Financial Crime World

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Budget Fraud: A Growing Concern in Europe

LONDON - The European Union’s budget is facing a significant threat from fraud, with nearly two-thirds of economic crimes committed in Hungary linked to budget fraud. According to recent statistics, the number of registered cases of budget fraud has been steadily increasing since 2013, reaching a peak of 1686 cases in 2016.

The Rise and Fall of Budget Fraud Cases

However, the trend has changed in recent years, with a significant decrease in reported cases, from 1049 in 2020. Despite this drop, budget fraud remains a major concern for EU authorities, accounting for nearly 90% of financial losses caused by economic crimes.

Strengthening Protection against Budget Fraud

The legal framework governing budget fraud was revised in [year], introducing new provisions to strengthen the protection of the EU’s financial interests. The changes aimed to eliminate initial problems and terminate differences between the protection of national and EU budgets.

Key Provisions of the Revised Definition

  • Budget Fraud: punishable under Section 396 of the Criminal Code (CC)
    • Punishes fraudulent conduct exercised in respect of both payment obligations and any funds originating from any of the budgets listed in the explanatory note specified in Subsection (9) of the criminal offence
    • Both revenue and expenditure sides of the EU budget are covered by budget fraud based on the legal definition
  • Making a False Statement: punishable as a punishable conduct, emphasizing that misleading conduct during tax returns or reporting obligations is also covered by this criminal offence

Chapter XXXIX: Budget Fraud Regulations

Budget fraud is regulated in a separate chapter (Chapter XXXIX) of the CC, which contains four criminal offences:

  • Fraud relating to social security, social and other welfare benefits
  • Budget fraud
  • Omission of oversight or supervisory responsibilities in connection with budget fraud
  • Conspiracy to commit excise violation

The European Public Prosecutor’s Office (EPPO)

The EPPO is also playing a crucial role in combating budget fraud. The EPPO is responsible for investigating and prosecuting criminal offences affecting the EU’s financial interests, including budget fraud. The EPPO is established in 22 Member States and has been operational since [year].

Conclusion

In conclusion, budget fraud remains a significant threat to the EU’s financial interests, and it is essential for authorities to continue strengthening their efforts to combat this type of crime. The revised legal framework provides a solid foundation for tackling budget fraud, but continued cooperation between law enforcement agencies and the EPPO will be crucial in preventing and prosecuting these crimes.

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