Now or Never: the European Public Prosecutor’s Office and Enhanced Cooperation

By Fabio Giuffrida, postgraduate research student at Queen Mary University of London.

In the middle of the turmoil caused by the allegations against the United Kingdom for the imports scam,[1] the protection of the EU budget could soon witness a sweeping change. The next few months are indeed crucial for the negotiations on the establishment of the controversial European Public Prosecutor’s Office (EPPO), which will be competent to investigate and prosecute crimes affecting the financial interests of the EU. Pursuant to Article 86 TFEU, the Office shall be set up by means of a regulation to be approved unanimously by the Council,[2] with the previous consent of the Parliament.

The Commission issued a Proposal for a Council Regulation in July 2013 and it was clear from the beginning that the creation of this body would have not been a bed of roses.[3] A group of national Parliaments objected that the text was not compliant with the principle of subsidiarity, triggering the so-called “yellow card” procedure provided for by Protocol No. 2 to the Treaty of Lisbon. This backlash notwithstanding, the Commission maintained the Proposal (November 2013) and restated its views on the pressing need to establish the EPPO.[4]

The matter has therefore been discussed in the Council since the end of 2013. In December 2016, most of the member states eventually agreed on the major issues of the forthcoming Regulation but the unanimous adoption of the text turned out to be unfeasible. In the Justice and Home Affairs Council of 8 December 2016, Sweden mentioned that it would have not taken part in the establishment of the EPPO, so that the Council formally registered the absence of unanimity in the General Affairs meeting of 7 February 2017.[5]

The lack of support from all the member states, however, does not prevent the Office from seeing the light of day. Once registered the absence of unanimity in the Council, Article 86(1), second subparagraph TFEU provides that a group of at least nine member states can request the referral of the draft regulation to the European Council. If agreement cannot be found in the European Council, the EPPO can be established through the procedure of enhanced cooperation by a group of at least nine member states, pursuant to the third subparagraph of Article 86(1) TFEU.

Thus, on the 14th of February 2017, convinced that “the project to set up a European Public Prosecutor’s Office is of utmost importance, and that steps must be taken swiftly to take the draft forward”,[6] the Permanent Representatives of 17 member states sent a letter to the President of the European Council, referring the draft Regulation and requesting to put it on the agenda of the European Council of 9 and 10 March 2017. As expected, in the admittedly turbulent meeting of 9 March 2017, the European Council could not reach an agreement on the matter.[7]

Therefore, the doors for the establishment of the EPPO by means of enhanced cooperation are now formally open: a group of at least nine member states have time until the 14th of June 2017 to notify the European Parliament, the Council and the Commission the will to proceed with the creation of the Office. For such notification, indeed, Article 86(1) TFEU sets out a deadline of four months, which run from the moment when the procedure in the Council is suspended and the draft regulation is referred to the European Council, i.e. the 14th of February 2017 in the present case.[8] Once notified their wish to establish the enhanced cooperation, the member states concerned could further negotiate on the basis of the latest version of the draft Regulation;[9] if and when the agreement will be reached, the final text shall be sent to the European Parliament for its consent.

As pointed out in a previous contribution, it can be questionable to establish an EU body aimed at the protection of intrinsic EU interests by means of enhanced cooperation.[10] In light of the current political scenario, however, a multi-speed Europe seems the only way forward. The need for as many states as possible to take part in setting up the body was debated during the meeting of the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs of 29 November 2016, where a representative of the Council made it clear that enhanced cooperation with fewer than 20 member states will hardly be accepted.[11] Nevertheless, as mentioned, eight countries have not signed the letter of 14 February 2017, but it cannot be excluded that some of them will take part to the possibly forthcoming enhanced cooperation. Those eight member states are: Sweden, the Netherlands, Hungary, Poland, Cyprus, Malta, Portugal, and Italy.

The reasons for this choice, when explicitly declared by the representatives of the member states (admittedly not often), are multifarious, but some common patterns can be detected. It is worth reminding that, if established, the EPPO will bring about a critical change in the current balance of powers between the EU and the member states. With the EPPO, the Union will be given direct competences in the field of criminal law and will exercise coercive powers vis-à-vis the individuals – although in a much less intrusive way than that provided for by the Commission’s proposal. This implies a visible surrender of sovereignty in favour of the EU, a shift that not all the member states are ready to accept.

Moreover, according to different authors, practitioners, and politicians, the Commission has not provided sufficient evidence that an effective fight against crimes affecting the EU budget really calls for the establishment of a new body encroaching upon national systems. Alternative options were available, such as the strengthening of the existing instruments and bodies meant to facilitate judicial cooperation, and more reliable data should have been collected on the real amount of money annually lost because of fraud.[12]

Finally, the last version of the draft Regulation substantially waters down the Commission’s Proposal, e.g. by providing for an EPPO with a complex multi-layered structure that can hardly allow the Office to tackle frauds effectively.[13] Against this backdrop, it is not surprising that some member states fail to see the added value of the EPPO and are reluctant to give up on the sovereignty in the field. For instance, the Maltese Minister of Justice has been reported to say in January 2017 that “Malta believes that tax issues should be a full competence of the member states”.[14] Since this country holds the current presidency of the Council (January-June 2017), however, he added that Malta “will act as an honest broker to make sure that this office is born”.[15]

Likewise, sovereignty is a central issue in the position of the Netherlands. In 2013, both the Chambers of the Dutch Parliament objected to the Commission that the issued Proposal did not respect the principle of subsidiarity; once the text was maintained, the House of the Representatives issued a position paper in April 2014 where it submitted that the answer of the Commission was unsatisfactory. For the House of the Representatives, the objective of the EPPO could be achieved “without breaching the sovereignty of the Member States”[16] and the strengthening of the current bodies and instruments of judicial cooperation would have been preferable.

The Dutch position paper echoes the above-mentioned strong critics that the Commission’s Proposal has raised and, in addition, it poses the problem of the status of the EPPO. The draft Regulation conceives an EPPO that is independent from EU bodies and institutions, as well as from national governments and parliaments. If such a legislation is welcomed in countries where the prosecuting authorities enjoy this same status, it is not acceptable in those where – such as in the Netherlands – the prosecutors are not entirely independent from the Minister of Justice, who is accountable for the supervision on their activities before the Parliament.[17]

Apparently, similar problems concerning the status of the EPPO could regard Hungary, since “the Hungarian chief prosecutor is appointed by parliament”.[18] Nevertheless, it seems that other reasons lie behind the position of this country. Politico reported that in December 2016 the Hungarian Minister of Justice spoke out against the EPPO claiming that it was “an example of ‘the furor of integration’ and said it was ‘not necessary’”.[19] Likewise, in a declaration he made after a meeting with the Dutch Minister of Justice in December 2016, he underlined that new tools are not necessary to fight against crimes affecting the EU budget.[20]

The refusal of Hungary to take part to the EPPO has been claimed to be contentious in light of the corruption and fraud-related problems lashing the country and allegedly not curbed in an effective way.[21] In addition, it can be reminded that OLAF has recently concluded an investigation concerning the irregularities occurred during the works for the construction of Budapest Metro Line 4. The report has been published by the Hungarian Government on its website,[22] and its figures are quite alarming: as a result of the “serious management irregularities and errors and possible fraud and other offences which took place from the beginning of the project”,[23] the impact on the EU Cohesion Fund has been estimated to be more than 225 million euros.[24]

Once more, this calls into question the reasonableness or desirability of establishing the EPPO without the participation of all member states, especially those who benefit most from the EU funds, such as Hungary and Poland. The latter country will not realistically take part to the enhanced cooperation as well, although it is “on the top of the list of Member States – beneficiaries of the EU funds” and “the EU Multiannual Financial Framework 2014-2020 assumes an even higher allocation”[25] of funds. In addition, the step back of Poland is at odds with the active participation of this member state to the negotiations on the Regulation, where for instance it backed up the switch from a hierarchical and small Office to a collegial one.[26] In April 2015, the Polish Minister of Justice even signed a joint declaration with his German colleague confirming the support to the establishment of the EPPO.

Nothing prevents, of course, these skeptical member states from joining the others in a later stage, but for the near future this seems unrealistic. On the contrary, less problematic could turn out to be the participation of Portugal and Cyprus, which seem not to have signed the letter of the 14th of February because of “internal procedures […] required to validate it”.[27] It is therefore possible that they will take part to the group of states establishing the EPPO via enhanced cooperation.[28] The same goes for Italy, whose position stands out among the others for its peculiarity. Its government does not complain about the EPPO being competent on matters traditionally reserved to national authorities, but it rather regrets that the Office will not be strong enough: the text agreed in the Council is not as far-reaching as expected and advocated by Italy. The current Italian Minister of Justice has repeatedly affirmed the need for an efficient EPPO to deal with cases, for instance, of cross-border terrorism,[29] but since the beginning of the negotiations it was clear that the Office, if ever established, would have been competent to cope only with crimes affecting the EU financial interests. Because of the dissatisfaction on the outcome of the negotiations, therefore, Italy has not signed the letter of 14 February 2017, despite its long-standing support for the creation of a European Public Prosecutor’s Office.

Thus, the scenario is fragmented and another uncertainty has been added to the already thorny EU political agenda. In the next few months it should become clear whether the EU will take a step forward on the path where “those who want more do more”[30] or whether the groundbreaking twenty-year old idea of a European Public Prosecutor’s Office will remain a fine example of “blue-sky thinking”.[31]

 

[1] https://www.theguardian.com/world/2017/mar/08/uk-faces-2bn-fine-over-chi.... ­

[2] In this context, unanimity refers to all EU member states with the exception of Denmark, the United Kingdom and Ireland.

[3] Proposal for a Council Regulation on the establishment of the European Public Prosecutor’s Office, COM(2013) 534 final, 17 July 2013.

[4] Communication from the Commission to the European Parliament, the Council and the national parliaments on the review of the proposal for a Council Regulation on the establishment of the European Public Prosecutor’s Office with regard to the principle of subsidiarity, in accordance with Protocol No 2, COM(2013) 851 final, 27 November 2013. For an analysis of this contested document, as well as of the objections of national Parliaments see I. Wieczorek, ‘The EPPO Draft Regulation Passes the First Subsidiarity Test: An Analysis and Interpretation of the European Commission’s Hasty Approach to National Parliaments’ Subsidiarity Arguments’, in German Law Journal, Vol. 16, No. 5, 2015, pp. 1247-1270.

[5] See the press release of the General Affairs Council meeting of 7 February 2017, no. 48/17 (www.consilium.europa.eu/press-releases-pdf/2017/2/47244654495_en.pdf). The outcome of the JHA Council meeting of December 2016 can be found in the public register (Council doc. 15391/16).   

[6] Draft Regulation on the European Public Prosecutor’s Office - Request for referral to the European Council in accordance with the procedure set out in the second subparagraph of Article 86(1) TFEU, doc. EUCO 4/17, 14 February 2017, p. 2.

[7] See the Conclusions by the President of the European Council, 9 March 2017, p. 6 (http://www.consilium.europa.eu/en/press/press-releases/2017/03/09-conclu...).

[8] If at least nine member states wish to proceed with the establishment of the EPPO, the authorisation of Council – required by Articles 20(2) TEU and 329(1) TFEU to establish enhanced cooperation – shall be deemed to be granted (Article 86(1), third subparagraph TFEU).

[9] Proposal for a Regulation on the establishment of the European Public Prosecutor’s Office – Draft Regulation, Council doc. 5766/17, 31 January 2017. An analysis of this text can be found in F. Giuffrida, ‘The European Public Prosecutor’s Office: King without kingdom?’, CEPS Research Report No. 2017/03, 14 February 2017, available at https://www.ceps.eu/publications/european-public-prosecutor%E2%80%99s-of....

[10] Ibid., pp. 7-8.

[11] The recording of the debate is available at www.europarl.europa.eu/ep-live/en/committees/video?event=20161129-0900-C....

[12] On the debated issue of the justification of the EPPO see F. Giuffrida, cit., pp. 4-6.

[13] Ibid., pp. 12ff.

[14] See https://euobserver.com/justice/137188. 

[15] Ibid.

[16] House of Representatives of the States General position paper with regard to the establishment of a European Public Prosecutor’s Office (EPPO), p. 1.

[17] J. van der Hulst, ‘No Added Value of the EPPO?’, in eucrim, No. 2, 2016, p. 102. The author offers a very detailed overview of the Dutch position on the EPPO, concluding that “[w]hat seems characteristic so far for the Dutch approach to the EPPO initiative is the overriding use of a purely national concept of sovereignty. This concept seems outdated and does not recognize the role of EU institutions in the European legal space, especially where the competence to deal with EU fraud is concerned” (ibid.). On the status of the Dutch prosecutor and the concerns raised by the participation of the Netherlands to the EPPO, see also Geelhoed W., ‘Embedding the European Public Prosecutor’s Office in Jurisdictions with a Wide Scope of Prosecutorial Discretion: the Dutch Example’, in C. Nowak (ed.), The European Public Prosecutor’s Office and national authorities, Wolters Kluwer-CEDAM, Milan, 2016, pp. 94-96.

[18] http://hungarianspectrum.org/tag/european-public-prosecutors-office/.

[19] http://www.politico.eu/article/malta-wont-back-new-eu-corruption-prosecu....

[20] See the news release on the website of the Hungarian Government: http://www.kormany.hu/en/ministry-of-justice/news/it-is-not-necessary-to....

[21] See http://hungarianspectrum.org/tag/european-public-prosecutors-office/.

[22] http://www.kormany.hu/download/8/54/f0000/final_report.pdf.

[23] OLAF, ‘Final Report – OF/2012/0118/B40’, p. 103.

[24] Ibid. See more at http://hungarianspectrum.org/2017/02/06/metro-4-the-largest-case-of-hung....

[25] Ibid., 67.

[26] See T. Ostropolski, ‘Status and structure of the EPPO from a national perspective of a Member State’, in C. Nowak (ed.), The European Public Prosecutor’s Office and national authorities, Wolters Kluwer-CEDAM, Milan, 2016, pp. 71-72.

[27] https://euobserver.com/justice/137188. However, other sources report that “the cases of Cyprus and Portugal were not simply an issue of “not clearing internal procedures in time”. Indeed, at the informal Valletta summit, the Cypriot Minister was clear that his country would not be signing the letter” (https://www.neweurope.eu/article/european-commission-jumps-the-gun-on-eppo/).

[28] https://www.euractiv.com/section/economy-jobs/news/commission-hails-down....

[29] See for instance his interviews of November 2015 (www.repubblica.it/politica/2015/11/28/news/orlando_contro_i_terroristi_m... polizia_niente_intercettazioni_per_tutti_cosi_si_tutela_la_nostra_libert-128324071/) and of August 2016 (http://www.ilsole24ore.com/art/notizie/2016-08-16/terrorismo-ministro-or...).

[30] Commission, ‘White Paper on the Future of Europe. Reflections and scenarios for the EU27 by 2025’, 1 March 2017, p. 20.

[31] J. Spencer, ‘Who’s Afraid of the Big, Bad European Public Prosecutor?’, in C. Barnard, M. Gehring and I. Solanke (eds.), Cambridge Yearbook of European Legal Studies, vol. 14, Hart, Oxford and Portland, 2012, p. 367.

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