Crooks milk EC for all it is worth

Sarah Lambert
Monday 26 April 1993 23:02 BST

EUROPE'S fraudbusters warned yesterday: 'You cannot just defraud the EC and get away with it' - but admitted that only about 10 per cent of money known to be illegally creamed from the EC budget is ever recovered. The Commission's role in policing its own budget has come under attack in recent weeks, as public concern over institutional corruption grows.

Emile Mennens, head of the Commission's unit for the Co- ordination of Fraud (known by its French acronym Uclaf), which was set up in 1988 to improve co-ordination between the various anti-fraud measures taken by the European Commission, said no EC official had been fired or disciplined for fraud. His unit is only allowed a limited role in the fight against crime - primarily the co-ordination of monitoring and investigative methods. The legal obligation to police fraudsters lies with the member states.

It is impossible to put a value on the amount which fraud costs the Community. The scope of the scams gets more complex as the abolition of internal borders makes detection of illegal cross- border trade more difficult.

The opening of east Europe, for example, has created a new potential. East European cattle are imported live into the EC, ostensibly for transhipment to North Africa. The cattle are, however, slaughtered and the meat sold as EC produce to get round the strict quotas applying to east Europe. Two Dutch operators caught in this scam have been sentenced to four years' in jail and heavily fined.

Such cases are fully documented in Uclaf's annual report on the fight against fraud, published yesterday.

The Community's complex and lucrative agricultural policies still offer the greatest scope for crime. Last year 1,030 cases of agricultural fraud involving pounds 94m were reported, against 820 cases involving the manipulation of customs duties or other trade levies. The pickings here are, however, greater - the 820 cases alone were worth pounds 121.6m.

Catching the criminals is one thing, Mr Mennens said yesterday, making them pay is another, since they can only be pursued through national courts. Of last year's pounds 94m of agricultural fraud, only about pounds 8m was recovered.

The reporting rate is variable: in 1992, Italy notified the greatest number of cases, the majority in the agricultural sector; Denmark, Britain and France were also very active, while Luxembourg reported no cases at all. Mr Mennens said the figures were more a reflection that Luxembourg has, bar its airport, no external frontiers, and a testament to the tenacity of the Italian authorities, than a comment on relative corruption.

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