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30 Crime L. & Soc. Change 1 (1998-1999)

handle is hein.journals/crmlsc30 and id is 1 raw text is: rA Crime, Law & Social Change 30: 1-42, 1998. 1 O © 1998 Kluwer Academic Publishers. Printed in the Netherlands. Euro-fraud: Organised fraud against the financial interests of the European Union * ULRICH SIEBER Director of the Centre for European Legal Studies, University of Wuerzburg, Wuerzburg, Germany Abstract. Fraud against the European Union is a matter of extensive public interest. This article results from an empirical study into fraud, its various forms and the perpetrators. Such information is central to recommendations for reform. The article describes in detail from case material how the frauds are perpetrated, laws and loopholes are exploited, and by whom before focusing on issues of reform- the role of organisations, intelligence, procedures, co-operation, controls and sanctions. I. Introduction Fraud against the European Union has been the subject of great public inter- est in recent years, especially as a result of the high sums of EC funds avail- able. In 1998 the EC general budget was approximately ECU 83.5 billion. The expenditure on European Guidance and Guarantee Funds for Agricul- ture, Guarantee division (EAGGF), is ECU 40.9 billion, ECU 25.6 billion on Structural Fund measures, ECU 2.7 billion on Cohesion Fund measures, ECU 4.5 billion on external measures, ECU 0.7 billion on social and educational measures and ECU 9.1 billion on other expenses.2 These figures illustrate that the greater part of the EC budget is used in subsidies to promote aims primarily of an economic nature. As a result there are considerable incentives for market participants to abuse such subsidy funds, and thereby to increase their income.3 As a consequence the EC is at risk from fraud and abuse, not only in the traditionally fraud-prone area of revenue,4 but also that of expenditure. 1. Fraud estimates and counter-measures Despite the growth in public interest relating to EC-fraud, there has only been limited substantial, empirical research on its nature, character and extent.5 This is particularly true for estimates of the extent of the damage caused. Different press reports, some clearly written with the intention of politically damaging European unification, claim that up to 20% of the EC budget falls * A modified German version was published in Schweizerische Zeitschrift far Strafrecht

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