23 June 2023 –
The fight against corruption is a high political priority in the European Union (EU). Several related initiatives will crystallize in legislation before the next European parliamentary elections in June 2024. This is why the months ahead present a window of opportunity for anti-corruption organizations and citizens to make recommendations that enhance the potential impact of these important reforms. In this blog post, we recapitulate the main initiatives connected to the fight against corruption that are being put forward and the existing opportunities for civil society to influence them.
“We will act to set up a framework toolbox to combat corruption”
This sentence comes from the Joint Declaration on EU Legislative Priorities for 2023 and 2024, made by the three institutions leading the EU: the European Commission, the Parliament and the Council. On May 3, 2023, three Commission’s Vice-presidents and two Commissioners presented an anti-corruption package including the proposal of a dedicated anti-corruption directive, a joint communication, and a new sanctions regime to target acts of corruption worldwide.
First and foremost, the proposed Directive on Combatting Corruption seeks to raise criminal law standards in the fight against corruption and includes significant references to the public and private sectors. Having detected gaps in national legal frameworks, for instance, in the definition of ‘public official’ and in corruption-related offenses and their treatment, which make the prosecution of transnational corruption more difficult; the directive intends to tighten and harmonize rules across the EU. In particular, EU Member States would be compelled to criminalize several forms of corruption in a similar way, in addition to bribery.
Along with a range of stakeholders, the UNCAC Coalition was consulted in January 2023 by the Commission’s Directorate-General for Migration and Home Affairs (DG HOME), which is leading the proposed anti-corruption directive. We suggested using a dedicated anti-corruption directive as an opportunity to ensure the consistent criminalization of all offenses covered by the UNCAC: those already mandatory – bribery, embezzlement of public funds, money-laundering, obstruction of justice, liability of legal persons – and other practices that States Parties are not required to criminalize under the UNCAC but are encouraged to – trading in influence, abuse of public functions, illicit enrichment, bribery and embezzlement in the private sector, and concealment. The UNCAC Coalition argued as well that, when constitutional concerns related to the presumption of innocence would prevent the criminalization of practices such as illicit enrichment, the EU should undertake a careful calibration of arguments and be guided by the general interest.
In addition to unifying definitions and corruption-related offenses, the proposed EU anti-corruption directive intends to strengthen and harmonize the level of criminal sanctions across its Member States, and to increase efforts for corruption prosecution. This involves removing obstacles to investigations, providing sufficient tools to law enforcement bodies, and ensuring that specialized anti-corruption bodies are independent and sufficiently resourced. In terms of prevention, the legislative proposal also covers areas not previously regulated by EU law, such as the obligation for Member States to adopt effective rules on open access to information of public interest, the disclosure and management of conflicts of interests, the disclosure and verification of assets of public officials, and the regulation of interactions between the private and the public sectors. It explicitly calls European Union’s Member States “to promote the participation of civil society, non-governmental organizations and community-based organizations in anti-corruption activities” (Article 3 of the proposed anti-corruption directive).
The Joint Communication on the fight against corruption that was presented alongside the draft directive addresses preventative aspects, and in particular the creation of an EU network against corruption that will bring together law enforcement and public authorities, but also representatives of civil society and international organizations, individual experts and researchers. The network will contribute to collecting evidence and data, elaborate practical guidance, and provide input for an EU anti-corruption strategy to be developed in consultation with the European Parliament and the Council. One of its first tasks will be to support the EU Commission to map out areas at high risk of corruption.
Finally, the set of anti-corruption measures announced include a new sanctions regime to deter and tackle “serious acts of corruption” that may affect the interests and financial system of the European Union and the objectives of the Common Foreign and Security Policy (CFSP), even if they occur beyond the frontiers of the EU. An example of this would be the bribery of foreign public officials by European citizens.
The proposed directive is currently being considered by the European Parliament (led by the Committee on Civil Liberties, Justice and Home Affairs – LIBE), and the Council, and will undergo negotiations. A provisional agreement could be reached in the European autumn of 2023, during the Spanish Presidency of the Council, and the directive should be adopted before June 2024. The current proposal mentions the consultation with relevant stakeholders and reflects input provided by the UNCAC Coalition and Transparency International. However, civil society organizations can undertake a thorough review of and further advocate for key aspects that would strengthen the proposal, such as explicitly mentioning access to information laws. Once the directive is adopted, civil society organizations might also call on EU Member States to go beyond the “minimum rules” for definitions and sanctions that will be set out in the directive.
Another development to closely follow is the creation of the EU network against corruption and ensure it is given a clear mission and governance, and that the involvement of civil society organizations and experts is meaningful. Concerning the new framework of CFSP sanctions targeting corruption, this will be first discussed by Member States and adopted by the Council of the European Union. Therefore, the timeframe in this case is not dependent on the European elections and could take longer than June 2024.
Other matters to keep an eye on
Besides the EU’s anti-corruption package, civil society organizations should continue to follow other ongoing negotiation processes in view of adopting new directives and regulations, including the updated anti-money laundering legislation, the directive on corporate sustainability due diligence, and the European Union’s 1st cycle UNCAC review, where a consultation of civil society stakeholders is foreseen in the second half of this year. A draft of the self-assessment checklist has already been made public.
The so-called 6th anti-money laundering directive was introduced in the summer of 2021. However, discussions are still underway as the three institutions involved, the EU Commission, Parliament and Council, fixed their initial positions in early May 2023 before starting the interinstitutional negotiation process. High expectations surround the issue of beneficial ownership transparency and particularly what will be agreed upon concerning access to registers of beneficial owners. Indeed, after the Court of Justice of the European Union rendered a ruling in November 2022 that declared EU provisions that granted access to beneficial ownership registers to a wide public “invalid”, all eyes turned to the 6th anti-money laundering directive. Among others, UNCAC Coalition member organizations have since been advocating for public access to the registers and, at least, to include strong provisions in the directive to ensure that journalists, civil society organizations and other stakeholders with a legitimate interest can consult beneficial ownership registers without having to resort to information requests on a case-by-case basis.
While the European Parliament is in favor of strong measures regarding legitimate interest access to beneficial ownership registers, it will have to reach an agreement with the Council on the final text. In the process, the Commission can provide technical advice on the legal and practical implications of different policy options and therefore a range of anti-corruption organizations recently called for the Commission’s responsible Directorate (DG FISMA) to keep the topic high on their agenda.
Another piece of legislation affecting the private sector, the proposed directive on corporate sustainability due diligence, is in its final negotiation stages after the Parliament adopted its position prior to discussing it with the Council. Amendments proposed by the Parliament, significantly, introduce a previously completely absent mention of how corruption and bribery can increase adverse human rights and environmental impacts and that “it may be necessary for companies to take into account these factors when carrying out human rights and environmental due diligence”. The European Union should ensure its forthcoming new legislation consistently incorporates corruption prevention as part of due diligence duties by large companies, just like the corporate sustainability reporting directive in force since January 2023 obliges them to disclose information about governance factors such as “business ethics and corporate culture, including anti-corruption and anti-bribery, the protection of whistleblowers (…)” and “lobbying activities”.
Finally, the European Union, as the only regional organization that is a party to the UNCAC, is undergoing the first review cycle of the UNCAC’s Implementation Review Mechanism (since July 2021). This review covers Chapter III (Criminalization and law enforcement) and Chapter IV (International cooperation) of the UNCAC. The European Commission is coordinating the process and in September 2022 submitted and published the European Union’s self-assessment under the review. As highlighted in the above-mentioned Joint Communication, the Commission commits to “promoting transparency and the involvement of civil society in the review process and will support the completion of the review under the first cycle by 2024”. The UNCAC Coalition’s member organizations and affiliated groups in Europe, alongside a wide range of other non-governmental stakeholders, expect to be invited to take part in the on-site visit and interact with the governmental experts from the reviewing countries when it is scheduled, presumably in the second half of 2023. Civil society insights will be key to ensuring this review gives an accurate account of the European Union’s efforts in the fight against corruption and areas for improvement.
This blog post incorporates insights from UNCAC Coalition members and partners, in particular from Nicholas Aiossa (Transparency International-EU), Maíra Martini (Transparency International-Secretariat), Ilaria Fevola (Article 19), Angela Reitmaier (Transparency International Deutschland), Mathias Huter (UNCAC Coalition).