The European Commission has adopted draft legislation aimed at streamlining the sentences handed down by member states’ courts in cases of fraud involving European Union money. 

The college of commissioners yesterday (11 July) endorsed a draft directive that sets standards for prosecuting and punishing criminal fraud involving EU funds, including minimum sentences of six months. The proposal was prepared by the services of Viviane Reding, the commissioner for justice, and Algirdas Šemeta, the commissioner for taxation and customs union, audit and anti-fraud.

Cecilia Malmström, the commissioner for home affairs, backed the proposal but objected to the introduction of minimum sentences for fraud because no such EU-wide minimum sentences exist for other serious crimes, such as drug trafficking, terrorism, human trafficking and sexual abuse of children. Malmström, with support from Connie Hedegaard, the commissioner for climate action, asked for a reservation to be entered in the minutes of yesterday’s college meeting. “I am concerned about the proportionality of the minimum and maximum penalties,” Malmström said in her reservation. She said that the maximum sentences were too high compared with the typical penalties for the production of child pornography or human trafficking.

Definitions

The draft directive defines criminal offences involving EU money, such as fraud, corruption, misappropriation, money-laundering and obstruction of public procurement procedures. For fraud exceeding €100,000, it sets minimum sentences of six months. The lowest maximum sentence is set at five years (ten years in the case of organised crime).

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The Commission says that the legislation is needed to reduce the current differences between the member states. The UK and Ireland have no minimum sentence for fraud, for example, while Austria has a maximum sentence of six months’ imprisonment. In Romania, the maximum sentence is 12 years, according to the Commission. In the 647 cases referred to national authorities by the Commission’s anti-fraud office (OLAF) since 2000, conviction rates range from 14% to 80% across the member states.