Protecting The EU’s financial interests: from the very beginning to the birth of The European Public Prosecutor’s Office (EPPO)

by Giovanni Barrocu* – Laurent Posocco**

ABSTRACT: EPPO’s first annual report shows that 2,832 crime reports have been processed, 576 investigations opened since June 1, 2021, 515 investigations active as of December 31, 2021, € 5.4 billion of estimated damages in active investigations, 147.3 million euro of seizures, three times the actual 2021 budget of the EPPO. We seem to have waited too long for a centralized body to protect the EU budget. This document tries to explain why such a long process was necessary and what criticalities can exist in this matter.

SUMMARY: 1. Introduction. – 2. How it all began. From European Economic Community to a Constitution for Europe. – 2.2 …from the Lisbon Treaty to the EPPO Regulation. – 3. Between National Law and European Union Law. The Trial Rules. – 4. The Italian Coordination Law. – 4.1. The Criminal Law. – 5. The French situation. Low volume of open investigations. – 5.1. Perspectives.

1. Following a decidedly bumpy process, after more than twenty years from the first EPPO project, the new body is now settled. It must be admitted, the first feeling was like the European Institutions were having a sort of “therapeutic obstinacy”: tickled many minds, but it never seemed will become reality.

Coming from a game played on multiple political levels, the fascination come from the very perseverance of the project; its ability to resist objections over time, to the different political orientations that over the years have alternated, as well as to change, without losing and deplete its original connotation, even at cost of overcoming the refusal of some Member States. In a similar scenario, during the years, many proposals would have been trashed.

Therefore, the right question is “why all this”? Very practical the EU answer: «EU countries lost an estimated €140 billion in value added tax (VAT) revenues in 2018 because of transnational fraud. The figures for 2020 may be higher due the effects of the COVID-19 pandemic on the EU economy. Member states have also reported that around €638 millions of EU structural funds were misused in 2015. Before the EPPO became operational, only national authorities could investigate such crimes – but with limited tools, as their powers stop at national borders. Similarly, the EU bodies that pre-dated the EPPO in this field, such as the European Anti-Fraud Office (OLAF), the European Union Agency for Law Enforcement Cooperation (Europol) and the European Union Agency for Criminal Justice (Eurojust), are unable to launch criminal investigations or carry out prosecutions in member states. The European Public Prosecutor’s Office helps to overcome these shortcomings and therefore to crack down on crimes against the EU budget». So, just a money matter? We prefer to think that there is something more, involving EU citizen’s rights, a first step for a real EU criminal and trial law.

Despite being EPPO defined as an independent Union body competent to fight crime against the Union budget, it is a body – partially decentralized – that can be full-fledged classified as a European institution which mostly has to apply national laws, at least for everything that is not delimited in the EPPO Council Regulation (UE) 2017/1939. Seems like we are facing a typical judicial instrument of a federal or “para federal” State, however, where is missing a political breakthrough in the direction of a real national laws’ harmonization. By the way, after a huge and though process, on 5 October 2017 – with 456 votes in favor, 115 against and 60 abstentions – the European Parliament approved the draft Regulation establishing the European Public Prosecutor ^[1].

2. From the birth of a European cooperation strategy, resulted in the creation of Economic Communities, were clear that a system based on multiple financial grants needed effective mutual funds protection. Indeed, the first efforts to prepare a regulation to sanctioning Community fraud and corruption dates back to the mid-1970s, when the Commission drew up a project to amend existing EEC treaties for adopting common legislation on the criminal protection of financial interests, on the officials and others Community agents’ liability, as well as on the infringement of the Treaties rules^[2].

In that political scenario, was probably a too huge step forward for a supranational institution who were still very far from organizing themselves in the form of “Union”. To confirm this, the proposal has never been seriously discussed in the Council since the establishment of the “Anti-Fraud Coordination Unit ” (UCLAF) to see a first embryonic European centralized figure in this matter. Nevertheless, this first step toward a forms of European coordination of the financial investigations, of an administrative nature, soon proved insufficient and – facilitated by the introduction of the so-called (now former) “Third Pillar” –, the Convention on the protection of the European Communities financial interests (Brussels , 26 July 1995) and the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union (Brussels, 26 May 1997).

The first one of these conventional instruments, known as the PFI Convention, marks the true forerunner of the current EU legal evolution in criminal matters, as it constitutes an organic attempt to harmonize the Members States criminal law. First of all, its sets out a useful definition of “community fraud”, with a distinction between the actions in terms of expenses and revenues; it is also established that each Member State shall take the necessary measures to ensure that the conduct and participating in and instigating the conduct in question, is punishable by effective, proportionate and dissuasive criminal penalties, including, at least in serious cases, penalties involving deprivation of liberty which can give rise to extradition.

At the same time, decisive steps were taken in the development of a European criminal and procedural law aimed at outlining common and unfailing elements that each national legal system had to adopt, even always with a limited law area. These were years of great intellectual turmoil both doctrinal than institutional that led to the well-known Corpus Juris and the Green Paper[3], whose principles reinforce the conviction that the creation of common criminal law must be followed, hand in hand, by a centralized investigative body: the European public prosecutor. From a procedural point of view, the limits of the ” Anti-Fraud Coordination Unit” are now becoming increasingly clear, which is fully replaced by the new body called OLAF[4] (European Anti-Fraud Office), fully independent in administrative investigations for the

purpose of strengthening the fight against fraud, corruption and any other illegal activity adversely affecting the Community’s financial interests, as well as any other act or activity by operators in breach of Community provision and develops anti-fraud policy for the European Commission.

However, the enthusiasm crashed into reality: the legislative limits of the Treaties in this matter largely precluded the advent of more incisive measures. Also, with the entry into force of the Treaty of Amsterdam, the tools referred to in art. K (replacing art. 209A introduced with the Maastricht Treaty), appeared to be excessively limiting as regards the objectives of creating a real common judicial area.

So, a probably too early attempt, took place during the negotiations that led to the Treaty of Nice, however without being able to find an agreement on the introduction of what was beginning to be defined as the “super procura”[5].

Anyway, the member States had doubts, but the consequent slowdowns did not stop the debate and the reformist projects that ended up merging into art. III-175 of «a Constitution for Europe». Despite failure of the constituent initiative, this has been an extremely important time because that formulation is very close to what will be the final one regulation. Thus, we have got the definition of European Public Prosecutor’s Office, established from Eurojust, with investigative powers to fight crimes that harm the financial interests of the Union, but without the creation of an autonomous judicial court, where the criminal action has to be exercised in front of member States judges. Furthermore, from a forward-looking perspective, after a Council decision, the European Public Prosecutor could also operate to fight the most serious forms of transnational organized crime.

The reasons of the political debacle of the constituent project are well known. With this background, was very clear that any reform plan of the European criminal and procedural law must pass thought a profound restyling of the EU, above all, of Community acts. And so it was, in Lisbon, on December 13, 2007

2.2. As we have seen, since the nineties there have been many attempts to move into more profitable investigative agreements, aimed to overcoming the very concept of investigative cooperation to merge into the broader one that perhaps can be defined as “common procedural rules “. In such a perspective, it may be useful to briefly recall how the Lisbon Treaty affected the European order and regulatory acts.

The EU has now two fundamental treaties, the Treaty on European Union (TEU) and the Treaty on the Functioning of the Union (TFEU); in particular, the pillar structure originally configured with the Maastricht Treaty was abolished. With the creation of the Union as an indistinct entity, the “community method” has become the system of widespread functioning, so much so that it can be argued that the European institutions – albeit with limits that will be specified – are competent to legislate in the criminal and procedural law, beyond the States sovereignty reserve that persisted in the matter.

In other words, in the matters under the former Third Pillar and, specifically talking, in the field of judicial and police cooperation, the regulatory acts traditionally used under First Pillar constitute now the ordinary way for all the EU law competences. We refer to regulations, acts of general application, mandatory in all their elements and directly applicable in each of the Member States; to directives, legal instruments that bind the Member States only to the result to be achieved, leaving them free to choose the internal implementation way; and decisions, consisting of mandatory acts in all their elements, which, where they identify specific recipients, are binding only towards them.

Another aspect worth mentioning concerns the role played by the European Parliament in this area. Indeed, remodeling EU law formation procedures has allowed the overcoming of the intergovernmental method and consequently limited what could be defined as a democratic deficit.  Furthermore, a fundamental element to keep in mind about the development towards to establishment of the EPPO concerns the introduction of suitable tools to avoid the paralysis of the regulatory process of fundamental strategic measures because of some Members states veto.

In the light of the above, in the general lines of action, art. 67 TFEU, aimed to the constitution an area of freedom, security and justice, the basis of the EPPO project must be found in art. 86 TFEU, which reads «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». Preceded by a draft directive concerning crimes attributed to the EPPO, on July 17, 2013, the Commission presented a proposal for the European Public Prosecutor’s Office and established the rules relating to its operation. Trying not to go beyond the limits coming from proportionality and subsidiarity principles, the proposal limited itself to establishing what was necessary to fight crimes that compromise UE’s financial interests, by increasing the number of prosecutions against these crimes and improving the exchange of information to successfully conduct investigations and subsequent prosecutions, growing its preventive effect. In other words, they were attempting to configure a tool that would affect the internal work of the investigative bodies as little as possible, while at the same time constituting a nerve center for the investigative activity that should also have a relative impact on national procedures.

However, increasing and making more efficient the detection and persecution of financial crimes very dangerous for EU economy, to overcome the States apparatuses physiological limits was the main objective, also considering the cross-border crimes implications. This is clearly manifested in the regulation proposal (in today’s wording too), where is emphasized that individually States repression cannot be an adequate level of protection, also if assisted by Eurojust, Europol and OLAF.

It immediately seemed clear to the national legislator that the establishment of the European Union must go hand in hand with a reorganization of the European judicial cooperation. Specifically, an important Eurojust renewal was very needed, through a Regulation – like happened for Europol – disciplined it with a self-executing measure, clarified its judicial functions and relations with the European Public Prosecutor.

Returning to the 2013 Eppo regulation proposal, the European Public Prosecutor, declared independent, with the obligation to report on its work to the Parliament, the Council and the Commission, had to be composed of a European Chief Prosecutor, directing and organizing the office’s work, by four deputies, by the secretarial staff and by the Member States European Delegated Prosecutors.

Numerous perplexities immediately emerged. The structuring of the EPPO did not receive the hoped-for favors and fourteen national assemblies formulated reservations on the content of the proposal; eleven States complained about the lack of respect for subsidiarity and proportion principles. Furthermore, doubts were raised about the keeping of the fundamental principles, as well as in relation to the possibility that the new body could weaken the national authority’s investigative efficiency.

In order to overcome similar resistance, as required by art. 7 of the Lisbon Treaty’s Protocol n. 2, the Commission had reviewed the proposal, limited to the aspects relating to the non-compliance with the subsidiarity principle, confirming for the other aspects that it wanted to keep the original text unchanged[6]. This choice was motivated by emphasizing the inadequacy of the repression system left to the Member States to guarantee a level of protection against Community fraud that was dissuasive, effective and equivalent throughout the European territory. As proof of this, according to the data reported by OLAF, compared to the numbers of the “underground criminal” there were few convictions and, moreover, without the same being to some extent uniform between the different countries’ jurisdiction, in a completely assimilable situation.

Furthermore, the Commission acknowledgment the impossibility of existing European bodies – such as Eurojust, Europol and OLAF – to evolve towards something more than a simple stimulus to cooperation between Member States, through important changes to the structures, not even with major structural changes[7]. Moreover, the Commission also noted that the exercise of repressive actions for financial crimes, through a centralization at the European Public Prosecutor’s Office, should act precisely as an obstacle to the violation of a sort of principle of Community equality among European citizens, as well as having to inhibit the so-called forum shopping, which immediately appeared as one of the most delicate problems to be solved (also in the current Regulation wording), as well as allowing the territorial limits of investigations on cross-border crimes to be overcome.

However, the multi-territorial connotation of the crimes does not constitute an exclusive criterion for responsible of the European Public Prosecutor’s Office, more than anything else it has been chosen to give it an all-encompassing and exclusive power for all crimes relating to fraud and corruption to the detriment of the EU budget. Id est also with reference to facts committed entirely in the territory of a Member State, to which is added the provision of many cases of imputation of the crimes connected to them.

From another point of view, the national reservations concerned the highly hierarchical structure of the EPPO: a more accentuated collegiality would have been preferred, also in management terms, preferably made up of representatives of the Member States[8]. However, the Commission seemed almost adamant, as it was believed that a pyramidal organizational structure, with the counterweight of external control systems on the work of the chief prosecutor, was the right direction for a true independence and effectiveness of the body. In other words, the European Public Prosecutor’s Office must have a hierarchical and top-down structure, in the face of operational decentralization, always under rigid control instruments.

Although partial changes have been made to the original project over the years, the consequence of the European Commission’s firmness in the face of the perplexities of national parliaments has been the impossibility of reaching a unanimous agreement in the Council. However, there was no lack of complex and exhausting negotiations with the most reticent Member States, however the most reasonable option seemed to be the use of the so-called “enhanced cooperation”, expressly indicated in art. 86, § 1, TFEU, precisely to overcome the deadlock resulting from the impossibility of reaching a widely accepted compromise. As is well known, the agreement of at least nine Member States was enough for the introduction of this special legislative procedure, without this desire being hampered by the absence of unanimity in the Council.

After this choice, conflicting rumors emerged on its goodness. At the time, the will to overcome some Member States opposition in that way could been very risky. In the first place, it was noted that the functioning of the European Public Prosecutor’s Office was directly connected to the territorial (in the States) diffusion of its work, as an unfailing logical prerequisite for its functioning. Indeed, if it is true that the priority has been the elimination of the virtual barriers imposed by national jurisdictions fighting financial crimes against the Union budget, the absence of an extended agreement would have implicitly hampered the effectiveness of the operation.

On the other hand, forcing a negotiation in search of unanimity would impose excessively limiting choices, or worse, abandoning the innovative perspective would probably have negatively affected the chances of establishing the EPPO. The real risk was that stasis would bring out even more Eurosceptic sentiments, suggesting insurmountable political difficulties regarding the concrete functioning of high-impact innovations, with the danger that even initially favorable States would begin to raise doubts.

Changing the point of view, the question must also be read in the perspective of the fundamental rights of EU citizens. Given that the protection of Community finances is certainly a problem for taxpayers, the question must be posed in terms of equal treatment of similar cases and of possible different repressive responses in the single legal area. In other words, the lack of agreement on centralized procedural modalities leads to inequalities among EU citizens, in relation to the same crimes. Certainly, it would be hypocritically omitted to underline how the lack of evolution towards a federalist system follows that equality between people from different Member States in matters of justice is far from being a reality. However, about crimes involving the EU’s financial interests – considering the harmonization work carried out with the PIF directive – the claim of similar procedural and sanctioning treatment is legitimate, as well as being decisive for the coherent functioning of the EPPO and to avoid the risk of those dangerous “forum shopping” phenomena mentioned above.

In any case, although some rules governing the work of the European Public Prosecutor’s Office are to be strongly criticized, it must be recognized that today’s initial bet has paid off, at least in purely numerical terms. First of all, it should be remembered that the judicial authorities of the non-adhering States will indirectly benefit from a centralized investigative nucleus, through the establishment of channels of mutual cooperation, created by exploiting the privileged relations of EPPO with Eurojust. In addition, on 7 February 2017, the Council, once noting the absence of unanimity, started negotiations for the establishment of the EPPO through enhanced cooperation and, on 3 April 2017, the same Council issued a press release with which stated that it had received notification from sixteen Member States announcing their intention to initiate the special legislative procedure for the establishment of the European Public Prosecutor on the basis of the consolidated text of the proposed regulation filed in January 2017. The process thus undertaken led to the final approval of the European Parliament on 5 October 2017, with the increase in the number of member states compared to the start of the procedure, so that, at the time of approval, twenty member countries – including Italy – have decided to participate in the constitution since its inception. Final approval arrived with considerable speed. On 12 October 2017, the Council approved the final text of the regulation establishing the European Public Prosecutor. Finally, at present, the Netherlands and Malta have also joined the new body; therefore, five states (Denmark opted out of AFSJ while Ireland, Poland, Sweden and Hungary may join any time) of the twenty-seven member countries are excluded, perhaps not coincidentally all – except Ireland – not belonging to the “euro zone”.

It was said, it is undeniable that the risky choice to proceed without unanimity has worked, many skeptics are convinced.

3. Once the main steps, the obvious difficulties and the compromises that manage to reach the EPPO regulation have been clarified, it is time to try a normative sources’ disambiguation, both ritual and substantive rules. A needed premise to solve this intricate tangle might be trying to mean how the European law power on the matter moves.

The big differences between national procedural laws involves that the chance of overcoming the difficulties of judicial cooperation in criminal matters – and of any actions centralized in community bodies – need the harmonization of local law. This further step requires clear EU regulatory interventions, but it is first necessary to verify whether and how this legislative power can be exercised. The most suitable instrument would seem to be the regulation, as introducing rules that do not need to be implemented and, consequently, would allow fewer differentiations between States law. However, although it may appear to be a more adaptable instrument to procedural law than substantive law, on closer inspection there appear to be legal obstacles to its use.

First, Article 82 TFEU, the opening rule of Chapter 4 entitled “Judicial cooperation in criminal matters”, reaffirms the need for mutual recognition of judgments and judicial decisions, which require the approximation of national disciplines. Furthermore, through the ordinary legislative procedure, minimum standards must be established to ensure mutual recognition of judicial acts, to prevent and resolve conflicts of jurisdiction and competence.

More than judicial cooperation, the legislation that introduces procedural rules in the member countries is of fundamental importance as it is a hierarchical intervention in terms of legal sources aimed at introducing provisions for the ordinary criminal procedure. All this despite the limitations. As specified by art. 82, § 2, TFEU, which indicates the purpose of introducing common procedural rules: facilitate mutual recognition of judgments and judicial decisions and police and judicial cooperation in criminal matters having a cross-border dimension. In this context, the European Parliament and the Council may, by means of directives adopted in accordance with the ordinary legislative procedure, establish minimum rules. Such rules shall consider the differences between the legal traditions and systems of the Member States, to which is added an “open final clause”. It refers to the mutual admissibility of evidence, to the procedural rights of the individual and victims in the criminal procedure.

The same superordinate rule indicates that EU intervention must be “minimal”, through directives, therefore not very suitable for harmonizing anything. Therefore, the legislative power of the EU, in addition to being limited, is conditioned by the potential differences that may arise in the implementation of European legislation. However, the final clause would allow for a broader intervention, because it indicates the possibility of legislating about «any other specific aspects of criminal procedure which the Council has identified in advance by a decision; for the adoption of such a decision, the Council shall act unanimously after obtaining the consent of the European Parliament»[9].

The regulatory framework is jagged and difficult to read. On the one hand, the Union can regulate the functioning and structure of the Community bodies that can significantly affect national criminal procedures through regulations – as happened with Europol, Eurojust and, above all, the European Public Prosecutor’s Office – on the other hand, the harmonization of internal regulations is implemented with directives, substantially minimalist in scope, also in the field of judicial cooperation, of which the Investigation Order Directive (EIO) is a clear example.

In concrete terms, the deplorable habit of issuing hyper-detailed directives – induced precisely by the impossibility of using the regulation widely – and the consequent need for an internal legislation linking the EU provisions can mitigate the differences between the two legislative instruments; however, the divergences and problems manifest themselves in all their breadth under the preceptive profile and, above all, the uniformity of interpretation.

Returning specifically to the European Public Prosecutor’s Office, it was established with a regulation that also governs its functioning, widely applying the procedural law of the individual States in which it investigates. Furthermore, as just pointed out, the attempt to approximate local legislations has not occurred, if not in part. However, pursuant to paragraph 3 of art. 86 TFEU, «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».

These are rules that can potentially overlap with the domestic law of the State in which the delegated prosecutor operates, endowed with superordinate hierarchical force that should lead to the non-application of conflicting national procedural rules. This exceptional legislative power, albeit limited to the specific areas indicated, constitutes a total novelty for European standards, the application of which is left exclusively to national courts[10].

Having said this, if at a first reading the choice made with the EPPO Regulation of an important reference to national procedural rules might appear to be the simplest and most rational, as it required less effort aimed at obtaining consensus on a complex set of common rules, it makes the operation of the European Public Prosecutor’s Office much more difficult. The legitimacy parameter of an investigative act will not be the only national legislation but will be examined in the same way as the European provisions introduced with a directive, possibly implemented with non-specular rules, with the rules of the EU Charter and, last but not least, with the rules of due process, as it comes from the “living law” of European origin (ECHR).

Furthermore, it is necessary to consider how in many cases the EPPO procedure can be transnational or in any case be subject to transfer between jurisdictions, also differentiating the place of the investigation from that where the process will take place. The problems derive from the differences between national legislations – sometimes declinable in a manner analogous to the lex loci and lex foro dualism, typical of cooperative dynamics – derive from profound differences, as well as juridical-systematic and constitutional, of a cultural and historical nature. a policy that involves different choices regarding the application of the minimum levels of protection of fundamental rights, identifiable as a parameter of legitimacy of the acts of the European Public Prosecutor.

It has been argued that this was a bold attempt to introduce an “advanced” version of the mutual recognition principle, although the new institute appears to have little to do with mutual recognition as it aims to overcome judicial cooperation between states for crimes against the EU budget. The birth of the European Public Prosecutor’s Office, in its latest version, in fact, is not even an expression of trust between countries because its entire organic configuration is aimed at curbing the potential abusive power of the Member States and the choice to remit the competence to the national courts was simply the only one currently feasible.

Furthermore, it is necessary to consider how in many cases the EPPO procedure can be transnational or in any case be subject to transfer between jurisdictions, also differentiating the place of the investigation from that where the process will take place. The problems derive from the differences between national legislations derive from the profound differences, as well as juridical-systematic and constitutional, of a historical and cultural nature. The same entail different choices regarding the application of the minimum levels of protection of fundamental rights, identifiable as a parameter of legitimacy of the acts of the European Public Prosecutor.

This was not a bold attempt to introduce an “advanced” version of the mutual recognition principle, as the new institution appears to have little to do with mutual recognition as it aims to overcome judicial cooperation between states for budget crimes of the EU. The birth of the European Public Prosecutor’s Office, in its latest version, in fact, is not even an expression of trust between countries because its entire organic configuration is aimed at curbing the potential abusive power of the Member States and the choice to remit the competence to the national courts was simply the only one currently feasible.

4. With art. 4 of the l. 4 October 2019, n. 117 containing “delegation to the Government for the adaptation of national legislation to the provisions of Regulation (EU) no. 2017/1939, relating to the implementation of enhanced cooperation for the establishment of the European Public Prosecutor”, a mandate was given for the introduction in the Italian legal system of a legislation adapting the EPPO regulation. Reference is not made appropriately to the implementation of supranational provisions, as pursuant to art. 86, § 1, TFEU, the European Public Prosecutor’s Office was established by means of a normative source of general application, mandatory in all its elements and directly applicable in the Member States (adhering to enhanced cooperation). In the explanatory report to the legislative decree, it is specified that the immediate preceptive efficacy of the rule generates “modifying and (substantially) abrogative effects of the pre-existing rules without the need for, or even allowed, an adjustment or implementation intervention by the national legislators. Furthermore, it has been argued that an internal act of transposition, even if purely reproductive of the European Union rules, would be not only useless but also harmful and prohibited; duplication, in fact, could generate confusion also in terms of interpretation in however, it was decided not to exercise certain powers conferred by the delegating law precisely because they would have resulted in a mere reproduction of the content of the regulation.

Well, there are many opinions expressed regarding the internal legislation deriving from the introduction of the European Public Prosecutor’s Office: opinions of the commissions, explanatory and technical reports, impact analysis, opinion of the CSM and of the Public Prosecutor’s Office at the Court of Cassation. There was a commonality of opinions on some points, there were criticisms, but something seems to have been substantially demanded, even if it was considered that according to the enabling law “one or more legislative decrees to adapt the national legislation” can be adopted: that a future integration cannot be excluded even if, given the expiry of the term, a new delegation will be necessary. There is no in-depth reflection on the impact relating to the individual provisions of the code, whose coordination has been resolved with some rules, which will require a massive and alternating hermeneutic intervention of the jurisprudence.

In other words, the feeling is that the analysis was in this first phase – albeit understandably – too “selfish”, focused on aspects relating to the appointment and status of magistrates; almost aimed primarily at averting the risk of internal “refusal crisis” referred to above, as well as trying to guarantee effective independence and the ability to effectively exercise the powers recognized by the legislation. On the other hand, there seem to be no provisions that fully guarantee the exercise of the rights of the (potential) parties, which coordinate some procedural aspects with the extraordinary powers of the permanent chambers, which allow – in short – not to transform an indictment into a criminal proceeding that is not only differentiated, probably inevitable, but also incomplete. The useful studies on the statistical impact of PIF crimes must not be misleading, not only because they are physiologically incomplete, but above all because it cannot be overlooked that this system essentially constitutes a test bed for a much wider procedural evolution of the European legal area.

4.1. To complete the regulatory framework on the subject, it remains to be seen how the obligations to criminalize conduct detrimental to the financial interests of the Union established in Directive (EU) 2017/1371 (PIF Directive) have been implemented, which – as transposed in the Member States – constitutes the act which determines the competence of the European Public Prosecutor. In the substantive field, legislation implementing the supranational discipline was indispensable, given the considerable perplexities about the possibility of a direct legislative power of the EU in criminal matters, evidenced by the lack of use of the regulatory source, as happened to the opposite for procedural legislation.

That said, the instrument has the declared intention of pursuing a policy of approximation of the substantive laws of the Member States, to complete the protection of the financial interests of the Union, at least for the most serious fraudulent behaviors, in order to avoid excessive differences between the laws of the States, also with reference to various sectors such as administrative law and civil law.

Starting from supranational legislation, the failure to use a self-executing source implicitly left a margin of discretion to the Member States in the transposition phase of the European directive. In any case, without neglecting the intrinsically subsidiary role of criminal law, the directive specifies that “the intended dissuasive effect of the application of criminal law sanctions requires particular caution with regard to fundamental rights”; which follows a list of inviolable rights which the directive must respect, as provided for in the EU Charter, which includes, among others, the right to an effective remedy and to a fair trial, the presumption of innocence and the rights of the defense, principles of legality and proportionality of criminal offences and sanctions, as well as the principle of ne bis in idem (whereas n. 28 and n. 21).

However, the PIF Directive first offered a series of classificatory definitions and then established criminalization obligations for the Member States. This commitment is transfused, in Italy, in the indications contained in art. 3 legge delega 117/2019 whose general lines can be summarized in the need to identify the crimes provided for by the regulations in force that can be considered harmful to the financial interests of the Union; in the repeal, by express provision, of all provisions incompatible with the indications contained in the PIF directive, with particular reference to the expansion of the area of ​​the criminally relevant to the attempt and participation in PIF offenses; in the express provision of the administrative liability of legal persons for crimes concerning the financial interests of the Union, through an integration of Legislative Decree no. 8 June 2001, no. 231. To these are added some more specific provisions, among which there is an indication that deserves to be remarked as it allows to extend the case of corruption to public officials and to persons in charge of public service of States not belonging to the European Union, when such facts are put in place in such a way that they harm or may harm the financial interests of the Union. In this way, the interpenetration between customs fraud and corruption is recognized, as they are linked by a functional relationship.

In detail, art. 1 indicates, in compliance with the provisions of lett. f, art. 3, l.d. 117/2019, the offenses for which an increase in the maximum legal penalty of up to four years of imprisonment is envisaged, if the fact committed affects the financial interests of the European Union and the damage, or the profit, resulting from the crime are over one hundred thousand euros: embezzlement through profit from the error of others (Art. 316 Codice penale), undue receipt of funds to the detriment of the State (Art. 316-ter), undue inducement to give or promise benefits (Art. 319-quater). Furthermore, as mentioned, art. 322-bis of the Criminal Code in order to extend the facts of passive corruption also to public officials and public service officers of third countries with respect to the European Union or international public organizations, if such facts could harm the financial interests of the EU. In addition, through an integration of art. 640, c. 2, Codice penale, in relation to the crime of aggravated fraud, the European Union is equated with the Italian State as regards the penalty and the prosecution of office.

In addition, a significant integration was made of the regulations relating to tax offenses. An exception has been introduced to the non-punishment of the attempt – not, however, as requested in the proxy, also regarding the concurrence of crimes – of the crimes of declaration with invoices or other documents for non-existent operations, fraudulent declaration with other expedients and false declaration, if the same are committed in the territory of another Member State, in order to evade VAT for a total value of not less than ten million.

Then the intervention concerned the area of ​​customs legislation and smuggling crimes as they are detrimental to the EU financial interests (Article 295, Presidential Decree 23 January 1973, no. 43). The changes involved two profiles. First of all, an aggravating circumstance has been envisaged that involves the application of a prison sentence, from three to five years, in place of the single fine when “the amount of border rights due is greater than one hundred thousand euros” and up to three years when is more than fifty thousand euros and less than one hundred thousand euros. Furthermore, the criminalization of decriminalized conduct was carried out with the legislative decree 15 January 2016, n. 8, when the amounts exceed ten thousand euros.

About the liability arising from the offense of legal persons, the European Union has been included among the subjects against whom the offense that gives rise to the liability of the entity is committed. In addition, with reference to crimes against the State or other public body, the catalog of cases in point has been integrated with the crimes of fraud in public supplies (Article 356 of the Criminal Code) and of embezzlement or diversion of EU funds committed by those who “By displaying false data or information, he or she improperly obtains, for oneself or for others, aid, bonuses, allowances, refunds, contributions or other disbursements paid in whole or in part by the European Agricultural Guarantee Fund and the European Agricultural Fund for rural development” (art. 2, l. 23 December 1986, n. 898).

The punishable offenses of embezzlement also committed through the profit of the error of others (articles 314, paragraph 1, and 316 of the criminal code), and the abuse of office (Article 323 of the criminal code). In this regard, it should be noted that the enlargement just mentioned, without adequate specification, should apply to the liability of entities tout court understood, and seems to go beyond the indications contained in the delegation which merely prescribes the government to integrate the discipline of liability administration of entities with regard only to crimes affecting the financial interests of the EU.

In the tax field, the liability of legal persons is introduced – if the value added tax for an amount exceeding ten million euros has been evaded – for the crimes of unfaithful declaration, omitted declaration and undue compensation, provided that the fact was partly committed in the territory of another Member State. Finally, the reproach of the entities is extended to smuggling offenses, with a modulated penalty in relation to the fact that the damage to the interests of the Union is considerable.

At last, art. 6 increases the maximum penalty to four years, when the damage or profit exceeds one hundred thousand euros, in relation to the crime committed by those who, mediate the exposure of false data or information, unduly obtain, for themselves or for others, aid, bonuses, allowances, refunds, contributions or other disbursements paid in whole or in part by the European Agricultural Guarantee Fund and the European Agricultural Fund for Rural Development. The replacement of all regulatory references to the European Community, contained in the criminal laws governing crimes damaging European financial interests, with the wording European Union has been established.

In closing, in the perspective of the necessary harmonization of European Union systems, following the indication contained in art. 18 of the PIF directive, art. 8 decreto legislativo 75/2020 provides that every year the Ministry of Justice sends to the European Commission a report containing the statistical data relating to the number of registered proceedings, the acquittal or conviction sentences issued and the archiving measures adopted that have concerned offenses affecting the financial interests of the Union; the amounts of the sums and the value of the assets subject to confiscation, in addition to the estimated damage for the Union and its institutions.

5. Pushed like others by the European Commission, France has adopted a law that defines the important competences and powers of the European Delegated Prosecutors[11], the procedural rules governing their action and the modalities of “articulation [of their] competences” with those of national authorities’ judicial authority[12].

For the moment, the information provided mainly concerns the number of investigations open and the convictions obtained[13].

A quantitative statement provides a first impression of the institution’s functioning. As of 31 December 2021, 515 “active investigations” were reported in Europe. Only 29 investigations are ongoing in France. This is very little compared, for example, to Italy, a country bordering a comparable demographic range (109 surveys in progress). In Spain, another neighboring country, the number of ongoing investigations is much lower (7 investigations). Furthermore, the low number of investigations open surprises the number of European prosecutors, strangely reduced in France compared to those of most other European countries (4 in France against 16 in Italy, for example). The numerical weakness is even more regrettable as France has highly specialized and particularly experienced investigative services in the field of financial crime.

The calculation of the estimated total damage of the ongoing investigations does not benefit France. This is 46.1 million euros (compared to 40.6 million euros in Spain and 1.7 billion euros in Italy). For VAT fraud alone, it amounts to 29.6 million euros (compared to 36.9 million euros for Spain and 1.3 billion euros for Italy). There are no accusations or kidnappings.

Finally, the complaints and reports received come from national authorities (25) and from EU institutions, bodies, offices and agencies (19) rather than from private entities (4). None were automatically recovered.

In this scenario of extreme caution[14], everyone agrees in recognizing that the first major challenge for the coming months and years lies in the treatment that the national courts will give to the cases presented by the European Public Prosecutor’s Office. Beyond the volumes of ongoing investigations, of the 515 active investigations, how many will lead to a definitive criminal conviction? It will be valuable for the European citizen to know the fate of the various investigations undertaken. It is at this price that the contenders will be able to get an idea of ​​the institute’s efficiency.

Another major issue is reporting[15]. This remains insufficient. In most cases, this situation is the result of a lack of practice and a European judicial culture. To remedy these difficulties, the European Public Prosecutor has proposed the creation of a body of specialized investigators sensitized to the problems that are those of the European Public Prosecutor’s Office and which brings together investigators from customs, tax administration and specialized delinquency services. financial. France is little in sight for the moment but the analyzes will not be long in showing a delay.

5.1. The next few months will be full of lessons on the judicial treatment reserved for the documents of the European Public Prosecutor’s Office, on the quantum of sentences handed down and on the evolution of the communication of the institution based in Luxembourg. They will be an opportunity to observe the evolution of the number of investigations carried out by the European Public Prosecutor’s Office in France and, more generally, the improvement (or not) of the internal procedures for detecting and reporting attacks on the financial interests of the European Union company. In the longer term, the question inevitably arises of extending the powers of the European Public Prosecutor’s Office to environmental crimes[16]. One can easily understand the attractiveness of this prospect. The development of a true European criminal law for the environment will be big business for the next few years, as the environmental issue is now central to our societies and by its nature raises issues that cannot be confined to the national sphere. The first step is to strengthen the repression of environmental crimes within each state and to make environmental crimes more legible. In France, this is the ambition of the so-called Loi “Climat et Résilience” of 22 August 2021. It will then be a question of developing, at the expense of companies, environmental compliance rules on the model of what has existed for years in the fight against corruption. Finally, it will be a question of ensuring a truly coordinated repression of environmental attacks on a continental scale. In this context, the European Public Prosecutor’s Office and its scope of transnational intervention appear particularly suited to these new imperatives.

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[1] S. Recchione, European Public Prosecutor Office. Anche gli entusiasti diventano scettici, in Dirittopenalecontemporaneo.it, 9 gennaio 2014.

[2] L. Salazar, Habemus Eppo! La lunga marcia della procura europea, in Arch. pen., 2017, 3, 1.

[3] Green Paper, Brussels, 11.12.2001, COM (2001) 715 final, «on criminal-law protection of the financial interests of the Community and the establishment of a European Prosecutor, where they said that «the protection of the Community’s financial interests is a specific enough concern to warrant a specific response transcending the limits of traditional judicial cooperation».

[4] Commission Decision of 28 April 1999 establishing the European Anti-fraud Office (OLAF) (1999/352/EC, ECSC, Euratom).

[5] In this meaning, E. Amodio, Diritto di difesa e diritto alla prova nello spazio giudiziario europeo, in Il difensore e il pubblico ministero europeo, a cura di A. Lanzi-F. Ruggieri-L. Camaldo, Padova, 2002, 103. Additional Commission contribution to the Intergovernmental Conference on institutional reforms – The criminal protection of the Community’s financial interests: A European Prosecutor, 29.9.2000, COM(2000) 608.   

[6] Communication from The Commision to The European Parliament, The Council and The National Parliaments, «on the review of the proposal for a Council Regulation on the establishment of the European Public Prosecutor’s Office with regard to the principle of subsidiarity, in accordance with Protocol No 2», Bruselles, November 27, 2013, COM (2013) 851 FINAL.

[7] About relationship between bodies, A. Csúri, The Proposed European Public Prosecutor’s Office – from a Trojan Horse to a White Elephant?, in Cambridge Yearbook of European Legal Studies, vol. 18, 140.

[8] About National States reservations, D. Flore, A European Public Prosecutor’s Office: guidelines for the European agenda, in Le sfide dell’attuazione di una Procura europea, 707.

[9] Anyway Art. 82, § 3, establish that where a member of the Council considers that a draft directive as referred to in paragraph 2 would affect fundamental aspects of its criminal justice system, it may request that the draft directive be referred to the European Council. In that case, the ordinary legislative procedure 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, which shall terminate the suspension of the ordinary legislative procedure» and «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 directive concerned, they shall notify the European Parliament, the Council and the Commission accordingly. In such a case, the authorization 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».

[10] On topic M. W. Zwiers, The European Public Prosecutor’s Office. Analysis of a Multilevel Criminal Justice System, Cambridge, 2011, 408

[11] Jocelyne Leblois-Happe, Les dispositions de la loi du 24 décembre 2020 relatives au Parquet européen ou l’avènement du procureur « augmenté » AJ Pénal 2021 p.64 ; Anne MARMISSE-D’ABBADIE D’ARRAST, Parquet européen, Répertoire de droit européen éd. Dalloz Avril 2022. 

[12] Loi n° 2020-1672 du 24 décembre 2020 relative au Parquet européen, à la justice environnementale et à la justice pénale spécialisée crée à cette fin ; V. Amandine SALA ; Michel LEROY ; Laurent POSOCCO, Banque, Répertoire de droit européen, éd. Dalloz Juin 2020.

[13] Paul Le Fèvre, Parquet européen : bilan d’une première année d’activité, AJ Pénal 2022 p.365.

[14] Gabriel Thierry, Les débuts prudents du pôle parisien du Parquet européen, Dalloz actualité 26 octobre 2021.

[15] Pauline Dufourq, Parquet européen : les contours des signalements au parquet européen délégué (Décr. n° 2021-694, 31 mai 2021, relatif au Parquet européen), Dalloz actualité 09 juin 2021.

[16] Pauline Dufourq, Parquet européen : les contours des signalements au parquet européen délégué (Décr. n° 2021-694, 31 mai 2021, relatif au Parquet européen), Dalloz actualité 09 juin 2021.

Authors

Giovanni Barrocu, Associate Professor of Criminal Procedure, University of Sassari

Laurent Posocco, Associate Professor of Private Law, University of Touluse

§ 1 has been written by both Authors, § 2,3,4, by Giovanni Barrocu, § 5 by Laurent Posocco