of the EU (TFEU) provides with the legal basis and the rules for setting up the EPPO. Under Art. 86, the proposed regulation is to be adopted in accordance with the Consent legislative procedure: the Council is to decide unanimously after obtaining the consent of the European Parliament.

On 7 February 2017, the Council registered the absence of unanimity in support of the proposal. Under Article 86 of the Treaty on the functioning of the EU, this opens the way for a group of at least nine Member States to refer the text for discussion to the European Council for a final attempt at securing consensus. The rapporteur regrets that only 20 Member States participate, to date, at the enhanced cooperation and encourages non-participating Member States to join as well in the future.

On 8 June, the Member States participating in enhanced cooperation adopted a general approach on the proposal.

The EP has adopted 3 interim reports (2014, 2015 and 2016) related to EPPO where it has raised number of concerns regarding the competences of the EPPO, PIF directive and VAT fraud, structure, investigations, procedural rights, judicial review and relations with other relevant EU agencies.

•  The structure of the EPPO 

The EPPO will be a body of the Union with a decentralised structure with the aim of integrating the national law enforcement authorities. A European Public Prosecutor will head the EPPO and every participating member will be represented with one prosecutor. According to the Regulation the investigations will be carried out by European Delegated Prosecutors (EDPS) located in each Member State. The number of EDPs for Member States will be decided nationally but each one should have at least one. The Delegated Prosecutors will be an integral part of the EPPO but also continue to exercise their functions as national prosecutors. When acting for the EPPO, they will be fully independent from the national prosecution bodies.

•  Competences

The EPPO will be responsible for investigating, prosecuting and bringing to judgment the perpetrators of offences against the Union’s financial interests. The functions of prosecutor will be carried out within the competent courts of the Member States in relation to such offences.

The set of competences and proceedings for the EPPO, include the proposed directive on fighting fraud against the Union’s financial interests by means of criminal law (‘PIF directive’). In December 2016, the EP and the Council reached a provisional agreement on the PIF proposal. They agreed to include serious cases of cross-border VAT frauds in the scope of the directive, setting the threshold value at €10 million.

The rapporteur welcomes that the “damage” criterion has been largely mitigated by exceptions introduced and is no longer applicable to Art 3(a), (b) and (d) of the PIF Directive (non-procurement related expenditure; procurement related expenditure and revenue arising from VAT own resources). The possibility to transfer cases from national authorities to EPPO, for which EPPO otherwise would not be able to exercise competence, has been introduced.

The EPPO regulation widens the scope of reporting obligations by national authorities and gives EPPO more possibilities to request additional information. The cross-border dimension of the serious crimes that fall under the competences of the EPPO could, in the future, be extended.

•  Judicial review

The EPPO Regulation ensures a comprehensive system of judicial review by national courts and allows for possibilities of direct review by the ECJ (EPPO decision to dismiss a case, contested on the basis of EU law, disputes relating to compensation of damage caused by the EPPO, disputes concerning arbitration clauses, staff-related matters and decisions affecting data subjects’ rights such as the right of public access to documents).

•  Investigative measures

EPPO will have sufficient investigative measures available to conduct its investigations. Art. 30 of the regulation provides for a list of measures where the offence subject to the investigation is punishable by a maximum penalty of at least four years of imprisonment. In this regard, the co-legislators have agreed on criteria for Member States to make requests for investigative measures based on the principle of mutual recognition set out in Directive 2014/41/EU regarding the European Investigation Order in criminal matters.

•  Procedural safeguards  

The protection of the procedural rights of suspected and accused persons is guaranteed in full compliance with the rights of suspects and accused persons enshrined in the Charter of Fundamental Rights. The regulation provide for rights of defence for EPPO suspects, in particular the right to legal aid, the right to interpretation and translation, the right to information and access to case materials, and the right to present evidence and to ask the EPPO to collect evidence on behalf of the suspect.

•  Eurojust, OLAF and Europol

As a necessary tool for exercising its duties, the EPPO may have to establish and maintain cooperative relations with existing Union agencies, offices or bodies such as Eurojust, OLAF and Europol.

EPPO and Eurojust in particular need to see their competences defined clearly in order to ensure legal certainty. With the aim of avoiding detrimental repetition and overlapping competences between the two offices, competences must be clearly delimited and defined. On a case-by-case basis, based on precise criteria, the two offices can work closely sharing information on their investigations.

In its relations with OLAF, the EPPO shall establish a close cooperation especially on information exchange. Provisions in the regulation provide for avoiding parallel investigations into the same facts. EPPO may request OLAF to provide information, facilitate coordination and conduct administrative investigations.

The relationship between EPPO and Europol will be based on strict cooperation and EPPO, when necessary for the purpose of its investigations, shall be able to obtain any relevant information held by Europol.

•  Non-Participating countries

The rapporteur welcomes the Council decision to include in the provisions of Art. 59a, concerning the relations between the EPPO and the Member States that do not participate in enhanced cooperation, the request for these to notify the EPPO as a competent authority for the purpose to respect the judicial cooperation in criminal matters.

•  Conclusions

Even though the rapporteur would welcome a more ambitious regulation, she considers that the EP concerns has been largely addressed in the text as it stands now.

The rapporteur regrets that not all the Member States of the EU participate to the establishment of the European Public Prosecutor Office but welcomes the fact that 20 of them reached a general approach that includes particularly PIF crimes and in particular serious VAT frauds. The rapporteur encourages non-participating Member States to join the enhanced cooperation in the future.

NOTES

(*) ART 86 TFEU:

1.         In order to combat crimes affecting the financial interests of the Union, the Council, by means of regulations adopted in accordance with a special legislative procedure, may establish a European Public Prosecutor’s Office from Eurojust. The Council shall act unanimously after obtaining the consent of the European Parliament.

In the absence of unanimity in the Council, a group of at least nine Member States may request that the draft regulation be referred to the European Council. In that case, the procedure in the Council shall be suspended. After discussion, and in case of a consensus, the European Council shall, within four months of this suspension, refer the draft back to the Council for adoption.

Within the same timeframe, in case of disagreement, and if at least nine Member States wish to establish enhanced cooperation on the basis of the draft regulation concerned, they shall notify the European Parliament, the Council and the Commission accordingly. In such a case, the authorisation to proceed with enhanced cooperation referred to in Article 20(2) of the Treaty on European Union and Article 329(1) of this Treaty shall be deemed to be granted and the provisions on enhanced cooperation shall apply.

2.         The European Public Prosecutor’s Office shall be responsible for investigating, prosecuting and bringing to judgment, where appropriate in liaison with Europol, the perpetrators of, and accomplices in, offences against the Union’s financial interests, as determined by the regulation provided for in paragraph 1. It shall exercise the functions of prosecutor in the competent courts of the Member States in relation to such offences.

3.         The regulations referred to in paragraph 1 shall determine the general rules applicable to the European Public Prosecutor’s Office, the conditions governing the performance of its functions, the rules of procedure applicable to its activities, as well as those governing the admissibility of evidence, and the rules applicable to the judicial review of procedural measures taken by it in the performance of its functions.

4.         The European Council may, at the same time or subsequently, adopt a decision amending paragraph 1 in order to extend the powers of the European Public Prosecutor’s Office to include serious crime having a cross-border dimension and amending accordingly paragraph 2 as regards the perpetrators of, and accomplices in, serious crimes affecting more than one Member State. The European Council shall act unanimously after obtaining the consent of the European Parliament and after consulting the Commission.

FURTHER REFERENCES (as suggested by the EP Research Service)

Further reading:

For further information: Piotr Bąkowski, Sofija Voronova, legislative-train@europarl.europa.eu

As of 20 September 2017

The protection and prosecution of offences against the EU budget and the financial interests of the EU is currently within the exclusive competence of Member States. OLAF, Eurojust and Europol do not have the mandate to conduct criminal investigations and the EPPO will fill this institutional gap.

The establishment of the EPPO will bring about substantial change in the way the Union’s financial interests are protected. It will combine European and national law-enforcement efforts in a unified, seamless and efficient approach to counter EU-frauds. Currently, only national authorities can investigate and prosecute EU-fraud and their competences stop at their national borders.

On the 17 July of 2013, the European Commission submitted a proposal for a regulation of the Council to set up the European Public Prosecutor’s Office (EPPO) defining its competences and procedures. Article 86 of the Treaty on the Functioning of the EU (TFEU) provides with the legal basis and the rules for setting up the EPPO. Under Art. 86, the proposed regulation is to be adopted in accordance with the Consent legislative procedure: the Council is to decide unanimously after obtaining the consent of the European Parliament.

On 7 February 2017, the Council registered the absence of unanimity in support of the proposal. Under Article 86 of the Treaty on the functioning of the EU, this opens the way for a group of at least nine Member States to refer the text for discussion to the European Council for a final attempt at securing consensus. The rapporteur regrets that only 20 Member States participate, to date, at the enhanced cooperation and encourages non-participating Member States to join as well in the future.

On 8 June, the Member States participating in enhanced cooperation adopted a general approach on the proposal.

The EP has adopted 3 interim reports (2014, 2015 and 2016) related to EPPO where it has raised number of concerns regarding the competences of the EPPO, PIF directive and VAT fraud, structure, investigations, procedural rights, judicial review and relations with other relevant EU agencies.

•  The structure of the EPPO

The EPPO will be a body of the Union with a decentralised structure with the aim of integrating the national law enforcement authorities. A European Public Prosecutor will head the EPPO and every participating member will be represented with one prosecutor. According to the Regulation the investigations will be carried out by European Delegated Prosecutors (EDPS) located in each Member State. The number of EDPs for Member States will be decided nationally but each one should have at least one. The Delegated Prosecutors will be an integral part of the EPPO but also continue to exercise their functions as national prosecutors. When acting for the EPPO, they will be fully independent from the national prosecution bodies.

•  Competences

The EPPO will be responsible for investigating, prosecuting and bringing to judgment the perpetrators of offences against the Union’s financial interests. The functions of prosecutor will be carried out within the competent courts of the Member States in relation to such offences.

The set of competences and proceedings for the EPPO, include the proposed directive on fighting fraud against the Union’s financial interests by means of criminal law (‘PIF directive’). In December 2016, the EP and the Council reached a provisional agreement on the PIF proposal. They agreed to include serious cases of cross-border VAT frauds in the scope of the directive, setting the threshold value at €10 million.

The rapporteur welcomes that the “damage” criterion has been largely mitigated by exceptions introduced and is no longer applicable to Art 3(a), (b) and (d) of the PIF Directive (non-procurement related expenditure; procurement related expenditure and revenue arising from VAT own resources). The possibility to transfer cases from national authorities to EPPO, for which EPPO otherwise would not be able to exercise competence, has been introduced.

The EPPO regulation widens the scope of reporting obligations by national authorities and gives EPPO more possibilities to request additional information. The cross-border dimension of the serious crimes that fall under the competences of the EPPO could, in the future, be extended.

•  Judicial review

The EPPO Regulation ensures a comprehensive system of judicial review by national courts and allows for possibilities of direct review by the ECJ (EPPO decision to dismiss a case, contested on the basis of EU law, disputes relating to compensation of damage caused by the EPPO, disputes concerning arbitration clauses, staff-related matters and decisions affecting data subjects’ rights such as the right of public access to documents).

•  Investigative measures

EPPO will have sufficient investigative measures available to conduct its investigations. Art. 30 of the regulation provides for a list of measures where the offence subject to the investigation is punishable by a maximum penalty of at least four years of imprisonment. In this regard, the co-legislators have agreed on criteria for Member States to make requests for investigative measures based on the principle of mutual recognition set out in Directive 2014/41/EU regarding the European Investigation Order in criminal matters.

•  Procedural safeguards

The protection of the procedural rights of suspected and accused persons is guaranteed in full compliance with the rights of suspects and accused persons enshrined in the Charter of Fundamental Rights. The regulation provide for rights of defence for EPPO suspects, in particular the right to legal aid, the right to interpretation and translation, the right to information and access to case materials, and the right to present evidence and to ask the EPPO to collect evidence on behalf of the suspect.

•  Eurojust, OLAF and Europol

As a necessary tool for exercising its duties, the EPPO may have to establish and maintain cooperative relations with existing Union agencies, offices or bodies such as Eurojust, OLAF and Europol.

EPPO and Eurojust in particular need to see their competences defined clearly in order to ensure legal certainty. With the aim of avoiding detrimental repetition and overlapping competences between the two offices, competences must be clearly delimited and defined. On a case-by-case basis, based on precise criteria, the two offices can work closely sharing information on their investigations.

In its relations with OLAF, the EPPO shall establish a close cooperation especially on information exchange. Provisions in the regulation provide for avoiding parallel investigations into the same facts. EPPO may request OLAF to provide information, facilitate coordination and conduct administrative investigations.

The relationship between EPPO and Europol will be based on strict cooperation and EPPO, when necessary for the purpose of its investigations, shall be able to obtain any relevant information held by Europol.

•  Non-Participating countries

The rapporteur welcomes the Council decision to include in the provisions of Art. 59a, concerning the relations between the EPPO and the Member States that do not participate in enhanced cooperation, the request for these to notify the EPPO as a competent authority for the purpose to respect the judicial cooperation in criminal matters.

•  Conclusions

Even though the rapporteur would welcome a more ambitious regulation, she considers that the EP concerns has been largely addressed in the text as it stands now.

The rapporteur regrets that not all the Member States of the EU participate to the establishment of the European Public Prosecutor Office but welcomes the fact that 20 of them reached a general approach that includes particularly PIF crimes and in particular serious VAT frauds. The rapporteur encourages non-participating Member States to join the enhanced cooperation in the future.

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