Ireland’s EPPO Opt-Out Aids Shell Firms

Ireland has been named by the EU’s incoming chief financial-crime prosecutor as a weak point 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 here and may be used in VAT fraud and money laundering across Europe (Irish Times, RTÉ).

His point was not that Ireland has been found guilty of anything. It was more awkward than that. Ireland sits outside EPPO, the EU body with power to investigate and prosecute fraud against the EU budget inside participating member states. That makes the State a gap in a system designed to follow money quickly across borders.

How the gap works

EPPO was built under Regulation 2017/1939 as a hybrid body. A central office in Luxembourg coordinates the strategy, while European delegated prosecutors operate inside national legal systems. In participating countries, they can order searches, freeze assets and run cases directly.

That matters when a VAT carousel fraud runs through Italy, Germany, France and Poland. Instead of four national authorities trying to stitch together a case, EPPO can treat it as one investigation across borders.

Ireland interrupts that chain. Because the State has opted out, EPPO prosecutors cannot act directly on Irish soil. They have to make formal requests and wait for the domestic system to respond. Ritter put the distinction plainly: inside EPPO, "we are not coordinating, we are doing it ourselves" (RTÉ).

Ireland is not refusing to cooperate. It received more than 50 EPPO requests between 2021 and late 2025, and took part in at least one investigation into an alleged €48 million VAT fraud spanning nine countries (Irish Times). But in carousel fraud, time is the asset. Shell companies can be wound up and money moved before a formal response comes back. Cooperation by request is useful; it is not the same as having prosecutorial power in the room.

Carousel fraud across borders

The figures explain why Ritter is pressing the issue. By the end of 2025, EPPO reported 3,602 active investigations with estimated damage of €67.27 billion. Of that, €45.01 billion related to VAT and customs fraud (EPPO). A year earlier, the numbers were 2,666 cases and €24.8 billion (Transparency International EU).

That increase reflects two things at once: fraud networks are growing, and prosecutors are getting better at seeing them.

The recent cases show the model. In Italy, the Metallo investigation targeted a suspected €42.8 million VAT scheme involving 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).

These schemes depend on chains of companies that can appear legitimate long enough to move goods, invoices and money. Ireland’s attraction, in Ritter’s telling, is that company registration here can fit neatly into that wider continental pattern while EPPO remains outside the Irish gate.

Closing the gap, slowly

Ireland is edging towards joining. An inter-agency working group recommended preparations in October 2023, and Justice Minister Jim O’Callaghan has indicated Ireland could seek membership next year (Law Society Gazette).

The difficulty is partly legal culture. Irish law separates investigation and prosecution more sharply than most continental systems. Bringing EPPO into the State’s domestic architecture means legislation, with the Department of Justice drafting a Bill, Cabinet approval and passage through the Oireachtas. There is no published timetable.

The holdout group is getting smaller. Hungary formally notified its intention to join in late May 2026 (Daily News Hungary). Denmark’s justice opt-out is constitutionally deeper; its government has raised the possibility of a referendum, but no decision has been taken (Berlingske).

Joining EPPO would close Ireland’s part of the enforcement gap, but membership does not settle every question. National courts still shape how far EPPO can reach. In Greece, courts gave EPPO prosecutors two-year terms rather than the five years the agency wanted, and rejected its appeal (Euronews Greece).

The unanswered question is why Ireland appears useful to fraud networks: the EPPO opt-out, easy company formation, financial infrastructure, or a combination of the three. Ritter has forced that question into the open. Dublin’s answer will depend on whether it can move legislation at anything like the speed at which money moves through the Single Market.