Top EU Fraud Cop Turns Sights On Russian Sanctions Evaders, Billions In Tax Fraud

(Bloomberg) --

The European Union’s chief prosecutor, who forged a reputation cracking down on corrupt politicians in her native Romania, says she’s itching to get to work tackling Russian sanctions evaders.  

The European Public Prosecutor’s Office, operational for just over a year now, is well-equipped to take on sanctions busting as the bloc pushes ahead with plans to make it a criminal offense under EU law and give her office the power to prosecute it as soon as possible, said Laura Codruta Kovesi.

“We’re certainly ready, we can do it,” Kovesi, 49, said in an online interview from her office in Luxembourg on Friday. “One of the possible crimes connected to the breach of sanctions is smuggling and we can already investigate that,” she explained. “So we could start as early as today if we had the legal instruments.” 

The bloc has so far frozen about €18.9 billion of assets belonging to sanctioned Russian individuals and entities since Vladimir Putin’s February invasion of Ukraine. Sanctions violations aside, Kovesi already has her hands full. The EPPO’s is already investigating more than 5 billion euros ($5.3 billion) worth of cases of suspected EU budget fraud. 

Kovesi was actually the first top-level EU official to visit Ukraine since the Russian invasion and signed an agreement with the authorities there to share information on suspected cases of fraud in Ukraine connected to EU-linked funds as the nation was recently given candidate status to the block and stands to get pre-accession funding.  

“We have a pretty solid contact with the Ukrainian general prosecutor’s office and looking forward to the potential new competency for the EPPO” to work more closely with colleagues in Kyiv, said Kovesi. 

Kovesi earned a reputation as a fearless prosecutor after leading an unprecedented anti-corruption drive in Romania that landed the country’s most powerful politicians behind bars. Now based in Luxembourg in the heart of the EU, she says she’s counting on the EPPO’s “helicopter view” to bring to justice transnational crimes and tackle the fraud cases that have done such damage to the EU’s budget. 

In its first year, the office has already recovered over 250 million euros and Kovesi expects the current caseload of about 1,200 files to double next year. 

Last week, it announced an operation targeting a 2.2 billion-euro VAT tax fraud case spanning 35 countries across Europe. Given some studies put annual VAT fraud across the EU at more than 50 billion euros, this is just the beginning, she says. 

A major obstacle for all the probes she oversees is that only 22 out of 27 EU member states are members of the EPPO and some, such as Poland reject any form of cooperation. 

“It’s a very big issue because there are connections to companies or people in Poland” but when the government “says we don’t cooperate, our investigation is clearly impacted,” said Kovesi. 

--With assistance from .

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