Criminal characterisation and boundaries in EU grant fraud: Next Generation EU and ERDF

The rollout of Next Generation EU funds has multiplied recovery proceedings and, with them, referrals to the criminal courts. A single question orders all of these matters: where does administrative irregularity in justifying the grant end, and where does the offence begin?

The applicable offence

The Spanish Criminal Code offers two routes that should not be conflated: grant fraud under Article 308 and fraud against the general budget of the European Union under Article 306. The choice is not neutral, since they differ in monetary thresholds and in how the conduct is defined. Establishing which is invoked, and why, is the defence's first line.

Irregularity is not intent

Proceedings to date show a pattern: the administration detects divergences between the application and actual performance, and the criminal referral is built on that divergence as though it were, in itself, proof of deception. It is not. EU grants operate over multi-year projects, with redefined milestones and complex subcontracting chains; divergence between plan and execution is the rule, not the exception.

The defence must reconstruct documentarily the beneficiary's decision-making: who decided each deviation, on what information, and with what communication to the managing authority. That essentially evidentiary work is what separates poor management — with administrative consequences — from criminally relevant deception.

The risk of parallel proceedings

The beneficiary usually faces the recovery proceedings and the criminal investigation at the same time. What is stated in the first conditions the second, and administrative submissions are often signed without weighing how they will later read in criminal terms. Coordinating both fronts from the first request is part of the defence, not a merely organisational matter.

EPPO jurisdiction

Where the fraud affects the financial interests of the Union, jurisdiction may lie with the European Public Prosecutor's Office. That possibility must be assessed from the outset: it changes the investigating authority, the rules governing each measure and the routes available to challenge them.