European prosecutor’s office head says that fight against criminality in Malta must be consistent

The European Public Prosecutor’s Office is currently investigating 12 cases of possible financial fraud with EU funds, VAT fraud, or Customs fraud in Malta, as the office’s head Laura Kövesi told The Malta Independent on Sunday that the fight against organised transnational crime must be consistent.

The European Public Prosecutors Office is the first transnational prosecution office to exist, and its main competence is to fight financial crimes which are within the financial interest of the European Union.

This consists of any crime which involves fraud on EU funds, VAT fraud, customs fraud, and corruption and money laundering related to these crimes.

“It’s important to say that we are not a foreign institution. We have two European delegated prosecutors who were appointed in Malta; they are Maltese prosecutors, they have the same powers as other magistrates in Malta, and they apply Maltese laws. If we go to court, we go to the Maltese courts,” Kovesi explained.

Maltese citizens can file a report directly with the EPPO either at their office in Valletta, the central office in Luxembourg, or through the EPPO’s website.

Kovesi said that there are currently 12 active investigations in relation to Malta which the EPPO is leading: up from nine reported at the end of 2022 in the office’s annual report.

Kovesi commented that this is an improved detection rate when compared to when she first visited Malta two years ago.  At that point, Malta had not reported a single case meriting an investigation to the office in five months – something Kovesi back then had scarcely found believable.

The cases being investigated today include VAT fraud and Customs fraud, Kovesi said before adding that she hopes that national authorities will continue to send information and reports to the EPPO for their consideration.

“The level of detection has improved, but we still have to work on a lot of different aspects,” she said when asked what the situation is today between the EPPO and national authorities.

“This is why I came here: to have a plan on how we can develop further, because it’s not enough just to discover the crime, to detect them, and to report them to the EPPO: we also have to make the investigations,” Kovesi said.

She said that having only two European-delegated prosecutors in Malta means that the office needs support from the police and other authorities in order to create a multidisciplinary team to work on EPPO cases.

This is a project which has already been started in other member states where there are police officers delegated specifically to EPPO cases.  It is being paralleled in Malta with a small team of police officers being assigned EPPO cases, but this is together with other local cases which they must work on.

In time, Kovesi said, it’s important to have a team of people from the police, financial crimes units, and customs departments amongst others to be solely dedicated to EPPO cases as these are very complex and more often than not international in nature.

Kovesi referred to an EPPO investigation which resulted in a number of arrests recently in relation to a suspected fraudulent scheme aimed at evading customs taxes and duties on imported clothing and other goods from China.

This was done by deliberately under-declaring the value and weight of the items. It is alleged that customs officials were involved in this scheme, as they were reportedly bribed to neglect their duties, and the crimes being investigated include customs fraud, corruption of public officials, and money laundering. It is estimated that the damage to the EU budget amounts to millions of euros.

She said that in cases such as this, organised criminal groups which operate out of various members states are involved.

“It’s important for national authorities to understand that Malta is not a white point on the map of criminality, and that criminals cannot think that they are protected because they are in Malta,” she said.

In this particular case, she said, the criminal group in question initially operated elsewhere before then moving to Malta.

“They are very flexible; they have access to a lot of resources, and they are moving from one member state to another member state on a frequent basis,” Kovesi said.

She said that another investigation had uncovered an organised crime group which exists to provide consultancy on where the best place to remain undetected while doing criminal activity is.

“You can see that we have to adapt to this new reality, and we cannot do it alone. We have to work together with the national authorities,” she said.

A point which Kovesi had commented upon after her first visit to Malta was the lack of clarity on which Maltese institution was responsible for what.

“I visited Malta. I had meetings with the national authorities and after two days it was very difficult for me to identify the institution that is responsible for detecting crimes,” she had said back at the start of 2022.

“All of them said that ‘it’s not me. It’s them.’ And when I visited them, they said ‘it’s not us’,” she said.

Asked whether this was still the case, Kovesi said that “now we have clarity on each institution and on what they have to do” – indicating that the matter has been resolved.

She said that there have been constructive meetings with the Home Affairs Ministry and Justice Ministry on this matter, and also referred to the signing of a Memorandum of Understanding with the Financial Analysis Intelligence Unit (FIAU).

Asked what her new plan on how to move forward in Malta consists of, Kovesi said that the most important thing is that the fight against crime is consistent.

“It shouldn’t be something which happens randomly as if we are saying ‘Okay, Kovesi complained that we didn’t send any cases so let’s send some cases and it is problem solved.’ No: these types of fraud are continuously committed and we have to be there and ready to stop them,” she said.

She noted that everyone is speaking of a lack of resources, but the EPPO provides a chance to investigate crimes and recover the financial damage: “any operational success by the EPPO means more money in the member states’ national budget.”

Kovesi said that in its two years of operation, her office has seized €700 million which went back into the coffers of the respective member state.

“If I were to be the Minister of Finance, I would be very happy to give some resources to the EPPO in order to reduce the gap of the VAT, for example,” she said, adding that Europol’s latest estimation shows that over €50 billion in VAT has never been paid across the EU.

She said that most of these cases can be investigated and that figure can be reduced.

“It’s not about the fact that now, today, you don’t have enough resources; it’s how you prioritise the resources and how you develop further,” she said.

Kovesi would not be drawn to comment on recent criticism directed towards the Attorney General’s office and the Police in particular on shortcomings in major investigations, saying that she is not in the country to evaluate their activity.

She said that for the EPPO it’s important to work with those authorities, and from the police’s side particularly it is important to have dedicated police officers to EPPO investigations.

“I can see that the level of detection has improved, which is a good sign. But we have to continue. As I said, we have to be consistent and I hope that the support towards the EPPO will increase, and not decrease so we can be consistent in what we have to do.”