The need to step up the fight against EU-wide frauds and, in general, crimes with a cross-border dimension emerged already in the 1990s. Efforts aimed at establishing a European Prosecutor date back to the year 2000, when a group of experts presented a set of rules to the Commission – known as Corpus Juris – that later became the backbone of the project. The (in)famous ‘Eurostat scandal’ of 2003 did the rest, raising awareness and consent on the idea that the perpetration of supranational crimes – especially those committed against the interests of the EU – needed a supranational response. The project, therefore, rapidly gained momentum and made its way into the Treaty Establishing a Constitution for Europe: Article III-274 provided for the legal basis required to establish a European Public Prosecutor’s Office (EPPO), leaving the determination of the specific features of EPPO to secondary legislation that was to be approved at a later stage. As is well-known, the European constitution never saw the light of day. EPPO however survived its derailment and was inserted into the Treaty of Lisbon. What is now Article 86 TFEU borrows from the previous experience in that it lays down a general framework for the establishment of EPPO but prescribes that the specific contents of the project will be determined by regulations to be adopted in accordance with a special legislative procedure.
The proposal took more than 4 years after the coming into force of the Treaty of Lisbon to land on the Council’s negotiating table. Negotiations are now slowly reaching a (seemingly) final stage. Labelled one of the most important novelties of the Reform Treaty by many EU law experts at the time of its introduction, the EPPO project can perhaps be considered one of the saddest disillusions of the post-Lisbon era. It clearly stands as yet another example – a particularly spectacular one – of how the Member States struggle to live up to their own promises and creations. The Treaty of Lisbon already indicated that Denmark was exonerated from participating in the project. It also authorised the United Kingdom and Ireland to exercise their right to opt-out in respect of the Area of Freedom, Security and Justice (AFSJ). Both have made clear from the outset that they will not opt-in in respect to this project. What is more (and much worse), several other Member States have also ganged up against the Commission’s proposal, with the purpose of buying some more time if not sabotaging it altogether. The result of such endless negotiations doesn’t seem to have settled all the difficult legal and practical questions that are involved in setting up a European-level prosecution service. Below we briefly discuss the thorniest issues of the proposed legislative framework as it currently stands.
The proposal at a glance
The proposed structure of the EPPO is becoming so complicated that it remains to be seen whether it will ever be able to effectively fight the cases of EU fraud it is designed to focus on. In actual prosecutions, a central office and a decentral level of prosecutors will be involved; the decentralised prosecutors being functionaries of the national prosecution services, tasked with fighting EU frauds on top of their national case load. In their second, European, capacity they are to take instructions from the central office. As if that double-hatted nature was not enough, the central office itself is foreseen to be quite complicated, consisting of European prosecutors from all participating Member States (probably not all will be in) who are to be organised into permanent chambers, and overseen by a single European chief prosecutor. Decision-making procedures can involve all levels of this structure, depending among other things on the number of Member States affected by an investigation. It wouldn’t be a strange thought to regard this structure as overly complicated realising that its aim is to handle a rather small amount of admittedly quite time-consuming cases.
Next to the complex structure, actual investigations could become very difficult to carry out since the investigative measures that are used should conform to the law of the Member State where the action takes place. That leaves the EPPO with the cumbersome task of having a clear insight of all the intricacies of the national laws on criminal procedure of the participating Member States. Moreover, the question is how the persons who are affected by these investigative measures will be able to get the action reviewed by an independent judicial authority. At the current state of the negotiations, it is still undecided whether this task will fall unto a judge of the state where an investigative measure is applied, or to the judge before whom the trial will eventually take place. There seem to be many pros and cons for both options.
The substantive competence of the EPPO is a major question as well. This competence is closely linked to the definition of offences against the EU’s financial interests as is to be laid down in a separate directive which is still in the phase of negotiations. The most difficult part of the negotiations in the Council appears to be whether to include VAT fraud within the scope of the directive. Discussions have been substantially affected by the ECJ ruling of 8 September 2015 in the Taricco case, which seems to have strengthened the willingness of some Member States to include VAT fraud within the scope of the directive and therewith within the competence of the EPPO. In the last few months, progress has been made in advancing the issue: Member States are more aware of the need for a clear offence definition of VAT fraud, and of the difficult relationship of criminal justice enforcement with tax authorities, an area in which sovereignty feelings are still quite strong. A close link will remain between EPPO’s competence and the substantive provisions in the directive. However, negotiation results indicate that for the purpose of exercising EPPO’s competence for VAT fraud, additional provisions might be needed.
Numerous other issues remain, such as the EPPO’s Case Management System and the access thereto for suspects; relations with other bodies such as OLAF and Eurojust; criteria for choosing a forum for prosecution; the procedure for ending cases out of court using transactions, and so forth.
Above we have provided a succinct overview of the most intricate legal issues concerning the functioning of the future EPPO. At this point, we will (hopefully) be forgiven for indulging ourselves in a little bit of self-advertisement by pointing the reader to a two-days conference that we, the authors of this blog post, are co-organising at the Asser Institute with a number of other colleagues. The aim of the event is precisely to engage in a thorough discussion of the proposed legal framework (more information can be found here) – something that seems all the more necessary and apposite at this stage.
Despite all the unresolved issues and the remaining challenges that EPPO will face, we firmly believe that its establishment will constitute a landmark development for the EU institutional set-up, one that the EU cannot afford to give up. The time is ripe to come to a final agreement and eventually deliver what the Lisbon framers promised almost 7 years ago.