Author : Maria Giulia Mariotti
Committee : Eu intitutions Committee
Date: 18/05/2025
On February 13th, 2025, The European Public Prosecutor’s Office (“EPPO”) and His Majesty’s Revenue and Customs (“HMRC”) have signed an important Working Arrangement regarding cooperation between the two of them. A Working Arrangement concluded by EPPO does not represent, per se, a legal base for cooperation in criminal matters; the aim of this kind of agreement is to facilitate the cooperation, which is always based on the applicable binding legal instrument (which is , for non-EU countries , an international agreement).
What is the United Kingdom’s HMRC?
The HMRC is a non-ministerial department of the UK government. It was founded in 2005 and currently has approximately 65 thousand employees. HMRC is the UK’s tax, payments and customs authority; it has many responsibilities, including the administration and collection of direct taxes; this agency is also responsible for investigating and tackling tax fraud, smuggling, money laundering, and other types of offences against the Treasury, given the fact that it is also a law enforcement agency. The HMRC has a strong net of criminal investigators responsible for investigating Serious Organised Fiscal Crime.
For the EPPO, the HMRC is considered as a “natural partner”, because of the flow of goods to
EU through British ports; also, the HMRC has an impressive network of liaison officers – HMRC Fiscal Crime Liaison Officers (FCLOs) – approximately 50 liaisons normally based overseas at British Embassies.
The Working Arrangement
The purpose of this Working Arrangement is to facilitate cooperation between the Parties in investigations and prosecutions within their respective competences, in particular with respect to the exchange of operational and strategic information, in accordance with the applicable legal framework. The Working Arrangement also states: the Parties shall assist each other and provide relevant information for the purpose of investigation and prosecution of criminal offenses; the Parties may organize high-level meetings to enhance cooperation between them; the Parties may amend in writing this Working Arrangement at any time, by mutual consent. The Working
Arrangement entered into force on February 13, 2025, date of its signature.
The Working Arrangement has been signed by Deputy European Chief Prosecutor Petr Klement (for the EPPO); Director of Fraud Investigation Service and Head of HMRC Investigation Richard
LAS and Deputy Director of Risk and Intelligence Service Richard McConaughey (for HMRC).
The arrangement has been written with regard to the EPPO Regulation (Council Regulation 2017/1939), in particular articles 99 (Common provisions) and 104 (Relations with third countries and international organizations), both regarding provisions on the relations of the EPPO with its partners. It has also been taken into account the provision of the Trade and Cooperation Agreement between the European Union and the United Kingdom, done at Brussels and London in 2020.
The will of the parties has been to establish a close cooperation with a view to protecting the financial interests of the European Union and the United Kingdom, given the respective competences of each Party.
The importance of cooperating with HMRC for EPPO
Cooperation with HMRC , and in general with UK authorities, is essential for the EPPO, and there have been many improvements throughout the years regarding this relationship: in 2020 the EU and the UK signed a Trade and Cooperation Agreement; the EU then notified the EPPO as its competent authority for Mutual Legal Assistance and Freezing of assets.
The bilateral cooperation with non-EU countries can be improved with designated contact point, exchange of expertise, regular operational meetings,..all summarized in one mean, a Working Arrangement, that the EPPO signs with counterparts in non-participating EU Member States and third countries. It is the main instrument to facilitate a strong collaboration.
Germany, the EPPO and the HMRC: a concrete scenario
An example of the importance of such cooperation, is a case involving Germany, the HMRC and the EPPO: the EPPO in Frankfurt is currently leading an investigation into suspected tax evasion linked to steel imports by a mechanical engineering company in the Rhine-Neckar region. The German company is believed to have falsely declared the origin of steel products as British during more than 100 customs clearances. According to the investigation, the steel was of Indian origin and had only been routed through the United Kingdom before being imported into Germany. Under EU customs regulations, correctly declaring the steel as Indian would have implied 25% higher import duties. The resulting loss to public finances is estimated at several hundred thousand euros.
The actions took place starting March 2021 for a 12 month period, with the result of a €2.9 million purchase of steel products by the company. In December 2024, customs officers from Stuttgart searched the business premises of the German company, while simultaneous searches were conducted in the United Kingdom at the seller’s location. This particular investigation underlines the concrete importance of the cooperation between UK and EU; in fact, the working Arrangement signed on February 13 was developed on the basis of already ongoing cooperation on particular cases. This is a result of an improvement in cooperation and coordination to fight financial crimes between the two Parties.
A future prospective: a non-stop effort
As for the future prospectives, it is clear that the impact of the EPPO is set to increase, so this kind of Arrangements are essential to set a functional and efficient cooperation between countries for a common goal. The EPPO currently has 24 partecipating states, and has signed many Working Arrangement with non-EU countries, such as Ukraine, Albania, Moldova, United States, etc. The EPPO has been operating since 2021, so the results achieved in such few years have been impressive; nevertheless, the effort to keep on improving cooperation with countries all over the world has to continue, because the annual reports of EPPO impact have clearly shown how much this kind of institution is needed to fight serious crimes that affect EU financial interests. As it is shown in the image, there are currently 767 active investigations with a cross-border dimension, and those are set to increase.
Chairs : Petr Klement; Florin-Răzvan Radu; Francisco Fonseca Morillo
References : the Working Arrangement between EPPO and HMRC signed on the 13th of February 2025; additional study material provided by Deputy European Chief Prosecutor Petr Klement, chair of the committee; EPPO annual report of 2024 .