EU sends Cyprus reasoned opinion over incorrectly transposing anti-fraud directive

Cyprus is one step from being referred to the Court of Justice of the EU for not having transposed correctly into its national legislation a directive on fight against fraud to the EU budget, according to the latest package of infringement decisions published by the European Commission.

In particular, the incorrect transposition of the directive concerns provisions on the definition and the liability of legal persons, as well as on the Cypriot jurisdiction over the offence of money laundering.

The European Commission on 24 April also decided to begin an additional infringement procedure against Cyprus for not having yet empowered the agency chosen to be its digital services coordinator, in order to be able to monitor and impose sanctions related to the Digital Services Act.

Rules on the fight against fraud to the Union's budget

The European Commission has decided to send a reasoned opinion to Cyprus (INFR(2021)2265) and Greece, which is the last step before a possible referral to the Court of Justice of the EU, for failing to correctly transpose into their national legislation the Directive on the fight against fraud to the Union's budget by means of criminal law (the PIF Directive).

These rules harmonise the definitions, sanctions and limitation periods of criminal offences affecting the EU’s financial interest and they lay out the foundation for the work of the European Public Prosecutor's Office (EPPO).

The Commission first sent a letter of formal notice to Greece in December 2021 and to Cyprus in February 2022.

After analysing their replies, the Commission considered that Cyprus has failed to fully transpose some provisions on the definition and the liability of legal persons, as well as on the Cypriot jurisdiction over the offence of money laundering, as required by the Directive.

The two countries now have two months to respond and address the shortcomings raised by the Commission. Otherwise, the Commission may decide to refer the case to the Court of Justice of the European Union.

Designating and empowering Digital Services Coordinators

The Commission has also decided to send letters of formal notice to Cyprus (INFR(2024)2016), Czechia, Estonia, Poland, Portugal and Slovakia as these Member States have not yet designated their Digital Services Coordinators under the Digital Services Act, or as the designation has not been complemented by sufficient empowerment powers. Member States should have done so by 17 February 2024.

To date, Estonia, Poland, and Slovakia still have to designate their Digital Services Coordinators, while Cyprus, Czechia and Portugal have designated their respective authorities but still have to empower them with the necessary powers and competences to carry out their tasks, including the imposition of sanctions in cases of non-compliance.

Fully empowered Digital Services Coordinators in each Member State are essential for the exercise of the new rights created under the DSA, notably to ensure users can lodge complaints in their place of residence against platforms, to award the status of trusted flaggers and to vet researchers.

The six Member States now have two months to respond and address the shortcomings raised by the Commission. In the absence of a satisfactory response, the Commission may decide to issue reasoned opinions.

(Source: CNA)