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After Paris: A coordinated fight against corruption could help save the European Union

Following the acts of war in Paris this weekend, as the sirens continue ringing in the city, it becomes even more obvious that the Member States can no longer throw rocks at the European Union while thinking they can recreate internal borders and live in quasi-autarky.

Citizens of the Member States are at the center of a global world and can only live with the strength and wealth they enjoyed in their past if they fully join their efforts and embrace the European Union.

The last European election held in 2014 showed a significant rise of eurosceptic and fascist political parties. It revealed how bad the reputation of the European Union is among its citizens. The EU is perceived as too distant, opaque and non-democratic; an additional layer in the political and administrative landscape that only creates more hurdles to the European citizens.

There are numerous ways for the European Union to improve its image. One involves the fight against cross-border corruption.

Siemens, Technip, Alcatel, BAE, Snamprogetti, Daimler, Total, Alstom, etc. — European companies have been hit the most by American authorities since 2008. The DOJ and the SEC saw that European companies were not being sanctioned in their home jurisdiction, which distorted the competition with American companies, in spite of the agreement on the OECD convention on corruption in 1997.

The response from the business world was quick. The European companies that settled with the U.S. set up robust compliance programs in line with the requirements of their deferred prosecution agreements. They and many other European companies enhanced their anti-corruption training, promoted employees into compliance positions, and put in place due diligence for certain third parties. Within many large public European companies, it is now no longer culturally accepted to engage in corrupt practices.

Nevertheless, we are far from having reached maturity, and there is still much to say about corruption by European companies in their home countries or abroad.

How are we going to solve that? Shall we let the DOJ and SEC continue investigating and prosecuting European companies? Certain Member States such as the UK, Germany and the Netherlands have developed strong regulations against transnational corruption and are enforcing them vigorously. France, which has been the most sanctioned on the other side of the Atlantic Ocean, is preparing a new law that is expected to be promising. Those are individual efforts by certain Member States only. Efforts should be joint and coordinated at the European level.

Today the European Union has a limited role in the fight against corruption, consisting in large part in monitoring what is being done by the Member States. Same with the European Council’s Group of States Against Corruption (GRECO), whose role is to monitor its members’ compliance with the anti-corruption standards of the Council and to identify deficiencies in national anti-corruption policies.

The European Union benefits from an ideal position to tackle cross-border corruption in light of the multi-jurisdictional nature of the crime, its complexity, and the significant means its investigation requires. Almost all Member States have ratified the OECD convention and all would enjoy a uniformed regulation in terms of corruption. Eventually, the European Union benefits from EU agencies that could be essential in the fight against corruption such as Europol, Eurojust and CEPOL (European Police College).

Investigations are already conducted at the EU level by the European Anti-Fraud Office (known by its French acronym as OLAF). Its role is limited to investigating fraud against the EU budget, and corruption and serious misconduct within the European institutions. It also develops anti-fraud policy for the European Commission.

The European Union, through its Commission, is improving the life of its citizens by protecting competition. The European Commission has a direct role in fighting cartels in Europe and controlling mergers. Such fight is not very visible in the daily life of European citizens who do not realize the benefits they get from it.

The fight against corruption is more obvious to citizens within the EU. One could imagine that the powers of OLAF be enlarged to investigate the acts of cross-border corruption committed by companies within its territory with real means and powers in the same way the European Commission now protects competition.

People would understand that fight. In addition to helping solve an issue that costs Europe billions of euros, joint anti-corruption efforts by the Member States would improve the image of the European Union in the eyes of its citizens. They would see the change in their daily life, enjoy more transparency, and reinforce the cohesion among the European nations in times that are particularly hard for them. Of course the salvation of the European Union cannot be accomplished only from a coordinated fight against corruption, but it would certainly help.

________

Nicolas Tollet is a lawyer admitted to the Bar in Paris and New York. He formerly practiced at Willkie Farr & Gallagher LLP, concentrating mergers and acquisitions and anti-corruption compliance. In 2012, he joined the Technip Group. Under the Chief Compliance Officer, he develops and implements the anti-corruption compliance program, sharing his time between Paris and Rio de Janeiro. In 2014, he founded the European Compliance Network to promote networking among European compliance professionals. He graduated from the University of Aix-en-Provence and the University of California Berkeley. He’s a member of Transparency International and of Cercle France-Amérique.

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3 Comments

  1. The level of global corruption is getting worse rather than better because the regulation of global supply chains and the funds spent to address corruption and such things as "conflict minerals", has been spent to support a system of illegal, illicit and corruption financial flows.

    The reason I developed The Green Program http://thegreenprogram.org is to address the human rights abuses and corruption in the global minerals trade from Africa that is based and runs through the traders in the EU. As long as companies who use conflict minerals in their products then they enable extreme poverty and violence will spread in our world.

    End user companies and government approaches (especially in the US) to address all forms of corruption is to spend billions that is used to support ways to cover up the existing status quo. The G8, G20 and OECD needs to develop more than talking points on talking the global corruption and extreme poverty. So far there is more talk and ineffective "capacity building" than actionable strategies.

  2. The last European election held in 2014 showed a significant rise of eurosceptic political parties, could it be the EU has lost the trust of the people?
    Is strength and wealth or power and greed more important than democracy?
    Within the EU in certain instances when you vote, you can agree or abstain, you cannot disagree, what sort of democratic system is this?
    The EU needs to understand the protection of the people is of utmost important, in order to protect the people you need border controls, how many large corporations would allow everyone to pass through their gates?
    By creating a European Union it may have opened the door to a new level of corruption which relies totally on power and forgets the democratic rights of the people of the countries which are in the system.

  3. After the carnage in Paris on November 13th, the fight against cross border corruption needs to be viewed in a new light. Does anyone doubt that the perpetrators are determined and adept at identifying and exploiting the west's weaknesses? If they can commit such acts of horror, does anyone think them incapable of hiring the sharpest accountants and tax lawyers to set up shell companies in secrecy havens and then using the west's financial system to fund their activities? When citizens complained about the intrusive nature of phone and email surveillance systems our politicians responded with "you have nothing to fear unless you have something to hide". It is strange that the politicians never say that when the discussion is about transparency and accountability with regards to shell companies and secrecy havens. Our leaders need to get serious about fighting these terrorists, they need to have the same surveillance powers over shell companies in secrecy havens as they have over law abiding citizens at home. The war on terror needs something more than just more police with more guns and more bombing missions. The war on terror needs more investigators,more accountants and more computers and of course the political will.


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