On 3 May 2023, the European Commission (EC) proposed an anti-corruption package and announced that they will step up their action by introducing stronger rules to fight corruption in the EU and worldwide. The EC wants to build on measures that are already in place with the goal of strengthening their efforts to integrate the prevention of corruption into the design of EU policies and programmes and actively supports Member States’ efforts to put in place strong anti-corruption policies and legislation.
The proposed measures include:
- Stronger rules to fight corruption and a minimum standard harmonizing anti-corruption standards across the EU;
- Setting up an EU network against corruption and working on developing the first EU anti-corruption
- A new framework of Common Foreign and Security Policy (CFSP) sanctions targeting
The legislative proposal aims to update the existing EU anti-corruption framework, address corruption risks in both the public and the private sectors, and set a substantial threat of sanctions and other adverse consequences to deter corruption.
Corporations operating in Europe may expect the risk of anti-bribery and corruption enforcement to increase further in the coming years. In the near future, it would be wise to reassess the bribery and corruption risk companies are subject to, and the adequacy of existing policies, systems and controls to address the new, wider scope of the EU anti-corruption package.
The President of the European Commission Ursula von der Leyen has set out the need for decisive action against corruption in her 2022 State of the Union. This is mainly because estimates suggest that corruption costs the EU economy at least €120bn per year, and Eurobarometer data shows that in 2022, almost 68 per cent of Europeans believed that corruption was widespread in their country and only 31 per cent thought that their government’s efforts to combat corruption were effective.
Besides the proposed measures, through its annual Rule of Law Report cycle, the EC also monitors anticorruption developments at a national level, identifying challenges and issues recommendations to Member States.
Stronger rules to fight corruption – the proposed new rules
The proposed new rules are focused on:
- Setting minimum standards for the scope of anti-corruption legislation;
- Ensuring effective investigations and the prosecution of corruption;
- Raising awareness of corruption;
- Imposing obligations on Member States to adopt effective rules on open access to information in the public interest, the disclosure and verification of assets of public officials and regulating the interaction between the private and public sectors;
- Combating corruption through criminal law, by harmonising the criminalisation and (increasing the) severity of penalties;
- Setting up specialised anti-corruption bodies and ensuring adequate resources and training for authorities responsible for preventing and fighting corruption; and
- Encouraging organisations to adopt effective compliance programs, increase awareness and establish tailor-made internal controls to prevent and address corruption risks.
Proposal for Directive of the EP and Council on combating corruption
In summary, the Directive aims to provide for appropriate sanctions, and address obstacles to effective investigations and prosecution, such as the short statutes of limitation, opaque procedures for lifting immunities or privileges, limited availability of resources, training and investigative tools. It also covers actions to prevent corruption and strengthen enforcement.
The proposed Directive obliges Member States to ensure that key preventive tools are in place, including effective rules on access to information, on conflicts of interests in the public sector, and on assets of public officials and their interaction with the private sector.
The Directive also mandates Member States to ensure the highest degree of transparency and accountability in public administration and public decision-making, and to take action to raise public awareness of the harm corruption can cause.
The proposed jurisdiction of the draft Directive is as follows; Member States shall establish jurisdiction over the offences referred to in this Directive where:
- The offence is committed in whole or in part in its territory;
- The offender is a national of or has his or her habitual residence in that Member State;
- The offence is committed for the benefit of a legal person established in the territory of that Member State.
New aspects to watch
- For the first time at EU level, the proposal brings together public and private sector corruption in one legal act. The Directive sets out monitoring and reporting requirements to help enforcement.
- It extends the list of EU corruption offences to cover misappropriation, trading in influence, abuse of functions, as well as obstruction of justice and illicit enrichment related to corruption offences, beyond the more classic bribery offences.
The private sector and legal persons
- Noteworthy is the draft article in which the liability of legal persons for all offences in the Directive is addressed. Liability is applicable when the offence is committed for the benefit of a legal person by any person with leading positions within the legal person, or by other persons under their control or supervision.
- It sets out consistent penalty levels, including maximum terms of, and alternatives to, imprisonment, and defines aggravating and mitigating circumstances for natural and legal persons.
- It introduces a specific article on bribery in the private sector, when committed intentionally and in the course of economic, financial, business or commercial activities. Two types of bribery, passive and active, are thereby distinguished. Furthermore, this offence requires an ‘undue advantage’ to be established.
- It extends the protection of whistleblowers – by the 2019 Whistleblower Protection Directive – to people reporting corruption offences.
- It addresses key factors in effective anti-corruption efforts, including capacity, specialisation and access to the relevant investigative tools, as well as obstacles to effective investigation and prosecution such as burdensome and opaque procedures for lifting immunities or excessively short limitation periods for corruption offences.
Obligations for Member States
- It obliges Member States to act and organise information and awareness-raising campaigns and research and education programmes.
- It requires Member States to encourage civil society and community-based organisations to participate in anti-corruption efforts, as well as to ensure that key preventive tools are in place, such as specialised bodies, open access to information of public interest, effective rules for the disclosure and management of conflicts of interests in the public sector, effective rules for the disclosure and verification of assets of public officials and effective rules regulating the interaction between the private and the public sector.
The Joint Communication gives an overview of the EU anti-corruption framework
The Joint Communication by the Commission and the High Representative of the Union for Foreign Affairs and Security Policy gives an overview of the EU anti-corruption framework and how anti-corruption can be further carried into the mainstream of EU policy design. It sets out a major EU commitment to work towards a comprehensive and strategic approach with an EU Anti-corruption Strategy.
A first step in this process will be an EU Network against corruption, bringing together law enforcement public authorities, practitioners, civil society and other stakeholders across the EU. The idea is that this Network could develop best practices and practical guidance. One key task of this Network will be to support the Commission in mapping common areas where corruption risks are high across the EU. The results of the Network will feed into an EU anti-corruption strategy, to be developed in consultation with the European Parliament and the Council.
Regulation on new CFSP Sanctions toolbox
The High Representative of the Union for Foreign Affairs and Security Policy, with the Commission’s support, proposes to complement the Common Foreign and Security Policy (CFSP) toolbox of restrictive measures (sanctions) with a sanctions regime to fight serious acts of corruption worldwide. So far, a CFSP sanctions regime has only been designed to enable the EU to target corruption outside of the EU in two specified third countries, namely Lebanon and the Republic of Moldova.
The High Representative is therefore submitting a proposal for a Council Decision and, jointly with the Commission, a proposal for a Council Regulation for a thematic framework for CFSP sanctions targeting corruption, to complement our internal and external policy actions to fight corruption.
The text of the Regulation has not yet been made public and still needs to be discussed and adopted by the Council.
Expected next steps
- The Commission has stated that the new EU anti-corruption strategy needs to be developed on a strong foundation of consensus and broad consultation in particular with the European Parliament and Member States.
- The Directive will have to be negotiated and adopted by the European Parliament and the Council before it can become EU law.
- The proposed framework of CFSP sanctions targeting corruption will have to be discussed and adopted by the Council.
- The average timeline from Commission proposal to formal adoption is approximately eighteen months. If the proposal is to be adopted, Member States will have to transpose the Directive into national law within eighteen months after adoption.
Published official documents
For further, detailed information, please consult these documents:
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