Rising fraud cost EU £1bn last year

Europe lost £1bn last year through fraud, financial irregularities and smuggling, and the number of cases being detected is on the increase, a report said yesterday.

Europe lost £1bn last year through fraud, financial irregularities and smuggling, and the number of cases being detected is on the increase, a report said yesterday.

The European Commission's annual report also gave a stern warning about the levels of alcohol trafficking and cigarette smuggling, which, the Commission said, "now vie with one another as the most serious form of fraud". Some member states, it added, "do not yet seem prepared to draw the necessary conclusions".

In the document, which gives a detailed breakdown of the battle to recover money stolen or lost through fraud and incompetence, the Commission argues that the responsibility for money going missing lies mostly with member states. They are responsible for raising money to fund the European Union, through VAT and excise duty, and for supervising the distribution of grants via the common agricultural policy and other funds.

Britain emerged as one of the EU countries least successful at recouping missing money. Its recovery rate is 23 per cent, the same as that of Germany but well short of the 51 per cent achieved in Spain or the 90 per cent in Denmark.

Cigarettes top of the list of items affected by fraud and irregularities, but dairy products, textiles and cars also feature in the report.