The European Public Prosecutor’s Office (EPPO) is facing a massive uptick in fraud cases, with an estimated €24.8 billion in damages by the end of 2024. Here’s a deep dive into the state of fraud across the EU, from VAT fraud to misuse of funds. At the end of 2024, EPPO had 2,666 active fraud-related investigations, a staggering 38% increase from the previous year. This sharp rise signals how critical tackling EU fraud has become.
VAT fraud remains the biggest threat to EU finances. Of the €13.15 billion in damages from fraud, more than half is linked to cross-border VAT fraud.
This criminal activity continues to burden the EU budget and requires urgent attention.
Germany and Italy lead the pack in active VAT fraud investigations.
Germany: 179 active investigations, with damages amounting to €3.89 billion. Italy: 149 investigations, with an even higher total of €4.65 billion in damages. Fraudsters set up companies in both EU and non-EU countries, creating chains of “missing traders” who disappear without paying taxes. The remaining companies claim fraudulent VAT reimbursements, costing the EU millions. This network of deceit undermines tax systems.
Despite three years of operations, EU institutions are still not reporting fraud effectively.
The EPPO‘s annual report highlights that institutions’ reporting hasn’t improved, leaving crucial fraud cases undetected. There’s a clear need for better inter-institutional collaboration. By 2024’s close, EPPO had 311 active fraud cases related to NextGenerationEU. Most of these cases concern the Recovery and Resilience Facility (RRF), involving false invoices, forged contracts, and bribery. This points to ongoing vulnerabilities in recovery fund management. The EPPO’s work is crucial in protecting the EU’s financial integrity. With fraud schemes evolving rapidly, there is an urgent need for better detection and collaboration across national and EU institutions to safeguard taxpayers’ money.