9 EU POLICY AGAINST CORRUPTION
(24630)
10332/03
COM(03) 317
| Commission Communication on a comprehensive EU policy against
corruption.
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| Legal base | —
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| Document originated | 28 May 2003
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| Deposited in Parliament |
17 June 2003 |
| Department | Home Office
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| Basis of consideration |
EM of 4 July 2003 |
| Previous Committee Report |
None; but see (23885) 12249/2/02: HC 63-v (2002-03), paragraph 10 (18 December 2002)
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| To be discussed in Council
| No date set |
| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background
9.1 Dealing with corruption has been a matter of international
and European concern for some years. In 2000 the UN General Assembly
appointed an ad hoc committee to draw up a United Nations convention
against corruption. In 1997 the OECD adopted a convention on combating
bribery of foreign public officials in international business
transactions, and the Council of Europe has established a body
known as GRECO, the group of States against corruption,[23]
as well as adopting a criminal law convention on corruption.
9.2 There has also been activity within
the European Union. The Council adopted an Action Plan against
organised crime in 1997[24]
which advocated a comprehensive policy against corruption. This
was followed in that year by a Commission Communication suggesting
a range of measures, including prohibiting the tax deductibility
of bribes, rules on public procurement, improved auditing and
accounting standards and the 'blacklisting of corrupt companies'.
Measures against corruption were subsequently referred to in the
1998 Vienna Action Plan adopted by the Council, the conclusions
of the Tampere European Council in 1999 and in the Millennium
Strategy on the prevention and control of organised crime of March
2000.[25]
The Communication from the Commission
9.3 The latest Communication sets out an
overview of what has been achieved at EU level and indicates the
Commission's views on what 'needs to be improved to give fresh
impetus to the fight against corruption, identifying possible
areas where the EU might be an appropriate actor to take future
initiatives'. The Commission states that it is its 'firm intention
to reduce corruption at all levels in a coherent way within the
EU institutions, in EU Member States and outside the EU'.
9.4 The Commission observes that the term
'corruption' can be defined in a narrow sense for the purposes
of the criminal law, but that it could more generally relate to
concepts such as integrity, transparency, accountability and good
governance. The Communication then reviews progress in ratifying
a number of EU and international instruments, including the Convention
on the Protection of the European Communities, Financial Interests,
the OECD convention on bribery of foreign public officials in
international business transactions and the Council of Europe
criminal and civil law conventions on corruption. In the latter
case, the communication urges Member States to ratify these conventions
and to join GRECO.
9.5 The Communication stresses the value
of evaluation and monitoring of the effectiveness of measures
to combat corruption, but does not consider that a separate EU
evaluation and monitoring mechanism is appropriate at this stage,
because of the duplication of effort this would involve. The
Communication advocates Community accession to the Council of
Europe conventions and membership of GRECO, adding that if membership
of GRECO is not practicable, the Commission will consider a separate
EU monitoring and evaluation system. Reference is also made to
improving judicial and police cooperation within the EU by such
means as the creation of EUROJUST, the adoption of the European
Arrest Warrant, and of the second money-laundering Directive[26]
and the negotiations on the Framework Decision on combating private
sector corruption.[27]
9.6 The Communication then discusses the
effective detection of and prosecution for corruption offences,
referring to the relatively small number of cases which are reported
to the police (but no statistics or other evidence is shown for
this conclusion). The Commission states that 'the only way to
know more is to convince witnesses to report corruption cases',
adding that this can only be achieved by the 'effective protection
of whistleblowers against victimisation and retaliation' and by
witness protection measures. The Commission recommends that Member
States should 'where appropriate at the proposal of the Commission'
introduce common standards for the collection of evidence, 'special
investigative techniques', protection for whistleblowers, victims
and witnesses of corruption, and the confiscation of proceeds
of corruption. The Commission invites Member States to introduce
clear guidelines for staff of public administrations, adding that
'reference might be made to the Commission Decision of 4 April
2002[28] as a model for
such guidelines'.
9.7 The Commission also refers to its proposal
for a revision of the EC Treaty to provide for a European Public
Prosecutor,[29] arguing
that 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'.[30]
9.8 The Communication discusses the building
up of an 'anti-corruption culture' in the EU institutions, referring
to the measures taken following the resignation of the Santer
Commission in 1999, including the creation of OLAF and the measures
pursuant to the Commission's White Paper of 2000. The Commission
refers in particular to internal measures for promoting accountability
and preventing corrupt practices within the Commission, including
its Decision of 4 April 2002 and the proposed rules in the Staff
Regulations on raising concerns about serious wrongdoing.
[31]
9.9 The Communication discusses the raising
of integrity in the public and private sectors, pointing to measures
taken in the field of public procurement and to prohibit the tax
deductibility of bribes. The private sector is exhorted to have
clear rules on 'whistleblowing', which should include training
and monitoring 'with a view to making it clear that corruption
is unacceptable, and encouraging employees to expose it'.
9.10 The Communication indicates that the
Commission will be presenting a Communication on accounting and
auditing standards and contains a (somewhat enigmatic) discussion
of corruption in 'bodies of special nature in-between the public
and private sector'. The Commission refers to a number of corruption
scandals, suggesting that there may be 'secret (triangular) links
between public office holders, the business world and representatives
of social partners …such as political parties, trade unions
and employers' associations' and that 'very often' undeclared
donations are given to these semi-public entities to influence
important political or economic decisions or 'to create a "good
climate" between the public and the private sector'.
9.11 The Commission suggests that a 'major
review' is needed to assess and analyse the nature of these links
and that on the basis of a study assessing 'the situation of political
corruption and financing of social partner entities and other
interest groups' the Commission will submit proposals containing
'standards and best practices for transparent funding of these
entities, election spending and avoiding of conflicts of interest'.
9.12 In relation to the new Member States
and third countries, the Communication refers to existing measures
to encourage anti-corruption policies and introduces ten principles
to be followed for 'improving the fight against corruption'. These
relate to such matters as national corruption strategies, adoption
of EU, UN, Council of Europe and OECD measures, law enforcement,
access to public office (including a requirement that 'civil
servants should be required to disclose their assets'), codes
of conduct and clear rules in the public and private sector on
whistleblowing, the adoption of 'clear and transparent rules on
party financing and external financial control of political parties
… to avoid covert links between politicians and (illicit)
business interests' and the development of incentives for the
private sector to refrain from corrupt practices 'such as "white
lists" for integer [sic][32]
companies'.
The Government's view
9.13 In her Explanatory Memorandum of 4
July the Parliamentary Under-Secretary of State at the Home Office
(Caroline Flint) explains that the Government agrees that policy
statement on corruption should be made at EU level, and that it
supports the accession of the European Community to GRECO. The
Minister further explains, however, that the Government does not
believe it is necessary to adopt wide-ranging minimum standards
for criminal procedure in order to investigate and prosecute corruption
cases effectively. The Minister adds that the Government accepts
that light minimum standards at EU level could prevent discrimination
against victims and witnesses who are not nationals of the Member
State in which criminal proceedings are taking place and therefore
supports minimum standards for access to legal and consular advice,
interpretation and translation.
9.14 In relation to efforts to combat corruption
damaging the financial interests of the EC, the Minister refers
to the creation of Eurojust and the extension of Europol's mandate,
as well as to the mutual recognition of judicial decisions being
a key to tackling corruption, fraud and cross-border crimes more
effectively. The Minister maintains the Government's view that
the Commission's proposal to establish a European Public Prosecutor
is not the solution, such a Prosecutor being both unnecessary
and unaccountable to Member States' authorities.
9.15 In relation to standards of integrity
in public administrations, the Minister recalls that civil servants
in the UK are required to conduct themselves in accordance with
the highest standards which are set out in the Civil Service Code
and the Civil Service Management Code. The Minister comments that
the UK has no objection to the proposal in the communication that
the EU should consider how common standards of integrity could
be further developed and the Government is ready to assist in
further development of this work.
9.16 The Minister adds that the Government
supports and encourages the private sector to draw up codes of
conduct and policies on social responsibility. In the Government's
view, these should be based on the OECD Guidelines for Multinational
Enterprises, which were first issued in 1976 and most recently
revised by OECD Ministers in 2000.
9.17 In respect of political corruption,
the illicit financing of 'social partner entities' (which the
Government takes as a reference to bodies which are 'on the borderline
between public and private') and the possibility of proposals
on election spending, the Minister comments that it is not clear
whether such proposals would be confined to European elections
and emphasises that the law on spending on local and national
elections should be a matter for the Member States. The Minister
recalls that statutory controls on the funding of political parties
were introduced under the Political Parties, Elections and Referendums
Act 2000, which restricts campaign expenditure and requires registered
political parties to report large donations. The Minister comments
that proposals by the Commission on national and local elections
would raise subsidiarity issues.
9.18 The Minister explains that the Government
supports the suggested ten general principles as a basis for anti-corruption
policies in acceding, candidate and other third countries, but
believes that the principle which requires civil servants to disclose
their assets 'may be disproportionate' and that a requirement
to disclose business interests or shareholdings in cases of conflict
is adequate for this purpose.
Conclusion
9.19 We are grateful to the Minister
for her helpful Explanatory Memorandum. We agree with the Minister
that proposals by the Commission to regulate spending on, or the
conduct of, national and local elections would raise subsidiarity
issues. In view of the Commission's stated 'firm intention'
to reduce corruption 'in a coherent way within the EU institutions,
in EU Member States and outside the EU', we ask the Minister to
explain what role, if any, could properly be undertaken by the
Commission in this regard within the UK.
9.20 We also
ask the Minister, in view of her support for Community accession
to GRECO, whether this might have the effect of conferring an
exclusive external competence on the European Community to negotiate
international agreements in this area, and if so, if the Minister
would find this acceptable.
9.21 In view of the controversies which
have arisen when Commission staff have raised concerns over actual
or potential impropriety, and our own concerns about the limited
protection given to such persons under the Decision of 4 April
2002 and the proposed Staff Regulations, we ask the Minister if
she considers that these are an appropriate model to recommend
to the Member States.
9.22 We shall hold the document under
scrutiny pending the Minister's reply.
23 The UK has been a member of GRECO since its inception
in 1999. Back
24
OJ No C 251, 15.8.1997, p.1. Back
25
OJ No C 124, 3.05.2000, p.1. Back
26
OJ No L344, 28.12.2001, p.76. Back
27
(23885) 12249/2/02; see HC 63-x (2002-03), paragraph 3 (29 January
2003). Official Report, European Standing Committee B,
12 February 2003. Back
28
C/2002/845 of 4 April 2002. Back
29
For our most recent criticisms of this proposal, see HC 63-xxvi
(2002-03), paragraphs 72-82. Back
30
It should nevertheless be recalled that OLAF does not have any
powers to conduct a criminal prosecution. This is a matter for
the relevant national authorities, as is demonstrated by the criminal
investigations now being conducted in Luxembourg and France into
the activities of Eurostat following inquiries by OLAF. Back
31
See (23534) 8456/03; HC 63-xxvii (2002-03), paragraph 3 (25 June
2003), in which we criticise the unduly circumscribed nature of
protection given to 'whistleblowers'. Back
32
Presumably, what is meant is a company which does have integrity
and does not engage in corruption. Back
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