EU prosecutor targets Ireland’s shell company gap

The EU's incoming chief financial-crime prosecutor has singled out Ireland as a gap in Europe's fraud defences. Andres Ritter, who takes over the European Public Prosecutor's Office (EPPO) on 1 November, told Irish media that "a lot of shell companies" are being set up in Ireland and may be involved in VAT fraud and money laundering across Europe (Irish Times, RTÉ). The reason he gave is structural: Ireland does not participate in EPPO, the EU body that can directly investigate and prosecute financial crimes against the EU budget inside member states.

This is a warning, not a proven judicial finding. But it comes from the person whose job is to fight exactly this kind of crime across 24 participating countries, and the mechanism he describes is real.

How the gap works

EPPO operates through a two-part system created by Regulation 2017/1939. In Luxembourg, a central office coordinates strategy. Inside each participating country, embedded prosecutors sit within national legal systems. They can order searches, freeze assets and run cases directly. When a VAT carousel fraud spans Italy, Germany, France and Poland, EPPO handles it as a single investigation.

Ireland breaks that chain. Because it opted out, EPPO prosecutors cannot act on Irish soil. They must file formal requests and wait. Ritter described the difference bluntly: inside EPPO, "we are not coordinating, we are doing it ourselves" (RTÉ).

Cooperation still happens. Ireland received more than 50 EPPO requests between 2021 and late 2025 and participated in at least one investigation into an alleged €48 million VAT fraud spanning nine countries (Irish Times). But in carousel fraud, speed is everything. Shell companies can be liquidated and proceeds moved before a formal response arrives. Request-based cooperation is not the same as direct prosecutorial power.

Carousel fraud across borders

The scale EPPO tracks explains why this gap matters. By the end of 2025, the agency reported 3,602 active investigations with estimated damages of €67.27 billion, of which €45.01 billion was linked to VAT and customs fraud (EPPO). A year earlier, those figures were 2,666 cases and €24.8 billion (Transparency International EU). The growth reflects both expanding fraud networks and expanding prosecutorial reach.

Recent cases show the pattern. In Italy, the Metallo investigation targeted a suspected €42.8 million VAT scheme built on luxury vehicles imported from Germany, false invoices and companies registered under front people (EPPO). In France, EPPO searched 26 companies suspected of VAT fraud in the Paris region (Le Figaro). Shell-company chains run across the continent. Ireland's role as a convenient place to register companies fits into that picture.

Closing the gap, slowly

Ireland is moving toward joining. An inter-agency working group recommended preparations in October 2023, and Justice Minister Jim O'Callaghan has indicated Ireland could request membership next year (Law Society Gazette). Irish legal tradition separates investigation from prosecution more sharply than most continental systems, and adapting domestic law requires parliamentary legislation with no published timeline. The domestic bottleneck sits with the justice ministry drafting the bill, cabinet approval, and Oireachtas (parliamentary) passage.

The holdout club is shrinking. Hungary formally notified its intention to join in late May 2026 (Daily News Hungary). Denmark's broader justice opt-out is constitutionally deeper; the government has floated a referendum, but no decision has been taken (Berlingske). Joining EPPO closes one gap, but national courts still shape how much power it really has: in Greece, courts gave EPPO prosecutors two-year terms instead of the five years requested and rejected the agency's appeal (Euronews Greece).

We still do not know why Ireland appears attractive to fraud networks: the EPPO opt-out, easy company formation, the financial infrastructure, or some mix of all three. Ritter's warning has put the question on the table. The answer depends on whether Dublin can move legislation at the speed the Single Market's enforcement gap demands.