Dr Dimitrios Kafteranis and Moran Harari ■ 10 steps the EU Commission must take to stamp out corruption in the EU
The European Union saw several scandals recently that demonstrate corruption is a persistent problem in need of better regulation. The ongoing Qatargate scandal has highlighted the potential for corruption in the European Parliament, making clear it is high time for the EU to take action.
In January 2023, the European Commission opened a public consultation on its plans to adopt EU-specific anti-corruption rules and establish an EU policy on corruption. Working with leading academics and members of civil society organisations[i], we have submitted a response to the consultation which is available to read in full here.
Our response to the European Commission’s public consultation on corruption identifies 10 points that should inform future policy:
- A directive on anti-corruption is urgently needed for legal clarity and to ensure harmonisation of efforts on countering corruption. We argue that the directive should contribute the best ways to regulate corruption at the EU and national levels, not only by adopting rules on bribery but also on undue lobbying, conflicts of interests, revolving doors, elite capture and dishonest practices in the public and private sectors. The EU has been inactive on this issue, despite the new legislative possibilities given to it by the Lisbon Treaty (Article 83 TFEU), and it is now the right time to address this phenomenon which harms societies and economies.
2. Anti-corruption strategies and agencies. We call upon the European Commission to put forward a clear strategy for countering political corruption and to adopt rules for anti-corruption agencies at the national level. These anti-corruption agencies should be independent, reporting to Parliament, and not to the government in power. They should also be provided with adequate personnel, budget and enforcement powers to fight corruption.
3. Whistleblowers have proven to be instrumental in discovering and reporting corruption. The long-awaited Directive 2019/1937 on the protection of persons who report breaches of EU law (the so-called Whistleblowers Directive) has not yet been transposed in most member states legislation, even though the transposition deadline has passed. Despite several advantages of the directive, there is still room for improvement. The directive’s transposition should be carefully reviewed and amendments should be proposed to ensure an appropriate reward/protection for all persons whose reports lead to successful revelation of wrongdoings that has an adverse impact on EU budgets.
4. Beneficial ownership transparency. Disclosing the beneficial owners behind legal vehicles is considered to be one of the most powerful transparency tools for tackling illicit financial flows related to corruption, as well as money laundering, tax evasion and the financing of terrorism. The EU had become a transparency leader with its 2018 amendment to the fourth Anti-Money Laundering Directive. However, public access to beneficial ownership information was recently invalidated by the European Court of Justice in relation to the cases WM (C-37/20) and Sovim (C 601/20) v Luxembourg Business Registers.
We believe that an EU anti-corruption directive should also require public access to information without needing to make a specific legitimate interest request. In addition, in order to better detect corruption and other crimes, the directive should require countries to establish asset registries for unregistered assets. Asset registers should collect information on the beneficial owners of the registered assets and cover a comprehensive range of assets, from real estate, yachts and private jets to crypto-assets, art works and jewellery.
5. Improved collection, access and use of banking information. The directive should require the SWIFT messaging system or any inter-banking communication within the EU to include beneficial ownership information.
6. Better risk indicators. EU member states should publish lists of the individuals who are politically exposed persons (PEPs) and asset declarations of Members of Parliament should include a comprehensive list of assets. Member states should also establish red flags or directly ban certain entities from entering into procurement contracts based on risk indicators from the entities’ country of origin.
7. Statistics on investigations and prosecutions. The EU should also develop a mechanism for independent monitoring of corruption and criminal law enforcement in the context of the member states. As part of this mechanism, the EU could establish a Corruption Observatory, which should perform and promote original research on corruption, create an open public repository of data on corruption and represent the EU as an active voice in countering corruption.
8. Monitoring of activities on corruption. We recommend that European agencies develop cyclical monitoring and evaluation of their respective and joint activities on corruption. Relevant European agencies, such as European Anti-Fraud Office (OLAF) and Eurojust, could closely work with relevant national authorities to more effectively operationalise a monitoring and evaluation mechanism that publishes annual reports on measures to combat corruption in the EU.
9. Training and learning. The EU should finance European exchange programmes between public officials, and, above all, train the younger generation of law enforcement officers.
10. Research on corruption. The Commission should also continue to promote advanced research on the criminological, sociological, economic, legal and behavioural dimensions of corruption to enhance effective harmonisation and cooperation within the EU and across its member states on corruption matters.
To conclude, the EU needs a comprehensive anti-corruption directive that is multi-pronged, as shown in our 10 points above. We believe these measures are necessary to meaningfully stamp out corruption in the EU.
[i] Prof. Umut Turksen, Dr Dimitrios Kafteranis, Dr Adam Abukari (Centre for Financial and Corporate Integrity – Coventry University), Dr Markus Meinzer, Moran Harari, Andres Knobel (Tax Justice Network), David Wright (Trilateral Research), Dr Wouter Wolfs (University of Leuven, Belgium), Ass. Prof. Aikaterini Pantazatou (University of Luxembourg), Dr. Erik Láštic (Comenius University, Slovakia) Pawan Kumar Sinha (International Anti-Corruption Academy).
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