Ireland’s EPPO Gap Shields Shell Companies

The EU’s incoming chief financial-crime prosecutor has pointed to Ireland as a weak point in Europe’s defences against fraud. 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).

His point was not that Ireland has been found guilty of anything. It was that the structure leaves a gap. Ireland does not take part in EPPO, the EU office that can directly investigate and prosecute crimes against the EU budget inside member states.

For Malta, this is familiar territory. A small, open economy with a large financial services sector cannot treat company registration, tax enforcement and reputation as separate questions. Once shell structures are used to move money across borders, the weakest legal link in the chain becomes everyone’s problem.

How the gap works

EPPO was created by Regulation 2017/1939 and works through a two-level system. Its central office in Luxembourg coordinates the overall strategy. In each participating country, European delegated prosecutors operate inside the national legal system, with powers to order searches, freeze assets and bring cases.

That matters because VAT fraud is rarely domestic. If a carousel fraud runs through Italy, Germany, France and Poland, EPPO can treat it as one investigation across 24 participating countries rather than a set of national files waiting for each other.

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

There is still cooperation. Ireland 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 carousel fraud depends on speed. Shell companies can be wound up and money moved before a formal request works its way through the system. Cooperation by request is useful, but it is not the same as prosecutorial power.

Carousel fraud across borders

The scale of EPPO’s caseload explains why Ritter’s warning landed. By the end of 2025, the office reported 3,602 active investigations with estimated damage of €67.27 billion. Of that, €45.01 billion was linked to VAT and customs fraud (EPPO). A year earlier, the figures stood at 2,666 cases and €24.8 billion (Transparency International EU).

That increase reflects two things at once: fraud networks are getting larger, and EPPO’s own reach is expanding. The two feed each other. The more cross-border cases the office can join together, the more visible the machinery becomes.

Recent files show the pattern. In Italy, the Metallo investigation targeted a suspected €42.8 million VAT scheme built around 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).

The common feature is not one country. It is the use of company chains across the Single Market. Ireland’s attraction as a place to register companies fits that wider picture, though Ritter has not yet proved which part of the Irish system is doing the most work for fraud networks.

Closing the gap, slowly

Ireland is moving towards joining EPPO, but not quickly. An inter-agency working group recommended preparations in October 2023, and Justice Minister Jim O’Callaghan has indicated that Ireland could request membership next year (Law Society Gazette).

The legal obstacle is domestic. Irish law separates investigation from prosecution more sharply than most continental systems, so joining EPPO requires legislation. There is no published timetable. The bottleneck now runs through the justice ministry drafting the bill, cabinet approval and passage through the Oireachtas, Ireland’s parliament.

The group of holdouts 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 raised the possibility of a referendum, but no decision has been taken (Berlingske).

Joining EPPO does not settle everything. National courts still affect how much practical power the office 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 useful to fraud networks: the EPPO opt-out, easy company formation, the financial infrastructure, or a combination of all three. Ritter has forced the question into the open. The answer will depend on whether Dublin can move its law at anything close to the speed at which money moves through the Single Market.