The European Attorney General denounces the scale of tax evasion in the EU

Laura KovesiProsecutor General of the European Public Prosecutor’s Office (EPPO), which concluded its first year of activity with 929 investigations opened and 259 million euros in assets frozen, estimates that 30 to 60 billion euros are lost each year due to tax evasion in the EU.

“If I were finance minister, I would probably lose sleep over it,” Kövesi said in an interview for Euronews.

The European Public Prosecutor’s Office was created five years ago by 22 member states and officially launched in June 2021. Bringing together prosecutors from each participating state and with 35 offices in total, it is responsible for protecting EU funds against financial criminals. Unlike national authorities, the EPPO has jurisdiction beyond borders.

Based in Luxembourg, the independent prosecutor’s office is headed by Laura Kövesi, who served as Romania’s chief anti-corruption prosecutor. Although praised by many in one of Europe’s most corrupt countries for her office’s impartial investigations, she was removed from office in 2018 by the Social Democratic government. Kövesi then quickly established herself as the main candidate to head the new EU supranational public prosecutor’s office, a position she eventually obtained.

One of the first challenges for the EPPO came from uncooperative national governments. Slovenian, Spanish, Hungarian and Polish authorities have sometimes interfered with the bureau’s investigations. The latter two do not participate in the European Public Prosecutor’s Office but must cooperate with it as members of the EU.

Despite this, the EPPO’s first year of activity saw it open 929 investigations, freeze €259 million in assets and obtain four convictions. Over four thousand financial crimes have been reported, of which around 1,900 by national authorities, 1,841 by private parties and the rest by EU institutions. However, Kövesi still sees a long way to go for the EPPO.

She says that by having different criminal codes, some EU states simply ignore certain cases of financial crime, while others do. “It’s about the willingness of the authorities to identify and detect crimes and report those crimes to the European Public Prosecutor’s Office,” Kövesi told Euronews. “We work in the interest of European citizens and protect their money,” she added.

The EU’s financial watchdog also noted that EU tax authorities fail to collect around €130 billion in VAT each year, with up to half of that sum lost to fraud.

Romania recorded the largest VAT collection deficit in the EU in 2019, losing nearly 35% of VAT revenue, according to a European Commission report. It was followed by Greece (25.8%) and Lithuania (23.5%). The lowest deficits were recorded in Croatia (1%), Sweden (1.4%) and Cyprus (2.7%).

radu@romania-insider.com

(Photo source: EPPO Facebook page)

Mary I. Bruner