EC to create public prosecutor to fight fraud

In its annual report, the Commission claims to be slowly winning the battle, saying there was a reduction of 20% to €482m euros in financial 'irregularities' in 2003.

But, recognising that this is still 'unacceptable', it blames the member states.

National authorities do not notify irregularities on a sufficiently consistent basis 'and their efforts to safeguard the Communities financial interests and claw-back funds are not always adequate,' said Brussels.

The thrust of the anti-fraud action plan for 2004/2005 is administrative collaboration between Brussels and the member states covering trans-national VAT fraud of €500,000 or more, money laundering, and EU budget swindles of €100,000 or more.

The national anti-fraud authorities will be required to conduct surveillance operations, speed up responses to requests by introducing 6-week time limits and set up a VAT information system so that the commission can provide evidence in administrative or judicial proceedings and draw up intelligence reports.

The worst country for fraud last year was Belgium, with a reported 470 cases, followed by the UK with 336 and Germany with 300.