Daily Times

BRUSSELS: The European Union lost nearly 900 million euros last year to fraud, the bloc’s anti-graft watchdog said on Tuesday.

In its annual report, the EU’s anti-fraud agency OLAF said it had detected an estimated 888 million euros ($991 million) in EU funds that were lost to fraudulent claims in 2015, a slight drop from 901 million euros the year before.

It said false claims in 2014 and in 2015 had, in each year, amounted to more than double the figure for 2013. Total EU spending last year amounted to 141.28 billion euros.

Some of the cases it dealt with had implications outside the bloc, including a fraud investigation into an ecological project in Africa and work with Japan and Malaysia on a case of evading anti-dumping duties.

In another case, OLAF looked into how 1.3 million euros was spent on modernising a plant to refrigerate fruit and vegetables in Bulgaria. It found an Italian citizen owned both the machinery supplier and the beneficiary plant, with the equipment sold at a “substantially inflated price”.

OLAF said criminal proceedings had been launched in Italy and Bulgaria on its recommendation. News of fraud or mismanaged EU funds risks fuelling dissatisfaction with the 28-nation European Union, including those campaigning for Britain to leave the bloc in a referendum in June.

OLAF Director General Giovanni Kessler said political will to tackle this “major problem” and greater citizen awareness were needed to ensure EU funds spur growth.

He said the agency was limited in how well it could fight fraud as it faces growing numbers of transnational cases which require more powers than it currently has.

“What we are working toward is a European public prosecutor’s office, a body which can both investigate fraud and prosecute inside and across member states,” Kessler said in the report.

Kessler himself is currently caught up in legal action, with OLAF saying it may sue after the EU stripped him of diplomatic immunity earlier this year over claims he illegally listened in on a phone call during a corruption investigation.

The Italian national is suspected by Belgian authorities of listening to the call during a probe that ended with the resignation in 2012 of Malta’s EU health commissioner John Dalli in a tobacco lobbying scandal.