The 1st  EU Anti-Corruption Report

Maria Krambia-Kapardis*

According to the first EU Anti-Corruption Report, which was published by the European Commission on the 3rd of February, corruption continues to be a challenge for Europe and it is affecting all 28 EU Member States. It is estimated that the cost of corruption to the European economy is around 120 billion euros per year.Although member states have taken some to combat corruption, the results are uneven and more should be done in the field of prevention and punishment.

Cecilia Malmström, the EU Commissioner for Home Affairs said that «Corruption undermines citizens” confidence in democratic institutions and the rule of law, it hurts the European economy and deprives States from much-needed tax revenue. Member States have done a lot in recent years to fight corruption, but today’s Report shows that it is far from enough. The Report suggests what can be done, and I look forward to working with Member States to follow it up”.

Corruption is broadly defined as any “abuse of power for private gain”. The Report covers all types of corruption, including political corruption, bribery of public officials, and private corruption. The EU Anti-Corruption Report, which aims on providing an overview of the fight against corruption across the Union, consists of an in-depth assessment of all 28 EU Member States’ strengths and weaknesses in curbing corruptionand builds on assessments conducted by the Commission over a two-year period, as well as independent assessments by Transparency International.

Issues addressed to the EU Anti- Corruption Report regarding Cyprus

The report relating to Cyprus is  balanced since it lists a number of initiatives taken to combat corruption, it outlines the weaknesses identified by the researchers and the Commission and it then makes a number of suggestions.

The report welcomes the 2003 decision of the Cypriot government to establish the Coordinating  Body Against Corruption as well as the:

(a)   harmonisation provisions on corruption across the criminal code and the more recent laws ratifying the OECD Criminal Law Convention on Corruption,

(b)   enforcement of a  Code of Ethics for Public Officials published in June 2013,

(c)    will of the presidential candidates in the previous presidential elections to disclose their assets and the elected President’s wish to ask his Ministerial Council to sign a Code of Conduct,

(d)   enactment of the Political Parties Funding Act 2012 and

(e)   Code of Conduct prepared by Treasury for procurement regulating conflicts of interest.

Finally, the report makes a reference to the suggestion made by Transparency International –Cyprus that there ought to be an Independent Commission Against Corruption with its own budget, to focus solely on preventing, detecting and investigating corruption.

The report also identifies the following weaknesses and gaps in the system:

(a)   there is no general legislation on access to information;

(b)   there is no Whistle-blower’s Protection legislation;

(c)    no ‘ revolving door’ legislation where elected or high ranking officers are employed in the private sector without a ‘cooling off’ period;

(d)   the Political Party Funding Legislation covers parties not individual candidates; it does not contain separate provisions for the monitoring of finances related to election campaigns or of individual donations above a certain threshold, timely and comprehensive publication of party accounts is not envisaged; there is no obligation to disclose the identity of donors or the amount of donations received from identified individuals and companies and an independent supervisory mechanism in respect of election candidate’s income and expenditure is not implemented;

(e)    the Coordinating Body Against Corruption has not developed an anti-corruption strategy;

(f)     there is a close relationship between the business and political environment, and

(g)   there is no specific mechanism in place within contracting authorities to help detect potentially corrupt practices in different stages of the procurement process.

Despite the fact that the authorities had demonstrated commitment to prevent and address corruption by amending legislation and establishing the Coordinating Body Against Corruption, the small number of cases investigated, prosecuted or adjudicated indicates the need to strengthen the enforcement system and implement transparency.

Thus a number of recommendations are made by the Commission:

(a)   the strengthening of the disciplinary regime for public servants and streamlining procedures to ensure effective investigation of corruption within the police,

(b)   the effective coordination of anti-corruption policies by establishing  an institution with the necessary powers,

(c)    introducing codes of conduct for elected and appointed officials for them to declare assets periodically and to disclose potential conflicts of interest,

(d)   lowering the threshold for donations to political parties, limiting the ability of state-owned companies to sponsor political events, regulating donations to election candidates and campaigns, obliging parties to publish their financial statements and accounts online (including the identity of donors), and establishing external supervision of election candidates income and expenditure, and

(e)   developing uniform and effective tools to prevent and detect corruption in public procurement at national and local level, including internal and external control mechanisms and risk management tools within contracting authorities.

The Commission will publish a follow up report in 2015 and will be expecting some changes and of course the suggestions made to be implemented. No comment as yet has been made by any government authority if they plan to implement any of the suggestions or address any of the weaknesses identified.

The EU Anti-Corruption Report as well as the annex relating to the Cyprus report are available on www.transparencycyprus.org

 

* Associate Professor in Accounting, Cyprus University of Technology, and Chair of Transparency International Cyprus.

 Published: Krambia-Kapardis M. (2014) The 1st EU Anti-Corruption Report, Accountancy Cyprus, Vol. 114, p82