Commission: Greece is one step before the European Court of Justice for omissions in the legislation on “passive bribery” and “public official”

The European Commission announced today that it has sent a letter of reasoned opinion to Greece, because it did not correctly transpose into national law the directive on combating, through criminal law, fraud against the financial interests of the Union (QTY directive), as well as in Cyprus.

These rules, on the one hand, increase the level of protection of the EU budget by harmonizing the definitions, sanctions and limitation periods of criminal offenses affecting the financial interests of the Union and, on the other hand, lay the foundations for the European Public Prosecutor’s Office (EPPO).

The Commission sent for the first time warning letter in Greece in December 2021. After analyzing the responses of the Greek Authorities, the Commission considered that Greece has not correctly transposed into its national law the provisions of the Directive which provide a definition of “passive bribery” and of “public official». In addition, the Commission considered that certain provisions notified by Greece provide for rules that limit the effectiveness and deterrence of sanctions provided for criminal offenses falling within the scope of the Directive.

For this reason, the Commission decided to send a reasoned opinion to Greece, which it has a period of two months to respond and correct the deficiencies pointed out by the Commission. Otherwise, the Commission may decide to refer the case to the Court of Justice of the European Union.

The purpose of the directive

• Creating a stronger and more harmonized system, with a minimum of common rules, to fight crime affecting the European budgetof the Union (EU).
• Better protection of EU financial interests and EU taxpayers’ money.

Field of application

The directive covers the following:

• fraud and other criminal offences, such as corruption, embezzlement or money laundering, which affect the EU’s financial interests – i.e. the EU budget, the budgets of the EU institutions and bodies established by the Treaties, or the budgets directly or indirectly managed and supervised by those bodies and agencies;
• serious offenses against the common value added tax (VAT) system, such as VAT chain fraud* i.e. offenses are considered serious when they are linked to the territory of two or more EU Member States and involve a total loss of at least 10 000 000 euros.

In addition, it lays down common rules on penalties and limitation periods for the criminal offenses covered by this Directive. Each of the following offenses is defined at EU level:

• fraud which is committed intentionally in relation to procurement and non-procurement expenditure, as well as in respect of revenue arising from VAT own resources and other revenue;
• money laundering as defined in Directive (EU) 2015/849 (see summary);
• passive and active bribery, when done intentionally;
• embezzlement, when done intentionally.

The directive defines “public officials” – EU officials and national civil servants (including in Member States) – and this definition is relevant to the definition of money laundering, bribery and embezzlement.

Criminal offenses as set out in the directive fall under the remit of the European Public Prosecutor’s Office, an independent EU body which will have the power to investigate and prosecute such crimes, as well as bring them to justice before the competent national courts.

In all Member States (except Denmark and the United Kingdom):

• such offenses shall be punishable as criminal offences, as shall be the attempt, abetment, aiding and abetting of their commission;
• legal persons* should be liable for any criminal offense committed for their benefit – including the possibility of criminal prosecution of the persons who are the perpetrators or who bear sole responsibility.

Penalties

The directive provides for minimum “effective, proportionate and dissuasive” criminal penalties.

These include a maximum prison sentence of at least four years:

• when the financial damage to the EU budget exceeds the threshold of €100,000;
• in cases of serious offenses against the common VAT system;
• in other serious circumstances defined by national law.

If a criminal offense involves damages not exceeding EUR 10,000, Member States may impose sanctions that are not criminal in nature.

As regards legal persons, the Directive provides for various other types of sanctions in addition to financial penalties (criminal and non-criminal in nature).

The commission of the aforementioned offenses in the context of a criminal organization as defined in the framework decision 2008/841/JHA (see summary) constitutes an aggravating circumstance (the criminal act will be considered more serious).

These sanctions do not exclude the following:

• the possibility of stricter penalties in national law;
• the exercise of disciplinary powers against public officials by the competent authorities.

The directive also refers to the following:

• the freezing and confiscation of the instruments of criminal offenses affecting the EU budget;
• in establishing jurisdiction over these offences;
• On the minimum statutes of limitations to allow for investigations and prosecutions and the imposition of penalties upon conviction for the commission of these offences.

Cooperation between the Member States and the institutions and other institutions and organizations of the EU

• Member States, the European Public Prosecutor’s Office, the European Union Organization for Cooperation in Criminal Justice and the European Anti-Fraud Office (OLAF) must cooperate to fight the criminal offenses covered by this Directive. OLAF – and where required the European Union Agency for Criminal Justice Cooperation – provides technical and operational assistance to facilitate the coordination of Member States’ investigations.
• If the European Court of Auditors and the auditors entrusted with the audit of the budgets of the EU institutions and bodies or other budgets managed and controlled by the institutions find anything that could be classified as a criminal offense under of this Directive, they must inform the European Public Prosecutor’s Office, OLAF and other competent authorities. Member States should ensure that national supervisory bodies do the same.