Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee - On a comprehensive EU policy against corruption
Date: 2003-05-28
Institutions: European Commission
Subjects: EU police cooperation, EU policy, area of freedom, security and justice, corruption, fight against crime, judicial cooperation in criminal matters in the EU

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 28.5.2003
COM(2003) 317 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL,
THE EUROPEAN PARLIAMENT AND THE EUROPEAN ECONOMIC AND
SOCIAL COMMITTEE

ON A COMPREHENSIVE EU POLICY AGAINST CORRUPTION

Table of Contents

1.

2.

3.

4.

5.

6.

7.

8.

Introduction.................................................................................................................. 3

Terminology................................................................................................................. 6

political commitment – a priority................................................................................. 6

Putting Effect to Criminal Law instruments ................................................................ 7

building up an anti-corruption culture in the EU institutions .................................... 13

Preventing Corruption – The single Market and other internal Policies.................... 15

External Aspects ........................................................................................................ 19

Conclusions................................................................................................................ 23

2

1. 

INTRODUCTION

Art. 29 of the Treaty on European Union lists the prevention and combating of corruption,
organised or otherwise, as one objective enabling the creation and safeguarding of a European
area of freedom, security and justice through closer judicial, police and customs cooperation
and, where necessary, approximation of criminal law.

Going beyond the area of pure law enforcement, the Council in its 1997 Action Plan against
organised  crime1  had  already  advocated  a  comprehensive  policy  against  corruption,
primarily focussing on preventive measures and taking into account the work carried out also
in other international fora. In particular, Member States, the Council and the Commission had
been invited to also tackle all aspects linked with the proper functioning of the internal market
and other internal policies, as well as external assistance and cooperation.

Responding  to  this  political  guideline,  the  Commission  put  forward  in  the  same  year  a
Communication  to  the  European  Parliament  and  to  the  Council2  suggesting  a  range  of
measures  (banning  of  tax  deductibility  of  bribes,  rules  on  public  procurement  procedures,
introduction  of  accounting  and  auditing  standards,  blacklisting  of  corrupt  companies  and
measures in the Community’s external aid and assistance scheme) with a view to formulating
an EU strategy on corruption both within and outside its borders.

Focussing again on the area of judicial cooperation in criminal law matters, the 1998 Council
Vienna Action Plan3 identified corruption as one of those criminal behaviours in the field of
organised crime where prioritised action was deemed necessary by elaborating and adopting
measures establishing minimum rules relating to the constituent elements of this offence and
penalties.

At the 1999 Tampere European Council, EU Heads of State or Government endorsed this
recommendation  by  identifying  corruption,  in  the  context  of  financial  crime,  as  one  of  the
sectors  of  particular  relevance  where  common  definitions,  incriminations  and  sanctions
should be agreed upon.

Finally,  in  line  with  the  1998  Action  Plan  and  the  Tampere  Conclusions,  the  so-called
Millennium Strategy on the Prevention and Control of Organised Crime of March 20004
reiterated  the  need  for  instruments  aimed  at  the  approximation  of  national  legislation  and
developing a more general (i.e. multi-disciplinary) EU policy towards corruption, taking into
account as appropriate work being carried out in international organisations. Furthermore, the
same document urged those Member  States,  which had not  yet ratified the  relevant EU  and
Council  of  Europe  anti-corruption  legal  instruments  to  ensure  speedy  ratification  within  a
clear timeframe.

1

2

3

4

Action plan to combat organized crime, adopted by the Council on 28 April 1997; OJ/C of 15.8.1997
N°251/1.
Communication from the Commission to the Council and the European Parliament on a Union policy
against corruption, adopted by the Commission on 21 May 1997 COM(97) 192 final.
Action plan of the Council and the Commission on how best to implement the provisions of the Treaty
of Amsterdam on an area of freedom, security and justice, adopted by the Council on 3 December 1998;
OJ C of 23/01/1999 N° 19/1.
The  prevention  and  control  of  organised  crime  –  a  European  Union  strategy  for  the  beginning  of  the
new millennium adopted by the Council on 27 March 2000; OJ C of 3/05/2000 N° 124/1.

3

                                                
Since  then  the  fight  against  corruption  has  gained  further  momentum  at  national,  EU  and
international level and important EU and international instruments have been adopted.

Concerning  EU  instruments,  the  EU  Convention  on  the  protection  of  the  European
Communities’  financial  interests  (PIF-Convention)5  and  its  first  protocol6  entered  into
force  on  17  October  2002;  the  second  protocol  to  the  PIF-Convention7  and  the  EU
Convention  on  the  fight  against  corruption  involving  officials  of  the  European
Communities or officials of the EU Member States8 are still in the ratification process.

Also with regard to the protection of the Communities’ financial interests, the Commission
has  been  addressing  in-house  corruption  by  establishing  a  European  Anti-fraud  Office
(OLAF)9  entrusted  with  interinstitutional  investigative  powers.  On  the  basis  of  article  280
TEC, which combines measures to prevent and to combat fraud detrimental to the EC budget,
an overall strategy was adopted. This strategy defines as a challenge within the Commission
four-axed  policy  document,  a  detailed  interinstitutional  approach  to  prevent  and  combat
corruption10. With respect to OLAF internal investigations, corruption covers the professional
misconduct  of  EU  officials  in  relation  with  the  exercise  of  their  duties  liable  to  result  in
disciplinary  or  criminal  proceedings.  The  European  Anti-Fraud  Office  (OLAF)  has  recently
been subject to an in-depth evaluation report of the Commission11, notably with respect to the
implementation  of  the  objectives  set  out  in  the  above  mentioned  strategy.  Having  a
comprehensive  approach  on  tackling  corruption,  the  present  communication  follows  a
coherent  approach  together  with  the  new  initiatives  on  the  protection  of  the  Communities’
financial interests announced by this evaluation report.

The OECD Convention on combating bribery of foreign public officials in international
business transactions12 and the Criminal Law Convention on Corruption of the Council
of Europe13 are  already  in force,  the  latter  still  lacking  ratification  instruments  of  most  EU
Member States.

5

6

7

8

9

10

11

12

13

OJ C of 27/11/1998 N°316.
OJ C of 23/10/1996 N° 313.
OJ C of 19/07/1997 N° 221.
OJ C of 25/06/1997 N° 195.
OLAF  was  created  in  1999  by  the  Commission  Decision  1999/352/EC,  ECSC,  Euratom  of  28  April
1999 (OJ L 136, 31.5.1999, p. 20).
See Communication on the fight against fraud, For an overall strategic approach, COM(2000) 358 final.
COM(2003), 154 final, 02.04.2003.
The Convention was signed on 21/11/1997 and entered into force on 15/02/1999. The full text, details
on 
reports  are  available  at
http://www.oecd.org/ under “corruption”.
The Convention was signed on 27/01/1999 and entered into force on 01/07/2002. The full text, details
on 
reports  are  available  at
http://www.greco.coe.int

legislation  and  evaluation 

legislation  and  evaluation 

ratification  and 

ratification  and 

implementing 

implementing 

4

                                                
In  2000,  the  UN  General  Assembly  decided  to  mandate  an  Ad-Hoc  Committee  with  the
elaboration  of  an  international  legal  instrument  against  corruption,  the  future  UN
Convention against corruption14. If agreed, this will have far-reaching implications for the
world-wide  fight  against  corruption.  The  EU  has  adopted  three  common  positions15  on  the
basis  of  article  34  of  the  Treaty  on  European  Union.  The  Commission  has  substantially
contributed  to  the  common  positions  and  was  authorised  by  the  Council  to  negotiate  those
provisions of the draft Convention relating to Community competencies.

In  the  aforesaid  recommendations,  the  EU  Council  repeatedly  emphasised  the  need  to  take
into account the activities of other international fora devoted to the fight  against corruption.
Bearing in mind this advice and with the conviction that duplicating similar activities can bind
unnecessary  resources  and  therefore  even  be  counterproductive,  the  Commission  holds  the
view that, at this stage of policy development, mainly those measures should be strengthened
and  supported  at  EU  level,  which  are  not  already  substantively  covered,  or  not  with  the
same degree of mandatory character as EU instruments, by international organisations.
This goes in particular for initiatives of the United Nations, the OECD and the Council
of Europe, where the EU has been playing a leading role and should continue to do so.

The objectives and purposes of combating corruption at EU level as referred to in article 29
TEU need to be put clearly and coherently in the context of other policy objectives resulting
from the EC treaty such as sound decision making, fair competition, effective functioning of
the  internal  market,  protection  of  the  financial  interests  of  the  European  Communities,
external aid and assistance, open, free and fair international trade. A clear delimitation of the
initiatives  outlined  in  the  present  Communication  with  respect  to  actions  in  the  above
mentioned policy areas is necessary with a view to providing a comprehensive framework and
to ensuring complementarity between the different areas.

This  Communication  sets  out  an  overview  of  what  has  been  achieved  at  EU  level,  but  also
indicates what needs to be improved to give fresh impetus to the fight against corruption. It
also seeks to identify possible areas where the EU might be an appropriate actor to take future
initiatives  in  the  fight  against  corruption.  It  is  the  Commission’s  firm  intention  to  reduce
corruption  at  all  levels  in  a  coherent  way  within  the  EU  institutions,  in  EU  Member
States  and  outside  the  EU,  i.e.  political  corruption,  corrupt  activities  committed  by  and
collusively with organised crime groups, private-to-private and so-called petty corruption.

As  long  as  there  is  crime,  the  interest  to  use  bribes  as  insurance  against  prosecution  and
punishment will remain and especially organised crime groups will rather reinvest a certain
amount  of  their  illicitly  acquired  gains  into  bribe-paying  than  running  the  risk  of  law
enforcement measures against them and thus facing deprivation of liberty and the loss of their
proceeds. Yet, it can be assumed that the level and degree of corruption within our societies
could be considerably diminished if repressive measures were strengthened and opportunities
reduced.

To this end, corrupt acts have to  be  detected  and  prosecuted  and offenders have  to  be
punished and deprived of their illicit proceeds.

14

15

Relevant  documents  of  the  Ad  Hoc  Committee  for  the  negotiations  of  a  United  Nations  Convention
against Corruption are available under:
http://www.unodc.org/unodc/fr/crime_cicp_convention_corruption_docs.html
These documents have not been made public.

5

                                                
At the same time, opportunities for corrupt practices have to be reduced and potential
conflicts  of  interest  have  to  be  prevented  through  transparent  and  accountable
administrative  structures  at  legislative,  executive  and  judicial  level  as  well  as  in  the
private sector.

Comprehensive 
integrity-enhancing  strategies,  exchange  of  best  practices  and
institutional safeguards should ensure that decisions in the public sector are solely taken
in the public interest.

2. 

TERMINOLOGY

There is no single uniform definition of all the constituent elements of corruption.16 Whereas
one  of  the  rather  traditional  definitions,  followed  by  the  World  Bank  and  the  non-
governmental organisation Transparency International, views corruption as “the use of one's
public  position  for  illegitimate  private  gains”,  it  appears  more  appropriate  to  use  a  broader
definition  such  as  the  one  of  the  Global  Programme  against  Corruption  run  by  the  United
Nations, i.e. “abuse of power for private gain” and including thereby both the entire public
and private sector.17

Given their very nature, the aforementioned EU instruments define corruption purely from a
criminal  law  perspective  criminalising  a  conduct,  which  is  usually  referred  to  as  (active  or
passive) bribery.18

In the following, a distinction should be  made between corruption  in this narrower criminal
law  sense  and  corruption  in  a  broader  socio-economic  sense.  This  distinction  is  necessary
because,  in  accordance  with  rule  of  law  principles,  criminal  law  provisions  require
unambiguous  and  precise  language,  whereas  the  concept  of  corruption  can  be  more  general
while  responding  to  the  purposes  of  crime  prevention.  In  this  context,  the  definition  of
corruption  could  embrace  concepts  such  as  integrity,  transparency,  accountability  and  good
governance.19  Hence,  the  boundaries  for  an  EU  anti-corruption  policy  will  differ  depending
on the subject: Whereas the initiatives mentioned in chapters 4 and 5 rather address corruption
in a narrower criminal law sense, chapters 3, 6 and 7 and the list of general principles attached
to this Communication are subject of a much broader concept of corruption.

3. 

POLITICAL COMMITMENT – A PRIORITY

Combating and preventing corruption can only be successful when all parts of society agree
that this is indispensable. However, the most important signal has to come from leaders and

16

17

18

19

Cf.  P.C.  van  Duyne:  “Will  ‘Caligula’  go  transparent  ?  Corruption  in  acts  and  attitudes”  in  Forum  on
Crime and Society, Vol. 1 N° 2, December 2001, p. 74-76.
The Civil  Law Convention on Corruption of  the  Council  of  Europe  (Strasbourg  4/11/1999;  European
Treaty  Series  n°174)  defines  “corruption”  as  “requesting,  offering,  giving  or  accepting,  directly  or
indirectly,  a  bribe  or  any  other  undue  advantage  or  prospect  thereof,  which  distorts  the  proper
performance of any duty or behaviour required of the recipient of the bribe, the undue advantage or the
prospect thereof.”
Cf.  Articles  2  and  3  of  the  Convention  on  the  fight  against  corruption  involving  officials  of  the
European  Communities  or  officials  of  Member  States  of  the  European,  articles  2  and  3  of  the  first
protocol  to  the  Convention  on  the  protection  of  the  European  Communities’  financial  interests  and
articles 2 and 3 of the Joint Action on corruption in the private sector.
It  is  useful  noting  that  these  principles  are  reflected  in  the  disciplinary  rules  as  laid  down  e.g.  in  the
Staff Regulations applying to all officials and other agents of the EU institutions.

6

                                                
decision-makers  themselves.  Public  agents  would  find  it  difficult  to  act  impartially,
objectively  and  solely  in  the  public  interest  if  the  country’s  highest  representatives  did  not
promote and live up to the anti-corruption standards to be established.

Clear  political  determination  and  an  unambiguous  stance  of  EU  governments  and  its
representatives  would  also  give  a  clear  signal  to  their  counterparts  in  those  countries
preparing for accession and to the rest of the world.

In this context, the Commissions recalls the underlying and common principles of the Union
as  stipulated  in  article  6  of  the  Treaty  on  European  Union:  liberty,  democracy,  respect  for
human rights and fundamental freedoms and the rule of law. Whereas corruption undermines
all  of  these  principles,  the  unlimited  respect  of  these  common  values  is  indeed  the  best
safeguard against the spread of corrupt practices.

The conclusions and recommendations of this Communication should be fully endorsed
by the European Council at one of its next meetings.

4. 

PUTTING EFFECT TO CRIMINAL LAW INSTRUMENTS

Further to the European Council of Tampere, devoted exclusively to Justice and Home Affairs
matters, the so-called Millennium Strategy on the Prevention and Control of Organised Crime
of 27 March 2000 quotes corruption in the context of financial crime as one of those offences
where the Council “should adopt instruments with a view to approximating the legislation of
Member  States”  by  agreeing  on  common  definitions,  incriminations  and  sanctions  and
developing a more general (i.e. multi-disciplinary) EU policy towards these specific form of
crime,  taking  into  account  as  appropriate  work  being  carried  out  in  other  international
organisations  (cf.  Tampere  Presidency  conclusion  48  and  recommendation  7  of  the
Millennium Strategy).

a)

Ratification of EU anti-corruption instruments

In  its  recommendation  27,  the  Millennium  Strategy  has  urged  those  Member  States,  which
have not yet ratified the following EU anti-corruption instruments to make proposals to their
Parliaments with a view to speedy ratification within the given timetable:

(1) 

by  mid-2001  the  Convention  on  the  Protection  of  the  European  Communities’
Financial Interests (PIF-Convention);

(2) 

by the end of 2001 the Protocols to the PIF-Convention;

(3) 

by the end of 2001 the EU Convention on the fight against corruption involving
officials of the European Communities or officials of the EU Member States.

With the ratification of all EU Member States, the PIF-Convention and its 1st Protocol (which
has for the first time legally defined active and passive corruption at EU level)  entered  into
force on 17 October 2002.

Moreover,  in  May  2001  the  Commission  adopted  a  proposal  for  a  Directive,  which  would
provide  for  a  common  definition  of  active  and  passive  corruption  to  the  detriment  of  the

7

Communities  financial  interests.20  Further  to  the  opinion  of  the  European  Parliament,  who
approved the text in principle at the first reading, the proposal was amended on 16 October
200221. The Council is still examining this proposal.

Whilst these instruments are limited to criminal behaviour damaging the financial interests of
the  European  Communities,  the  1997  Convention  on  the  fight  against  corruption  involving
officials of the European Communities or officials of Member States of the European Union
criminalises  active  and  passive  transborder  corruption  within  the  EU  territory,  even  when
Communities  financial  interests  are  not  affected.  However,  two  EU  Member  States  have
still not completed the ratification process.

The  Commission  calls  upon  those  Member  States  which  have  not  yet  ratified  the  EU
Convention  on  Corruption  and/or  the  2nd  Protocol  to  the  PIF-Convention,  to  do  so
without any further delay.

b) Ratification of international anti-corruption instruments

All  EU  Member  States  have  ratified  the  OECD  Convention  on  bribery  of  foreign  public
officials  in  international  business  transactions  of  1997  and  have  adjusted  their  criminal  law
accordingly.

With 14 ratifications completed, the Criminal Law Convention on Corruption of the Council
of Europe entered into force on 1 July 2002. Still, only four EU Member States have ratified
this Convention.

Only  2  EU  Member  States  have  ratified  the  Civil  Law  Convention  on  Corruption  of  the
Council of Europe so far.

The  Commission  calls  upon  those  Member  States  which  have  not  yet  ratified  the
Criminal and/or the Civil Law Convention on Corruption of the Council of Europe or
which  have  not  joined  the  Group  of  States  against  Corruption  (GRECO),  to  do  so
without any further delay.

c)

Monitoring the implementation of anti-corruption instruments

Once these EU and international instruments will have come into force by effective enacting
legislation,  many  of  the  Member  States’  relevant  criminal  law  provisions  (incriminations,
sanctions  and  confiscation,  liability  of  and  sanctions  for  legal  persons,  extradition,
prosecution  and  cooperation  between  Member  States’  law  enforcement  authorities)  will  be
already assimilated.

The Commission is of the opinion that all international efforts on  combating  corruption can
only prove their worth if they are followed by monitoring and evaluation mechanisms based
on  peer  review.  On  the  other  hand,  (costly  and  often  counterproductive)  duplication  of
international activities should be avoided as much as possible.

20

21

The proposal aims at aligning substantive criminal law in the Member States as regards the definition of
fraud,  corruption  and  money  laundering  affecting  Community  financial  interests  as  well  as  criminal
liability  and  the  criminal  penalties  applicable,  in  accordance  with  the  PIF-Convention  and  its  two
protocols.
COM(2002) 577 final.

8

                                                
As  guardian  of  the  Treaties,  the  Commission  has  a  general  role  in  monitoring  the
implementation of in particular  EC law  and closely  following the  implementation of all EU
instruments by the Member States

Nevertheless, apart from the possibility to submit questions on interpretation and validity on
Framework  Decisions  and  Conventions  to  the  European  Court  of  Justice  by  way  of
preliminary  rulings, the EU instruments do  not  provide  a  genuine  follow-up  monitoring  or
evaluating mechanism comparable to the (subregional) OECD Working Group on Bribery or
the (mainly European) Group of States against Corruption (GRECO) mandated to ensure the
implementation of the OECD Bribery Convention and the Council of Europe’s Criminal and
Civil Law Conventions. GRECO22 is responsible for monitoring observance of the Council of
Europe’s  20  Guiding  Principles  for  the  Fight  against  Corruption  and  implementation  of  the
Criminal  and  Civil  Law  Conventions  on  Corruption  and  on  codes  of  conduct  for  public
officials.  It  evaluates  in  two  phases  through  peer  review,  the  compliance  with  undertakings
contained  in  these  legal  instruments  and  thus  contributes  to  identifying  deficiencies  and
insufficiencies  of  national  mechanisms  against  corruption,  and  to  prompting  the  necessary
legislative,  institutional  and  practical  reforms  in  order  to  better  prevent  and  combat
corruption. In this context, it is useful recalling that both Council of Europe Conventions on
corruption  followed  the  adoption  of  the  EU  criminal  law  instruments  and  developed  them
further.

The Commission is of the opinion that at this stage a separate EU anti-corruption evaluation
and monitoring mechanism is inappropriate, because this would run against the Commission’s
general conviction that unnecessary duplication of efforts should be avoided

Both  Conventions  on  Corruption  of  the  Council  of  Europe  and  GRECO’s  Statute
provide  already  specific  accession  clauses  for  the  European  Community.  Whilst
accession to the Criminal Law Convention and GRECO membership independent of the two
Conventions requires a formal invitation by the Council of Europe’s Committee of Ministers,
the accession to the Civil Law Convention, followed automatically by GRECO membership,
can be unilaterally decided by the EC.

Hence,  the  Commission  will  prepare,  within  the  limits  of  Community  competence,  the
accession of the European Community to both Conventions on Corruption of the Council of
Europe and request the Council for authorisation to negotiate with the Council of Europe the
terms and modalities of the Community’s subsequent participation in GRECO. EU Member
States should in the Council and in the Committee of Ministers of the Council of Europe
fully  support  the  possible  application  of  the  European  Community,  prepared  by  the
Commission, to the Criminal Law Convention on Corruption of the Council of Europe,
including its subsequent participation in GRECO, based on the appropriate modalities
to be agreed.

In case participation in GRECO will not be considered a viable option, the Commission
would  consider  if  a  separate  EU  mutual  evaluation  and  monitoring  mechanism  on  the
fight against corruption could be set up.

22

GRECO became operational as of 1 May 1999 and currently has 34 members, including all EU Member
States  (except  Austria  and  Italy)  and  candidate  countries  (except  Turkey)  and  the  US.  For  more
information see. www.greco.coe.int

9

                                                
d)

Improving judicial and police cooperation within the EU

Police and judicial cooperation within the EU has been strengthened through the setting-up of
EUROJUST, a judicial cooperation network, and an extended mandate for Europol.

The  creation  of  the  provisional  EUROJUST  unit  was  approved  in  December  2001  and
nomination  of  its  members  took  place  in  July  2002.  EUROJUST  is  composed  of  one
magistracy  (prosecutor,  judge,  police  officers  with  prosecuting  powers)  for  each  Member
State  with  a  view  to  facilitating  contacts,  enabling  cooperation  between  magistrates  and
discovering  links  between  on-going  transborder  cases.  The  material  competence  of
EUROJUST is very similar to the mandate of the Europol Convention covering inter alia
fraud and corruption, money laundering and participation in a criminal organisation.

Hence, both bodies can and will be dealing with transborder corruption cases and thus fulfil
requirements stemming from relevant provisions of the EU anti-corruption instruments. Also
the European Financial Prosecutor as proposed by the Commission in its Green Paper of 11
December  200123  would  be  mandated  to  deal  with  corruption  offences  provided  they  affect
the financial interests of the Community.

In  this  context,  the  Framework  Decision  on  the  European  Arrest  Warrant,  whose
provisions will be applied by all Member States at the latest on 1 January 2004, will be a key
factor  in  the  fight  against  corruption.  The  Framework  Decision  will  include  the  offence  of
corruption  among  the  offences  for  which  prior  verification  of  double  criminality  is  not
required, and this should ensure that offenders are surrendered to the judicial authorities of the
requesting State.

Furthermore, the Council is currently examining proposals for two new legal acts, which once
adopted, would engage Member States to adjust national legislation or adopt new provisions
with  a  view  to  ensuring  mutual  recognition  of  freezing  orders,  including  proceeds  of
corruption  offences,  and  facilitating  confiscation  of  proceeds,  especially  by  allowing  the
competent authorities to confiscate property belonging to a person convicted of a criminal act
“that  is  of  such  nature  that  it  can  generate  substantial  proceeds”,  unless  that  person  can
demonstrate that the property was legitimately acquired. In the two texts, no specific predicate
offences are listed; it would be applicable to all acts punishable by a maximum sentence of up
to six years’ imprisonment.

Albeit from a legal point of view not covering the area of judicial and police cooperation, it is
useful also recalling in this context that the second Money Laundering Directive adopted in
November  200124  extends  the  scope  of  predicate  offences  to  all  serious  crime,  including
explicitly "corruption", and obliges Member States to combat and to prevent the laundering of
proceeds stemming from these offences. Actions which amount to corruption under the laws
of the Member States, whether passive or active or in the private or public sectors, should be
covered  taking  into  account  the  common  standards  and  definitions  developed  under  the  EU
instruments  and  the  OECD  Bribery  Convention  and  the  Council  of  Europe  Conventions  on
Corruption.

23

24

COM(2001) 715 final.
OJ L 344, p.76 of 28/12/2001.

10

                                                
e)

Fighting private-to-private corruption

As regards private sector  corruption,  a  Joint Action on  corruption  in  the  private  sector25
was adopted in December 1998, which calls on Member States to make a criminal offence of
both active and passive corruption of a person acting in the course of business. Member States
may however limit themselves to cover conduct which involves the distortion of competition
within the common market and which results in economic damage to others by the improper
award or execution of a contract.

Still, the Joint Action only committed the Member States’ governments, but not the national
parliaments  and  indeed  up  to  now,  only  eight  Member  States  have  implemented  the  Joint
Action in its entirety.

Hence,  Denmark submitted in July 2002  an  initiative  for  a  Council  Framework  Decision
on combating private sector corruption.26 It is supposed to reformat and to further develop
the Joint Action of 1998 and thus have a more binding character than the previous instrument.
The  Commission  recalls  that  the  aforesaid  Joint  Action  was  accompanied  by  a  Council
declaration, which was supported by the Commission, suggesting to take further steps in the
future.

The  Commission  welcomes  this  initiative,  which  takes  into  account  the  process  of
privatisation in former public companies at large. The suggested instrument would also ensure
that  there  is  no  imbalance  between  the  instruments  covering  corruption  involving  public
officials  and  corruption  between  private  entities.  Thus,  independent  of  the  organisational
structure  of  certain  sectors  within  the  EU  and  taking  into  account  that  the  public  sector
criminal  law  instruments  refer  to  domestic  law  when  defining  what  public  officials  are,
possible legal discrepancies can be evened out with a view to giving the same degree of legal
protection  against  the  same  corrupt  behaviour.  Furthermore,  the  Danish  initiative  seeks  to
follow the approach chosen in other Framework Decisions.

f)

Detecting, prosecuting and punishing corruption cases

Whilst substantial criminal law legislation on corruption covering both active and passive in
the public and the private sector is already or will be shortly in place in all EU Member States
and  its  candidate  countries  –  thanks  to  supranational  efforts  in  this  field  by  drawing  up  the
aforementioned EU and international anti-corruption instruments - the  true problem of the
fight against corruption seems to lie rather in the field of implementing these laws, i.e.
preventing, investigating, prosecuting and adjudicating corruption cases.

This is due to the fact that corruption is often referred to as the crime without (direct) victim.
Hence, there is rarely  an  affected  party  being  able  to  report  a  corruption  case  to  police  and
judicial authorities and indeed very few cases of corruption are reported. This is probably due
to  the  fact  that  corruption  usually  is  sealed  through  the  pact  of  silence  between  briber  and
bribee, who have a mutual interest in concealing their activities as far as possible.

25

26

OJ L of 31/12/1998 N° 358.
At their meeting on 19 December 2002, EU Ministers of Justice and Home  Affairs reached a general
political agreement on the text of the draft Framework Decision.

11

                                                
Furthermore there are only very limited statistics and crime records on corruption cases, and
those that exist do not serve as indicators of the general problem due to the high number of
unreported cases. Consequently, it is very difficult to draw the right conclusions and the only
way in order to know more is to convince witnesses to report corruption cases. This can only
be achieved by the effective protection of whistleblowers against victimisation and retaliation
(loss  of  job,  personal  threats  etc.)  and  witness  protection  instruments  as  suggested  in  the
Millennium Strategy on the prevention and control of organised  crime (cf. Recommendation
n° 25).

Often,  there  will  be  no  witnesses  at  all  that  could  report  a  corruption  case,  so  that  the  only
way to reveal corrupt practices seems to be to give incentives for persons directly involved in
these  practices  to  report  their  accomplices.  If  none  of  these  possibilities  provides  the  right
solution, one has to think, as a last resort, about ways to facilitate the burden of proof for law
enforcement authorities.

The  Commission  Decision27 on raising concerns about serious  wrongdoings sets  out clear
rules for the Commission staff on what to do and whom to  contact in cases of e.g.  fraud or
corruption.

Member States should, where appropriate at the proposal of the Commission, introduce
common standards for collection of evidence, special investigative techniques, protection
for whistleblowers, victims and witnesses of corruption and the confiscation of proceeds
of  corruption  with  a  view  to  facilitating  the  detection,  investigation,  prosecution  and
adjudication  of  corruption  cases.  They  should  ensure  that  appropriate  remedies  are
available for victims of corruption.

The  Commission  invites  Member  States  to  introduce,  where  appropriate,  clear
guidelines  for  staff  of  public  administrations.  Reference  might  be  made  to  the
Commission Decision of 4 April 2002 as a model for such guidelines.

It is estimated that the global cost of corruption adds up to approximately 5 % of the world
economy.  Organised  crime  groups  use  up  to  30  %  of  their  proceeds  to  bribe  police,
prosecutors,  judges  and  public  administration  in  general  to  “purchase  exemption”  from  law
enforcement measures.

However, comparatively little public money is used to investigate and  to prevent  corruption
cases,  although  experience  shows  that  higher  investment  into  specialised  anti–corruption
services  could  multiply  the  detection  and  prosecution  of  offenders  and  thereby  the
effectiveness of any anti-corruption policy.

Specialised  anti-corruption  authorities  and  Member  States’  officials  fighting  against
corruption  and  related  economic  crimes  such  as  fraud,  money  laundering,  tax  and
accounting offences must enjoy appropriate independence, autonomy and protection in
the exercise of their functions, be free from improper influence and have effective means
for gathering evidence and protecting those persons helping the authorities in combating
corruption.

27

C/2002/845 of 4 April 2002.

12

                                                
Interagency  co-operation  and  joint  investigations,  focusing  on  financial  investigations
should be enhanced and networks and national contact points  specifically dealing with
corruption cases should be set-up in order to facilitate international cooperation.

In addition to these suggested initiatives, the Commission has advocated a revision of the EC
Treaty to  enable  the  creation  of  an  independent  European  Public  Prosecutor  responsible  for
detecting, prosecuting and remitting for trial the authors of offences against the EC financial
interests  including  corruption  of  EU  public  servants28.  The  establishment  of  a  European
public prosecutor  would  guarantee  effective criminal law  enforcement  while  contributing  to
the  respect  for  individual  rights  and  securing  judicial  review  of  the  OLAF  operational
activities

5. 

BUILDING UP AN ANTI-CORRUPTION CULTURE IN THE EU INSTITUTIONS

Tackling corruption and fraud within the EU institutions and bodies has become an absolute
priority for the EU in the last years. The crisis triggered by the Commission’s resignation in
March 1999 revealed the necessity to set up more effective measures for the protection of the
integrity of the European Public Administration29. In order to improve the legal framework in
this  field,  the  Commission  has  defined  various  initiatives  in  its  overall  strategy  for  the
protection  of  the  Community  financial  interests  of  2000,  its  action  plan  2001-200330,  and
more recently, its evaluation report on the OLAF activities31.

28

29

30

31

See Commission Green Paper on the protection of Community financial interests and the establishment
of  a  European  public  prosecutor,  COM(2001)  715  from  12/12/2001  and  its  follow-up  report
COM(2003) 128 final of 19/03/2003.
Based  upon  a  thorough  scrutiny  of  existing  rules  and  practices,  several  documents  pointed  out  the
weakness  of  the  legal  framework,  and  especially  the  fact  that  no  investigation  on  alleged  cases  of
corruption or fraud could be carried out within the EU institutions. See Special Report of the Court of
Auditors on the Commission's services specifically involved in the fight against fraud, notably UCLAF
(OJ  C  230,  22/7/1998).  See  Committee  of  Independent  Experts,  report  of  15  March  1999  on  fraud,
mismanagement  and  favoritism  in  the  European  Commission,  followed  by  a  second  report,  dated  10
September  1999,  on  the  reform  of  the  Commission,  analysis  of  practices  in  force  and  proposals  to
remedy mismanagement, irregularities and fraud.
Communication on the fight against fraud, for an overall strategic approach COM(2000) 358 final and
Communication on the fight against fraud, Action plan 2001-2003 COM(2001) 254 final.
See COM(2003) 154 final.

13

                                                
Created in 1999 as an independent administrative body OLAF is entrusted to investigate cases
of corruption, fraud and other serious professional misconduct affecting EC budget within all
EU institutions and bodies32 (internal investigations). The interinstitutional agreement of May
199933  extended  further  the  scope  of  its  investigation  power34  to  all  activities  affecting
Community interests against irregular conduct liable to give rise to administrative or criminal
proceedings  of  the  EC  public  servants.  The  Cologne  European  Council  asked  all  the
institutions and bodies to join the interinstitutional agreement so that the investigations would
be carried out under equivalent conditions in all of them.

In order to assure a better protection of the European Public Administration integrity all the
institutions and bodies should accede to interinstitutional agreement of May 1999 and adopt
an  internal  decision  in  line  with  the  model  decision  annexed  to  the  interinstitutional
agreement35.

OLAF acts principally on the basis of referral of cases and using information supplied by the
members  and  staff  of  the  institutions  fulfilling  their  duty  of  loyalty36.  In  this  respect,  the
Commission recommends that OLAF develop  practices  to  secure  compliance  with  and
the  standardised  application  of  information  procedures  to  institutions  and  bodies
concerned and information procedures to persons involved in the investigations37.

The  cooperation  between  OLAF  and  other  EU  institutions  and  bodies  as  well  as  the
authorities specialising in financial irregularities has also been designed as an important
issue for combating corruption and fraud within EU institutions38.

32

33

34

35

36

37

38

Commission Decision 1999/352/EC, ECSC, Euratom of 28 April 1999 establishing the European Anti-
Fraud Office (OJ L 136, 31/5/1999, p. 20).
Interinstitutional  agreement  between  the  Commission,  the  Council  and  the  Parliament  concerning
internal  investigations  carried  out  by  the  Office  (OJ  L  136,  31/5/1999,  p.  15)  and  model  Decision
annexed.
According  to  Parliament  and  Council  Regulation  (EC)  No  1073/1999  and  Council  Regulation
(Euratom) No 1074/1999 (OJ L 136, 31/5/1999, p. 1 and 8), the purpose of OLAF’s investigations is
fighting fraud, corruption and any other illegal activity affecting the financial interests of the European
Community”  and  “investigating  to  that  end  serious  matters  relating  to  the  discharge  of  professional
duties  such  as  to  constitute  a  dereliction  of  the  obligations  of  officials  and  other  servants  of  the
Communities  liable  to  result  in  disciplinary  or,  as  the  case  may  be,  criminal  proceedings,  or  an
equivalent  failure  to  discharge  obligations  on  the  part  of  members  ...  or  members  of  the  staff  of
institutions, bodies, offices or agencies not subject to the Staff Regulations ...”.
See recommendation n°1 of the Commission report, Evaluation of the activities of the European Anti-
fraud Office (OLAF), COM(2003) 154.
The duty to communicate cases of fraud or corruption is laid down in the regulation 1073/1999.
See recommendation n°16 of the Commission report, Evaluation of the activities of the European Anti-
fraud Office (OLAF).
See Commission report, Evaluation of the activities of the European Anti-fraud Office (OLAF)

14

                                                
Further  to  its  White  Paper  on  Reform39,  the  Commission  has  drafted  a  practical  guide  for
sound  financial  management  describing  standards  of  conduct,  with  reference  to  the
fundamental ethical obligations provided in the Staff Regulations, in particular  the duties of
integrity,  loyalty  and  impartiality40.  The  Commission  has  also  introduced  internal  measures
with  a  view  to  promoting  accountability  and  preventing  corrupt  practices  within  the
Commission41  such  as  the  Decision  of  4  April  2002  on  raising  concerns  about  serious
wrongdoings,  Codes  of  Conduct  for  Commissioners  and  Commission  staff42,  standards  for
internal control within the Commission’s services, a Guide to testing for vulnerability to fraud
or new rules on job rotation for sensitive posts.

With the creation of the Investigation and Disciplinary Office (IDOC)43, the Commission has
set up a system, which better addresses corruption or generally conflict of interest situations
from a disciplinary  point  of view.  The cooperation between  IDOC  and  OLAF  should  be
considered  as  essential  issue  in  assuring  an  efficient  and  uniform  protection  of  the
integrity  of  the  European  Public  Administration.  Taking 
into  account  their
complementary missions44 in the field of administrative investigation, a memorandum of
understanding should organise their relations and both guarantee appropriate follow-up
of the OLAF enquiries when requiring disciplinary sanctions and avoid overlapping in
their competencies45.

6. 

PREVENTING  CORRUPTION  –  THE  SINGLE  MARKET  AND  OTHER  INTERNAL
POLICIES

The Commission believes that future initiatives should focus on preventive measures with a
view  to  reducing  opportunities  for  corrupt  behaviour  by  avoiding  conflicts  of  interest  and
introducing  systematic  checks  and  controls.  This  was  also  the  approach  in  the
Commission’s first Communication on corruption.

In response to the Communication, the European Parliament called upon the Commission to
exercise  its  power  in  different  areas  such  as  tax  deductibility,  blacklisting  regarding  public
procurement  procedures,  financial  transactions,  training  programmes,  fraud  within  the  EU
institutions, money laundering and external aid and assistance.

39

40

41

42

43

44

45

White Paper on Reforming the Commission of 1 March 2000, COM(2000) 200/2.
See Action 92, For sound project management, Practical guide. The draft is to be submitted for approval
by the full Commission.
In the framework of the reform, the Commission proposes to include rules applying to staff of all EU
institutions  on  raising  concerns  about  serious  wrongdoings  in  the  future  Staff  Regulations,  which  are
presently under discussion in the Council.
Code of good administrative behaviour for staff of the European Commission in their relations with the
public
Decision C(2002) 540 on the conduct of administrative inquiries and disciplinary proceedings
The OLAF has broader internal power to carry out investigations, even into members or personnel not
subject to the Staff Regulations, which it can exercise in all institutions and bodies.
Taking  into  account  the  OLAF  expertise  in  the  fight  against  behaviour  involving  serious  forms  of
economic  and  financial  offences,  this  memorandum  should  make  the  practical  breakdown  of  tasks
between  OLAF  and  disciplinary  bodies  more  transparent.  See  recommendation  8  of  the  Commission
Evaluation report on the activities of the European anti-fraud Office.

15

                                                
a) Raising integrity in the public sector

On  7  November  2000,  EU  Ministers  in  charge  of  Civil  Service  and  Public  Administration
adopted  in  Strasbourg  a  resolution  on  quality  and  benchmarking  of  public  services  in  the
European Union.

The  cornerstone  of  this  resolution  is  the  setting-up  of  a  self-assessment  framework  of  total
quality  management  in  public  services  (so-called  "Cadre  d'Auto-évaluation  des  Fonctions
publiques" or Common Assessment Framework, CAF).

The  CAF  is  supposed  to  serve  both  as  a  means  of  communication  and  as  a  tool  for
benchmarking  among  EU  Member  States'  public  administrations  with  a  view  to  raising
integrity, accountability and transparency in public institutions

At  the  request  of  Ministers,  Directors-general  of  Civil  Service  and  Public  Administrations
have  developed  a  work  programme  for  the  "innovative  public  services  group"  aimed  at
improving the quality and efficiency of administrations on a continuous basis.

The Commission therefore recommends engaging a comprehensive dialogue within the
EU  on  minimum  standards  and  benchmarks  in  administrative  integrity  and  good
governance on the basis of the Strasbourg Resolution, essential to prevent and to combat
effectively organised and transborder corruption.

b) Tax Deductibility of bribes

Further  to  a  recommendation  of  the  OECD  of  1996  and  the  Commission’s  1997
Communication, all EU Member States that still allowed or tolerated the tax deductibility of
bribes paid to foreign public officials have amended their legislation with a view to banning
this possibility.

c) Public Procurement

Public procurement represents about 15 % of the GDP in the EU. The Community directives
on  public  procurement  ensure  transparency  and  non-discriminatory  access  to  procurement
opportunities.  The  prevention  of  fraud,  corruption  and  collusion  between  the  tenderers  and
contracting  authorities  is  taken  into  consideration  in  the  Community  system.  Collusive
behaviour  between  companies  participating  in  a  tender  moreover  may  constitute  a  direct
infringement  of  the  prohibition  laid  down  in  article  81  of  the  EC  Treaty.  In  the  aforesaid
Millennium Strategy, the Council has called on Member States and the European Commission
to  ensure  that  the  applicable  legislation  provides  for  the  possibility  that  an  applicant  in  a
public tender procedure who has committed offences connected with organised crime can be
excluded  from  the  participation  in  tender  procedures  conducted  by  Member  States  and  the
Community; specific provisions relating to the role of the Commission both in administrative
co-operation  and  the  setting  up  of  black-lists,  should  be  drawn  up  to  ensure  that  these
commitments can be carried out, while ensuring conformity with the relevant rules relating to
data protection.

16

In  its  draft  amendment  of  the  public  procurement  directives,  submitted  in  May  2000,  the
Commission  inserted  an  obligation  to  exclude  any  tenderer  who  has  been  convicted  by
definitive  judgement  for  corruption,  fraud  or  participation  in  the  activities  of  a  criminal
organisation. Article 45 of the modified proposal for a directive provides for a possibility for a
contracting  authority  to  ask  for  the  cooperation  of  the  competent  authorities  of  another
Member State when they need to obtain information concerning the personal situation of the
candidates  or  tenderers  concerned.  The  authority  contacted  in  another  Member  State  is
obliged to cooperate upon request. Both the Council and the European Parliament in their first
reading of the proposed directive have supported the amendments to article 45. Therefore no
further legislative proposal is needed in order to start implementing article 45 of the proposed
directive.

The Commission will reassess this issue in the light of the application of the new rules.

d) Raising Integrity in the private sector

i.

Protection of vulnerable professions against influences of crime

An  open  and  fruitful  dialogue  has  started  with  representatives  of  the  legal  professions,
accountants and auditors, in order to identify possible gaps or inconsistencies, develop basic
ethical  principles  at  EU  level  and  strike  the  right  balance  between  professional  secrecy  and
public interest.

As a result, a Charter of the European professional associations in support of the fight against
crime was signed on 27 July 1999. The European professional associations (notaries, lawyers,
accountants,  auditors  and  tax  consultants)  encourage  their  Member  Associations  to  adopt
standards  within  the  existing  or  future  Codes  of  conduct  to  protect  the  professionals  they
represent  from  being  involved  in  fraud,  corruption  and  money  laundering  or  from  being
exploited by organised crime.

The  Commission  invites  the  signatories  of  the  Charter  of  the  European  professional
associations  in  support  of  the  fight  against  crime  to  further  strengthen  their  self-
regulatory regimes. This  with  a  view  to  reducing  the  risk  that  representatives  of  these
professions should sacrifice their professional integrity as a result of acts performed by
criminals for illicit purposes.

ii.

Strengthening corporate social responsibility

Companies  and  their  representatives  are  usually  both  offenders  of  corrupt  practices  (supply
side  of  corruption)  and  victims  (either  as  an  unselected  bidder,  because  a  contract  was
awarded to a competitor using  bribes  to  influence  the  decision  to  their  favour  or  as  victims
where an employee has acted against the company’s interests because he or she was bribed by
a competing company).

This  double-faced  role  of  the  private  sector  has  to  be  addressed  through  promoting
corporate  responsibility  and  liability  on  the  basis  of  international  standards  and  principles,
including the development and implementation of modern accounting standards, adoption of
adequate  internal  audit  schemes,  codes  of  conduct  and  their  implementation,  and  the
establishment of channels for communication

17

Further to the adoption of the 1997 OECD Convention on bribery of foreign public officials
in international business transactions, it is a punishable offence (including corporate liability)
in all  state  parties’  jurisdictions  (including  all  EU  Member  States)  to  bribe  a  foreign  public
official  of  any  jurisdiction  world-wide.  Still,  recent  studies  (cf.  Bribe  Payers’  Index  of
Transparency  International)  seem  to  indicate  that  only  few  companies  are  aware  of  this
international  instrument  and  national  implementing  legislation.  Awareness  raising  within
the  entire  private  sector  should  be  improved  with  a  view  to  sensitising  companies  to  the
damaging consequences that corrupt practices might have on companies and their reputation
and thus preventing corruption.

Bribery  is  a  hidden  phenomenon  because  it  is  built  on  “the  pact  of  silence”  between  briber
and  bribee.  Companies  should  therefore  have  clear  rules  on  “whistleblowing”  (i.e.
procedures  to  follow  if  an  employee  becomes  aware  of  corrupt  behaviour  inside  the
company). This should include training and monitoring of these rules with a view to making it
clear that corruption is unacceptable, and encouraging employees to expose it.

The Commission intends to further stimulate the necessary dialogue in this area between
the  public  and  the  private  sector  through  initiatives  such  as  the  EU  Forum  on  the
prevention of organised crime.

e) Accounting standards and statutory audit

In the area  of  accounting  and  auditing,  major  recent  scandals  have  led to  an  acceleration of
decision-making  with  a  view  to  creating  an  efficient  and  competitive  EU  capital  market  by
2005, which is the objective of the EU’s “Financial Services Action Plan”.

In  June  2002,  the  EU  adopted  a  regulation  requiring  listed  companies,  including  banks  and
insurance companies, to prepare their consolidated accounts in accordance with International
Accounting  Standards  (IAS)  from  2005  onwards.  This  will  ensure  that  company  accounts
throughout the EU are more reliable, transparent and more easily comparable. This will also
facilitate  the  detection  of  fraud  and  corruption.  Now,  the  Commission  has  to  ensure  proper
implementation, harmonised interpretation and enforcement of the IAS.

In  May  2002,  the  Commission  has  issued  Recommendations  on  the  independence  of  the
statutory  auditor.  The  recommendations  contain  a  set  of  demanding  principles.  They
recommend in particular that auditors should be prohibited from carrying out a statutory audit
if  they  have  any  relationship  with  the  client  that  might  compromise  their  independence.
Although recommendations are not legally binding,  they will  serve  as a clear  benchmark of
best practice. The Commission will monitor implementation and will consider, in the light of
practical application, whether binding EU legislation may be required.

At  present  there  are  no  agreed  auditing  standards  in  the  EU.  Although  there  is  general
agreement that  any initiative in this field  should be based on the  International  Standards  on
Auditing (ISA), it is still unclear how all statutory audits in the EU will be carried out on this
basis. There is also no EU mechanism to deal with supervision of the audit profession.

Statutory  audit  will  be  subject  of  a  forthcoming  communication  of  the  Commission
outlining future policy priorities in this field.

18

f) Fighting corruption in bodies of special nature in-between the public and the private
sector

In  recent  years,  Western  Europe  has  been  hit  by  a  wave  of  political  corruption  scandals.
They  have  highlighted  that  there  may  be  secret  (triangular)  links  between  public  office
holders,  the  business  world  and  representatives  of  social  partners  and  other  interest  groups,
somewhat in-between the public and the private sector, such as political parties, trade unions
and employers’ associations, or foundations, etc. Very often  undeclared  donations  are  given
to  these  semi-public  entities  of  special  nature,  often  circumventing  legal  obligations,  to
influence important political or economic decisions or to create a "good climate" between the
public and the private sector.

The secret nature of these links usually makes it very difficult to prove concrete quid-pro-quo
bribe  giving  and  bribe  taking  in  a  criminal  law  sense  and  sometimes  the  behaviour  is  not
punishable at all.

In  particular,  a  handful  of  high-profile  cases  disclosed  by  the  media  has  highlighted  this
phenomenon. This trend can be broadly linked to the structure and rules of the financing of
social  partners  and  other  interest  groups  within  the  countries  concerned.  This  growth  in
political  scandals  linked  to  the  financing  of  these  entities  is  due  in  part  to  the  following
factors:  growing  bureaucratisation  of  organisations, 
increasing  costs  of  campaign
expenditures, a change in the nature of political competition through greater use of the media
or  the  declining  role  of  the  state  as  a  public  service  provider  and  competition  for  state
contracts.

As such, a major review is needed that assesses and analyses the nature of these links so as to
expose  the  problem  and  address  it  in  the  future.  In  fact,  only  utmost  transparency  in
financing  of  social  partners  and  interest  groups,  election  spending  and  certain
restrictions on business activities of representatives of these entities can ensure that they
act free of (potential) conflicts of interests.

The  Commission  is  very  concerned  about  this  development  and  suggests  the  EU-wide
adoption of clear and transparent rules on the financing of these entities of special nature and
an increasing role of the civil society.

On the basis of a study assessing the situation of political corruption and financing of social
partner entities and other interest groups in Europe, the Commission will prepare and submit
proposals  to  the  European  Parliament  and  to  the  Council  containing  standards  and  best
practices for transparent funding of these entities, election spending and avoiding of conflicts
of interest.

7. 

EXTERNAL ASPECTS

The  forthcoming  accession  of  new  EU  Members  States  and  a  stronger  coherence  between
internal  and  external  EU  policy  as  suggested  in  the  Tampere  conclusions  or  in  the  recent
“Communication  on  Wider  Europe  –  Neighbourhood”,  with  a  particular  focus  on  Russia,
Western  NIS,  South-East  Europe  and  the  Mediterranean  Partners  already  pave  the  way  for
future (concentrated) EU initiatives in the fight against corruption.

19

a)  Encouraging  anti-corruption  policies  in  the  acceding,  candidate  and  other  third
countries on the basis of 10 general principles (cf. attached to this document)

In  the  EU  acceding  and  candidate  countries  the  fight  against  corruption  has  become  much
more  prominent  during  recent  years,  particularly  driven  by  the  prospect  of  accession.
Although  enormous  progress  has  already  been  achieved  and  the  majority  of  these  countries
have  adopted  national  anti-corruption  strategies,  corruption,  and  other  economic  crimes
remain  prevalent  as  highlighted  by  the  Commission  in  its  regular  progress  reports  on
accession.  Moreover,  overlapping  jurisdictions  and  lack  of  co-ordination  endanger  the
achievements.

Although capacity building in the fight against corruption was addressed during the accession
negotiations and the PHARE  programme has supported several  anti-corruption projects, the
Commission  proposes  that  efforts  should  be  intensified  to  ensure  that  its  overall  anti-
corruption strategy is fully extended to acceding and candidate countries.

Although  all  acceding  and  candidate  countries  have  signed  at  least  one  of  the  relevant
international anti-corruption instruments, such as the Criminal and the Civil Law Conventions
of the Council of Europe or the OECD Convention on bribery of foreign public  officials in
their  effective
international  business 
implementation.

the  biggest  challenge 

transactions, 

remains 

The  Commission  has  frequently  recommended  improved  co-ordination  between  different
authorities responsible for fighting corruption and further campaigns to raise public awareness
in  order  to  prevent  corruption.  The  establishment  of  a  single  anti-corruption  unit  or  a
single co-ordinating body would represent a significant step forward in this respect.

The  capacity  of  public  administration  structures  and  the  judiciary  to  perform  their
tasks effectively is an overarching concern of the Commission. This holds in particular for
the implementation of legal obligations derived from the acquis. In order to render the fight
against  corruption  effective,  the  enhanced  integrity,  transparency  and  accountability  of
administrations  and  the  promotion  of  good  governance  constitute  essential  elements  of  a
comprehensive preventative policy.

The  Commission  favours,  on  the  basis  of  ten  general  principles  (cf.  attached  to  this
document) and the needs of each particular country, a comprehensive effort of the Phare
programme  in  the  remaining  time-frame  prior  to  accession  with  a  view  to  further
(judiciary,  police,  customs,  public
strengthening 
procurement) in the candidate countries.

relevant  administrative  capacities 

The Commission considers that training and specialisation in this field should be improved
in order to provide the national bodies in all relevant areas such as judiciary, prosecution, law
enforcement, customs and police with appropriate and well-trained staff. Above all the most
comprehensive  and  central  recommendation  in  this  context  is  an  enhanced  alignment  of
national  legislation  with  the  acquis  and  other  international  instruments  to  ensure  further
development.

The  Commission  fully  recognises  that  the  effectiveness  of  national  anti-corruption  policies
can be only assessed at least one year after their implementation.

20

In other countries, such as the states of the Western Balkans, corruption remains a widespread
phenomenon.  A  general  strengthening  of  the  national  institution  is  a  key  element  of  the
Stabilisation  and  Association  process  in  the  Western  Balkan  countries.  Stronger  and  more
effective institutions will have a better capacity to resist corruption. Addressing corruption is
an  important  part  of  regional  and  country  strategies  set  up  in  the  context  of  the  CARDS
assistance  programme  with  regard  to,  for  example,  fighting  organised  crime.  In  general,
progress in eliminating  corruption is essential if  the  countries of the western Balkans  are  to
advance further on their way towards European integration.

In December 2002, the Copenhagen European Council confirmed that the Union should take
the  opportunity  offered  by  enlargement  to  enhance  relations  with  its  neighbours,  Russia,
Ukraine, Moldova, Belarus and the Mediterranean countries, to avoid drawing new dividing
lines in Europe and to promote stability and prosperity within and beyond the new borders of
the  Union.  Within  the  new  Neighbourhood  Policy,  it  is  foreseen  to  intensify  cooperation  to
prevent  and  combat  common  security  threats,  including  corruption.  The  EU  will  explore
possibilities  to  work  more  closely  with  the  neighbouring  countries  on  judicial  and  police
cooperation and  the development of mutual legal  assistance.  These  countries  need  to  attract
foreign  investment  in  order  to  boost  economic  performance.  This  provides  strong  indirect
incentives to reduce levels of corruption, and politicians have increasingly shown awareness
of this fact.

b) Cooperation agreements and foreign aid programmes

The promotion of human rights, the consolidation of democratic principles and the rule of law
have become key objectives of the foreign and development policy of the EU. They have been
integrated  as  “essential  elements”  in  the  different  co-operation  agreements  with  developing
countries and are  part  of  the  regular political  dialogue  with  partner  countries.  The  ACP-EU
Partnership Agreement signed in Cotonou the 23 June 2000 between the EU and 77 African,
Caribbean  and  Pacific  (ACP)  countries  goes  one  step  further  by  explicitly  addressing  the
issues  of  good  governance  (as  “fundamental  element”)  and  corruption.  The  ACP  and  EU
agreed on a definition of good-governance46 that includes the fight against corruption. These
areas are also an important subject for political dialogue. The parties have agreed that, when
the  Community  is  a  significant  partner  in  terms  of  financial  support,  serious  cases  of
corruption, including acts of bribery leading to such corruption, can give rise to a consultation
procedure.  If  the  measures  to  remedy  the  situation  are  not  taken,  the  suspension  of  the  co-
operation can be decided as a measure of last resort.

46

Good  governance  is  the  transparent  and  accountable  management  of  human,  natural,  economic  and
financial resources for the purpose of equitable and sustainable development. It entails clear decision-
making  procedures  at  the  level  of  public  authorities,  transparent  and  accountable  institutions,  the
primacy of the rule of law in  the  management  of  resources  and  capacity  building  for  elaborating  and
implementing measures aiming in particular to preventing and combating corruption

21

                                                
The Cotonou Agreement does not define the “serious cases of corruption” that can lead to the
suspension  of  the  co-operation.  In  the  framework  of  the  permanent  political  dialogue  that
covers  governance-related  issues,  the  parties  examine  the  changes  underway  and  the
continuity  of  the  progresses  achieved.  This  regular  assessment  takes  into  account  each
country’s  economic,  social,  cultural  and  historical  context.  The  consultation  procedure  does
not  apply  exclusively  or  necessarily  when  EC  funds  are  involved  but  more  generally  when
corruption  constitutes  an  obstacle  to  the  country’s  development.  Consultations  have  taken
place  in  one  case,  when  the  European  Union  were  deeply  preoccupied  by  the  lack  of
transparency  in  the  public  accounting  system  and  by  the  risks  of  serious  corruption  in
particular  in  the  management  of  natural  resources  and  the  exploitation  of  monopolies  in  a
partner country.

The  Commission’s  Manual  of  Instructions  on  Contracts  for  works,  supplies  and  services
concluded  for  the  purposes  of  Community  co-operation  with  third  countries  contains
provisions  that  apply  to  cases  of  corrupt  practices  detected  in  the  context  of  a  particular
project. These provisions do not necessarily involve the suspension of the application of the
Co-operation framework with the country concerned. They affect in general, at least at a first
stage, EC disbursements for supporting this particular project.

Section 7 of the Manual provides for the possibility to “suspend or cancel project financing if
corrupt  practices  of  any  kind  are  discovered  at  any  stage  of  the  award  process  and  if  the
contracting authority fails to take all appropriate measures to remedy the situation. For the
purposes  of  this  provision,  ‘corrupt  practices’  are  the  offer  of  a  bribe,  gift,  gratuity  or
commission to any person as an inducement or reward for performing or refraining from any
act  relating  to  the  award  of  a  contract  or  implementation  of  a  contract  already  concluded
with the contracting authority.”

In  order  to  implement  this  new  policy,  the  Commission  is  currently  reviewing  its
framework and specific financing agreements with beneficiary states as well as its tender
documents  and  contracts  with  a  view  to  inserting  standard  clauses  clarifying  that  the
Commission  may  cancel  financing  and  making  the  beneficiary  state  responsible  for
taking concrete actions in cases of corruption.

More recently (December 2001, January 2002) agreements were concluded with Algeria and
Lebanon containing  new  chapters  dedicated  to  cooperation  in  the  Justice  and  Home  Affairs
area.  They  include  a  specific  article  on  the  fight  against  corruption  and  refer  to  existing
international  legal  instruments  and  commit  the  parties  to  take  concrete  measures  against
corruption and grant mutual legal assistance in criminal enquiries.

c) EU Trade Policy and Officially Supported Export Credits

Recent  studies  examining  the  connection  between  the  openness  of  a  country  and  good
governance on the one hand, and the degree of corruption on the other hand, suggest that the
best  corruption  prevention  strategy  seems  to  be  a  high  investment  in  institution-building
(“good governance”), well-paid civil servants and participation in free trade and provision of
open  markets:  the  more  open  a  country  is,  the  less  prone  will  it  be  to  corruption.  By
increasing  uncertainty  and  the  costs  of  transactions,  corruption  hampers  international
trade and reduces investment and therefore growth. Open, transparent and competitive
market conditions locally and at the international level can reduce corruption.

22

The  EU,  through  the  Commission,  has  consistently  sought  transparency  as  an  essential
element in international trade. In this context, it has always recognised the need for increased
transparency in government procurement as one of its highest priorities. The EC promotes the
extension  to  other  WTO  Parties  of  the  Agreement  on  Government  Procurement,  which
contains  provisions  of  enhanced  transparency  and  ensures  fair  competition  in  international
procurement. The EC is also committed to engage actively in the envisaged negotiations for a
multilateral  agreement  on  transparency  in  government  procurement  as  agreed  in  the  Doha
WTO 4th Ministerial Conference. Its proposals in other rule making areas of the WTO Doha
agenda  to  improve  the  transparency  and  predictability  of  the  multilateral  systems  will,  if
implemented, also improve levels of integrity.

Concerning  officially  supported  export  credits,  the  Commission  invites  Member  States  to
monitor  concrete  implementation  of  anti-corruption  clauses  in  the  rules  applied  by  relevant
national agencies and in line with the OECD “Action Statement” of December 200047.

8. 

CONCLUSIONS

In  conclusion,  the  future  EU  policy  on  corruption  should  consist  of  the  following  core
elements:

(cid:1)  A strong political commitment against all forms of corruption should come from the

highest level of EU institutions.

(cid:1)  The  implementation  of  existing  anti-corruption  instruments  should  be  closely
monitored and strengthened for the time being through the adhesion of the European
Community to one or both Conventions on Corruption of the Council of Europe and
the participation in its monitoring mechanism GRECO.

(cid:1)  EU Member States should develop and improve investigative tools and allocate more

specialised staff to the fight against corruption.

(cid:1)  Member  States  and  EU  institutions  and  bodies  should  enhance  efforts  to  combat

corruption damaging the financial interests of the European Community.

(cid:1)  Common  integrity  standards  in  public  administrations  across  the  EU  such  as  the
Common  Assessment  Framework  of  EU  Heads  of  Civil  Service  and  Public
Administration should be further developed at EU level.

(cid:1)  Member States and the Commission should support the private sector in its efforts to

raise integrity and corporate responsibility.

47

This  document  has  been  revised  and  replaced  on  7  February  2003.  Full  documentation  can  be  found
under http://www.oecd.org/EN/home/0,,EN-home-355-nodirectorate-no-no-no-31,00.html

23

                                                
(cid:1)  The  fight  against  political  corruption  and  illicit  financing  of  social  partner  entities
and other interest groups needs to be strengthened at EU and Member States level.

(cid:1)  In their permanent dialogue with acceding, candidate and other third countries, the
Member States and the Commission should systematically include corruption-related
issues  and  further  assist  these  countries  in  their  efforts  to  set-up  and  implement
national anti-corruption policies on the basis of the attached ten general principles.

(cid:1)  The  EU  should  continue  making  the  fight  against  corruption  an  integral  part  of  its

external and trade police.

24

ANNEX

TEN PRINCIPLES FOR IMPROVING THE FIGHT AGAINST
CORRUPTION IN ACCEDING, CANDIDATE AND OTHER THIRD
COUNTRIES

1
To  ensure  credibility,  a  clear  stance  against  corruption  is  essential  from
leaders  and  decision-makers.  Bearing  in  mind  that  no  universally  applicable
recipes  exist,  national  anti-corruption  strategies  or  programmes,  covering  both
preventive  and  repressive  measures,  should  be  drawn  up  and  implemented.
These strategies should be subject to broad consultation at all levels.

2
Current and future EU Members shall fully align with the EU acquis and
ratify and implement all main international anti-corruption instruments they are
party  to  (UN,  Council  of  Europe  and  OECD  Conventions).  Third  countries
should sign and ratify as well as implement relevant international anti-corruption
instruments.

laws  are 

Anti-corruption 

important,  but  more 

3
their
implementation  by  competent  and  visible  anti-corruption  bodies  (i.e.  well
trained  and  specialised  services  such  as  anti-corruption  prosecutors).  Targeted
investigative techniques, statistics and indicators should be developed. The role
of  law  enforcement  bodies  should  be  strengthened  concerning  not  only
corruption but also fraud, tax offences and money laundering.

important 

is 

4
Access  to  public  office  must  be  open  to  every  citizen.  Recruitment  and
promotion  should  be  regulated  by  objective  and  merit-based  criteria.  Salaries
and social rights must be adequate. Civil servants should be required to disclose
their assets. Sensitive posts should be subject to rotation.

Integrity,  accountability  and  transparency  in  public  administration
5
(judiciary,  police,  customs, 
tax  administration,  health  sector,  public
procurement) should be raised through employing quality management tools and
auditing and monitoring standards, such as the Common Assessment Framework
of  EU  Heads  of  Public  Administrations  and  the  Strasbourg  Resolution.
Increased transparency  is  important  in view of  developing  confidence between
the citizens and public administration.

Codes  of  conduct  in  the  public  sector  should  be  established  and

6
monitored.

7
Clear rules should be established in both the public and private sector on
whistle blowing (given that corruption is an offence without direct victims who
could witness and report it) and reporting.

25

Public intolerance of corruption should be increased, through awareness-
8
raising campaigns in the media and training. The central message must be that
corruption is not a tolerable phenomenon, but a criminal offence. Civil society
has an important role to play in preventing and fighting the problem.

9
Clear  and  transparent  rules  on  party  financing,  and  external  financial
control of political  parties, should  be  introduced  to  avoid  covert  links between
politicians and (illicit) business interests. Political parties evidently have strong
influence on decision-makers, but are often immune to anti-bribery laws.

Incentives  should  be  developed  for  the  private  sector  to  refrain  from
10
corrupt  practices  such  as  codes  of  conduct  or  “white  lists”  for  integer
companies.

26