What Comes Next in the Fight against Fraud? – Questions Arise over the Transposition of the PIF Directive

  • 2022/05/29
  • kutatocsoport5

On May 19, 2022, the European Commission decided to initiate an infringement procedure against Hungary, alleging that the given Member State failed to correctly transposeDirective (EU) 2017/1371, providing the European Union (‘EU’) rules on the fight against fraud to the Union’s financial interests by means of criminal law, also known as the PIF Directive (for further details concerning the current topic, see the blog of the present author). Besides Hungary, Estonia, Malta, and the Netherlands also landed in hot water over this issue, upon receiving letters of formal notice assigned with identical reasons, marking the commencement of infringement procedures.

The aforementioned provisions of the PIF Directive, forming part of the Commission’s broader anti-fraud strategy, safeguard the EU’s budget by harmonising the definitions, sanctions, jurisdiction rules, and limitation periods in relation to fraud and other criminal offences, such as corruption and misappropriation, representing the possible means of protection against frauds infringing the EU’s financial interests. The deadline to transpose the PIF Directive into national law has expired almost a term of three years ago, on July 6, 2019.

The four Member States concerned now have two months to respond to the arguments raised by the Commission. Upon failure to act so, the EU’s executive arm may take the procedures to the next level, by deciding to assign reasoned opinions. The May infringement package also reveals that, in addition to the procedure under examination, regarding Hungary – along with the other Member States –, four other cases have been opened or are ongoing, affecting the following fields: fight against cybercrime, renewable energy, energy performance of buildings, road transport.

Nothing New under the Sun?

It should be noted that the currently discussed decision of the Commission has been preceded by other letters of formal notice regarding the non-conformity of national legislation with the PIF Directive, assigned to Croatia, Finland, Greece, Latvia, Luxembourg, Portugal, Romania, and Spain in December 2021 – it should also be noted that the Commission identified several compliance issues in its transposition report on the Directive on September 6, 2021, as well – and, by the same token, assigned to Belgium, Cyprus, Slovakia, Slovenia, and Sweden in February 2022. Moreover, except for the latest one, all of the listed Member States participate in the European Public Prosecutor’s Office (‘EPPO’), the new independent public prosecution office of the EU, which is quite controversial, bearing in mind that the proper transposition of the rules in question by the Member States is indispensable to enable the EPPO to conduct effective investigations and prosecutions, as the Commission highlights in its relevant infringement packages.

Nevertheless, the Commission is not only constantly deciding on the commencements of such procedures. The infringement case opened against Austria in September 2019 for having failed to properly communicate the transposition measures of the PIF Directive has been terminated in a satisfactory manner.

Hungary Special?

As is stated in several articles in connection with the topic in question, the latest infringement procedure against Hungary may be identified as one which reveals a new risk of corruption in the Hungarian legal system, as „…a recurring element in the debate over EU recovery funds is that Hungary does not have access to these funds as the Commission considers the risk of corruption to be too high.” It should be added that the aspect of combating corruption gets emphasis with regard to Hungary in the country-specific recommendation and its accompanying document, the country report as well, issued recently under the European Semester Spring Package.

Nonetheless, the Prime Minister’s Office announced late Thursday that the issues raised by the Commission on the matter are of bearing a merely legally technical nature and are related to the interpretation of certain notions of the Hungarian Criminal Code (Act C of 2012). „These technical issues are not part of the negotiations between Hungary and the Commission over the Recovery and Resilience Facility (RRF) [and] are being resolved at expert level”, the Office added.

One thing is certain: we are eagerly awaiting what comes next concerning this constantly evolving field.


For a list of references, click HERE.

Author: dr. Petra Ágnes Kanyuk, Ph.D. Student at the Géza Marton Doctoral School of Legal Studies of the University of Debrecen, Department of Criminal Law and Criminology

Source of the picture: Euromontana, https://www.euromontana.org/en/future-eu-budget-announcements-come-next-week/ [accessed May 24, 2021]

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