Cause and Effect in European Politics and Law

Finally the European Prosecutor's Office Is Born

Adelina Marini, October 18, 2017

After four years of tough negotiations, the European Union has made a big integration step in an area which has always been a taboo - justice and home affairs. On 12 October, the justice ministers of 20 member states voted unanimously to create an office of the European prosecutor (EPPO), who will handle fraud with EU funds, and will start functioning as of 2020. The ink on the adopted huge regulation was not dry yet but the ministers agreed with the European Commission's intention to amend it to increase the powers of the not yet established institution. The Commission will present a new proposal in September next year when it is also expected to make a direct link between participation in the EPPO and allocation of EU funds.

The adoption of the regulation was made possible in the beginning of this year when the leaders of the member states agreed to continue with an enhanced cooperation procedure as all other possibilities to reach a compromise between the most sceptic countries and those who insisted on a strong supranational body were depleted. The countries that will not take part in the establishment of the EPPO are Great Britain, Ireland, Denmark, Sweden, the Netherlands, Hungary, Poland and Malta. The first three states because they have a permanent opt-out (or opt-in) from deepening of integration in the area of justice and home affairs. The Netherlands and Sweden refrained because they believe their judicial systems are good enough and they do not need supranational efforts, whereas Poland and Hungary because of their growing euroscepticism.

The regulation was also made possible with the obligatory consent of the European Parliament, where 456 voted in favour, 115 against and 60 abstained. Work on the regulation was very difficult and was accompanied by many high and low tides, the change of many ministers and even EU commissioners.

The approval of the EPPO is a typical example of the separation of a new integration speed. Estonian Justice Minister Urmas Reinsalu opened the public session of the ministers on October 12 with the words: "Now, let's start making history", and German Justice Minister Heiko Maas even described it as a victory over euroscepticism: "This makes quite clear that European integration is continuing to work. This is a good signal at a time when some are trying to become more attached to nation states.  [...] Today is a good day for the rule of law", the minister said.

The vote on October 12 was rather formal. The big victory was scored in June when the ministers approved in general the consolidated text of the regulation. The Malta presidency announced then that this was a historic moment in the area of European criminal justice. "For the first time a judicial authority with real powers to enforce the law across the borders of the national states will be created", announced the Estonian minister of justice on behalf of the presidency of Malta, which does not take part in the enhanced cooperation procedure. Justice Commissioner Vera Jourova (The Czech Republic, ALDE) was also not saving words of praise after the huge effort she invested in the work on the draft. "Today, we mark a truly important day. I would say a good day for justice in Europe and a bad day for criminals in Europe. The EPPO is one of the most important issues in the area of justice", the commissioner said on June 8 after she had received the consent of the participating member states.

June 8 is a very important date in the history of creation of the office because back then two more countries joined the enhanced cooperation procedure. Initially, 16 member states announced that they will continue on the unbeaten track of integration in the area of justice. Soon afterwards, two more countries joined and on 8 June Italy and Austria announced their participation. At first, Italy was against it because it was not happy with the significant reduction of the EPPO powers. Italy was leading literally a crusade during all these 4 years of negotiations demanding the powers of the office to be expanded to include fight against organised crime and to remove any possibility the national authorities to be able to influence investigations.

Rome decided to join after a commitment was made the powers of the body to be expanded. In his state of the union address, European Commission President Jean-Claude Juncker (Luxembourg, EPP) announced his intention to propose amendments to the regulation, which will expand EPPO powers to include investigation of cross border terrorism. This is what French President Emmanuel Macron also called for in his European speech in the Sorbonne in end-September. "We cannot join the general enthusiasm because, as you know, we had very high expectations for this institution, and the regulation that we have has continued to be improved upon, but we don't think its sufficient yet. And in this respect we think that Italy still has misgivings, the text is not what we like it to be, but we are prepared to participate in the enhanced cooperation", said Italy Justice Minister Andrea Orlando on June 8.

On October 12, he was much happier. "We are happy that some of the critical issues have been sorted out, in particular as regards the jurisdiction and the subject matters to be dealt with by EPPO. The text is significantly improved. This is not just the finishing line for us but a starting point for a new, more efficient EPPO", said Mr Orlando before the vote.

What is the European Prosecutor's Office?

The office will be responsible for the investigation, prosecution and bringing to court of the perpetrators and their accomplices in crimes against the financial interests of the Union. This means that the office will be able to launch investigations and to play the role of a prosecutor in front of the competent courts in the member states. The institution is a complex organism, consisting of an unprecedented synchronisation of European and national legislation. The national legislation will be applied to the extent which is not covered by the regulation. In cases when a crime is covered by national legislation and by the regulation, the latter will prevail.

The office will consist of a chief prosecutor and two deputies. The chief prosecutor will report once a year to the European Parliament, the Council and the national parliaments (if requested). He will make annual reports on the work of his office. The structure is divided in two parts - a centralised one and a decentralised one. At the central level is the main office, which consists of a College, Permanent Chambers, the chief prosecutor, the deputies, the European prosecutors and an administrative director. At the decentralised level are the European delegated prosecutors, who will be based in the participating countries (one or two per country). The College will consist of the European chief prosecutor and a European prosecutor per member state. The Permanent Chambers will monitor and direct investigations and prosecutions led by the delegated prosecutors. They will also handle the coordination of cross border investigations.

The chambers have the power to give instructions, in line with national law, to the delegated prosecutor in charge of a case and, when necessary, to interfere in his/her work. In cases of disagreement between the EPPO and the national authorities on whether a crime is covered by the regulation, national authorities will decide how to share the competences for the investigation of the case. When investigating people protected by immunity or other privileges the EPPO will have the power to demand lifting the immunity when the person in question is an obstacle to the investigation.

In cases when more than one member state have jurisdiction over a case the Permanent Chamber will decide (via a simple majority) to launch the case in the country of the leading delegated prosecutor. The Chamber has the right to redirect a case in another member state if it has sufficient grounds to do so. Evidence collected by the European prosecutors cannot be rejected on grounds they are collected in another member states and under a different law. The prosecution will create a case management system with a software which will be ordered by the European Commission.

The EPPO and the EU funds

The office will be financed by the participating states through the EU budget and the non-participating countries will receive adjustments. On June 8, EU Budget Commissioner Guenther Oettinger (Germany, EPP) said it was not necessary to wait for the next multiannual budget of the EU (post 2020), because money has been secured for the beginning of the establishment of the institution. The headquarters of the EPPO will be in Luxembourg. The operating costs are estimated at 21 million euro per year. The staff will consist of 115 people, but more than half of them will be reappointed from Eurojust and most of all from OLAF. The Commission has assured that this will not harm the two agencies as such concerns were raised multiple times during the negotiations. The delegated prosecutors will be 32. According to Commissioner Jourova, since the very beginning the office will be able to recover annually more than 500 million euros. She argued that the benefits of the body will exceed significantly the costs for its functioning.

During the negotiations, many times it was hinted that there will be a link between participation in the EPPO and EU funds. Back in June, Vera Jourova clearly stated that she would like to bind the access to funds with participation in the EPPO. The Netherlands sharply rejected such ideas during the debate on June 8. "We do not see any connection, neither legal nor moral, between enhanced cooperation and EU funds", said the Dutch representative. The commissioner explained that the EPPO will be at the centre of discussions on the future architecture of the cohesion policy. "I must sharply reject the simplification which might have appeared in the press that no EPPO, no money. I meant it in the way that the EPPO should be a factor for, first of all, creating the new rules for the new cohesion policy", she said.

In the European Parliament, the issue was also raised several times during the debate on October 4. The former prime minister of Belgium and now a MEP from the Liberals group, Louis Michel, said that this was about the money of the European taxpayers and "it's particularly regrettable that member states, including the largest beneficiaries of EU funds, are basically shirking their moral and political responsibilities in combating fraud. It should be seriously considered the linking of provision of EU funds to taking part in the EPPO", he said. Kazimierz Michał Ujazdowski (ECR, Poland) objected by attacking Belgium in return whose judiciary, he claims, France has been complaining a lot of. "So, maybe we should first start repairing the national legal systems before starting to accuse other member states that don't want to participate in a voluntary cooperation", the Polish MEP said.

The chairwoman of the budget committee in EP, Ingeborg Graessle (EPP, Germany), said that the EPPO is the only EU body which can initiate an investigation on its own. "And there are member states of which we have doubts as to whether they can properly investigate, particularly the member states that benefit the most", she said and urged not to give money to those who do not want to participate. Ingeborg Graessle is the MEP who organised with hard efforts and almost secretly the big hearing of Bulgarian and Romanian officials under the Cooperation and Verification Mechanism. Vera Jourova was much more eloquent during the plenary debate, saying that she never hid she sees a need to bind cohesion policy with the EPPO.

"And I will be very strong on this because I'm convinced that the EPPO will work as a very strong repressive body. If a member state doesn't want a EPPO we must be very strong in preventive action. For the member states which will get cohesion money and not participate in the EPPO we will have to be much stronger in enhancing this control and audit", she said. This statement of hers can be viewed also in the context of her intention to work for simplification of the rules for payments under the cohesion policy. As a former minister for EU funds and regional development of the Czech Republic Vera Jourova said she is a strong critic of the excessive complexity of procedures.

"The system is overheated by enormous reporting, control and audit duties by the micromanagement, and I'm sure that the EPPO could come as a very positive factor as a deterrent effect and the definition what is fraud and corruption, and could lead to radical simplification. We should come with relevant measures in the regional policy [too]", the EU commissioner said in June. Of all said so far it can be concluded that the participants in the EPPO will receive simplified rules for access to EU funds, whereas for the rest the rules will be even tightened to ensure there will be no fraud.

Voting in the EP revealed again the division mainly within the eurosceptic groups. In the Europe of Freedom and Direct Democracy group, known as Nigel Farage's group, consisting of his party and the party of Italian comedian Beppe Grillo, Five Star Movement, all Italians voted in favour of the regulation, whereas the Faragists voted against. Most split was the group of the European Conservatives and Reformists, where the British Conservatives are seated together with a large number of populist parties from across Europe. This is the group with the most members absent from the voting, including Bulgarian MEP Nikolay Barekov, according to VoteWatch.

Almost all Polish MEPs from ECR voted against in line with the national policies, whereas MEPs from various nations, including Bulgaria, voted in favour. In the mainstream groups, the division followed national lines - the MEPs from non-participant countries were either absent or abstained.

Work on the establishment of the EPPO is starting next year when the rules for election of the chief prosecutor, his deputies and the delegated prosecutors will be defined. Initially, the European Commission will take over the administrative management of the office until its foundations are built. This process will not have ended yet when the Commission will present a proposal for amendments. It can even now be seen, however, that the EPPO could prove the missing link between the countries without rule of law and those who have it. If its powers are to be enhanced, the office might appear as a strong boost to complete the reforms of the judiciary in the countries where the rule of law is still not established or is threatened, like in Bulgaria and Romania for example.

Although the situation in Bulgaria on this issue is quite severe and has been getting worse in the past years, the country, which will take over the Council presidency on January 1st, has committed to work actively on the implementation of the regulation. This is a paradox which is yet to be studied - a country whose ruling majority is working to undermine the rule of law at home, at EU level supports supranational activities in the opposite direction.

It is possible that when the regulation is opened for amendments the number of participating countries is smaller. The Czech minister of justice said on October 12 that it was still early to say whether his country is in for amendments, moreover that the relevant domestic procedures have not yet been completed and will hardly be completed before the election this Sunday. He said that at this stage he has no objections, but it is possible the election on October 22 to be won by a eurosceptic political option. On the other hand, Sweden and the Netherlands have not completely rejected the possibility to join at a later stage. The opening of the regulation is a new chance for them because otherwise they will have to join something they have not taken part in the making of.

All euinside articles on the establishment of the EPPO you can read in this subject