EU's Anti-Fraud Office Warns COVID-19 Relief Funds Targeted
With COVID-19's second wave engulfing a number of European Union the bloc has responded with a record 1.8 trillion euros ($2.13 billion) in aid, but warned against fraud and corruption.
With countries like Hungary, the Czech Republic, Slovakia and Bulgaria facing accusations of misspending EU agricultural subsidies, there are concerns the tempting amount of money being put up will be siphoned off.
The COVID-19 aid, to be distributed in loans and grants over seven years is such an unprecedented pot that the EU's anti-fraud agency, OLAF, said infrastructure, research, and development are especially susceptible.
OLAF set up a center to share information on cross-border fraud schemes and is stepping up cooperation between institutions, said Euronews in a feature.
"Fraudsters will be attracted to the huge amount of money that is going to be made available - that's very clear," Ernesto Bianchi, Acting Deputy Director-General of OLAF told the news site.
As early as April, as the pandemic was unfolding, the Council of Europe's Group of States Against Corruption (GRECO) published guidelines aimed at preventing corruption and fraud.
In July, the Paris Prosecutor's Office said it was investigating "massive fraud" of the country's temporary unemployment scheme that saw people fraudulently being paid 1.7 million euros ($2.01 million.)
Besides EU funds, member states are putting up huge sums in subsidies to workers and businesses affected by lockdowns that closed essential businesses, creating another pool of vast sums.
In June, the site ACAMS Money Laundering reported German authorities filed some 2,500 charges in suspected COVID-19 financial crimes since March 25 when lawmakers approved a 1.1 trillion euro ($1.3 trillion) relief package.
The report said the Financial Intelligence Unit (FIU) was probing more than 17,000 suspicious transaction reports and found fraud in some 20 percent of the cases.
The European Public Prosecutor's Office (EPPO) warned it expected people trying to bilk the system during a time of fear. The newly established office won't be operational until the autumn and will work with OLAF.
For all that, the EU hasn't tied subsidies to the rule of law in countries such as Hungary where critics said it's being undermined and are disappointed by the bloc’s leaders’ timid response.
While the European Council representing the bloc's 27 heads of state was assailed for not linking aid to ensuring democratic standards are upheld, discussing it was enough to satisfy some.
"It's a huge victory," Hungarian pro-government Member of the European Parliament Tamás Deutsch, told Euronews, adding, "The rule of law and the protection of the financial interests of the European Union are not connected."
Nicholas Aiossa, Deputy Director at Transparency International said, "It's extremely positive that the Council has concluded that these funds need to be protected through conditionalities and stronger anti-fraud measures."