Bill targets criminal misuse of EU funds

The fraudulent misuse of EU funds will be addressed specifically through proposed amendments to the Criminal Code, with offenders facing jail terms of up to 8 years.

Though fraud and related crimes, naturally, are already covered by the Criminal Code, categorised as crimes affecting public trust, the EU has sought to specifically address fraud and irregularities in the use of EU funds. With this aim, the so-called PIF Directive, on the protection of the union’s financial interest, was adopted in 2017.

The amendments transpose the directive by making fraud affecting the EU’s financial interest a specific crime, with offenders normally liable to a jail term ranging from 6 months to 4 years. Public officers who misappropriate EU funds may incur jail terms ranging from three to eighteen months.

However, in cases which “involve considerable damage or advantage” – the proposed amendments specify cases where the amounts involved exceed €100,000 – offenders may be jailed from 4-8 years. The punishment can also be increased by up to two degrees whenever the offence is committed within a criminal organisation.

Since the collection of VAT is one of the EU’s funding sources, VAT offences may also be covered by these provisions, though only in cases where the total damage is at least €10 million.

Companies involved in offences covered by the amendments may incur fines of up to €2 million.

Justice Minister Edward Zammit Lewis emphasised that EU funds have greatly benefited the country, even reserving praise for the financial package negotiated by a Nationalist government for the 2014-2020 funding period. The government, he added, has used these funds effectively and with great discipline.

“So we have a strong interest in preventing this fraud, the misuse of EU funds, as this fraud affects us all,” Zammit Lewis said.