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Harry Cassin
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Richard L. Cassin
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Cody Worthington
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Julie DiMauro
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Thomas Fox
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Marc Alain Bohn
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Bill Waite
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Russell A. Stamets
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A deeper dive into EU corruption monitoring report

The publication last week of the EU’s first corruption monitoring report, with biennial ones to follow, highlights a striking disparity between its 28 members in tackling corruption.

Corruption is defined as “the abuse of power for private gain,” and the report estimates that the cost of corruption (€120 billion) almost equates to the EU’s annual budget.

As is fairly typical of these types of report, there are a myriad of fairly meaningless public perception survey results. Nevertheless, according to the report, 40 percent of EU-companies considered corruption to be a problem, and over two-thirds of companies surveyed considered corruption to be a problem in the Czech Republic, Portugal, Greece and Slovakia.  

The urban development, construction, pharmaceutical and healthcare sectors are considered the most vulnerable to corruption. Corruption risks were found to be higher at regional and local levels where checks and balances and internal controls were weaker than at national levels.

The report, without making any reference to the Romanian parliament, draws attention to the continued reluctance on the part of a number of member countries to include elected officials within a harmonized definition of “public official.”

The financing of political parties is considered to be a major driver of national corruption, along with the absence of adequate rules for public official asset disclosure and conflicts of interest between public officials and private sector staff.

The report notes that there are serious shortcomings and variations in how member countries combat corruption in the private sector, and it highlights the dearth of information on corruption enforcement.

In a swipe at the offshore tax-haven jurisdictions, the report refers to the direct link, established by the World Bank, between large-scale corruption by high-level public officials and the concealment of stolen assets through opaque shell companies, trusts and multi-corporate structures.

The report found that serious corruption problems exist within EU state-owned companies and with the accelerated privatizations of such companies.

Much of the report deals with corruption in public procurement. Despite significant advances in tackling corruption, improving anti-fraud safeguards in public procurement remains a matter of priority.

Particular risk areas and patterns of procurement corruption include: kickbacks; drafting of tailor-made specifications to favor certain bidders; unjustified use of emergency procedures; inadequate analysis of situations where the bid prices were too low; excessive reliance on the lowest price as the most important criterion; bid rigging; conflicts of interest and inadequate due diligence.

The report is a useful, if somewhat dense piece of work. Perhaps the one issue it does not illuminate is why recent offers of EU membership were not made conditional on candidate countries putting in place appropriate and harmonized anti-corruption regimes.

The EU Anti-Corruption Report can be found here.


Alistair Craig is a commercial barrister practicing in London.  

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