Last year, the European Public Prosecutor's Office (EPPO) opened 23 investigations in Croatia on suspicion of fraud with EU funds in the total amount of €313.6 million, the EPPO said in its annual report on Wednesday.

The investigations mainly focused on the misuse of funding from EU funds and the state budget, and public procurement fraud.

Listing ongoing expenditure fraud cases in Croatia, the EPPO cited six cases concerning agriculture and rural development programmes, seven concerning regional and urban development programmes, two concerning employment, social cohesion, inclusion and values programmes, one concerning recovery and resilience programmes, and one concerning digitalisation, mobility and energy programmes.

Eight indictments issued, two cases in trial phase

The EPPO said that in Croatia, eight indictments were issued in 2022 and two cases were in the trial phase. Courts handed down six convictions and as many first court decisions.

Assets worth €400,000 were frozen on the EPPO’s orders, and cross-border investigations were underway in two cases .

The EPPO’s Croatia Office received four complaints from EU institutions, 17 from private parties and 29 from national authorities, while two cases were opened ex officio.

The EPPO’s most high-profile suspects in Croatia are Gabrijela Zalac, who has been charged with abuse of office and influence peddling while serving as Minister for EU Funds, and former minister Tomislav Tolusić, who has been under investigation since July 2022.

‘Organisational and legal adjustments needed’

By the end of 2022, the EPPO had 1,117 active investigations in the 22 participating states with overall estimated damages of €14.1 billion, nearly half of which (47%) resulted from VAT fraud.

In 2022, the EPPO received and processed 3,318 crime reports and opened 865 investigations. Moreover, judges granted the freezing of €359.1 million in EPPO investigations (compared to €147.3 million in 2021), which represents more than seven times the organisation’s 2022 budget.

European Chief Prosecutor Laura Kövesi noted that in 2022 the EPPO demonstrated that it “has an unprecedented capacity to identify and trace volatile financial flows and opaque legal arrangements.”

“We are on the right track, but we need to do more. The EPPO is far from having reached its full potential. If we want the EPPO to make a lasting difference, we need organisational and legal adjustments. This includes the revision of the EPPO Regulation, and the assignment to the EPPO cases of dedicated and specialised financial fraud investigators in all the participating Member States,” she said.