The European Union is suffering losses from fraud that are vastly larger than previous reports have indicated. According to a report from the House of Lords EU sub-committee released 4/18, there are a lot of weaknesses in the EU’s anti-fraud system, and the main one is failure of member countries to take responsibility for reporting fraud to the Commission.
The report was highly critical of both the EU’s members and the Office de Lutte Anti-Fraude (OLAF), which is the EU’s own policing body. It was suggested that OLAF is ineffectual partly because it has to choose which cases to pursue and it is not getting enough valid information, but also because when it does make recommendations, they are largely ignored.
The latest EU audit cited figures of about €404m (or £348m); the House of Lords report cites figures in the billions – five billion and probably more than that if all the evidence were to be confirmed. The report further notes that EU Member States are responsible for uncovering fraud against the EU’s budget and reporting it to the proper authorities when it’s found. They are also expected to follow up and act on information supplied by OLAF (which has limited powers).
One of the suggestions made in this report was that the UK should set up a separate department to deal with EU fraud, and take responsibility for its own contribution to the problem. In the UK alone, according to treasury reports, there was a loss of as much as £1billion in VAT fraud and another £242m against EU agriculture and cohesion policies collectively.
Chairman of the reporting Committee Lord Bowness remarked that though the UK has no control over how other EU members manage their affairs, it can and should take charge of what is going on within its own borders.