The European Public Prosecutor’s Office (EPPO) in Zagreb (Croatia) has filed an indictment against two suspects, including a public official, for subsidy fraud and abuse of office and authority, following an investigation into projects for building a winery and planting a vineyard, co-funded by the EU.
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One of the defendants, who owns a family farm, applied in May 2020 to Croatia’s Paying Agency for Agriculture, Fisheries and Rural Development (hereinafter ‘the Agency’) for a wine sector subsidy, namely the project ‘Construction and Equipping of a Winery’, valued at approximately €620 000, with the EU contribution amounting to 70%.
It is alleged that, in that application, the defendant falsely stated that his own financial contribution to the project would be secured by a bank loan, by submitting a letter of intent issued by a financial institution.
The defendant did not, however, apply for a loan, as the bank had previously informed him that he did not qualify for one.
According to the investigation, he financed the project with money whose legal origin, in part (approximately €135 000), could not be determined. For this project, he received a subsidy of €396 500.
The same defendant also applied for another project, published by the Agency on 2 June 2021, for planting new vineyards. It is alleged that, in this second application, he falsely stated that his farm had the required economic size, and that there were no planted vines on the farm’s plots.
To this effect, he submitted a report to the other defendant in this case – a public official at the Ministry of Agriculture – which stated that the project was intended for starting a vineyard.
This was despite the fact that he had already planted vines on those plots and was aware that, for this reason, he did not meet the eligibility criteria.
The public official is accused of evaluating the report positively, despite knowing of the existence of the vineyard, in breach of his obligation to lawfully perform his duties.
Due to the fact that his intent became known to the Croatian authorities, the farm owner removed the previously planted vines and submitted a new application to receive a subsidy of €200 000, of which 85% was financed by the EU.
However, due to procedural reasons, the Agency did not grant the funds.
In order to compensate the damage to the EU budget, the farm owner’s winery has been subjected to a freezing order. ■