Filenews 13 March 2025 - by Theano Thiopolou
The annual report of the European Public Prosecutor's Office records an alarming rise in financial fraud phenomena in Europe in 2024, with cases being investigated concerning Community funding programmes, the Recovery Fund and... VAT of course.
At the end of 2024, the European Public Prosecutor's Office had a total of 2,666 active investigations, which is up 38% on the previous year, with the estimated damage to the EU budget reaching €24.8 billion, an increase of 22.5% compared to 2023. More than 50% of the EU's economic damage comes from VAT fraud involving carousels and disappeared traders.
The 2024 annual report states, inter alia, that the role of the European Public Prosecutor's Office (EPPO) is to protect the EU's financial interests through criminal law. "We are investigating fraud involving EU funds over €10,000 and cross-border VAT involving losses of more than €10 million," it said.
At European level, more than 1,500 new investigations were launched in 2024 (almost 10% more than in the previous year), representing an estimated damage of €13.07 billion. This increase is mostly the result of improved cooperation between the EPPO and competent national authorities and the determination of the Public Prosecutor's Office to target criminal organisations, particularly active in VAT fraud but also fraud involving EU funds. By the end of 2024, the EPPO was handling 311 active cases involving NextGenerationEU, the majority of which (307) came from the Recovery and Resilience Fund.
Research in Cyprus
Regarding Cyprus, the EPPO report states that 12 investigations are active with an estimated fraud size of €572 million, while four investigations have a cross-border dimension, as there is cooperation with individuals and businesses from other EU countries.
In addition, four cases concern money laundering, while last year assets of persons involved were frozen, for an amount of €0.21 million. euro.
The areas of fraud detected and investigated by the European Public Prosecutor's Office, excluding VAT and money laundering, are: Agricultural aid: one survey, education and culture: two investigations. Research and innovation programmes: two surveys, transport, energy and digitisation programmes: three surveys, other programmes: two surveys.
What happens in other countries
Beyond Cyprus, let's see what is happening in other countries, according to the annual report of the European Public Prosecutor's Office.
- As far as Greece is concerned, the report states that 84 investigations are active, with an estimated fraud size of €1.71 billion. euro.
- In Austria, 46 investigations are active, with an estimated fraud size of €766 million, in Belgium there are 79 investigations active with an estimated fraud size of €1.74 billion, in Bulgaria there are 254 investigations active with an estimated fraud size of €1.13 billion, in Croatia there are 80 investigations with an estimated fraud size of €373 million, in Czechia there are 105 active investigations with an estimated fraud size of €779 million, in Estonia there are 13 active investigations with an estimated fraud size of €8.4 million, in Finland there are 13 active cases and an estimated fraud size of €9.09 million, in France there are 114 active cases and an estimated fraud size of €642.8 million, in Germany 295 active cases with an estimated fraud size of €5 billion, in Italy there are 764 active cases and an estimated fraud size of €7.05 billion.
- Also in Latvia there are 43 active cases with an estimated fraud size of €130.7 million, in Lithuania 39 active cases with an estimated fraud size of €77.21 million, in Luxembourg 18 active cases with an estimated fraud size of €173.8 million, in Malta 16 active cases with an estimated fraud size of €181.41 million, in the Netherlands 32 active cases with an estimated fraud size of €213.7 million, in Portugal 69 active cases with an estimated fraud size of €730.81 million, in Romania 380 active cases with an estimated fraud size of €2.57 billion, in Slovakia 98 active cases with an estimated fraud of €681.2 million, in Slovenia 37 active cases with an estimated fraud of €60.6 million, in Spain 75 active cases with an estimated fraud cost of €464.8 million
How VAT fraud for appliances was set up
According to the EPPO's report, suspicious and investigative companies established in 15 EU Member States, acting as legitimate suppliers of electronic products, sold electronic devices worth more than €1.48 billion through online marketplaces to customers located in the EU. While final customers paid VAT on purchases, selling companies did not meet their tax obligations. With the disappearance of their owners, they avoided transferring the amounts owed to the competent national tax authorities.
Other companies then claimed a VAT refund from national tax authorities, generating an estimated VAT loss of EUR 297 million. euro. "The European Public Prosecutor's Office suspects that more than 400 companies are involved in this complex fraudulent scheme, which is believed to have been used to launder proceeds from drug trafficking and different types of cybercrime. All persons are presumed innocent until proven guilty in the appropriate courts," the report said.
Around 8% of the offences investigated by the EPPO by the end of 2024 concerned non-VAT revenue. The report states that these offences are committed more through the use or presentation of false, incorrect statements or, in many cases, smuggling, without any documents whatsoever.
According to the report, this type of fraud affects a wide range of products, including textiles, electronics, ceramic tiles, e-bikes, automobiles, industrial materials such as aluminium, steel, pipes and fiberglass, and usually smuggled goods such as tobacco, bicycles, industrial components, spare parts, medical supplies (such as masks and robes) and cosmetics.
