11
Jun
2021
Désirée Maier
Désirée Maier
Investigations, White Collar, and Fraud / München
E-Mail: desiree.maier@hoganlovells.com
Telefon: +49 89 290 12 0
» zur Autorenseite
Désirée Maier
Vincent Rek
Vincent Rek
Investigations, White Collar, and Fraud / Berlin
E-Mail: vincent.rek@hoganlovells.com
Telefon: +49 30 800 9300 86
» zur Autorenseite
& Vincent Rek
Laurin Jona Stammler
Laurin Jona Stammler
Investigations, White Collar, and Fraud / Hamburg
E-Mail: laurinjona.stammler@hoganlovells.com
Telefon: +49 40 419 93 398
» zur Autorenseite
& Laurin Jona Stammler

European Public Prosecutor’s Office

On June 1, 2021 the European Public Prosecutor’s Office („EPPO“) launched its operations. The EPPO is the first independent and decentralized prosecution agency in the European Union („EU“) with the power to investigate and prosecute crimes affecting the EU’s financial interests.

1. Background: Establishment of the European’s Public Prosecutor’s Office

In November 2017, the EU adopted Regulation (EU) No. 2017/1939 establishing the legal framework for a European Public Prosecutor’s Office. The aim was to ensure a centrally organized and thus effective European prosecution of crimes incurring financial damage for the EUs budget.

On October 14, 2019, former Romanian anti-corruption prosecutor Laura Codruţa Kövesi was confirmed as the first European Chief Prosecutor („ECP“). The European Prosecutors of the EPPO were appointed in July 2020. On June 1, 2021, the EPPO formally started its operations, i.e. investigating and prosecuting crimes affecting the EU’s financial interests committed after November 20, 2017.

So far, 22 EU Member States are participating. At present, Hungary, Ireland, Poland, Denmark and Sweden have not joined. However, the EPPO can also cooperate with non-participating Member States, just as the individual prosecutors of Member States have done in the past.

2. Dual Structure of the EPPO

The EPPO is designed as an autonomous and independent body of the EU consisting of European and national prosecutors and has its seat in Luxembourg. It is organized on a central and national level.

2.1 Central Level

The ECP, 22 European Prosecutors (one per participating Member State) and the Administrative Director form the central level:

  • The ECP is heading the EPPO and responsible for the communication with EU countries and third parties.
  • The College of Prosecutors consisting of the ECP and the 22 European Prosecutors is responsible for strategic decisions and ensuring a coherent and effective approach regarding EPPO investigations and prosecutions. They are competent to issue respective guidelines and internal rules of procedure.
  • Permanent Chambers consisting of two European Prosecutors and chaired by the ECP are monitoring and directing each individual investigation and prosecution. They can decide on all substantial operational decisions, inter alia, whether a case is to be brought to court or dismissed, applying simplified procedure and referring a case to national authorities. To ensure the independent handling of each case, the monitoring Permanent Chamber has to be from a country other than where the case is being investigated and prosecuted.

2.2 National Level

The European Delegated Prosecutors („EDPs“) form the decentralized, national level.

  • There are at least two EDPs assigned per participating Member State.
  • They are handling cases falling within the EPPO´s competence and are responsible for investigating and, if appropriate, prosecuting cases.
  • The EDPs have a dual function: In addition to their duties as EDPs, they continue to perform their duties as national prosecutors. Depending on the offense prosecuted, they act either as a national prosecutor for the national prosecution office or as a European Delegated Prosecutor.

3. Competence

The EPPO is competent to prosecute crimes against property affecting the financial interests of the EU. Financial interests of the EU comprise all revenues, expenditures and assets covered by, acquired through or due to the EU budget and the budget of the respective EU institutions.

The concerned offenses within the mandate of the EPPO are outlined in the „PIF Directive“. The PIF Directive defines the following offenses:

  • Cross-border VAT fraud with incurred total damages of at least EUR 10,000,000;
  • All other types of fraud affecting the EU’s financial interests;
  • Corruption affecting the EU’s financial interests;
  • Misappropriation of EU funds or assets by a public official;
  • Money laundering and organized crime, as well as other offenses inextricably linked to one of the previous categories; and
  • Participation in a criminal organization focusing on committing any of the aforementioned offenses.

The offenses committed must meet at least one of the following characteristics:

  • The criminal offenses have been committed, in whole or in part, within the territory of a participating EU Member State;
  • The criminal offenses have been committed by a citizen of a participating EU Member State; or
  • The criminal offenses have been committed by a person who was subject to the Staff Regulations or to the Conditions of Employment of EU staff.

4. Enforcement

The investigations and proceedings of the EPPO are governed by the provisions of the national procedural law of the EU Member State in which the respective investigation or proceeding is taking place. EDPs have the same investigative measures at their disposal as the national public prosecutor’s office. Charges are brought before the competent national court. Cases are tried in public hearings, unless national exemptions apply.

Under certain circumstances, the EPPO can withdraw ongoing proceedings from national prosecution authorities and assign proceedings to them. Whether national authorities will accept such orders from Luxembourg is contested. Pursuant to Article 36 of the Regulation (EU) No. 2017/1939 the Permanent Chamber may decide to try the case in a different Member State than the one in which the investigation was launched, if there are sufficient grounds to do so, taking into account the criteria set out in Article 26, Paragraph 4 and 5, inter alia:

  • The place of the suspect’s or accused person’s habitual residence;
  • The nationality of the suspect or accused person; and
  • The place where the main financial damage has occurred.

5. Who can report a crime?

Anyone (EU or non-EU citizens, private individuals or legal entities) can report a crime to the EPPO if there are reasonable grounds that a crime has been committed within the competence of the EPPO.

The report can be made via web form to the EPPO’s headquarters in Luxembourg in any of the official languages of the EU. If it is allowed by the national law, the report can be made anonymously directly with the EDP in the respective EU Member State.

6. What does this mean in practice?

In practice, the establishment of the EPPO means in particular the following:

  • New external whistleblower reporting channel resulting in potential criminal enforcement activities;
  • New criminal enforcement agency increasing the likelihood of cross-border cooperation of local enforcers; and
  • Political pressure for activity.

However, despite these aspects, the level of activity in practice remains to be seen. This is in particular the case because of the limited capacities the EPPO has at this stage.