Fraud against EU tops pounds 800m

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The Independent Online
Professional criminals are turning from robbing banks to the much richer pickings of the frontier-free single European market, according to the European Commission. Cigarette smuggling, emerging as one of the most lucrative rackets for international mafia-style gangs, cost EU governments pounds 310m and the UK treasury pounds 36m in unpaid duties last year, the Commission's annual fraud report, published yesterday, claims.

The Commission says 4,700 cases of fraud were detected during 1995, an increase of around 15 per cent on the previous year and a reflection of the new determination in Brussels to answer frequent charges that the EU is soft on fraud. Cases detected last year represent losses of pounds 800m or 1.4 per cent of the EU's pounds 62bn budget. Just 10 per cent of the cases accounted for half of the money siphoned off.

The most worrying trend, according to EU financial control commissioner Anita Gradin, is that EU funds, across all sections of the budget, are being targeted increasingly by the perpetrators of organised international crime, often operating from eastern Europe. "We are not talking about individual farmers claiming an extra hectare of farm aid, we are talking about criminals, mafia-like organisations, the same people who are trafficking in drugs, in humans, and who are involved in money laundering."

Agriculture, which absorbs almost half of the central budget, is still the area most susceptible to fraud, accounting for half of last year's cases. Swindling the EU's generous regional and social grants schemes increased three-fold last year, with detected losses of pounds 54m. In one case, the head of a Danish job-training institute was found to be diverting funds intended for France, the UK and Ireland.

Lorry-loads of meat, live cattle, bananas, butter, sugar and milk powder were involved in cases uncovered last year, representing pounds 600m in lost revenue.