Vice-President of the European Commission, EU Commissioner for Justice
Strengthening the basis for EU criminal law and judicial cooperation
CRIM Special Committee, European Parliament/Brussels
19 March 2013
Ladies and Gentlemen;
A new criminal landscape is emerging in Europe. Organised crime is changing and becoming increasingly diverse in its methods, group structures, and impact on society.
The most recent Europol Organised Crime Threat Assessment confirms high mobility and flexibility of organised groups operating in multiple jurisdictions and in multiple criminal sectors.
We have been concerned about fighting organised crime, corruption and money laundering for a long time. For this fight to be effective, we need a multifaceted approach.
And criminal law has an important role to play: Criminal law should protect our common values, our common goods and ensure that serious criminal offences breaching these values are defined, investigated and prosecuted throughout the European Union.
Combating serious financial and economic crimes with cross-border dimension is particularly emphasised in the Lisbon Treaty. However, hundreds of millions of euro of taxpayers' money continue to get into the wrong pockets due to such criminal activities.
Fraud to the interests of the Union is also becoming more sophisticated; it often involves multiple actors, jurisdictions and transactions. At the end it is not only the Union itself that is victim of fraud. Many citizens and companies are adversely affected.
1. The need for the EU to strengthen the legal framework for EU criminal law – Anti fraud directive
We have an integrated approach to tackle EU fraud: On the one hand, we want to consolidate the legal framework and on the other hand we want to increase trust - Citizens' trust that taxpayers' money is well protected from misuse, fraud and corruption.
More than 90% of the EU's budget is managed by national authorities. It is thus no surprise that the fraud happens at national level where the protection of the Union's financial interests differs significantly from one Member State to another. We need to overcome this fragmentation to ensure that EU funds are invested to meet the right policy objectives.
And I am strongly committed to a policy of zero tolerance to EU budget fraud.
In June 2012 we have proposed a Directive for the protection of the financial interests of the Union by criminal law.
Our proposal aims to better equip us for the fight against fraud damaging the EU budget. Thanks to the Lisbon Treaty we now have a strengthened basis for EU criminal law to counter illegal activities affecting the financial interests of the EU. This means full co-decision powers to the European Parliament. It is therefore important that the Parliament gets quickly working on the substance of this file to make full use of the new Treaty.
In our view, the Treaty provides the legal basis to adopt measures of both administrative and criminal nature. And it allows – as a consequence – for a uniform protection applicable to all Member States.
I recall the key aspects of our proposal:
First, we introduce common definitions of offences against the EU budget. This will ensure a common criminal law defence of the financial interest at European level. Let me give you an example: Today, some Member States define the misuse of procurement proceedings as a type of fraud; others do not.
Common definitions will achieve a uniform level of protection end the current Swiss cheese situation where legal loopholes are used by criminals.
Another challenge we are currently facing concern minimum sanctions: Some Member states have them in place, others do not. This gives rise to arbitrage effects where criminal organisations find the safe havens to pursue their activities.
We proposed minimum sanction of six months of imprisonment for the most serious offences against the Union's financial interests. This should apply where there is a considerable damage to the EU budget or where there are high gains for the perpetrator. These minimum sanctions should work as a strong deterrent for this type of white collar crime and fraudsters. And what is more, the Member States will be obliged to provide common rules on time limitation (or prescription limitations) for criminal proceedings – the period after which you cannot prosecute anymore. Many criminals have let the clock run and used delaying tactics to escape from the law. We want to put an end to this.
The proposed Anti-Fraud Directive is an important first step towards a more efficient protection of the Union's financial interests. The draft is being discussed in the Council since last summer. But I count on the European Parliament's strong support and constructive position in the decision procedure. I would therefore make a strong plea here in this Committee that a rapporteur is designated so that work can immediately start. Criminals have no sympathy for turf wars.
2. The need for the EU to strengthen the legal framework for EU criminal law – protection the euro against counterfeiting
The euro continues to be a target of organised crime groups active in money forgery. The reasons for this are obvious: the euro is used at large scale in international trading transactions and it serves as a major reserve currency worldwide. Around one quarter of the value of the euro-notes is circulating outside the euro area. In just 10 years the euro became the world's second most important currency.
Since the introduction of euro banknotes and coins in 2002, its counterfeiting led to a financial damage of around 500 million euro. In 2012 alone, 531,000 counterfeit euro banknotes and 184,000 euro coins were withdrawn from circulation.
Europol – which is also the Central Office for Combating Euro Counterfeiting – confirms that we face a growing long-term trend in counterfeiting. New illegal printeries and mints are continuously discovered.
A month ago, when I visited Portugal, the Judiciary Police had announced, that in cooperation with Europol, it had dismantled an illegal counterfeit euro print shop seizing 30,000 euro. Days later the same Judiciary Police made the world’s largest seizure of counterfeit euros. This resulted in the confiscation of a total of 380,200 euro in fake 200-euro notes of exceptional quality.
Evidence is also growing of the threat by forgers from outside the European Union and in particular in South America.
The situation is clear: counterfeiting of the euro – and other currencies – is a threat to our economies and remains a concern. We must therefore improve its protection against counterfeiting.
t is essential to ensure trust and confidence in the euro. This includes in the authenticity of notes and coins and the trust that citizens, companies and financial institutions place in the common currency. This is why we have proposed a Directive modernising the existing pre-Lisbon rules.
This Directive maintains most of the provisions of the existing Framework Decision of 2000. This is the case of the definitions of the offences and the principle of universal jurisdiction that we have improved to further reduce the risk of conflicts of jurisdiction.
But the Directive also innovates. The novel elements we introduced in the draft Directive are the following:
Firstly, putting more effective investigative tools at the disposal of law enforcement authorities fighting organised crime.
Secondly, allowing counterfeit banknotes and coins to be transmitted to the national analysis centres also during on-going judicial proceedings. This allows authorities to react more quickly once forged money is detected.
And thirdly, more effective, dissuasive and proportionate sanctions to deter criminals.
3. The need for the EU to foster the institutional dimension as a guarantor for a consistent EU policy – establishment of the EPPO
We have decided to go for an integrated approach to combat EU fraud. Our flagship will therefore be the establishment of the European Public Prosecutor's Office.
The figures of detection, investigation and successful prosecution concerning offences against the EU budget vary considerably from one Member States to another: between 19% and 90%!
This is mainly because it is up for national authorities alone to deal with offences against the EU budget – against this common European budget. European bodies, such as Europol and Eurojust, may assist in the coordination of cross-border investigations and prosecutions but they can neither launch nor direct investigations.
This can be changed and it will be changed. And we simply have to make use of the Treaty of Lisbon – and in particular its Article 86: Establishing a European Public Prosecutor's Office responsible for investigating, prosecuting and bringing to justice those who damage assets managed by the EU.
We are advancing well in our preparations and consultations and I plan to present a proposal this summer.
Our proposal will have a clear focus on the protection of the financial interests of the Union. What will be the main features of the EPPO?
The Treaty makes it clear that the EPPO will be established "from Eurojust". It is indeed important to ensure strong relations between EPPO and Eurojust. There should be operational, functional and administrative interfaces.
We envisage an integrated and yet decentralised system. "Integrated" means that the EPPO will be a European office; "decentralised" means that the EPPO will be embedded operationally in the Member States.
The EPPO shall directly investigate, prosecute and bring to justice throughout the Union territory offences against the Union's financial interests, hand in hand with national law enforcement and judicial authorities.
For this to happen, we must organise the relations between EPPO and the national authorities in a way that avoids overlaps and duplication in their work.
The EPPO's autonomous powers of investigation and prosecution will require strong safeguards for its independence from both Union institutions and national authorities. This independence will underpin the EPPO's credibility and legitimacy.
At the same time, the EPPO's accountability must be guaranteed and the European Parliament and the Council must have a say on the EPPO's overall performance.
The EPPO operational autonomy must be guaranteed while all of its investigations will be subject to strict judicial control.
Not least, the EPPO should have a slim and lean structure to efficiently protect the EU budget in a cost effective manner. We will build on existing resources to generate economies of scale. In short, we want to better tackle fraud at lower cost.
To sum up, the EPPO will add value by bringing changes in the cycle of enforcement - detection, investigation, prosecution and trial. This cycle of enforcement has proved to be weak, uneven and fragmented. The European Prosecutor will ensure unity and continuity of action throughout the Union territory. We are pursuing our preparations and would appreciate receiving the support of this Committee and of the Parliament to back the ground-breaking work being done here to ensure that the EU's interests are appropriately secured against crime.
4. Eurojust reform and the cooperation between Eurojust and EPPO
The proposal on the establishment of the EPPO will be accompanied by a proposal on the reform of Eurojust.
This is the third milestone in our integrated approach.
The proposed reform of Eurojust will tackle both the institutional and practical links between Eurojust and EPPO.
Since its inception, Eurojust has seen impressive developments. What started in 2000 as an informal round-table meeting of prosecutors has, over the years, become a player in judicial cooperation in criminal matters.
Today, the European area of justice would be hard to conceived without Eurojust.
In the last years Eurojust has gained a key role in the coordination of cross-border investigations of serious offences, including organised crime, corruption and money laundering.
The figures speak for themselves. In 2011 only, the Eurojust College had 204 coordination meetings and set up 33 Joint Investigation Teams.
But we should not lose sight of the fact that further progress is both feasible and necessary. I am convinced that the time has come to prepare Eurojust for a new decade of judicial cooperation, to modernise its legal framework and to streamline its functioning and structure.
It is necessary to make Eurojust more transparent and accountable, to streamline its functioning and to align its legal framework with the requirements of the Treaty of Lisbon. It is time to shake the Third Pillar dust of this institution and bring it under the more democratic and transparent setting afforded by Lisbon and in particular by giving a clear role to the European Parliament in evaluating the activities of Eurojust.
Besides, Eurojust should become more efficient: This means reducing the administrative workload of members and allow them to focus on Eurojust's core tasks related to the fight against serious crime.
To this end, the reform will introduce a mechanism to better distinguish between operational and administrative functions of the College. Roles and responsibilities of all actors, including simplified and equivalent powers of national members, will be clearly defined.
Moreover, the reform will simplify and clarify the legal regime. A single Regulation will be directly applicable in all Member States and in this way end the cumbersome complexities of today's legal structure.
We need the integrated approach to combat EU fraud now.
In the current times, budget is tight everywhere. With austerity measures all over Europe, also citizens need to tighten their belts. It is our responsibility to do what we can to prevent damage to the EU budget and effectively prosecute fraudsters.
I am convinced that the package will give a new impetus for the fight against crime and EU fraud.