Documents considered by the Committee on 1 March 2017 Contents

7Bulgaria and Romania: Cooperation and Verification Mechanism

Committee’s assessment

Politically important

Committee’s decision

(a) Cleared from scrutiny; (b) Not cleared from scrutiny; further information requested

Document details

(a) Report from the Commission on Progress in Bulgaria under the Co-operation and Verification Mechanism; (b) Report from the Commission on Progress in Romania under the Co-operation and Verification Mechanism

Legal base

Department

Exiting the European Union

Document Numbers

(a) (38479), 5675/17 + ADD 1, COM(17) 43; (b) (38480), 5676/17 + ADD 1, COM(17) 44

Summary and Committee’s conclusions

7.1Each year, the European Commission monitors progress made in Bulgaria and Romania in the fight against corruption and the protection of judicial independence. The monitoring system, called the Cooperation and Verification Mechanism (CVM), was instituted after concerns that the two countries did not meet the requisite standards of good governance even after they had formally joined the EU in 2007. The Commission’s regular reports have shown that both countries have further to go to tackle corruption and improve the functioning of their respective judicial systems.

7.2The reports on developments in both countries in 2016 were published by the Commission in January 2017. In Romania, past progress was largely sustained, even if implementation and entrenchment of the reforms has not always been satisfactory; in Bulgaria, progress has been much less pronounced, especially in the fight against high-level corruption. In his Explanatory Memoranda of 24 February,29 the Minister of State at the Department for Exiting the EU (David Jones) endorses both Commission reports as providing a “balanced understanding of progress achieved”. Of Bulgaria, the Minister says: “For progress to be made, there needs to be greater political will. […] The fight against high-level corruption has however not progressed and Bulgaria needs to significantly accelerate its overall progress on reforms”.

7.3With respect to Romania, the Minister agrees with the Commission’s assessment that the country has made “impressive progress” on all fronts in the past decade. However, he appears to caution the Romanian government against believing that the report has demonstrated sufficient progress for the country to “graduate” from the Cooperation and Verification Mechanism in the near future. He refers specifically to the recent proposed amendment of the Romanian Criminal Code, by emergency ordinance, as calling into question the irreversibility of reforms achieved so far.30 The amendment, which would have shrunk the scope of the criminal offence of corruption, was only withdrawn by the Romanian government after widespread public protest.31

7.4The Commission, which finalised its report when the amendment was available as a draft but had not yet been formally tabled, restricted itself to a more general observation:

“Clearly legal amendments with the effect of weakening or shrinking the scope of corruption as an offence, or which represented a major challenge to the independence or effectiveness of DNA,32 would entail a reassessment of the progress made.”33

7.5Overall, the Minister reiterates a point made repeatedly by his predecessors about the credibility of the CVM process: that it is “right [to] recognise when progress has been made,” and that a “relentlessly critical approach” would “further reinforce the belief [in Bulgaria and Romania] that the CVM is a moving target which can never fully be met”.

7.6We take note of the Commission’s reports on developments in Bulgaria and Romania in the decade since their accession to the EU, and over the past year in particular. The situation in Bulgaria does not seem to have improved significantly in the last twelve months, and this is reflected in the Commission’s report and the Minister’s Explanatory Memorandum.

7.7We agree with the Minister’s assessment that Romania’s prospects of exiting the CVM were not helped by the recent attempts to narrow the definition of “corruption” in the country’s new Criminal Code. We are concerned at the apparent insouciance with which the Commission treated these developments, given that the text of Romanian government’s proposed amendment was already available in draft form when it finalised its report.

7.8We do not think the Commission should have adopted the wait-and-see approach that it did. It has itself stated that progress towards the CVM benchmarks can “only be fully assessed by looking at whether their intended effect is felt in practice, and whether they can be considered to be embedded in the legal and institutional framework of Romania and to be irreversible”. The mere fact that the amendments to the Criminal Code were drafted (and subsequently promulgated a week after publication of the Commission report), even if they were withdrawn before they could take effect, might call into question the irreversibility of progress made.

7.9We have previously sought, and obtained, reassurance from the Government with respect to the operation of the European Arrest Warrant issued by the Romanian and Bulgarian authorities. The Government is confident that the current legislative framework, underpinned by Court of Justice case law, is sufficient to protect UK and other EU nationals from being extradited under the terms of an EAW if it is likely their human rights would be infringed (see “Background” for more information).

7.10Given our concerns about the lack of consideration of recent developments in Romania in the Commission document, we retain the report on Romania under scrutiny. We ask the Minister whether he is satisfied with Romania’s progress, and whether he will raise this issue with the Commission or the Council. We are content to clear the report on Bulgaria from scrutiny.

Full details of the documents

(a) Report from the Commission on Progress in Bulgaria under the Co-operation and Verification Mechanism: (38479), 5675/17 + ADD 1, COM(17) 43; (b) Report from the Commission on Progress in Romania under the Co-operation and Verification Mechanism: (38480), 5676/17 + ADD 1, COM(17) 44.

Background

Background to the Cooperation and Verification Mechanism

7.11When Bulgaria and Romania joined the EU on 1 January 2007, the existing Member States agreed that they still needed to make progress in a number of areas related to justice and home affairs (JHA). While both countries had met the technical requirements for accession, having put in place the necessary legislation, implementation was considered inadequate.

7.12To address these concerns, the European Commission established the Cooperation and Verification Mechanism (CVM) to support and monitor progress against certain benchmarks, all of which revolve around the independence and quality of the judicial system, tackling corruption and, in the case of Bulgaria, organised crime.34

7.13Under the terms of the Council Decisions which established the Mechanism and as reiterated by the Member States in subsequent Council conclusions, monitoring of both countries under the CVM will end only when they meet all of their respective benchmarks. Overall, Romania has been quicker to make progress than Bulgaria, and there has been speculation that it could exit the Mechanism before the end of the current European Commission’s mandate in 2019 (see paragraph 7.32 for more information).

Progress Report on Bulgaria

7.14The 2017 Commission report on progress in Bulgaria is broader in scope than usual, as it assesses the country’s efforts overall in the decade since it joined the EU as well as developments in 2016 in more detail.35

7.15As in previous years, the Commission notes that the pace of reform has been variable, and while a legislative framework for judicial reform and anti-corruption has gradually been put in place, concrete and lasting reform has so far proved elusive. Overall, the Commission describes the situation as follows:

“During 2016 Bulgaria made additional significant progress in the implementation of the judicial reform strategy, while implementation of the national anti-corruption strategy still remains in an early stage. More generally, over the past ten years, overall progress has not been as fast as hoped for and a number of significant challenges remain to be addressed. The new government will need to drive reform forward to secure irreversible results. Therefore, this report cannot conclude that the benchmarks are at this stage satisfactorily fulfilled.”

7.16With respect to the functioning of the judiciary, the Commission concludes that progress has been mixed. During a decade of EU membership, Bulgaria has improved the functioning of the Supreme Judicial Council (SJC; the governing body for the Bulgarian judiciary),36 which led to “substantial progress” in improving the independence of the judiciary. However, the outdated nature of the Bulgarian criminal code and uneven distribution of caseloads among different courts have meant that high-level corruption and organised crime are not being effectively prosecuted.

7.17In the fight against corruption, the Commission notes “slow progress” and has called on the Bulgarian government to introduce a new anti-corruption law to introduce risk assessments and reporting obligations for public officials. Overall, the Minister says, Bulgaria continues to experience “systematic difficulties in fulfilling its obligations to carry out effective investigations into corruption”. This is also borne out by the Commission’s assessment, which found a “very limited track record” of concrete cases leading to final convictions for corruption. Bulgaria continues to rank among the EU Member States with the highest perceived level of corruption.

7.18Bulgaria’s final CVM benchmark relates to tackling of organised crime. The Commission notes that the extent of the issue has dissipated somewhat since the early years of the country’s EU membership, making the problem “more comparable to the situation in some other Member States”. However, its law enforcement authorities do not yet show sufficient capacity to effectively fight organised crime. The Commission does praise the work of the independent Asset Forfeiture Commission, which can seize illicitly-obtained assets without the need for a criminal conviction.

7.19The Commission has made a number of recommendations to Bulgaria to accelerate the implementation of the necessary reforms. These include, with respect to the judiciary, the need for a more transparent process for electing members of the Supreme Judicial Council, the institution of a merit-based approach to judicial appointments and further updates to the Civil and Criminal Codes. The Commission has also urged the Bulgarian authorities to adopt a new legislative framework on anti-corruption, including the establishment of an effective anti-corruption agency.

Progress Report on Romania

7.20Over the past three years, the reports on judicial reform and anti-corruption efforts in Romania against the CVM benchmarks have been largely positive.37 In its latest report, the Commission concludes that the country has made “major progress” over the course of the past decade. Nonetheless, a number of shortcomings remain unaddressed—particularly in relations to official accountability and the irreversibility of the implemented reforms—and as such the Commission has felt unable to conclude that all criteria have been fulfilled; the Mechanism will therefore remain in operation for at least another year.

7.21The Commission summarises its findings in Romania as follows:

“The Commission’s 2014, 2015 and 2016 CVM reports were able to highlight a positive trend and a track record pointing to strong progress and growing irreversibility of the reforms […]. This positive trend was confirmed in 2016 with a continued track record for the judicial institutions in a time of change in leadership and a strong impetus by the government to strengthen corruption prevention. […].”

7.22Safeguarding the independence of the Romanian judiciary is a central objective of the Superior Council of the Magistracy (SCM). The Commission concludes that the Superior Council has shown an “increasing willingness” to fulfil its constitutional role in recent years, which is reflected in a continued strong public perception of judicial independence and trust in the judiciary. However, structural reforms to increase the system’s efficiency have been slower to show improvements, particularly with respect to the imbalance in the workload between different courts.

7.23Romania has also adopted new Civil and Criminal Codes in recent years, which are not yet fully implemented. The Commission has expressed concerns that rulings by the Constitutional Court had not yet been fully incorporated into statute, and that the new infrastructure required to give full effect to the new Civil Code had been repeatedly delayed. Overall, however, the Commission notes the effect of the reforms has been positive:

“There is evidence that the result has been some acceleration in the length of court proceedings, enhanced respect for fair trial rights as well as more consistency in judicial decisions.”

7.24The Commission has also considered the work of the National Integrity Agency, which investigates potential conflicts of interest by verifying the provenance of public officials’ assets. Where it finds a conflict of interest, it can impose sanctions. The Commission notes that the Agency’s findings have been consistently upheld in court, and that a “consistent trend” of significant results in tackling conflicts of interest, observed since 2013, persisted in 2016. However, there are still problems with the enforcement of its rulings, with the sanctions—typically financial penalties or dismissal from public service—sometimes being resisted by the relevant government department or agency.

7.25The final two benchmarks for Romania relate to the fight against corruption at the highest level of government and in local government. As the Commission notes, corruption is still widely perceived to be a problem in Romania. Prosecutions for high-level corruption have increased significantly since 2013, with the Commission describing the progress made:

“The track record of the institutions involved in investigating, prosecuting and ruling on high-level corruption has been strong, with regular indictments and conclusion of cases concerning politicians of all ranks and parties, as well as civil servants, magistrates and businessmen. […]. [Overall], the achievements of Romania in this area have rightly attracted widespread recognition and substantial progress has been made on [this] benchmark.”

7.26Efforts against corruption in local government, for example with regards to the awarding of public tenders, have been slower to produce results. The Commission attributes this to “insufficient political will from the top of the institutions to implement corruption prevention measures”. Overall, therefore, “important challenges remain in the effective implementation of the preventive policies that have recently been defined”.

7.27The Commission closes its report with a number of recommendations to the Romanian authorities to help them meet their benchmarks. These include reducing “excessive political discretion” in senior judicial appointments by making the process more transparent and independent. The Commission also calls for full implementation of the new Civil and Criminal Codes, and has urged the Romanian government and parliament to ensure that future amendments are only adopted after full public scrutiny. With respect to anti-corruption efforts, it wants the criteria for lifting of immunity for serving MPs and Ministers to be made more objective.

Our assessment

7.28Judicial reform and anti-corruption efforts in Romania and Bulgaria continue to be of interest to the Committee. They are especially pertinent in view of the EU’s legislative framework governing the mutual recognition of judicial instruments such as arrest warrants. For this system to have the trust of the public, it is fundamental that all EU countries uphold fundamental principles of good governance and judicial independence.

7.29In our 2015 report, we raised concerns about the operation of the European Arrest Warrant (EAW) in Romania and Bulgaria, given the widespread concerns about political corruption and inadequate safeguards for judicial independence.38 We considered there was a real risk of UK and EU nationals having their rights infringed by improperly issued arrest warrants originating in these two countries. However, in March 2016, we received an assessment by the Home Office and the Foreign and Commonwealth Office as to the effectiveness of the general protection afforded by UK domestic legislation to those against whom EAWs have been issued, which concluded that it offers “adequate safeguards”.39 Furthermore, recent case law of the Court of Justice allows national courts to refuse to execute an EAW where there is general evidence that a person’s human rights might be violated by its execution.40

7.30More generally, the Committee has also been keen to ensure that the lessons that emerged from Bulgaria and Romania’s accession to the EU were incorporated into the handling of future accessions. We were therefore pleased to see that, as a result of previous experiences, “good governance” issues are now included in more detail in the EU entry process. As a pre-condition for joining the EU, each accession candidate must demonstrate a track record of effectively implementing legislation, not just of adopting it. Based on the current state of play in the three on-going sets of accession negotiations, Montenegro will be the first country which will have to meet these stricter conditions as part of its entry negotiations.41

7.31With respect to the operation of the CVM, we agree with the Minister that it is right to recognise genuine efforts by authorities in both countries to meet their respective benchmarks. However, with ten years having passed since the inception of this monitoring system, it is equally right to ask whether the system is having any meaningful effect in driving reforms in Bulgaria. There, anti-corruption efforts in particular appear to be yielding few concrete results.

7.32With regards to Romania, we take note of press reports that the President of the European Commission, Jean-Claude Juncker, said in February 2016 that he expected Romania to exit the CVM before the end of the current Commission’s mandate in 2019.42 However, the progressive trend which was thought to have taken root in Romania appeared to come under serious attack earlier this year, when the government tried to amend the Criminal Code by emergency ordinance to narrow the scope of the offence of corruption.43 These developments are not given any prominence in the Commission report, apparently on the basis that the amendment was only available as a draft and had not been “finally adopted”.

7.33We are concerned at the apparent insouciance with which the Commission treated these developments, even if the proposed amendment was only available in draft form when it finalised its report. While the Commission states that any “weakening or shrinking the scope of corruption as an offence” would “entail a reassessment of the progress made”, it did not conduct any such assessment even though efforts to produce exactly such a weakening were underway.

7.34Instead, it appears the Commission was content to bury reference to the developments in a footnote, and commit to a proper assessment of the forces driving the potential weakening of the anti-corruption legislation only if the changes were “finally adopted”. While the ordinance was promulgated on 2 February—a week after the publication of the Commission report—and subsequently withdrawn on 5 February, we do not think the Commission should have adopted the wait-and-see approach that it did. It has itself stated that progress towards the CVM benchmarks can “only be fully assessed by looking at whether their intended effect is felt in practice, and whether they can be considered to be embedded in the legal and institutional framework of Romania and to be irreversible”. The mere fact that the amendments to the Criminal Code were drafted (and subsequently promulgated), even if they were withdrawn before they could take effect, might call into question the irreversibility of progress made.

7.35Given our concerns about the lack of consideration of recent developments in Romania in the Commission document, we have retained the report on Romania under scrutiny.

Implications for Brexit

7.36In view of the outcome of the UK’s referendum on EU membership, we assess all the documents we scrutinise for their potential implications in the context of Brexit. In this instance, we judge that no substantive issues arise in relation to the UK’s exit from the EU specifically as the Cooperation and Verification Mechanism relates to domestic issues in two specific Member States. Further enlargement of the EU in the future, and the state of governance in the acceding countries, will primarily be a matter for the EU and its remaining Member States. No new accessions are likely to occur while the UK is still a Member State.

7.37As noted above, the cross-border element to the CVM process is confined to areas of judicial and police cooperation under the aegis of EU justice and home affairs legislation. On the issue of potentially deficient European Arrest Warrants, our main concern, we have already received reassurance from the Foreign and Commonwealth Office and the Home Office. The quality of the judicial systems in Bulgaria and Romania would continue to be especially relevant if the UK and EU decide to maintain a close relationship in the area of justice and home affairs after Brexit (for example if a bilateral agreement was struck to maintain the functioning of the European Arrest Warrant for the UK after it ceases to be an EU Member State).

The Government’s view

7.38In his Explanatory Memoranda of 24 February, the Minister of State at the Department for Exiting the EU (David Jones) endorses the Commission reports, calling them “comprehensive and balanced”. He also welcomed the Commission’s “renewed focus” on offering Bulgaria and Romania practical support in meeting their outstanding benchmarks.

Bulgaria

7.39With respect to developments in Bulgaria, the Minister notes that there had been “some positive developments”. He explains that the Bulgarian government’s independent analysis of the prosecutor’s office, which is currently being assessed, also benefitted from expertise contributed by the UK. However, he also acknowledges that there has been no real progress on tackling corruption:

“For progress to be made, there needs to be greater political will. The report rightly notes that the lack of independence and low journalistic standards of Bulgarian media has held the country back and is affecting its ability to implement reforms. For example, Parliament has not passed an anti-corruption law, designed to put in place a unified anti-corruption agency. The resignation of the previous government and the fact that there will be an interim government in place until early elections in March are also factors.”

Romania

7.40The Minister endorses the Commission’s report on Romania, saying it highlights the “impressive progress” made by Romania over the past ten years. He calls the document an “accurate, detailed and thorough analysis of progress achieved”. However, the Minister notes that the CVM process can only be closed once progress made so far becomes “irreversible”. In this respect, he refers to the recent proposed amendment of the Romanian Criminal Code by emergency ordinance as questioning the irreversibility of reforms achieved so far.44

Overall conclusions

7.41As regards the continued credibility of the Cooperation and Verification Mechanism in both countries, the Minister says that it is “right that we recognise when progress has been made, and when the government has made efforts, even if these have been frustrated by parliament”. He concludes, as have his predecessors in previous correspondence with the Committee, that a “relentlessly critical approach” would “further reinforce the belief that the CVM is a moving target which can never fully be met”.

Previous Committee Reports

Twenty-eighth Report HC 342-xxxvii (2015–16) chapter 16 (13 April 2016) and Twenty-fourth Report HC 342-xxiii (2015–16) chapter 7 (24 February 2016) and Thirty-fifth Report HC 219-xxxiv (2014–15) chapter 16 (4 March 2015); Thirty-seventh Report HC 83-xxxiv (2013–14) chapter 20 (26 February 2014).


29 The Minister’s Explanatory Memoranda are available here and here for Bulgaria and Romania respectively.

30 The emergency ordinance was published in draft in January 2017, just prior to the publication of the Commission report. The final legal text was made available on 31 January, promulgated on 2 February (for entry into force on 10 February) and withdrawn by the Romanian government on 5 February.

31 The decree would have decriminalised abuse of power offences where sums of less than €44,000 (£38,000) were involved. For more information on the emergency ordinance: BBC News, “Romania government scraps corruption decree after protests“ (5 February 2017).

32 DNA is the National Anti-Corruption Directorate.

33 COM(17) 44, p. 13.

34 The benchmarks for Bulgaria are laid down in Decision 2006/929/EC. For Romania, in Decision 2006/928/EC.

35 For the Commission’s earlier assessments of progress made by Bulgaria, see the “Previous Reports” section.

36 The Supreme Judicial Council has wide-ranging powers over the appointment, appraisal, promotion, and disciplining of judges and prosecutors, as well as managing the judiciary’s budget. It also represents judges and prosecutors in public discourse.

37 For the Commission’s earlier assessments of progress made by Romania, see the “Previous Reports” section.

38 See our Report of 4 March 2015: Thirty-fifth Report HC 219-xxxiv (2014–15) chapter 16.

39 See for more information on the Government’s assessment of the European Arrest Warrant in relation to Bulgaria and Romania this letter from the Foreign Commonwealth Office dated 22 March 2016.

40 See the Court’s judgement the case C-404/15 (Mr Pál Aranyosi).

41 The other countries currently engaged in EU accession negotiations are Serbia and Turkey. Albania and the FYROM are awaiting the start of accession talks, while Bosnia & Herzegovina and Kosovo are “potential candidates” for accession.

42 Politico.EU, “Romania ready to exit EU corruption monitoring“ (15 February 2016).

43 The decree would have decriminalised abuse of power offences where sums of less than €44,000 (£38,000) were involved. For more information on the emergency ordinance: BBC News, “Romania government scraps corruption decree after protests“ (5 February 2017).

44 The emergency ordinance was published in draft in January 2017, just prior to the publication of the Commission report and therefore not included in the analysis. The final legal text was made available on 31 January, and withdrawn by the Romanian government on 5 February.




3 March 2017