According to the European Commission, fraud offences against the European Union (EU) budget cost the EU and its member states over €1 billion in losses in 2018, in addition to the annual losses of around €150 billion resulting from VAT fraud. With current criminal enforcement efforts across the EU apparently failing to effectively tackle such offences, the EU established the European Public Prosecutor’s Office (EPPO) to act as an independent and decentralized office with the power to investigate and prosecute crimes against the EU budget, such as fraud, corruption, misappropriation and cross-border VAT-related fraud.

Set to become fully operational in November 2020, based in Luxemburg, with its funding for 2020 increased by nearly 50%, the EPPO is expected to ramp up prosecutions of corporate crime concerning the EU’s financial interests and facilitate the recovery of misused EU funds. Previously, only national authorities could investigate and prosecute such offences within the scope of their own borders.

How the United Kingdom (UK) will be impacted by the EPPO after the Brexit transition period, which ends on December 31, 2020, will depend on the final agreements between the UK and the EU. As the UK has opted out of the PIF Directive, it would be considered a non-participating member state during the transition period. After the transition period, if the UK continues to participate in EU spending programs or makes use of EU funding, it appears likely that the UK law enforcement authorities would co-operate with the EPPO to prosecute crimes against the EU budget. It also appears likely that the EPPO will enter into a formal working arrangement with UK law enforcement.

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