Since the start of its operations on 1 June 2021 the EU Public Prosecutor’s Office (EPPO) has already shown its considerable investigative strength. Charged with the prosecution of criminal offences affecting financial interests in the EU, the EPPO has already opened 929 investigations and granted freezing orders valuing €259m.
In its 2021 annual report, the EPPO points out that its success also rests on establishing cooperation mechanisms with other European Institutions, eg the European Investment Bank, non-participating EU Member States (eg Hungary) and third countries.
In reviewing its investigative efforts in 2021 the EPPO has identified low levels of detection of fraud affecting the financial interests of the EU. As a result, partnerships with third countries that enable evidence sharing and other forms of cooperation are increasingly invaluable to the EPPO. On July 26 2022 the EPPO signed a working arrangement with the US Department of Justice (DOJ) and the US Department of Homeland Security. The agreement seeks to facilitate cooperation in investigating and prosecuting criminal offences within their respective competences. Here we look at the potential implications of this agreement for the EPPO.
EPPO goes global
The EPPO can already fall back on a large supranational investigatory apparatus, which includes other European institutions such as the European Investment Bank, the European Anti-Fraud Office, Eurojust and Europol as well as the European Delegated Prosecutors in the EU Member States with their national (police) authorities.
The working arrangement with the DOJ and the Department of Homeland Security expands the EPPO’s accumulation of centralised and decentralised investigatory resources and adds an international layer. The working arrangement with the DOJ and the Department of Homeland Security entails the exchange of evidence or other strategic information, the operation of joint investigation teams, the extradition of persons subject to an EPPO investigation and other forms of cooperation such as training sessions, workshops or the provision of technical support.
Benefitting from the EPPO’s decentralised structure
When drafting the working arrangement, EPPO and the US authorities took advantage of the decentralised structure of the EPPO. Its prosecutions are conducted by the respective EU Member State’s national public prosecutors who are simultaneously serving as European Delegated Prosecutors. The working arrangement determines that the DOJ will provide assistance to requests made on behalf of a European Delegated Prosecutor handling the matter and directly transmit requested evidence to the appropriate authority of the EU member state in which the prosecution is being carried out.
Ultimately the working arrangement turns a potential weakness – the decentralised prosecution of EPPO cases – into an advantage for the purpose of cross-border cooperation with the US. Subjects of an EPPO investigation face a European Delegated Prosecutor, who, when it comes to the timely transmission of evidence from the US, is not held captive by the organisational structure of the EPPO, while also being able to fall back on its supranational capabilities (eg centralised case management, coordination with other European institutions).
Similarly, the working arrangement also makes use of pre-existing treaties for judicial cooperation between EU member states and the US. Where the EPPO seeks the extradition of a person sought for a prosecution it is conducting, the European Delegated Prosecutor handling the matter may, pursuant to the working arrangement, request the appropriate authority of the EU Member State in which the prosecution is being carried out to seek provisional arrest or extradition consistent with the applicable treaty between the EU member state concerned and the US.
Joint EPPO-US investigation teams on the horizon?
The working arrangement enables the EPPO, the DOJ and the Department of Homeland Security to set up joint investigation teams (JITs). JITs can operate within the territorial jurisdiction of the EPPO or the US. For the operation of a JIT the working arrangement refers to the EU-US Agreement on mutual legal assistance from 2003. Where a JIT needs an investigative measure to be taken within the territory of one state, a member of the team coming from that state may take these measures without the other state having to submit a request for mutual legal assistance. If the EPPO and the DOJ were to set up a JIT within the US, the EPPO would not have to (indirectly) request mutual legal assistance from the US to take certain investigative measures within US territory, but a team member from the DOJ may directly require the competent US authorities to take the respective measure pursuant to the applicable domestic legal basis.
Although the EPPO has only been in operation a little over a year, it has already operated a JIT with Swedish prosecutors in February 2022 to investigate a major case of VAT fraud. That JIT was implemented with the assistance of Eurojust on the basis of working arrangement between the EPPO and Eurojust. Against the backdrop of the existing JIT with Sweden it does not seem unlikely that the EPPO, if deemed necessary for an investigation, will operate joint teams with the DOJ and/or the Department of Homeland Security.
For subjects of an EPPO investigation, a JIT may pose the risk of potential ‘investigatory jurisdiction shopping.’ The EPPO could use a JIT with the DOJ and/or the Department of Homeland Security to circumvent the comparatively more limited investigatory powers within a European Delegated Prosecutors member state, by collecting the evidence in the US through US law enforcement’s more extensive investigatory powers.
In turn, however, the admissibility of evidence obtained through a JIT could potentially be challenged. Notwithstanding the general legality of JITs, evidence could be inadmissible in some cases, if the criminal procedural law of the state on whose territory the investigation is conducted undercuts essential principles of the criminal procedural law of the EPPO member state in which the criminal proceedings are conducted.
EPPO substantially expands its investigative reach towards the US
The working arrangement substantially expands the investigative reach of the EPPO towards the US. While extending its already large supranational apparatus internationally, the working arrangement also takes advantage of the decentralised structure of the EPPO.
To summarise it: It’s a(nother) partnership worth watching.
Freshfields will continue to monitor the partnership between the EPPO, the DOJ and the Department of Homeland Security in its Risk and Compliance publications. Watch this space.