Author: Sandra Grabmeier
Committee: Investigation and Activities Committee
Date: 22/10/2024
On September 30, 2024, Laura Kövesi, the European Chief Prosecutor, addressed the European Parliament’s Committee on Civil Liberties, Justice, and Home Affairs (hereinafter referred to as “LIBE”) in Brussels to highlight the European Public Prosecutor’s Office’s (hereinafter referred to as “EPPO”) progress and ongoing challenges. In this article, two key aspects of European Chief Prosecutor Laura Kövesi’s recent speech to LIBE will be explored: First, the newly established relationship between the EPPO and LIBE, focusing on how their collaboration strengthens the fight against cross-border crime, will be examined. Second, we will delve into “Operation Admiral”, a major EPPO investigation into a € 2.2 billion VAT fraud scheme, which was previously discussed in the STEPPO blog earlier this year2
EPPO and LIBE: Establishing a Crucial Partnership
The EPPO, operational since 2021, was set up to tackle crimes affecting the EU’s financial interests, particularly fraud, corruption, and cross-border VAT fraud. However, as Laura Kövesi pointed out in her speech, the EPPO’s role has evolved beyond its original focus on protecting the EU’s financial interests. While initially focused on financial crimes like VAT fraud, investigations such as Operation Admiral have revealed connections to broader criminal networks, including money laundering and organized crime.
In this context, the role of LIBE is pivotal. The committee—tasked with safeguarding the rule of law, bolstering fundamental rights and ensuring the protection of European Union citizen’s data and privacy—now works closely with the EPPO, setting the legal and institutional frame- work for how the EPPO operates within member states. Kövesi emphasized that LIBE plays a crucial oversight and support role, especially as the EPPO continues to navigate political challenges and operational constraints. The prosecutor’s relationship with LIBE ensures that the EPPO has the backing of the European Parliament to carry out its investigations with the necessary authority and resources.
LIBE’s role also involves shaping legislative frameworks that allow the EPPO to function effectively. Kövesi’s speech highlighted the importance of ongoing collaboration between the EPPO and LIBE to address gaps in the current system, such as inconsistent cooperation from certain member states or inadequate funding for investigative activities. This relationship is still developing, but it is clear that LIBE’s support will be crucial in enabling the EPPO to fulfill its expanding mandate.
Operation Admiral: A Case Study of VAT Fraud and Organized Crime
A significant part of Kövesi’s speech was dedicated to highlighting the importance of combating VAT fraud, which has become a key focus for the EPPO. One of the most prominent cases she referred to was Operation Admiral, a large-scale investigation that exposed a VAT fraud network spanning several EU countries, including Portugal and Italy.
Operation Admiral is an EPPO-led investigation involving € 2.2 billion in evaded VAT across multiple jurisdictions. The case resulted in the indictment of 12 individuals and 15 companies, including major players in Portugal. This operation illustrated the sophistication of the criminal networks involved, as well as their connections to broader illegal activities such as money laundering and tax evasion.
As Kövesi explained, VAT fraud is no longer a low-risk, white-collar crime—it has become a major revenue stream for organized crime networks, with links to more dangerous activities like terrorism financing and drug trafficking. The EPPO, with its cross-border investigative powers, was able to dismantle this network, showcasing its effectiveness in handling complex, transnational cases.
Kövesi’s Call to Action: What She Wants the European Union to Do
Kövesi used the success of Operation Admiral as a foundation for her broader call to the European Commission and Parliament to step up their efforts against VAT fraud and organized crime. She urged for three key actions:
1. Political Prioritization of VAT and Customs Fraud: Kövesi stressed that the fight against VAT fraud and customs fraud should be a political priority for the EU, as it not only harms the financial interests of the Union but also feeds organized crime. The EPPO has proven its ability to investigate these crimes, but without strong political backing and resources, the scope of the problem will continue to grow. Failure to treat the fight against these crimes with the seriousness it deserves will undermine its credibility.
2. Greater Powers to the EPPO: The EPPO needs adequate funding and a revision of the EPPO’s regulatory framework to enhance its effectiveness. In addition to the call for increased resources, Kövesi stressed the critical need for specialized investigators capable of managing complex, transnational cases like Operation Admiral, which demonstrated the involvement of organized crime in financial crimes. She noted that the EPPO’s effectiveness is hindered by insufficient resources in some member states, limiting their capacity to conduct thorough, cross-border investigations. As criminal networks grow increasingly violent and sophisticated, the EPPO’s role must adapt to confront these challenges and protect the EU’s financial interests more effectively.
3. Reinforced Role for Europol: Kövesi advocated for closer collaboration between the EPPO and Europol, suggesting that Europol should be able to play a larger role in supporting EPPO investigations. This would allow for better intelligence sharing and operational support in cases involving organized crime networks that cross multiple borders.
Conclusion
Laura Kövesi’s speech at LIBE served as a clear call for more action, urging more significant efforts and resources to combat organized crime across the EU. With cases like Operation Admiral demonstrating the immense financial damage caused by VAT fraud, Kövesi’s message was urgent: make the fight against VAT fraud a political priority, grant the EPPO greater powers, and advocate for a closer collaboration between the EPPO and Europol. Her message underscored that without immediate action, the EU risks allowing organized crime to grow un- checked.
The evolving relationship between the EPPO and LIBE will be critical in shaping the future of EU justice, particularly as organized crime continues to evolve, and more complex criminal networks are uncovered.
1 Speech of European Chief Prosecutor Laura Kövesi at LIBE Committee (https://www.eppo.europa.eu/en/me- dia/news/speech-european-chief-prosecutor-laura-kovesi-libe-committee).
2 “Operazione Admiral: EPPO ottiene il rinvio a giudizio in Portogallo di 12 persone e 15 società per una frode da 2,2 miliardi di euro di IVA evasa,” STEPPO Blog, January 16, 2024 (https://www.steppo-eu- law.com/2024/01/16/operazione-admiral-eppo-ottiene-il-rinvio-a-giudizio-in-portogallo-di-12-persone-e-15-so- cieta-per-una-frode-da-22-miliardi-di-euro-di-iva-evasa/).