Subsidiarity assessment

As the Committee highlighted in its report The Fight Against Fraud on the EU's Finances it is difficult to estimate the extent of fraud committed against the EU budget. That report suggested that the figure could be 5 billion euro per year or more. For the purposes of its Impact Assessment the Commission has conservatively assumed that about 3 billion euro per year could be at risk through fraud. These are significant amounts, and both Member States and the EU as a whole have a strong interest in reducing the level EU fraud. In broad terms, the Commission's proposed response to this level of fraud is to establish the European Public Prosecutor's Office (EPPO) as an EU body with exclusive power to investigate and prosecute a broad range of criminal offences affecting the financial interests of the Union and inextricably linked offences, able to call upon the resources of national authorities. This would create a very significant and disruptive incursion into the sensitive criminal law systems of the Member States. The House of Lords considers that such action at EU level would breach the principle of subsidiarity in that it is unnecessary, excessive and insufficiently justified by the Commission. It considers that the objective of countering fraud affecting the financial interests of the Union can best be achieved by action by the Member States within the existing framework for co-ordination and cooperation. This framework is capable, if necessary, of being strengthened to meet this objective effectively