P9_TA(2021)0501

The impact of organised crime on own resources of the EU and on the misuse of EU funds

European Parliament resolution of 15 December 2021 on the impact of organised crime on own resources of the EU and on the misuse of EU funds with a particular focus on shared management from an auditing and control perspective (2020/2221(INI))

(2022/C 251/03)

The European Parliament,

— having regard to Articles 310, 317 and 325 of the Treaty on the Functioning of the European Union,

— having regard to Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law (PIF Directive) (1),

— having regard to Directive (EU) 2018/843 of the European Parliament and the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU (2),

— having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/20121 (3) (Financial Regulation),

— having regard to the OLAF Reports 2019 and 2020, and the 2019 and 2020 Activity Reports of the OLAF Supervisory Committee,

— having regard to Special Report No 01/2019 of the European Court of Auditors (ECA) entitled ‘Fighting fraud in EU spending: action needed’,

— having regard to Special Report No 06/2019 of the ECA entitled ‘Tackling fraud in EU cohesion spending: managing authorities need to strengthen detection, response and coordination’,

— having regard to Special Report No 13/2021 of the ECA entitled ‘EU efforts to combat money laundering in the banking sector are fragmented and implementation is insufficient’,

— having regard to the Commission communication of 28 April 2019 entitled ‘Commission Anti-Fraud Strategy: enhanced action to protect the EU budget’ (COM(2019)0196) and the accompanying staff working document entitled ‘Fraud risk assessment’ (SWD(2019)0171),

— having regard to the report from the Commission to the European Parliament and the Council of 3 September 2020 entitled ‘31st Annual Report on the protection of the European Union’s financial interests — Fight against fraud — 2019’ (PIF Report) (COM(2020)0363) and the accompanying staff working documents (SWD(2020)0156, SWD(2020)0157, SWD(2020)0158, SWD(2020)0159 and SWD(2020)0160),

— having regard to Regulation (EU) 2021/785 of the European Parliament and of the Council of 29 April 2021 establishing the Union Anti-Fraud Programme and repealing Regulation (EU) No 250/2014 (4),

— having regard to Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (5),

— having regard to Decision (EU) 2019/1798 of the European Parliament and of the Council of 23 October 2019 appointing the European Chief Prosecutor of the European Public Prosecutor’s Office (6),

— having regard to Article 5(3) of the Treaty on European Union and Protocol (No 2) on the application of the principles of subsidiarity and proportionality,

— having regard to the 2019 report of the Organisation for Economic Co-operation and Development (OECD) entitled ‘Fraud and corruption in European Structural and Investment Funds — a spotlight on common schemes and preventive actions’ (7),

— having regard to the Guidelines on National Anti-Fraud Strategies developed by a working group of Member States’ experts, directed and coordinated by the Fraud Prevention, Reporting and Analysis unit in the European Anti-Fraud Office (OLAF) (8), published on 13 December 2016,

— having regard to the Commission communication of 14 April 2021 entitled ‘The EU Strategy to tackle Organised Crime 2021-2025’ (COM(2021)0170),

— having regard to the study published by the European Parliament’s Directorate-General for Internal Policies on 7 July 2021 entitled ‘The Impact of Organised Crime on the EU’s Financial Interests’,

— having regard to the Commission’s package of four legislative proposals to harmonise the EU’s rules on anti-money laundering and countering the financing of terrorism (AML/CFT), published on 20 July 2021,

— having regard to its resolution of 7 July 2021 on the protection of the EU’s financial interests — combating fraud — annual report 2019 (9),

— having regard to Rule 54 of its Rules of Procedure,

— having regard to the opinions of the Committee on Agriculture and Rural Development and the Committee on Civil Liberties, Justice and Home Affairs,

— having regard to the report of the Committee on Budgetary Control (A9-0330/2021),

A. whereas financial and economic crime involves corruption, fraud, coercion, violence, collusion, obstruction and intimidation for unlawful gain, with monies of illegal origin being concealed by means of money laundering and, possibly, used for further unlawful purposes, including the financing of terrorism;

B. whereas, according to the ECA, fraud prevention has not received enough attention and the Commission lacks comprehensive information on the scale, nature and causes of fraud;

C. whereas a rising number of organised crime groups are active in the EU, often with cross-border reach; whereas the phenomenon is increasingly complex with new criminal markets and new ways of operating that are emerging due to globalisation and new technologies; whereas Mafia-style organisations are particularly active in their attempts to intercept EU funds in various Member States;

D. whereas technology brings new detection and monitoring capabilities, rendering the work of investigators more effective and enabling the design of smarter enforcement measures;

EU funds impacted by organised crime

1. Stresses that organised crime has demonstrated a high degree of infiltration into the social, political, economic, financial, entrepreneurial and administrative structure of Member States, as well as an ability to launder in the legal economy the huge proceeds of crimes including those committed against the EU’s financial interests, thus representing a serious threat to EU citizens’ liberties; stresses, against that background, that organised crime represents a serious threat to democracy and the rule of law, and that the fight against corruption and the infiltration of the legal economy by organised crime is essential to guaranteeing equal treatment before the law, protecting citizens’ rights and welfare, preventing abuses and ensuring the accountability of public office-holders; believes that a common, coordinated response from the EU and its Member States is necessary;

2. Notes that revenue fraud is an area in which the harm done by organised crime is particularly significant, including customs fraud; notes that fraud is a substantial component of revenue fraud; notes that this type of fraud is often committed by falsifying import declarations, using fraudulent documents to declare goods, and falsely declaring the origin of goods to circumvent EU anti-dumping duties; notes that the ECA recently highlighted shortcomings in customs controls legislation and its application, which result in insufficient harmonisation, risk assessment and information exchange across the Union and between Member States; is concerned that this creates opportunities for organised crime to exploit weaknesses in the current system and defraud the Union and its Member States of income; notes that customs fraud is also frequently committed by under-declaring the value of goods imported into the EU, by which fraudsters can avoid paying higher rates of import duties; notes that the undervaluation schemes investigated by OLAF in recent years mainly concern goods imported from China; welcomes the work done by OLAF in investigating these cases, which has reduced the estimated EU budget losses from over EUR 1 billion in 2017 to EUR 180 million 2020 ( 10 ) ; underlines that despite these positive developments, efforts to fight undervaluation fraud must continue, as fraud schemes are evolving to develop new patterns, in particular in the area of e-commerce;

3. Notes that value-added tax (VAT) fraud is another major component of revenue fraud; notes that VAT fraud is defined as avoiding the payment of VAT or fraudulently claiming repayments of VAT from national authorities following an illicit chain of transactions; notes that the most common forms of VAT fraud are missing trader intra-Community fraud, e-commerce fraud, and fraud against customs procedure 42; points out that the fuel sector is one of the sectors most at risk from VAT fraud, whereby criminal networks abuse VAT exemption rules and price differences between different types of fuel, resulting in huge losses in tax revenue; is concerned by the fact that criminal groups have been proven to exchange knowledge, information and intelligence in the area of VAT fraud, making extensive use of new technologies, alternative cryptocurrencies and shortcomings in legal business structures to enhance and conceal their criminal activities, thereby generating multi-billion euro profits from VAT fraud; highlights the fact that, according to Europol’s European Union Serious and Organised Crime Threat Assessment (SOCTA) 2021, VAT fraud is committed by people with good knowledge of the VAT system, legislation and tax procedures; finds regrettable the systemic weaknesses of the current intra-Community VAT system and the insufficient exchange of information between Member States;

4. Expresses its regret that subsidies are an area affected by fraud on the expenditure side of the Union budget; notes with deep concern that, according to Europol reports, the number of such cases has steadily increased over the years; notes that subsidy fraud happens in many areas of EU spending, such as agriculture policy, cohesion policy, research and development and environmental policy; notes with concern that fraudulent applications for EU grants and tenders are usually based on false declarations, progress reports and invoices; points out that many such fraudulent activities are carried out by organised crime gangs, including mafia-style gangs;

5. Notes that besides the obvious dangers to public policy and public security presented by the forms of violence which are typical of criminal organisations, organised crime may cause equally serious problems in the form of penetration into the legal economy and associated conduct which corrupts public officials, with the consequent infiltration of institutions and public administrations; reiterates its call for the EU to become a full member of the Group of States against Corruption (GRECO) without delay; underlines the necessity to provide sufficient resources for the judiciary system and to use all available tools in a coherent manner across Member States to detect and tackle fraud and financial as well as economic crime;

6. Highlights that the common agricultural policy (CAP) is the largest item in the EU budget, representing 31 % of total budgetary expenditure for the 2021-2027 period; stresses that it is vital for the CAP control systems at EU and national level to work properly to ensure that the financial interests of the EU and its citizens are effectively protected against any misuse of EU funds; takes note of the special impact of organised crime in the misuse of CAP funds; reiterates its concern that the current structure of CAP subsidies incentivises land grabbing by criminal and oligarchic structures; stresses that oligarchic structures, in comparison with organised crime gangs, are equally or more financially detrimental to the CAP, and that the identification of these structures is essential to protect genuine farmers; underlines that farmers must be protected from intimidation by criminal gangs who seek to claim subsidies for their land; stresses that limited transparency in combination with corruption enables criminal organisations to keep their actions out of sight and prevent EU funding from reaching its intended beneficiaries; reiterates that the development of proper Union-level legal instruments against land grabbing and the enabling of effective information sharing are crucial in this regard; reiterates firmly the need for improved cooperation between the Commission and the Member States;

7. Stresses that the establishment of a centralised interoperable database with standardised and high-quality data displaying the direct and ultimate beneficiaries of EU subsidies is crucial in order to identify fraudsters, criminal networks and oligarchical structures, and to prevent them from misusing EU funds; highlights that such a database would substantially boost the capability of law enforcement to recover misused funds; underlines that in order to create such a database, the interoperability between existing national and EU-level databases must be improved; calls on the Commission and the Member States to cooperate in creating such a centralised database in line with the rulings of the European Court of Justice; emphasises that information must be of adequate quality and available in a standardised format, so that it can be exchanged and aggregated in an automated way; underlines that beneficiaries must have a unique identifier that ensures their traceability across Member States and funds, independent of the management method; highlights that the use of new technologies, such as comprehensive digital land registers, is essential in enhancing transparency, effective data collection and risk mitigation, thereby ultimately reducing opportunities for fraudsters; welcomes the Commission’s efforts to expand the use of such technologies and calls on all Member States to speed up the implementation of these solutions; points to the need for greater scrutiny by the Commission or the relevant agencies, including with regard to livestock, and, in particular, as regards the funds granted per head of cattle, the actual existence of which must be properly verified;

8. Points out that the concentration of agricultural income support is mainly driven by area-based direct payments; underlines the need for more targeted support and a better balance between large and small beneficiaries at Member State level; regrets that capping remains voluntary in the new CAP; calls on the Member States to use the different redistributive tools within the new CAP as a measure against the misuse of agricultural funds and for their fairer distribution; criticises the fact that, at the Special European Council of July 2020, Member States unilaterally decided not to introduce maximum amounts for natural persons under the first or second pillars, pre-empting a decision in the trilogue negotiations on the reform of the CAP;

9. Highlights that the Member States are responsible for the EU agricultural funds under shared management with the Commission; considers that the new delivery model and the new national strategic plans can be an opportunity to reinforce controls by the Member States and the Commission pertaining to the distribution and management of funds, provided that Member States have effective management and control systems in place, and to raise awareness among the authorities responsible for awarding grants of the opportunities for fraud; emphasises that the principle of the single audit should help relieve the pressure on farmers and that controls should not result in an unnecessary or additional administrative burden for small and medium-sized farmers; stresses, in this context, the importance of exchanges between European law enforcement actors and funding release authorities in order to ensure the highest possible level of prior awareness of possible fraud;

10. Calls on the Commission to raise the Member States’ awareness of organised criminals engaging in tax evasion, corruption and illegal practices (such as ‘pocket contracts’) in connection with land transactions, and to support them in combating such crime;

11. Considers that every effort should be made to ensure that the new delivery model for the CAP does not result in a reduction in the level of absorption of CAP funds by final beneficiaries as a consequence of unintentional errors, a lack of transparency in the rules or a lack of adequate information, particularly during the initial implementation period;

12. Stresses the need for a specifically tailored fraud prevention system to prevent any misuse of EU agricultural funds; points out that although the number of instances of fraud has been reduced considerably over recent years, anti-fraud measures should remain a high priority for the EU and the Member States; underlines that EU funds must be recovered in a timely manner and welcomes the provisions laid down in the CAP horizontal regulation on proportionate penalties as effective deterrents;

13. Notes that OLAF is responsible for combating fraud in CAP payments, and that open cases are based on information from Member States or reports from members of the public who have been affected and who may then face retaliation; emphasises, furthermore, that OLAF cases are highly confidential and are not widely publicised when they are closed; calls, therefore, for whistleblowers to be protected and for fraud investigation authorities in the Member States to share best practices in the area;

14. Stresses the need to monitor agricultural paying agencies in the Member States, to guarantee both their formal and informal independence, and to bring their work in line with EU rules, in connection with which spot inspections, among other measures, may lead to a better control system;

15. Stresses that the Financial Regulation, in particular Article 61 thereof, must be respected and implemented in all Member States and applied to all payments of EU funds, including direct payments for agriculture;

16. Urges the Commission to propose a centralised Union-wide complaints mechanism to support those individuals having to deal with unfair land-grabbing practices and intimidation by criminal organisations, by giving them the opportunity to lodge a complaint swiftly with the Commission;

17. Calls on Member States to rapidly implement Directive (EU) 2019/1937 on the protection of persons who report breaches of Union law ( 11 ) (the Whistleblower Directive) and to include, as part of the implementation process, legal safeguards for individuals and independent bodies who expose corruption, including journalists, whistleblowers, independent media, and anti-corruption NGOs; calls on all Member States to establish comprehensive whistleblower protection frameworks; reiterates the urgency of this demand given reporting of increased physical attacks on journalists, the rise of strategic lawsuits against public participation (SLAPP suits) and the use of fast-tracked security laws in certain Member States, which criminalise the dissemination of images of or data regarding law enforcement officers, thus blocking journalists’ work and limiting the accountability of national authorities;

18. Notes with concern that the Commission and OLAF have identified fraud in public tenders and procurement as a major trend among fraudsters; notes that collusion between individuals and organisations, the use of fake invoices, the creation of fake companies and credentials, and the redirection of funds from their original purpose are common ways to undermine public procurement procedures; points out that fraud schemes often take place on a transnational level and can span several (EU and non-EU) countries, making them difficult to identify and dissolve; expresses its regret that in many Member States there is no specific legislation against organised crime; highlights that timely cooperation between national law enforcement authorities is a key component of an effective response to transnational crime; calls on the relevant EU and national authorities to improve the interoperability of their systems, facilitating the timely exchange of information and enhancing cooperation and joint operations for tackling transnational organised crime; calls, therefore, for the transnational nature of the fight against fraud and the harmonisation of criminal laws in the Member States to combat organised crime to be reinforced, something which is of vital importance; encourages the Commission to develop a common rules framework that would allow Member States to transfer criminal proceedings to another Member State in order to avoid parallel investigations;

19. Notes that the COVID-19 pandemic creates new opportunities for fraudsters and organised crime; notes with concern that Europol observed a rise in coronavirus-related criminal activities in the form of cybercrime, fraud and counterfeiting, including that of medical equipment and personal protective equipment (PPE); recalls the scams and fake offers of vaccines detected by EU countries, as one of many harmful examples, where fraudsters tried to sell more than 1,1 billion vaccine doses for a total price of over EUR 15,4 billion; highlights that the threat of illicit sales of false COVID-19 digital certificates is rapidly growing, with numerous examples having been identified in several Member States;

20. Is concerned by the assessment of the PIF Report, which found that seven Member States detected fraud in relation to health infrastructure in 2019 and that health infrastructure was particularly affected by violations of public procurement rules; points out that the dependence on emergency procurement procedures in response to the COVID-19 crisis may have aggravated these problems; highlights that emergency procedures must respect the same standards of transparency and accountability as regular procedures; calls on the Commission and Member State authorities to complement these procedures through the use of risk mitigation tools, focusing on prevention, as well as through comprehensive ex post controls and scrutiny;

21. Is extremely worried by Europol’s expectation that the recession following the pandemic will create new opportunities for organised crime; warns that as organised crime follows the money, the unprecedented increase in EU spending in the context of the NextGenerationEU recovery plan offers major potential for misuse of funds by organised crime; highlights that this unprecedented increase in spending must be met with proper resources, to be allocated to the relevant institutions which constitute the EU and national frameworks for fighting corruption, fraud and organised crime; recalls, in this regard, that the use of new technologies, such as the Arachne database and the early-detection and exclusion system (EDES), should become compulsory elements of the EU budget’s implementation; reiterates its call on the Council to agree to the addition of 40 auditor posts at the ECA, and its call on OLAF and the European Public Prosecutor’s Office (EPPO) to ensure that they allocate sufficient resources to the discovery and prosecution of criminal activities targeting NextGenerationEU;

22. Stresses that organised criminals, in particular mafia-style criminals, are already known to have geared their business towards renewable energy in the past; warns that, since they are already active in this sector, criminal organisations can easily intercept funds earmarked for the ecological transition, which account for a significant percentage of NextGenerationEU funds;

23. Takes note with concern of the facilitators of organised crime, such as money laundering, cybercrime, document fraud, corruption, fake registration and the use of shell companies; stresses that these actions impact on the authorities’ ability to effectively monitor whether EU money is spent as intended;

Estimates of the financial impact of organised crime

24. Is concerned that the task of estimating the extent and severity of the impact of organised crime on the EU budget has repeatedly been judged to be extremely difficult or even impossible, due, among other reasons, to the differing definitions of organised crime among the Member States and the lack of reliable estimates as regards assessing the situation, thereby complicating the efforts to coordinate measures and investigate and prosecute cases; expresses its regret that the Commission and national authorities lack insight into the scale, nature and causes of fraud, and have, to date, carried out no consistent assessments of undetected fraud; stresses that the lack of reliable estimates prevents an accurate assessment of the situation, which hampers the fight against organised crime; calls on the relevant national authorities to improve data collection and increase the reliability of data communicated to the Commission; calls on the Commission to coordinate and collaborate with Member State authorities in order to carry out a comprehensive EU-wide assessment into the actual size, nature and causes of fraud, involving the relevant EU agencies and collaborating with partners from the EU’s neighbouring countries;

25. Notes that the 2019 PIF Report counted 514 fraudulent irregularities on the expenditure side with a financial value of EUR 381,4 million, and 425 fraudulent irregularities on the revenue side, totalling EUR 79,7 million; emphasises that these numbers do not capture the true extent of fraud, which is likely to be significantly greater; further highlights that not all fraud is committed by organised crime gangs, especially on the expenditure side, where fraud is frequently committed by individuals or individual companies and can even include high-ranking public or government officials;

26. Notes that according to recent studies, organised crime penetration of EU public procurement lies between 2,7 % and 3,6 % of total spending; regrets that this indicates that from 2014-2020, EUR 1,9 billion to EUR 2,6 billion of EU Cohesion Funds may have been misappropriated by organised crime; notes that while data limitations impact the reliability of these estimates, they still give an indication of the seriousness of the problem;

27. Stresses with concern that corruption is an integral part of nearly all the activities of criminal organisations and that it poses a serious threat to the financial interests of the EU, with an estimated GDP loss ranging between EUR 170 billion and EUR 990 billion and a cost to the EU of more than EUR 5 billion per year for the public procurement part of the budget alone ( 12 )

28. Regrets that according to Europol, an estimated EUR 40 billion to EUR 60 billion is lost per annum to organised crime groups through a specific form of VAT fraud, namely missing trader intra-Community (MTIC) fraud; highlights that the majority of VAT losses are borne by the Member States, as only 0,3 % of VAT collected is transferred to the EU budget; emphasises that, nevertheless, VAT-based own resources constituted 11,97 % of total EU budget revenue in 2019, which indicates that VAT losses caused by criminal organisations have a serious impact on EU revenue;

Audit and control measures against organised crime

29. Regrets that the Commission has identified shortcomings in its collection and analysis of data in the fight against fraud, the use of reporting systems (such as EDES and Arachne) by Member States, and the flow of information; notes that the EU legislation on exchanging information on cross-border crime was updated only recently and does not cover all relevant authorities, thereby hindering an effective information exchange across EU bodies and Member States;

30. inter alia , the definition of criminal offences (‘fraud affecting the Union’s financial interests’, ‘money laundering’, ‘corruption’, ‘misappropriation’), the liability of and sanctions against legal and natural persons, and the Member States’ obligation to annually report statistical data to the Commission; urges the Member States to fully align their national legislation with the requirements of the PIF Directive and urges the Commission to closely monitor Member States’ compliance, as proper transposition is of vital importance in enabling the EPPO to conduct effective investigations and prosecutions; urges the Commission to take all necessary steps to ensure correct and comprehensive transposition, including the possibility of infringement procedures; Regards the PIF Directive as an important step towards protecting the EU budget, as it provides a common definition of criminal offences and the misuse of funds, and the harmonisation of sanctions for crimes against the EU’s financial interests; appreciates that the directive sets out clear reporting and investigation procedures, defines the monitoring of the fraud risk-management framework and promotes the use of information, databases and data analytics by the Member States; welcomes the Commission’s recent assessment on the implementation of the PIF Directive and the fact that all Member States have provided notification of their complete transposition of the PIF Directive ( 13 ) ; is concerned, however, about the degree to which the directive has been transposed into national law; recalls that the Commission identified conformity issues in several Member States; notes that these issues concern,, the definition of criminal offences (‘fraud affecting the Union’s financial interests’, ‘money laundering’, ‘corruption’, ‘misappropriation’), the liability of and sanctions against legal and natural persons, and the Member States’ obligation to annually report statistical data to the Commission; urges the Member States to fully align their national legislation with the requirements of the PIF Directive and urges the Commission to closely monitor Member States’ compliance, as proper transposition is of vital importance in enabling the EPPO to conduct effective investigations and prosecutions; urges the Commission to take all necessary steps to ensure correct and comprehensive transposition, including the possibility of infringement procedures;

31. Welcomes the establishment of the EPPO, with its mandate to investigate, prosecute and bring to judgment crimes against the EU budget, as an important asset in the fight against fraud and organised crime in the EU; calls for effective funding and the appropriate allocation of human resources for the EPPO; regards the EPPO’s role as especially promising in the fight against cross-border crime related to the Union budget, as national authorities are limited by their borders in their prosecution and other EU bodies (such as Eurojust, Europol and OLAF) do not hold the required investigative and prosecuting powers; notes that the focus of the EPPO’s mandate is defined in the PIF Directive and includes the fight against fraud to EU expenditures and revenues, VAT fraud, money laundering, corruption and participation in criminal organisations; highlights that these focus points are crucial in the fight against organised crime, and trusts that the EPPO will therefore be an effective tool for fighting criminal organisations that impact the EU budget; regrets that five Member States have not yet joined the EPPO and calls on them to take the necessary steps towards joining it; calls on the Commission, in the meantime, to step up its oversight of those Member States’ regrets the lack of nominations of European delegated prosecutors, in particular by Slovenia, and considerable delays in many other Member States; highlights that this severely weakens the efficiency and effectiveness of the pan-European effective fight against cross-border crime;

32. Highlights the need to better tackle environmental crimes with a cross-border dimension and which affect biodiversity and natural resources, such as the illegal trade in plants and animals, illegal logging and timber trafficking, and illegal waste trafficking; calls on the Commission to initiate the extension of the EPPO’s mandate in order to cover cross-border environmental crimes;

33. Expresses its regret that the Commission established a staffing plan for the EPPO that does not allow it to fulfil its mandate efficiently; underlines that adequate staffing is necessary so that the EPPO can carry out its main task, namely the fight against cross-border crime affecting the EU budget; expresses its regret that the EPPO is currently equipped with an insufficient number of case analysts and financial investigators to support the prosecutorial activities of the European delegated prosecutors; expresses its regret that the EPPO’s operational staff are currently mainly focused on the registration of cases and not their prosecution; expresses its regret that the EPPO has indicated an urgent lack of additional qualified legal and IT experts, as well as administrative staff to enable operations to run smoothly; highlights that on top of its annual case load of 2 000 cases, the EPPO has to deal with a backlog of more than 3 000 cases; is concerned that the EPPO’s workload will increase even further in the coming years in light of the unprecedented amounts mobilised through the Recovery and Resilience Facility and the acceleration of procurement procedures during the COVID-19 crisis; emphasises that the Commission’s staffing plan for the EPPO for 2022 is insufficient to remedy the shortcomings identified by the EPPO; highlights that when fully functional, the EPPO’s benefits as regards protecting the EU budget will exceed its costs; strongly calls on the Commission to increase the budget and qualified staff available to the EPPO so that it can achieve its full potential in the fight against crime;

34. Welcomes the Commission communication on the EU Strategy to tackle Organised Crime 2021-2025 and its focus on boosting an effective and timely information exchange across EU bodies and Member States, for instance through better interoperability between EU information systems and ensuring connection to relevant databases across Member States; appreciates the Commission’s commitment to streamline law enforcement cooperation and to fully harness the potential of existing tools, such as the European Multidisciplinary Platform Against Criminal Threats (EMPACT); welcomes the Commission’s aim to improve information exchange and cooperation between Europol, Eurojust and non-EU countries;

35. Welcomes the Commission’s focus on preventing the infiltration of organised crime into the legal economy, for instance by reviewing the EU Anti-Money Laundering Framework and the existing EU anti-corruption rules; welcomes the Commission’s focus on making law enforcement fit for the digital age;

36. Notes that money laundering enables criminals to keep their profits undetected, and that offering money laundering services has in itself become a profitable business for criminal organisations; emphasises that this significantly impacts the financial interests of the Union and Member States, as a devastating 98 % of estimated criminal proceeds are not confiscated and remain at the disposal of criminals; believes that the fight against money laundering is crucial to prevent the misuse of funds by criminal organisations; is deeply concerned by the ECA’s ( 14 ) findings that EU actions to prevent money laundering are fragmented and poorly coordinated, that the existing legal framework is inconsistent and still not fully transposed in all Member States and that this can be exploited by criminals; commends the Commission on the new legislative package aiming to revise the AML/CTF framework, a single set of rules that represents a major step forward in the fight against money laundering and that will allow for the uniform application of AML/CTF legislation;

37. Welcomes, in particular, the proposal for the creation of a new EU agency, the Anti-Money Laundering Authority (AMLA), and emphasises that the AMLA must be provided with adequate human and financial resources in order to be fully functional; expresses its regret that the establishment of the AMLA is not anticipated until 2023 and that it won’t be fully operational until 2026; underlines that the current issues as regards AML/CTF are pressing in nature and do not allow for more time to be lost; calls on the Commission to present concrete measures to address the current issues before the AMLA becomes fully operational;

38. Welcomes, furthermore, the Commission’s new proposals on crypto-assets, a largely unregulated sector widely exploited by organised criminals, who move large flows of illicit money with impunity on the cryptocurrency market; recalls that the anonymity surrounding certain cryptocurrencies is leading to an increase in their use for illegitimate activities; calls on the Member States to encourage cryptocurrency companies to use analysis tools to assess potential criminal activity associated with destination and recipient addresses and to ensure that they fully apply the anti-money laundering legislation when users convert cryptocurrencies to real currency; stresses that cryptocurrencies must be subject to the same supervisory bodies as traditional currencies;

39. Notes that financial intelligence units (FIUs) play a major part in detecting cross-border money laundering and terrorist financing (ML/TF) cases; notes that in the EU, FIUs operate on a national level and that the Commission found the coordination and exchange of information among national FIUs to be insufficient ( 15 ) ; regrets that there are differences in the amount and type of data exchanged between FIUs; notes that this hampers cooperation between them, which in turn negatively impacts their capability to detect and persecute cross-border crime in a timely manner;

40. Regrets that the national approaches to tackle organised crime vary significantly across Member States in terms of legislation, strategies and operational capacity; notes that this is partly due to varying levels of adoption and implementation of EU legislation; is concerned by the varying role and capabilities of Anti-Fraud Coordination Services (AFCOS) in Member States, possibly because EU legislation does not define their mandate precisely enough and complicate coordination at the national and EU level; Expresses concern at the fact that efforts to combat fraud involving EU funds tend not to be prioritised to the same extent as fraud involving national expenditures; this is highlighted by the fact that more than half of OLAF investigations are not followed up by Member States and even less reach the prosecution stage; regrets greatly that some Member States continuously choose not to implement OLAF’s recommendations following the conclusion of an investigation and do not launch judiciary actions aiming at recovering defrauded EU funds; calls on the Commission to make use of its prerogatives and take the necessary measures for ensuring the timely and correct implementation of EU legislation;

41. Expresses its regret that recent research indicates that some Member States do not prioritise fraud involving EU funds to the same extent as fraud affecting domestic spending; notes that although the Commission has encouraged Member States to develop national anti-fraud strategies (NAFS), only 13 Member States have done so and none of them used the template provided by the Commission; notes with concern that these differences across Member States pose obstacles for efficient cooperation; calls, therefore, on the Commission to take more resolute action with a view to making it mandatory for the Member States to lay down rules to prevent fraud against the EU;

Conclusions

42. Calls on the Commission to develop a common approach for assessing the impact of organised crime on EU funds and evaluate the effectiveness of measures taken to tackle the problem across Member States; regards as crucial a timely, complete and effective exchange of information, and reiterates, therefore, the importance of harmonising definitions in order to achieve comparable data across EU bodies and Member States to estimate the impact of the activities of organised crime on EU finances and swift action to combat it;

43. Is concerned that the current system of differing national approaches prevents an effective, cross-border approach to address the problem, which gives criminals an opportunity to continue their actions without being held accountable; calls on the Member States to cooperate closely with EU bodies and each other and to make use of the Union’s tools and services in the fight against organised crime in order to maximise data exchange and facilitate cross-border operations targeting organised crime activities against the EU budget;

44. Calls on the Member States and the Commission to consider a more coherent use of all the available tools to detect and tackle fraud, in particular the Arachne IT platform and EDES; emphasises that the interoperability of Arachne, EDES and institutional and national databases is crucial for ensuring the effective exchange of information exchange aiming to prevent and identify fraud against the EU budget; expresses its regret that Arachne and EDES are currently limited in their scope and in the awareness and use thereof by Member States; highlights, in this regard, that EDES covers directly and indirectly managed funds but not funds under shared management, even though the latter represent roughly 80 % of EU expenditure; calls on the Commission to extend the application of EDES to these funds; reiterates its call on the Commission and, in particular, on the Member States in the Council, to make the use of Arachne compulsory; calls on the Commission to reassess the framework for data exchange across EU institutions and with the Member States, in order to maximise the degree of effective information exchange, while at the same time respecting data protection requirements;

45. Calls on the Commission to support Member States by providing training to national authorities to equip them with adequate knowledge for using tools such as EDES and Arachne in the most effective manner possible and in accordance with EU reporting standards; calls on the Commission, in cooperation with the Member States, to analyse difficulties that national authorities encounter when using EDES and Arachne and to issue specific recommendations and improve the existing general guidelines and the user-friendliness of these tools; expresses its regret that some Member States oppose using these tools for fear of increased bureaucratic burden; highlights that when properly integrated, these tools can in fact reduce bureaucracy; calls on the Member States to reconsider their position on this matter and on the Commission to further engage in promoting the advantages of EDES and Arachne to the Member States; calls for the introduction of anti-money laundering training schemes allowing authorities to detect the risk of potential fraud before funds are disbursed, in particular in the area of ‘know your client’ and the undisclosed involvement of politically exposed persons in CAP subsidies, projects and grants;

46. Regards the Common Provisions Regulation ( 16 ) (CPR Regulation), which lays down common rules applicable to European Structural and Investment Funds, the European Regional Development Fund, the European Social Fund Plus and the Cohesion Fund, as another important element for preventing misuse of EU funds by organised crime;

47. Highlights that an important step in fighting organised crime is making it less profitable; recalls, in this regard, the work of OLAF, whose investigations are a crucial tool in the fight against fraud; expresses its regret that the indictment rate following recommendations by OLAF to Member States is low and follows a downward trend, having decreased from 53 % in the 2007-2014 period to 37 % in the 2016-2020 period; further notes that the extent to which financial amounts recommended for recovery are actually recovered has not been assessed in recent years, and that the most recent assessment covering the years 2002 to 2016 indicates a recovery rate of 30 %; calls on OLAF and the Commission to investigate the underlying reasons and on the Member States to fulfil their legal obligation to recover the funds and to cooperate closely with the Union’s bodies to ensure that funds misused by organised crime are effectively recovered, as a devastating 98 % of estimated criminal proceeds are not confiscated and remain at the disposal of criminals; calls on OLAF to collect information on the rate of recovery following its financial recommendations and to publish this information in its annual reports; takes the view that decisive action to recover funds, including through preventive or value-based seizures, can deter criminal organisations from committing fraud against the EU, thereby protecting its financial interests; calls on the Member States to increase the confiscation rate of funds associated with fraud, with more emphasis on preventative measures; invites the Commission to assess the possibility of complementing the current fragmented approach towards asset recovery through an EU-wide body in charge of ensuring the timely and effective recovery of EU funds;

48. Believes that fraud prevention and the fight against fraud by organised crime should be a priority focus of managing, certifying and audit authorities, as well as being the subject of specialised financial investigations; believes that the fight against organised criminal groups also requires enhanced rules and measures regarding the freezing and confiscation of assets, including, where appropriate, the temporary seizure of property of equivalent value to the criminal proceeds in order to prevent the transfer or disposal of those proceeds of crime before criminal proceedings have been concluded; stresses that it is absolutely essential that every effort is made to recover EU funds obtained through fraudulent means; strongly supports more effective investigations in order to disrupt organised crime structures and stresses that law enforcement authorities have to be ahead of criminals who increasingly use new technologies and seize any opportunity to expand their illegal activities, online or offline;

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49. Instructs its President to forward this resolution to the Council and the Commission.

(1) OJ L 198, 28.7.2017, p. 29.

(2) OJ L 156, 19.6.2018, p. 43.

(3) OJ L 193, 30.7.2018, p. 1.

(4) OJ L 172, 17.5.2021, p. 110.

(5) OJ L 283, 31.10.2017, p. 1.

(6) OJ L 274, 28.10.2019, p. 1.

(7) https://www.oecd.org/gov/ethics/prevention-fraud-corruption-european-funds.pdf

(8) https://ec.europa.eu/sfc/sites/default/files/EN-ORI-General%20Guidelines%20on%20National%20Anti-Fraud%20Strategies%20ARES%282016%296943965.pdf

(9) Texts adopted, P9_TA(2021)0337.

(10) The OLAF report 2020.

(11) OJ L 305, 26.11.2019, p. 17.

(12) Rand Europe, 2016, The Cost of Non-Europe in the area of Organised Crime and Corruption: Annex II: Corruption.

(13) Report from the Commission to the European Parliament and the Council on the implementation of Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law (COM(2021)0536).

(14) European Court of Auditors Special Report No 13/2021: ‘EU efforts to fight money laundering in the banking sector are fragmented and implementation is insufficient’.

(15) Commission staff working document SWD(2021)0190. Impact assessment accompanying the Anti-money laundering package, 20.07.2021.

(16) Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, p. 159).