Explanatory Memorandum to COM(2023)234 - Combating corruption - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2023)234 - Combating corruption. |
|---|---|
| source | COM(2023)234 |
| date | 03-05-2023 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Corruption is highly damaging to society, to our democracies, to the economy and to individuals. It undermines the institutions on which we depend, diluting their credibility as well as their ability to deliver public policies and quality public services. It acts as an enabler for organised crime and hostile foreign interference. Successfully preventing and fighting against corruption is essential both to safeguard EU values and the effectiveness of EU policies, and to maintain the rule of law and trust in those who govern and public institutions.
Corruption is an impediment to sustainable economic growth, diverting resources from productive outcomes, undermining the efficiency of public spending and deepening social inequalities. It hampers the effective and smooth functioning of the single market, creates uncertainties in doing business, and holds back investment. Corruption is by its nature difficult to quantify, but even conservative estimates suggest that it costs the EU economy at least EUR 120 billion per year1. The negative effects of corruption are felt worldwide, undercutting efforts to bring good governance and prosperity, and to meet the United Nations Sustainable Development Goals.
The Eurobarometer survey data of 2022 suggests that 68 % of people in the EU and 62 % of companies based in the EU consider that corruption is widespread in their country2. The 2022 State of the Union address puts the fight against corruption high on the European’s Commission’s agenda highlighting the need to tackle it both at the EU and at the national level. The European Parliament has also repeatedly called for more EU action to combat corruption3. The Council made similar calls, in particular in the context of cooperation to fight organised and serious international crime4.
The existing EU legal framework on combating corruption needs to be updated to take into account the evolution of corruption threats and the legal obligations on the Union and Member States under international law, as well as the evolution of national criminal legal frameworks. Council Framework Decision 2003/568/JHA5 lays down requirements on the criminalisation of corruption concerning the private sector. The 1997 Convention on the fight against corruption involving EU officials or officials of EU Member States6 addresses certain acts of corruption involving those officials in general. These instruments are, however, not sufficiently comprehensive, and the existing rules in the Member States need to be developed further to ensure a more coherent and effective response in the Union. Enforcement gaps at national level and obstacles in the cooperation between the competent authorities in different Member States have also emerged. Authorities in the Member States face challenges linked to the excessive length of prosecution, short statutes of limitations, rules on immunity and privileges, limited availability of resources, training and investigative powers to name a few.
The EU is a party to the United Nations Convention Against Corruption (UNCAC)7, which is the most comprehensive international legal instrument in this field, combining a wide range of measures to prevent and fight corruption. This legislative proposal will update the EU legislative framework, including by incorporating international standards binding on the EU, such as those in the UNCAC. The aim is to ensure that all forms of corruption are criminalised in all Member States, that legal persons may also be held responsible for such offences, and that offences incur effective, proportionate and dissuasive penalties. In addition, the proposal includes relevant measures to prevent corruption in accordance with international standards and facilitate cross-border cooperation, as required by the UNCAC.
To root out corruption, both preventive and repressive mechanisms are needed. Member States are encouraged to take a wide range of preventive, legislative and cooperative measures as part of the fight against corruption. Failings in integrity, undisclosed conflicts of interests or serious breaches of ethical rules can lead to corrupt activities if left unaddressed. The prevention of corruption mitigates the need for criminal repression and has wider benefits in promoting public trust and managing the conduct of public officials.
• Consistency with existing policy provisions in the policy area
The proposal for a Directive complements the EU Security Union Strategy (2020-2025)8. In April 2021, the Commission also adopted the 2021-2025 EU Strategy to tackle Organised Crime9 with dedicated measures to combat corruption as an enabler of organised crime. As a follow up, the Commission assessed the current state of play of both the legislative and the operational dimension in preventing and fighting corruption in the context of an external study, which was finalised at the end of 202210.
The EU Strategy on Combatting Trafficking in Human Beings (2021-2025)11, adopted in April 2021, is closely interlinked with the EU Strategy to tackle Organised Crime. It highlights that organised crime groups involved in trafficking in human beings increasingly exploit legal businesses in their operations and are involved in other serious crimes, such as corruption, to support their core activities. Corruption may further hinder detection of trafficking in human beings, for instance if the authorities responsible for identifying the victims are involved in corruption.
• Consistency with other Union policies
Contents
Since 2020, the Commission has been monitoring anti-corruption developments at national level as one of the central pillars of the annual Rule of Law Report cycle. Since 2022, the reports also include recommendations for each country, with the objective to support Member States in their efforts to take forward ongoing or planned reforms, to encourage positive developments, and to help identify where improvements or follow-up to recent changes or reforms may be needed. Anti-corruption measures are also part of the work with Member States in the framework of the European Semester and the Recovery and Resilience Plans. The European Semester has assessed challenges in the fight against corruption, such as public procurement, integrity in public administration, the business environment and healthcare sectors. Country-specific recommendations under the Semester have guided concrete reforms and investments to improve the capacity to fight corruption in several Member States. These are reflected in concrete milestones in the national Recovery and Resilience Plans .
Under the Regulation on a general regime of conditionality for the protection of the Union budget (Regulation (EU, Euratom) 2020/2092), the Commission can propose that the Council of the EU imposes budgetary measures on EU Member States where breaches of the rule of law principles – including corruption – can affect, or seriously risk affecting, the sound financial management of the Union budget or of the financial interests of the Union in a sufficiently direct way.
Corruption is also a tool for foreign interference in democratic processes, the core target of action now being developed in the Defence of Democracy package also included in the Commission Work Programme 2023.
Directive 2014/4212 established rules on freezing and confiscation of instrumentalities and proceeds of crime to effectively deprive criminals of their illegal assets. It included in its scope offences covered by the Convention on the fight against corruption involving officials13 as well as the Council Framework Decision 2003/568/JHA on combating corruption in the private sector14. In May 2022, the Commission presented a proposal for a new Directive on Asset Recovery and Confiscation15, building upon the previous legislation16. The proposal provides for a new and strengthened asset recovery framework to ensure that crime does not pay. It would give authorities better tools to deprive organised crime groups of the financial means to carry out further criminal activities, including corruption.
Corruption and money laundering are intrinsically linked. Similar to other proceeds-generating crimes, corruption offences are committed with the objective of obtaining a private gain. Combating money laundering is the cornerstone of the broader agenda to fight serious crime, including corruption, by depriving criminals of their ill-gotten gains and by prosecuting those who assist in the laundering of such gains.
The Directive on combating money laundering by criminal law (EU) 2018/167317 establishes ground rules on the criminalisation of money laundering and sets out that corruption must be a predicate offence to money laundering. In July 2021, the Commission adopted legislative proposals to strengthen the Union’s rules to combat money laundering and the financing of terrorism (AML/CFT)18, in particular by strengthening the ability of Financial Intelligence Units (FIUs) to detect, analyse and disseminate financial intelligence related to the laundering of proceeds of crime. This is a key prerequisite for effectively investigate and prosecute corruption offences.
Trafficking in cultural goods is a lucrative business for organised crime. Beyond trafficking, criminals can abuse even legally acquired cultural goods, for money laundering and sanctions evasion. On 13 December 2022, the Commission adopted the EU Action Plan against Trafficking in Cultural Goods19 which provides a comprehensive framework for the EU and the Member States to advance prevention, detection and criminal justice response to cultural goods trafficking and related crimes, including corruption.
Directive (EU) 2019/1937 on the protection of persons who report breaches of Union law (‘the Whistleblowing Directive’)20 was adopted in 2019 with the aim of providing robust protection of whistleblowers as a means of strengthening the enforcement of EU law in key policy areas. The Directive also applies to the reporting of fraud, corruption and any other illegal activity affecting the financial interests of the Union and the protection of persons reporting such breaches21. This Directive should be made applicable to the reporting of offences as referred to in this proposal, as well as to the protection of persons reporting such offences. Competent national authorities should also ensure that persons providing evidence or otherwise cooperating with criminal investigations are given the necessary protection, support and assistance in the context of criminal proceedings.
Investor citizenship and residence schemes (‘golden visas’ and ‘golden passport’ schemes) can help hide or facilitate financial and economic crimes, including corruption22. There are also concerns around these schemes’ lack of transparency and control, linked as well to the role of intermediaries in these schemes. The Commission’s proposal for a new Anti-money Laundering Regulation23 seeks to establish supervision over the activities of intermediaries in investor residence schemes. The Commission considers investor citizenship schemes, under which citizenship of a Member State, and thus EU citizenship, is systematically awarded in exchange for pre-determined payments or investments, and without a genuine link with the awarding Member State, to be in breach of EU law. As a consequence, the Commission is of the opinion that Member States must not operate such schemes24. The Commission has taken action against Member States maintaining such schemes directly on the basis of its prerogatives as guardian of the Treaties, with a view to their termination.
A Commission Recommendation of 28 March 2022 called on Member States to take all the necessary measures and safeguards to address the different risks inherent in investor residence schemes, including those linked to corruption25.
Protection of the Union’s financial interests
Directive (EU) 2017/137126 aims to establish a harmonised system, with minimum common rules, to fight fraud and other criminal offences affecting the Union’s financial interests. The Directive provides common definitions of a number of criminal offences affecting the Union’s financial interests, which include fraud, money laundering, active and passive corruption, and misappropriation.
Article 325 of the Treaty on the Functioning of the European Union (TFEU) establishes a shared responsibility between the Union and the Member States to counter fraud and any other illegal activity affecting the financial interests of the Union through effective and deterrent measures. It also sets out an obligation to ensure the same level of protection between the Union’s and the national financial interests.
In order to ensure that the Member States have in place equivalent measures to counter corruption affecting the Union’s and their own financial interests, there is a need to align Directive (EU) 2017/1371 with the standards set out in this Directive, in terms of sanctions, aggravating and mitigating circumstances and limitation periods.
In the context of the evaluation of Directive (EU) 2017/1371, in accordance with Article 18 thereof, the Commission will assess the extent to which the offences provided for in that Directive also need to be updated in the light of the current Directive.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal bases for this proposal are Articles 83(1), 83 i and 82(1)(d) TFEU.
Article 83(1) TFEU identifies corruption as one of the crimes with a particular cross-border dimension. It enables the European Parliament and the Council to establish the necessary minimum rules on the definition of corruption by means of directives adopted in accordance with the ordinary legislative procedure.
There is no single definition of corruption as corruption exists in different forms involving different participants. Indeed, corruption is an endemic phenomenon that takes multiple shapes and forms across all facets of society, for example bribery, embezzlement, trading in influence, trading of information, abuse of functions and illicit enrichment27.
During the negotiations of UNCAC, United Nations States Parties carefully considered whether to develop a legal definition of corruption. It was concluded that any attempt at a comprehensive definition would inevitably fail to address some forms of corruption. As a consequence, the international community reached consensus on certain manifestations of corruption while leaving each State free to go beyond the minimum standards set forth in UNCAC28.
Article 83 i TFEU is the legal basis on which Directive (EU) 2017/1371, which is amended by the proposed Directive, was adopted. It sets out the EU’s competence to establish minimum rules with regard to the definition of criminal offences and sanctions in EU policy areas which have been subject to harmonisation measures, if this is essential to ensure the effective implementation of such policy areas.
Article 82(1)(d) provides the legal basis for measures to facilitate cooperation between judicial or equivalent authorities of the Member States in relation to proceedings in criminal matters and the enforcement of decisions, such as the adoption of common rules concerning jurisdiction in criminal matters.
• Subsidiarity (for non-exclusive competence)
Corruption is a transnational phenomenon that affects all societies and economies. Measures adopted solely at national or even at Union level, without taking into account international coordination and cooperation, would have unsatisfactory effect. Union action should give due consideration to the work of the Group of States against Corruption of the Council of Europe (GRECO), the Organisation for Economic Cooperation and Development (OECD) and the United Nations Office against Drugs and Crime (UNODC). From 2016 to 2021, Eurojust registered 505 cross-border corruption cases, with the number steadily increasing over this 5-year period29, which confirms that corruption is a gradually growing cross-border phenomenon in the EU. A recent study published by the European Commission found that “the lack of a coherent European framework including provisions for all corruption-related crimes identified by international standards constitutes a source for legislative and operational challenges in tackling cross-border corruption cases”30.
Due to corruption’s transnational dimension, and taking into account already existing EU legislation, EU-level action is expected to be more effective and efficient and to bring a tangible added value compared to action taken by Member States individually. EU intervention would create added value by further approximating criminal law of Member States, contributing to ensuring a common playing field between Member States, as well as coordination and common standards. As evidenced by the analysis in the yearly Rule of Law Reports, the gaps in and limited enforcement of existing legislation, together with the need for cooperation and capacity to prosecute cross-border cases, suggest the need for a stronger coordination and definition of common standards across the EU. Moreover, the effectiveness of prevention measures and investigative tools across the EU would be enhanced. Furthermore, given the increasingly cross-border nature of corruption cases, a close collaboration between Member States is required to ensure adequate prevention and repression. Shared definitions of criminal offences would facilitate such collaboration. Finally, the fight against corruption requires the combined efforts of many actors. Thus, framing the issue of corruption in the broader context of the EU, as opposed to the single national contexts of Member States, allows for a broader involvement of all relevant stakeholders.
If no action is taken at EU level, the scale of the corruption problem is likely to increase significantly in coming years. This would have clear cross-border implications and a direct effect on the single market, the financial interest of the EU, and internal security more generally. Corruption in one Member State is of direct interest to other Member States due to its cross-border effects. Judicial and law enforcement authorities would continue to face serious difficulties in dealing with more complex corruption cases, allowing perpetrators opportunities to possibly shop for EU jurisdictions which do not capture, or capture less effectively and comprehensively, certain corrupt activities within their anti-corruption legislative framework. Continued corruption would ultimately result in a wider societal cost through continued criminal activity and could also facilitate the continued operation of organised crime groups.
• Proportionality
In accordance with the principle of proportionality, as set out in Article 5 i TEU, the proposed new Directive is limited to what is necessary and proportionate to efficiently prevent and combat corruption and to implement international obligations and standards, in particular as regards the criminalisation of corruption, in line with the UNCAC.
The UNCAC requires that parties to the Convention take legislative and other measures to establish bribery, misappropriation and money laundering as criminal offences and to consider taking legislative and other measures to establish certain other acts as criminal offences (abuse of functions, trading in influence and, subject to its constitution and the fundamental principles of its legal system, illict enrichment). In line with the commitments contained in Political Declaration adopted at the 2021 UN General Assembly Special Session against Corruption, the European Union should, to the degree possible, go beyond the minimum and adopt additional measures for preventing and combating corruption.
The proposal defines the scope of the corruption offences with a view to covering all relevant conduct while limiting it to what is necessary and proportionate. The proposal strengthens existing international obligations where necessary, in order to improve cross-border cooperation and to prevent criminals from exploiting the differences between national legislations to their advantage.
The impact of the proposed measures on Member States in terms of necessary resources and the need to adapt national framework is outweighed by the benefits provided by the increased ability of Member States to tackle corruption by means of criminal law, including through better cross-border cooperation between competent authorities in cases of cross-border corruption. Approximation of measures related to prevention and the use of investigative tools is provided for only to the extent needed for the proposed criminal law framework to function effectively.
• Choice of the instrument
In accordance with Article 83 and Article 82(1) TFEU, the establishment of minimum rules concerning the definition of criminal offences and sanctions in the area of serious crime with a cross-border dimension, including corruption can only be achieved by means of a Directive of the European Parliament and the Council adopted in accordance with the ordinary legislative procedure.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
The 1997 Convention on the fight against corruption involving public officials, covering bribery in the public sector, and Framework Decision 2003/568/JHA, covering bribery in the private sector, have not been subject to an ex-post evaluation.
The Commission has so far adopted two reports on the implementation of Directive (EU) 2017/1371. On 6 September 2021, the Commission adopted the first such report31, which outlines that all Member States bound by the Directive have transposed its main provisions, yet the transposition of the Directive still needs to be improved with regard to some other provisions. The report notes that some aspects of the definition of ‘public official’ have not been transposed into the legislation of about a half of the Member States. According to the report, an additional aspect ‘breach of duties’ is required in the definition of both active and passive corruption in several Member States. This additional aspect significantly narrows the scope of the Directive’s definitions of corruption.
On ‘passive corruption’, the Commission found that, in a small number of Member States, the aspect concerning the refraining of public officials ‘from acting in accordance with [their] duty’ is not covered by national legislation. On ‘active corruption’, the report mentions that some of the aspects of the definition provided for by the Directive are missing or not transposed correctly in some Member States. With regard to misappropriation, the Commission found that some Member States have provided for a narrower transposition of the relevant provision or not transposed it altogether. The report also mentions that, with regard to penalties, the provisions of the Directive have not been correctly transposed in a quarter of the Member States. As far as limitation periods are concerned, the Commission found that, in a few Member States, the limitation period for executing a judgment is shorter than that provided for by the Directive32.
In September 2022, the Commission adopted the second implementation report of the Directive (EU) 2017/137133. The report focused on three specific issues: i) the appropriateness of the threshold provided for by the Directive with regard to VAT-related fraud (EUR 10 million of total damage); ii) the effectiveness of the provisions on limitation periods; and iii) whether the Directive effectively addresses cases of procurement fraud. In accordance with Article 18 i of Directive (EU) 2017/1371, the report was primarily based on the information that Member States provided to the Commission, including annual statistics on the criminal offences referred to in the Directive.
• Stakeholder consultations
In 2022 and 2023, the Commission consulted Member States about their existing provisions at national level regarding the criminalisation of and fight against corruption, by requesting updated information through two questionnaires, as described in the section below.
The ideas for a draft Directive, and the responses to the questionnaires, were discussed in two experience-sharing workshops on the fight against corruption. These workshops took place on 14 December 2022 and 14 March 2023 with experts from Member States, including representatives of the Ministries of Interior, Ministries of Justice, Anti-Corruption Agencies, police and prosecution. The Commission has also consulted the Union Agencies and bodies in charge of supporting police and judicial cooperation between Member States, including the European Union Agency for Criminal Justice Cooperation (Eurojust) and the European Union Agency for Law Enforcement Cooperation (Europol), as well as the European Public Prosecutor’s Office (EPPO) and national authorities in charge of prevention and suppression of corruption.
The Commission consulted and received input from international organisations, including the UNODC, the OECD, and GRECO. Academic and civil society also provided input, including Transparency International and the UNCAC Coalition. A plenary meeting of the Local Research Correspondents on Corruption34 discussed various topics in relation to the proposal on 13 March 2023.
This proposal was also discussed at the meetings of the Network of contact points on the Rule of Law on 27 January 2023, the Expert Group on Investor Citizenship and Residence Schemes on 1 March 2023, the EU FIU Platform on 15 March 2023 and the Commission Expert Group on EU Criminal Policy on 27 March 2023.
Overall, Member States and stakeholders stressed the need for harmonisation of corruption offences and sanctions to combat corruption across the EU in a comprehensive and effective way. Stakeholders indicated that there were frequent cases in which differing definitions hindered effective cross-border cooperation in the prosecution of corruption offences. Approximating respective definitions of the corruption offences should improve cross border information exchange and cooperation between law enforcement authorities. Aligning the level of sanctions imposed for corruption offences would also make enforcement and deterrence more effective across the EU. A number of Member States submitted that a mechanical transposition of the offence of illicit enrichment as defined in the UNCAC would be at odds with the presumption of innocence and the constitutional traditions of the Member States. A large part of the stakeholders suggested that the proposal should also cover the prevention of corruption, include additional sanctions, such as the ineligibility to run or hold public office or tender for public funds, and reflect the importance of specialised anti-corruption bodies, with sufficient independence, training and resources.
A call for evidence was published for feedback from 20 January 2023 to 17 February 2023, with a total of 361 contributions received35. The replies confirmed the vital importance of the fight against corruption and the need to tackle corruption in the EU at many levels, including in the EU institutions. While the vast majority of replies called for additional measures, some also underlined the need to ensure the proper implementation of the current international framework and to carefully consider new legal or soft law intiatives. Several contributions stressed that there is a close link between corruption and organised crime. On strengthening the current framework, most respondents agreed that legislative gaps need to be addressed and criminalisation should cover criminal conduct beyond the current international legislative framework with corresponding sanctions. According to some respondents, to efficiently address the complexity of corruption cases, adequate capacities in terms of resources, training, special investigation techniques and specialised equipment need to be made available to law enforcement authorities. Several respondents called for a monitoring and verification tool to be created with the help of civil society.
• Collection and use of expertise
In line with the commitment made in the EU’s 2021-2025 Organised Crime Strategy, the European Commission contracted a study to review the EU’s body of law in the fight against corruption. The study “Strengthening the fight against corruption: assessing the EU legislative and policy framework”, carried out by a consortium of EY and the RAND Corporation, was published on 3 January 202336. It analysed the gaps in the EU legislative framework in the area of corruption prevention and repression, and provided recommendations for possible EU measures to address these gaps, by assessing and comparing the impacts of such measures.
The study concluded that closer legislative alignment between EU Member States, flanked by supporting soft measures, would have the biggest impact on the fight against corruption. Specifically, the study called for laying down common minimum rules on the definition of corruption offences and related penalties, alongside common rules to improve investigation and prosecution of corruption crimes across the Member States (e.g. boosting reporting, harmonising approaches to immunity and statutes of limitation, as well as to enablers of corruption). These conclusions have been taken on board in this proposal for a Directive. In addition, the study also called for measures aimed at ensuring effective prevention of corruption, including the comprehensive collection of corruption data, and the having in place of dedicated anti-corruption authorities both at the EU and national levels.
The Commission also took other data into account, such as the 2022 Eurobarometer surveys on corruption. The Commission has also relied on relevant documents of the UNODC, the OECD, the GRECO, and the European Parliamentary Research Service.
As mentioned above, the Commission sent a questionnaire to Member States to identify what criminal justice data on bribery offences is available. Most Member States collect data on bribery cases, whereas not all Member States that responded seem to collect data on convictions of legal persons, the number of pending cases and cases resolved in a different manner than convictions or acquittals. This indicates that a more harmonised collection of data on corruption cases could help identify and analyse trends across the EU.
The Commission also asked Member States to provide information on their specialised bodies working on the prevention of corruption including bodies that have certain repressive powers (such as levying fines). Most Member States reported one or several bodies that have some role in the area of prevention of corruption. In many Member States, there are several such bodies with their own powers, but some Member States have a single body with more comprehensive powers. Eight Member States did not report on the existence of a specialised preventive body but rather to bodies that, aside of their other tasks, also deal with prevention.
The Commission also asked Member States to provide information on the powers of their specialised bodies working on the prevention of corruption. This mapping reveals a wide variation in the tasks and powers of such bodies, which range from powers related to the oversight of declarations of assets/interests or gifts to enforcement of lobbying regulation and of “revolving doors” rules. Some bodies also have enforcement powers such as issuing fines.
Member States were also asked about their bodies specialised in the repression of corruption. Whereas all Member States allow regular police and prosecutorial bodies to investigate and prosecute some forms of corruption, almost all Member States also have in place some form of a specialised police to investigate specific corruption cases, for instance when they are more serious, complex or relating to a certain category of suspects. When it comes to prosecution of corruption, most Member States have specialised prosecutors to deal with such corruption cases.
A second questionnaire, for which input was gathered between 9 January and 8 February 2023, focused on information on the corruption offences, to inform and guide the Commission in relation to this proposal. Member States were invited to share their national legal provisions covering these offences, as defined in the UNCAC, the maximum length of imprisonment linked to such offences, and limitation periods in place. The corruption offences for which information was asked were bribery in the public and private sector, misappropriation by a public official or in the private sector, trading in influence, abuse of functions, illicit enrichment and obstruction of justice. All Member States except for Bulgaria and Denmark replied to the questionnaire. The results of this questionnaire are summarised below.
Figure 1: Criminalisation of corruption offences in Member States
| OFFENCES | NUMBER OF MS WHERE THE OFFENCE IS COVERED IN NATIONAL LAW | NUMBER OF MS WHERE THE OFFENCE IS NOT COVERED IN NATIONAL LAW |
| Bribery in the public sector | 25 | 0 |
| Bribery in the private sector | 25 | 0 |
| Embezzlement, misappropriation and other diversion of property by a public official | 25 | 0 |
| Embezzlement in the private sector | 25 | 0 |
| Trading in influence | 23 | 2 |
| Abuse of functions | 25 | 0 |
| Illicit enrichment | 8 | 17 |
| Obstruction of justice | 25 | 0 |
The analysis of what Member States reported shows that Member States have in their national legislation offences on bribery in the public and private sectors, embezzlement, misappropriation, obstruction of justice37 and abuse of functions. Nonetheless, definitions have many variations, in particular when looking at embezzlement or abuse of functions. It can certainly not be concluded that Member States cover the full scope of corruption offences as defined in the UNCAC38. Many Member States report that they criminalised trading in influence in their national legislation, but some definitions differ significantly from the relevant UNCAC provision and sometimes the offence is only partly covered. Illicit enrichment remains sparsely covered, with eight Member States reporting some form of coverage in national legislation, while a number of others reporting that these aspects were covered in their money laundering or asset confiscation legislation. Differences in the definition of offences and the lack of criminalisation of some corrupt conduct causes problems in cross-border cases and leads to criticism by certain monitoring bodies of how Member States implement international instruments.
Figure 2: Imprisonment sanctions for corruption offences in Member States
| Length of imprisonment in Member States | EU - range in years (based on received contributions) | EU - average in years (based on received contributions) | Median in years |
| Bribery in the public sector | 0,25 - 15 | 6.94 - 9.59 | 6 - 10 |
| Bribery in the private sector | 0,25 - 12 | 5.74 - 6.43 | 5 - 6 |
| Embezzlement, misappropriation and other diversion of property by a public official | 0,25 - 15 | 6.15 - 8.34 | –6 - 10 |
| Embezzlement in the private sector | 0,25 - 20 | 5.57 - 8.08 | 5 - 8 |
| Trading in influence | 0,25 - 10 | 4.87 - 5.53 | 5 |
| Abuse of functions | 1 - 20 | –5.92 - 6.56 | 4 - 5 |
| Illicit enrichment | 0,5 - 15 | 5.38 - 7.19 | 3.5 - 6 |
| Obstruction of justice | 1 - life | 5.58 - 8.67 | 4,5 - 6 |
In setting the minimum level of the maximum penalty for the offences in this proposal, the Commission took into account the nature of the offences, the levels of penalties set in Member States (see Figure 2), and the levels set by other EU instruments in the area of substantive criminal law. The penalties proposed in this Directive do not go beyond the average level of maximum penalties for these offences in Member States. For instance, the average penalty for bribery in the public sector ranges from around 7 to 9.5 years, while for bribery in the private sector it ranges from around 5.5 to 6 years. At the same time, there are also significant differences in Member States’ legislation. For instance, the maximum penalties for the offence of misappropriation range from 3 months in Spain to 15 years in Greece39. Setting a minimum level of the maximum penalty at EU level will therefore facilitate cross-border police and judicial cooperation and increase deterrence.
Figure 3: Statute of limitations for corruption offences in Member States
| Limitation periods in Member States | EU - range in years (based on received contributions) | EU - average in years (based on received contributions) | Median in years |
| Bribery in the public sector | 3 - 25 | 10.76 -14.28 | 10 - 12 |
| Bribery in the private sector | 3 - 25 | 10.26 -11.70 | 10 |
| Embezzlement, misappropriation and other diversion of property by a public official | 3 - 25 | 10.50 - 13.20 | 10 - 12 |
| Embezzlement in the private sector | 3 - 25 | 9.42 - 12.19 | 10 |
| Trading in influence | 2 - 25 | 9.00 – 10.82 | 8 - 10 |
| Abuse of functions | 5 - 25 | 10.48 – 11.63 | 9 - 10 |
| Illicit enrichment | 5 - 20 | 10.13 – 11.38 | 10-11 |
| Obstruction of justice | 3 - 25 | 9.25 – 12.70 | 10 |
The responses of Member States concerning limitation periods for corruption offences in national legislation informed the Commission in its current proposal. For bribery in the public sector, the average ranges between 11 and 14 years; while for bribery in the private sector, the average ranges between 10 and 11.5 years. At the same time, there are also considerable differences in Member States legislation: for bribery in the public and the private sector minimum and maximum limitation periods range from 3 years in Member States like Czechia or Lithuania to 25 years in Poland.
The annual Rule of Law reports noted that operational shortcomings can severely obstruct the investigation and prosecution of corruption cases and undermine the effectiveness of the fight against corruption. Examples include excessively cumbersome or unclear provisions on lifting immunities, and short statutes of limitations, which can prevent the finalisation of complex cases, in particular if combined with other factors contributing to lengthy proceedings. Such obstacles can be particularly harmful for high-level and complex corruption cases and may create a risk of impunity, depriving anti-corruption efforts of their deterrent effects.
• Impact assessment
Given that this proposal for a Directive mainly incorporates international obligations and standards, leaving little margin for alternative courses of action, this proposal is exceptionally presented without an accompanying impact assessment. Moreover, the initiative is not likely to have significant economic, environmental or social impacts and costs, or those entailing significant spending. At the same time, it should benefit the economy and society as a whole.
This proposal nevertheless builds on the evidence gathered through external studies and assessments described in the earlier section and the various stakeholder consultations.
Different approaches were considered using the available evidence:
1. Non-legislative action at EU or national level, including guidelines, exchange of best practices, training and the development of correspondence tables for corruption-related offences;
2. A proposal transposing the provisions of the UNCAC;
3. A proposal transposing the provisions of the UNCAC while at the same time going beyond international obligations in certain aspects, by imposing minimum levels for the upper limit of sanctions, to facilitate prosecutions and increase awareness on ethics and integrity among public officials;
4. A proposal defining the various conditions and elements of all possible corruption offences and requirements for preventive measures such as rules on lobbying and conflicts of interest.
On the basis of the evidence gathered and previous assessments described above, the Commission has opted for an approach (option 3 above) that proposes harmonisation in line with the provisions of the UNCAC, while taking a more ambitous approach and going beyond international obligations in those areas where action has demonstrable benefits in terms of cross-border cooperation while respecting national traditions and case-law and ensuring consistency with EU law.
The legislative proposal is expected to make a positive contribution to the prevention and detection of, and response to, corruption, notably by approximation of definitions of criminal offences and alignment of criminal sanctions. Taking measures to prevent corruption, while prosecuting perpetrators and reducing the criminal phenomenon of corruption is expected to reduce economic and social costs and have a positive impact on the economy. Ensuring deterrent penalties for perpetrators is likely to increase the overall level of security and disrupt organised crime groups’ activities. Increasing harmonisation in this field in principle would enable the EU to further align with international standards on corruption and reduce the administrative burden in case of cross-border cooperation between law enforcement and judicial authorities.
• Regulatory fitness and simplification
For the first time at EU level, the proposal brings together public and private sector corruption in one legal act. The proposal aims to introduce international obligations and standards in the EU legislation and updating the legal framework so it can properly respond to the cross-border phenomenon of corruption. This will help Member States when transposing and implementing the relevant provisions.
• Fundamental rights
The Union was founded on the values enshrined in Article 2 TEU and it recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights in accordance with Article 6(1) TEU. Corruption undermines democratic institutions and EU values, including the protection of fundamental rights. By tackling corruption, this proposal positively contributes to the protection of fundamental rights, such as the right to fair trial and freedom of expression.
The fight against corruption and the protection of fundamental rights are complementary, not conflicting, objectives. Setting out, implementing and applying criminalisation has to be carried out in full respect of fundamental rights obligations. Any limitation on the exercise of fundamental rights and freedoms is subject to the conditions set out in Article 52(1) of the Charter of Fundamental Rights, namely be subject to the principle of proportionality with respect to the legitimate aim of genuinely meeting objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others, be provided for by law and respect the essence of those rights and freedoms.
A variety of fundamental rights and freedoms enshrined in the Charter of Fundamental Rights have to be taken into account in this respect. Rights which are particularly relevant in relation to the proposed measures include, but are not limited to, the right to liberty and security, the protection of personal data, the freedom to choose an occupation and right to engage in work, the freedom to conduct a business, the right to property, the right to an effective remedy and to a fair trial, as well as the principle that a person cannot be tried or punished twice for the same offence (‘ne bis in idem’).
All measures adopted by the Union and its Member States on the criminalisation of corruption as provided for in this Directive, and the determination of criminal and non-criminal sanctions thereof, must be subject to the principle of legality and proportionality of criminal offences and penalties, to the presumption of innocence and to the rights of defence, and should exclude any forms or arbitrariness.
This proposal respects the principle that criminal offences and penalties must be set out in law and be proportionate. Fundamental rights in general and the principle of proportionality are respected in limiting the scope of the offences to what is strictly necessary to allow for the effective prosecution of acts that pose a particular threat to the stability and security of societies. The proposal also takes into account the principle of proportionality by providing for obligations related to aggravating and mitigating circumstances.
The Directive introduces minimum rules on the level of sanctions in accordance with the principle of proportionality (see in particular Articles 11(1) and 13(1) of the Directive), having regard to the nature of the offence. Moreover, administrative sanctions imposed are to be taken into account when sentencing the person for a criminal offence set out in the Directive (recital 13). The Directive also highlights that, to ensure the effective and transparent investigation and prosecution of corruption offences, Member States should establish procedures for the suspension or temporary reassignment of a public official accused of an offence as referred to in this Directive. In such cases they should bear in mind the principle of the presumption of innocence and the need to respect right to an effective remedy (recital 19).
The use of investigative tools, which the Directive seeks to ensure, has to respect fundamental rights, such as the right to an effective remedy and to a fair trial (Article 47) and the presumption of innocence and the right of defence (Article 48). The use of such tools, in accordance with national law, should be targeted and take into account the principle of proportionality and the nature and seriousness of the offences under investigation and should respect the right to the protection of personal data. Moreover, when applying the Directive, Member States must respect their obligations under Union law with regard to procedural rights of suspects or accused persons in criminal proceedings.
The data collected by Member States for the purposes of this Directive is statistical and does not include any personal data; therefore, Article 8 of the Charter of Fundamental Rights (‘protection of personal data’) is not affected by the obligation for Member States to collect and publish data.
4. BUDGETARY IMPLICATIONS
This proposal has no immediate budgetary implications for the Union.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The implementation of the Directive will be monitored by the Commission on the basis of the information provided by the Member States on the measures taken to bring into force the laws, regulations and administrative provisions necessary to comply with the Directive. The Commission shall, two years after the deadline for implementation of this Directive, submit a report to the European Parliament and to the Council, assessing the extent to which the Member States have taken the necessary measures to comply with this Directive.
Four years following the deadline for implementation of this Directive, the Commission shall submit a report to the European Parliament and to the Council, assessing the added value of this Directive with regard to combating corruption, including the impact on fundamental rights and freedoms. On the basis of this evaluation, the Commission shall, if necessary, decide on appropriate follow-up actions.
• Explanatory documents
No explanatory documents on the transposition are considered necessary.
• Detailed explanation of the specific provisions of the proposal
Article 1: Subject matter and scope – This provision sets out the purpose and scope of the draft Directive, in particular that it establishes minimum rules concerning the definition of criminal offences and sanctions in the area of corruption, as well as measures to better prevent and fight corruption.
Article 2: Definitions – This provision establishes definitions for ‘property’ (in relation to the offences of corruption in Articles 7-13) in line with the body of EU law40 and ‘legal persons’ (in relation to the obligation to establish liability of legal persons in Article 16). The concept of ‘public official’ is based on the definitions provided for in the 1997 Convention and Directive (EU) 2017/1371 while making explicit that it also covers persons working in third countries, international organisations, including the institutions of the European Union, and national and international courts. This Directive uses a single definition of ‘public official’ which is applicable to all corruption offences set out in it. The concept of ‘high level official’ is defined in relation to aggravating circumstances (Articles 18 and 28), preventive measures (Article 23) and data collection (Article 25).
Article 3: Prevention of corruption – This provision aims to underline the need to address the fight against corruption from a preventive perspective. It aims to explore activities to raise awareness on the fight against corruption, through education and research programmes, involving civil society and non-governmental organisations. In order to properly establish such a preventive system, an adequate risk assessment process is needed, in order to identify and tackle gaps and sectors most at risk of corruption. As set out in the Communication accompanying this proposal, the Commission will, with help of the EU network against corruption, and in close consultation with Member States, map common high-risk areas by 2024. The results will inform the Member States’ national assessment of risks, required by this proposal.
Article 4: Specialised bodies – This provision requires Member States to put or have in place bodies in their national legal orders that are specialised in the prevention and repression of corruption. Such bodies need to be independent, have sufficient human, financial, technical and technological resources and have the necessary powers for the exercise of their tasks. They need to be known to the public and exercise their functions with transparency, integrity and accountability.
Article 5: Resources – This provision aims at ensuring that Member State authorities responsible for the detection, investigation, prosecution or adjudication of the offences under the Directive continuously have appropriate human, financial, technical and technological resources necessary for the effective performance of their duties.
Article 6: Training – This provision obliges Member States to provide specialised anti-corruption training for competent authorities and their staff and to ensure that there are adequate resources for this. It also contains obligations concerning relevant training for public officials.
Articles 7 and 8: Bribery – These provisions define bribery in the public and private sectors and provide that such conduct is to be punishable as a criminal offence, when committed intentionally. The definition of the criminal offences covers both active and passive bribery.
Article 9: Misappropriation – This provision defines misappropriation in the public and private sector and provides that such conduct is to be punishable as a criminal offence, when committed intentionally.
Article 10: Trading in influence – This provision defines trading in influence and provides that such conduct is to be punishable as a criminal offence, when committed intentionally. The provision also specifies that trading in influence is punishable regardless of whether the influence is exerted or whether it’s supposed exercise leads to results.
Article 11: Abuse of functions – This provision defines abuse of functions in the public and private sector and provides that conduct or failure to act is to be punishable as a criminal offence, when committed intentionally.
Article 12: Obstruction of justice – This provision defines obstruction of justice and provides that such conduct is to be punishable as a criminal offence, when committed intentionally and in the context of a proceedings concerning an offence as defined in this Directive.
Article 13: Enrichment from corruption offences –Directive (EU) 2018/1673 of the European Parliament and of the Council of 23 October 2018 on combating money laundering by criminal law41 establishes ground rules on the criminalisation of money laundering and sets out that corruption should be considered as a predicate offence to money laundering. However, that Directive does not oblige Member States to criminalise the acquisition, possession or use of property derived from corruption if a person was involved in the offence from which the property was derived (this is what is called ‘self-laundering’). This proposal for a Directive introduces such a targeted requirement, thereby creating the offence of ‘enrichment from corruption’. For this offence, the prosecution would only have to prove a link between the property and the involvement in corruption, just as they would have to prove corruption as a predicate offence for the purpose of money laundering.
Article 14: Incitement, aiding and abetting, and attempt – This is a provision applicable to the criminal offences mentioned above, which requires Member States to criminalise forms of aiding and abetting, inciting and attempting most of the mentioned offences.
Aiding and abetting a corruption offence may include a large variety of activities that range from facilitating or providing counselling to the provision of supportive services for the commission of these acts. In addition, in order to ensure effective deterrence, it is necessary to criminalise incitement, making punishable the act of soliciting others to carry out the offences set out in the proposed Directive. Since the definition of some corruption offences, such as bribery, encompass acts that may qualify as preparatory and do not require that the offender obtained an actual advantage, this Directive does not require Member States to criminalise their attempt.
Article 15: Penalties and measures for natural persons – This provision is applicable to all offences and requires Member States to apply effective, proportionate and dissuasive criminal penalties.
In addition, the provision establishes the minimum level of the maximum sanction. Framework Decision 2003/568/JHA already sets a minimum threshold for a maximum penalty of one to three years for bribery in the private sector. The 1997 Convention on the fight against corruption requires for bribery of public officials, at least in serious cases, penalties involving deprivation of liberty which can give rise to extradition.
This proposal sets the minimum maximum penalty between four and six years, depending on the seriousness of the offence, which is an increase in comparison to the above-mentioned penalties at EU level for bribery. As explained above, the Commission analysed Member States’ legislation in preparation of this legislation.
Framework Decision 2003/568/JHA already sets the possibility that a person convicted for corruption may be temporarily prohibited from carrying on his business activity. This Directive sets a number of additional sanctions that the competent authorities should be able to impose upon persons convicted for a corruption offence.
Article 16: Liability of legal persons – This is a provision applicable to all criminal offences set out in this Directive, which requires Member States to ensure the liability of legal persons, while excluding that such liability is alternative to that of natural persons. The provision is in line with Article 10 of the Warsaw Convention.
This provision follows a standard formula that can be found in other EU legal instruments, obliging Member States to ensure that legal persons can be held liable for criminal offences referred to in this Directive committed for their benefit by any person with leading positions, within the legal person, or by other persons under their control or supervision. It is not required that such liability be exclusively criminal.
Article 17: Sanctions for legal persons – This provision is applicable to sanctions for legal persons. It establishes a list of sanctions and measures, which are not necessarily of a criminal nature, such as the temporary or permanent exclusion from public procurement.
Article 18: Aggravating and mitigating circumstances – This provision first provides a list circumstances that must be regarded as aggravating circumstances to allow the judiciary to take into account the broader societal damage perpetrated for example by organised groups or persons holding positions of public responsibility. It also provides a list of circumstances that must be regarded as mitigating circumstances, covering for instance cases in which offenders provide information or collaborate with authorities.
Article 19: Immunity or privileges from investigation and prosecution of corruption offences – This is a provision applicable to all offences mentioned above, which requires Member States to take measures to ensure that immunity or privileges from investigation and prosecution which are granted under national law for the offences referred to in this Directive can be lifted through an effective and transparent process pre-established by law and that is concluded in a reasonable timeframe.
Article 20: Jurisdiction – This provision is applicable to all criminal offences set out in this Directive and requires the existence of jurisdiction grounds for the judicial authorities to initiate investigations, pursue prosecutions and bring to judgment the perpetrators of the criminal offences defined in this Directive.
Article 21: Limitation periods for criminal offences – This article lays down provisions on limitation periods in order to allow the competent authorities to investigate, prosecute and adjudicate the criminal offences covered by this proposal, as well as the execution of relevant sanctions, for a sufficient time period. This proposal sets the minimum length of the limitation periods between eight to fifteen years, depending on the seriousness of the offence.
Article 22: Protection of persons who report offences or assist the investigation – Directive (EU) 2019/1937 establishes rules and procedures to protect individuals who report information they acquired in a work-related context on breaches of EU law in key policy areas. Whistleblowers can provide valuable information to competent authorities, enabling them to effectively prevent, detect and prosecute corruption. When whistleblowers report criminal offences referred to in this directive, this provison requires the application of Directive (EU) 2019/1937. This Article also provides that competent national authorities ensure that persons who asssist the investigations are given the necessary protection, support and assistance in the context of criminal proceedings
Article 23: Investigative tools – This provision aims at ensuring that investigative tools which are provided for in national law for organised crime or other serious crime cases can also be used in cases of money laundering.
Article 24: Cooperation between Member States’ authorities, the Commission, Europol, Eurojust, the European Anti-Fraud Office and the European Public Prosecutor’s Office – This provision envisions the cooperation between the Member States’ authorities, Europol, Eurojust, the European Public Prosecutor’s Office and the Commission in the fight against corruption. This includes the provision of technical and operational assistance by Europol, Eurojust, OLAF, the European Public Prosecutor’s Office and the Commission.
Article 25: Commission support to Member States and their competent authorities – This provision sets out the ways in which the Commission will support Member States and competent authorities in complying with their obligations under this Directive. As announced in the accompanying Communication, the Commission will establish an EU network against corruption, which will rationalise and support existing networks and maximise the exchange of best practices between national authorities and agencies, civil society and independent experts.
Article 26: Data collection and statistics – This provision requires Member States to collect statistical data to monitor the effectiveness of their systems to combat corruption. The provision lists, in a non-exhaustive manner, the statistical data that should be collected by the Member States and obliges them to publish such data annually.
Article 27: Replacement of Council Framework Decision 2003/568/JHA and the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union – This provision replaces the current provisions in the area of the criminalisation of corruption in relation to Member States participating in this Directive.
Article 28: Amendments to Directive (EU) 2017/1371 – This provision amends Directive (EU) 2017/1371 on the fight against fraud to the Union’s financial interests by means of criminal law. As a result, the standards set out in Directive (EU) 2017/1371 for fighting corruption affecting the Union’s financial interests, notably in terms of sanctions with regard to natural and legal persons, aggravating and mitigating circumstances and limitation periods, are aligned with those laid down by this Directive.
Article 29: Transposition – The Commission will report on the transposition of this Directive 24 months after the deadline for transposition has passed, which is 18 months after the adoption of this Directive.
Article 30: Evaluation and reporting – This provision sets out that, starting 12 months after the deadline for implementation of this Directive, Member States report every two years on how they implement Articles 3 to 6 and that the Commission will also adopt an evaluation report.