European Union

Fraud prevention

Cigarette smuggling... counterfeiting of euro coins... evasion of import duties on shoes and clothes... subsidies for growing oranges on farms that don't exist — all are examples of fraud that cost European taxpayers money.

The main EU body for combating these activities is the European Anti-Fraud Office (OLAF).

Report suspected fraud to OLAF

What does OLAF do?

  • investigate fraud, corruption and other illegal activities
  • detect and investigate serious misconduct by EU staff
  • help the European Commission formulate & implement policies to prevent and detect fraud.


  1. Investigations can involve interviews and inspection of premises - including outside the EU. OLAF also coordinates inspections by national anti-fraud agencies.
  2. After an investigation, OLAF then recommends action to the EU institutions and national governments concerned: criminal investigations, prosecution, financial recoveries or other disciplinary measures.
  3. OLAF also monitors how these recommendations are implemented.

Customs operations

National customs authorities, both inside and outside the EU, carry out regular joint operations with OLAF (and other EU agencies) to stop smuggling and fraud in certain high-risk areas and on identified routes.

One example was in October 2014, when over 1.2 million counterfeit goods and 130 million cigarettes were seized in an international customs operation. The operation, code-named REPLICA, targeted the import of counterfeit goods including cigarettes, perfumes, car and bicycle spare parts, toys, fashion accessories and electric devices by sea.

Key issues

Cigarette smuggling

Avoidance of excise and customs duties on cigarettes - generally by smuggling - is one of the major types of fraud in the EU. OLAF receives notifications from its partner agencies about suspicious movements of cargo vessels and cross-checks national intelligence to produce insights into smuggling methods. 

For example, over the period 2012-14, joint OLAF operations tracking vessels with national agencies led to the seizure of:

  • 9 ships containing some 215 million cigarettes (evading duties worth €43m).
  • containers holding 93 million cigarettes (evading duties worth €15m).

Fake euros

Counterfeiting of the euro has caused financial damage of at least €500m since the currency was introduced in 2002.

The EU tackles this through:

  • legislation - to coordinate action by national authorities, to maintain the correct authentication measures for coins and banknotes, and ensure adequate penalties for counterfeiters under national law.
  • training – funded through the Pericles programme, for national agencies, banks, law enforcement, judicial authorities and others involved in combating euro counterfeiting - both in the EU and outside.
  • analysis of counterfeit coins by the European Technical & Scientific Centre (most commonly the €2 coin).
  • joint action – through meetings of experts from national agencies.

More concerted EU action?

Action to combat fraud in the EU is still hampered by differences in rules and practices in member countries - which results in differing degrees of protection for public money .

To address these issues, the EU is currently debating a new Directive to protect EU financial interests through criminal law , which would further align the definitions of offences and penalties.

This directive would provide the legal basis for the operation of the proposed European Public Prosecutor's Office (EPPO), which is currently being discussed by EU governments.

If established, the EPPO should improve the investigation and prosecution of offences affecting the EU budget. The idea is to provide EU-wide enforcement - given the complexity of many types of large-scale fraud, which often involve more than a single country and so go beyond national jurisdiction.

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