EU Prosecutor Probes Fraudulently Obtained EU Subsidies in Croatia

Published: 10 October 2023

FigsCroatian businesswoman suspected of fraudulently using EU funds to cultivate figs. (Photo: Noël Zia Lee, Flickr, License)

By Zdravko Ljubas

A day after Croatia arrested four people on suspicion of committing fraud related to European Union subsidies and money laundering, the European Public Prosecutor’s Office (EPPO) initiated an investigation into the four suspects and one company on Thursday.

The EPPO alleges that between February 2015 and October 2023, the first suspect, who is the founder of the company under investigation and currently serves as the business manager of another company, conspired with the three other suspects to fraudulently obtain non-refundable EU agricultural funds.

“This occurred via a single request to the ‘Support for investments in agricultural holdings’ call, which had a total value of over 2.5 million euro (US$2.63 million) and was co-financed by the EU’s European Agricultural Fund for Rural Development (EAFRD) at a rate of 85 percent, and the state budget of the Republic of Croatia at a rate of 15 percent,” the EPPO said in a statement.

The primary suspect, identified by Croatian media as Vanja G., an entrepreneur from Croatia’s Adriatic coast, allegedly submitted a fraudulent request on behalf of her company, falsely claiming that her company met the required qualifying conditions.

Vanja G., hailing from the northern port city of Rijeka, is suspected of fabricating her own financial capacity to cultivate fig trees on Jakljan island near the southern Dalmatian city of Dubrovnik with the assistance of co-suspects, reported the Index news outlet.

"As a result, the subsidy application was approved, and Croatia’s Paying Agency for Agriculture, Fisheries, and Rural Development disbursed over 1.5 million euros ($1.57 million) to the first suspect’s company," EPPO explained.

According to EPPO, she gained an unfair financial advantage equal to the amount of the subsidy received, thereby causing "damage exceeding 1.5 million euros ($1.57 million) to the EU and national budgets."

Furthermore, the evidence indicates that she "periodically withdrew portions of the disbursed subsidy in cash from her company's account, and in order to obscure the illegal money flow, directed part of it to other affiliated companies before withdrawing it in cash, either personally or through one of the other suspects."

Croatian media reported that EPPO investigators used a drone to film the fig plantation on Jakljan island, while Croatia’s Paying Agency for Agriculture seemingly did not suspect any illicit activity on the part of the Rijeka businesswoman.

Subsequently, experts examined the plantation images and determined that they did not justify the funds allocated from the EU.