Dr. Krystyna Bakhtina, Luiss University
Photo credit: Kiwiev,
via Wikimedia
Commons
In mid-July
2025, the European Commission
announced a structured reflection process to review the EU Anti-Fraud
Architecture, complementing the preparatory work on the next multiannual
financial framework. The goal is to ensure a stronger and more efficient
protection of the Union’s financial interests. This review comes at a critical
moment: transnational fraud schemes are becoming more sophisticated, organised
crime continues to target EU funds, and criminal networks increasingly exploit
advanced technologies such as AI and cryptocurrencies to misappropriate Union
funds.
Examining the Directive
(EU) 2017/1371 on the fight against fraud to the Union’s financial interests by
means of criminal law (PIF Directive) is therefore highly relevant. Drawing on
findings from the BETKONEXT
project’s working paper, this blog outlines how PIF Directive has been
implemented across several EU Member States. It provides insight into how
effectively the EU financial interests are safeguarded, highlighting the main
challenges and gaps that persist.
Built on Article
325 TFEU, the Directive establishes common rules to protect EU funds,
harmonising definitions of key crimes, such as fraud, corruption,
misappropriation, and money laundering, it provides rules on sanctions and
limitation periods. Its aim
is to close legal loopholes, reduce fragmentation across national frameworks,
and enhance the safeguarding of EU funds and taxpayers’ money.
Implementation
in Practice: A Comparative Perspective
While the
European Commission’s
report confirmed that the PIF Directive’s core provisions have been transposed,
it also noted certain gaps and shortcomings in national implementation. The
comparative research as part of the BETKONEXT
project shows that many of these problems remain and, in some cases, reveal
deeper systemic shortcomings affecting the Directive’s uniform application and
the safeguarding of the EU financial interests.
An examination
of four Member States, namely Italy, Poland, Belgium, and Spain, illustrates
how these divergences manifest in practice.
Italy
demonstrates a generally high degree of compliance; however, recent legislative
reforms risk reversing this progress. The repeal of the offence of abuse of
office and the introduction of a much narrower offence limited to the improper
allocation of money or movable property significantly restrict the intended
scope of the Directive. Unlike the Directive, which refers broadly to “funds or
assets,” the new offence applies only to money or physical assets and is
triggered exclusively when conduct violates specific laws that leave no
discretion to public officials. This raises concerns about compliance with
Article 4(3) of the Directive, as certain harmful behaviour could escape
prosecution under Italian law.
Poland faces
some transposition challenges, most notably its failure to criminalise attempts
to commit certain offences covered by the Directive, and its reliance on
restrictive jurisdictional provisions grounded in the principle of double
criminality, contrary to Article 11. Moreover, some forms of misuse of EU
funds, such as non-disclosure of relevant information when granting financial
support, remain insufficiently addressed.
Belgium presents
similar concerns. Its legislation does not criminalise attempts to commit
certain offences relevant to the Directive, particularly embezzlement and
misuse of company assets. Additionally, Belgian law conditions prosecution of
nationals for crimes committed abroad on the filing of a complaint by the
victim or foreign authorities - a procedural requirement that conflicts with
the Directive.
Spain introduced
broad reforms to align its criminal law with the Directive, including lowering
the monetary thresholds for fraud offences, expanding the definition of “public
official” for bribery and embezzlement cases, and extending corporate criminal
liability to embezzlement. These changes closed an important gap in the
previous framework and strengthened the overall system of protection for the
EU’s financial interests. However, overlapping provisions on fraud remain in
force, creating legal uncertainty. Research
highlights that this overlap could lead to inconsistent enforcement until the
redundant rules are clarified or repealed.
Conclusion
Although the PIF
Directive aims to harmonise criminal law and enhance the protection of the EU
budget, its potential to fulfil the obligations enshrined in Article 325 TFEU
remains only partially achieved. Persistent divergences in national
implementation and unresolved gaps undermine uniform application and weaken the
level of protection envisioned by the Treaty. To ensure genuine compliance with
Article 325 and strengthen the Union’s financial integrity, targeted legislative
reforms and closer coordination among Member States and key Union institutions
are essential. At the same time, preventive systems—such as internal controls,
audits, and compliance measures—play a complementary role and should be reinforced
where criminal sanctions are limited.
