Tightening the net on corruption

14th of September 2023
Tightening the net on corruption

Corruption ... how widespread is it across the European Union? Citizen surveys show it is perceived a serious threat and one the bloc is losing the fight to contain. Hartley Milner reports on the growing impacts of corruption and how EU legislators are responding.

'Corruption' and 'sleaze' are the two words that most readily trip from people's lips at the first whiff of scandal. Such knee-jerk assertions may not carry much evidential weight but do point to growing distrust in EU institutions and cynicism about how they are regulated.

Crime agencies struggle with corruption. This is because "the abuse of entrusted power for private gain", as it is commonly defined, happens in the shadows, which makes it difficult to detect, prosecute and to know the true extent of its reach.

What is known is that in its most aggressive guise, corruption permeates our political, corporate, legal, health and security institutions and trickles down to the very bedrock of society, manifesting in fraud, bribery, extortion, cronyism and nepotism. It compromises internal markets by reducing growth, spreading uncertainty, creating additional costs and lowering investment levels. It weakens democracy, exacerbates inequality, poverty, social division and environmental degradation. It is an ally only of organised crime and repressive autocratic regimes.

Corruption is estimated to cost the European Union between €179 billion and €990 billion a year, as much as six per cent of its GDP. The wide disparity in these estimates further highlights how little is understood about the extent of the problem and how challenging it is for law enforcers to get a grip on. EU countries are among the least corrupt in the world, according to the UN. But citizens of the region are far from reassured, a recent report on corruption has found.

Pessimistic view

Across the 27 EU member states, four in 10 respondents told a survey conducted by the European Commission they believe corruption has increased in their country over the past three years. More than 70 per cent say it is "widespread" in their country, up two percentage points since 2022.

Meanwhile, 22 per cent believe it to be "very widespread", 48 per cent "fairly widespread", 26 per cent "rare", 22 per cent "fairly rare" and four per cent "very rare". These findings show respondents have a slightly more pessimistic view of the spread of corrupt activities in their country than population samples polled last year.

In 21 member states, the majority of respondents say corruption is widespread across their country. A whopping 97 per cent say this in Greece and 96 per cent in Croatia. Perceptions are much the same in Portugal (93 per cent) and in Cyprus and Malta (both 92 per cent). However, Greece is the only country where more than half of respondents (54 per cent) think corruption is "very widespread". In six countries, fewer than half believe it is widespread: Finland (13 per cent), Denmark (21 per cent), Sweden (36 per cent), Luxembourg (40 per cent), the Netherlands (47 per cent) and Estonia (48 per cent).

The business sector is broadly on the same page with regard to the extent of the problem. More than 65 per cent of companies perceive corruption to be "fairly" to "very" widespread in their country. Notably, the number saying it is "very widespread" rose by four percentage points to 28 per cent compared to 2022.

Both citizens and businesses are increasingly sceptical about national efforts to combat corruption, the study shows. More than three quarters of Europeans think that too close links between business and politics lead to corruption, while two thirds say high-level cases are not pursued sufficiently. Only a minority of citizens have confidence in their country's anti-corruption measures, with just 35 per cent believing they are applied impartially and "without ulterior motives". Under a third (32 per cent) feel there are enough successful prosecutions to deter corrupt practices.

Threat never higher

A small majority of companies think it likely individuals and businesses engaged in corrupt practices would face charges and go to court. Just 12 per cent of respondents think it "very likely" they would and 41 per cent "fairly likely" More than three out of four company managers (78 per cent) say "too close" links between business and politics lead to corruption and 72 per cent agree favouritism and corruption hamper business competition. One in two companies doubt businesses engaging in corruption would be caught or reported, and less than 40 per cent that they would be heavily fined or imprisoned.

Whatever the perceptions about corruption, it has never posed "such a high threat to the EU and its citizens as it does today", according to Europol. In its latest crime threat report, the police agency says almost 60 per cent of criminal networks engage in corruption in one form or another and more than 80 per cent of crime organisations active in the region use legal business structures for their criminal activities.

"Criminals are digital natives," Europol says, adding: "Virtually all criminal activities now feature some online component and many crimes have fully migrated online." Criminals exploit encrypted communications to network among each other, and use social media and instant messaging services to reach larger audiences to advertise illegal goods or spread disinformation.

Fraud body Eurojust logged more than 500 cases of corruption across EU states during the six years to 2021, steadily increasing each year from 78 cases in 2016 to 112 by the end of the period, despite the pandemic. The agency's quadrennial report shows countries with the highest number of registered cases were Greece (114 cases), Germany (99), Romania (88), Italy (87) and Spain (77). Denmark and Estonia had the lowest number, with seven and 11 cases.

Meanwhile, watchdog Transparency International identifies a significant ‘implementation gap' in the EU between anti-corruption rules and actual practice. "The EU and the European Commission in particular has not fully recognised the role that civil society can have in changing norms and achieving better implementation and enforcement," it says. "The EU needs to focus on facilitating anti-corruption efforts in member states and non-EU countries alike, and on creating a space for meaningful engagement with civil society."

European Commission president Ursula Von Der Leyen last year vowed decisive action to bolster the EU's war on corruption. She said: "If we want to be credible when we ask candidate countries to strengthen their democracies, we must also eradicate corruption at home. We will raise standards on offences such as illicit enrichment, trafficking in influence and abuse of power beyond the more classic offences such as bribery. And we will also propose to include corruption in our human rights sanction regime, our new tool to protect our values abroad. Corruption erodes trust in our institutions. So we must fight back with the full force of the law."

Need for EU focus

In a draft directive announced in May, the Commission sets out wide-ranging measures it says would deliver on Von Der Leyen's pledges. Misappropriation of funds, trading in influence, abuse of office, illicit enrichment and obstruction of justice will now become harmonised criminal offences across the bloc, along with punishments for corruption offences. Bribery in the public and private sectors is currently the only corruption offence criminalised at EU level.

Neither do all EU member states criminalise all forms of corrupt behaviour. Illicit enrichment is an offence in only eight countries, a gap that leaves many countries falling short of UN-defined standards, according to EU officials. Trading in influence is reported as criminalised by 23 states, but how the offence is defined differs significantly across countries and may only be partly covered in national legislation.

Punishments vary widely as well. Prison terms for bribery in the public sector range from three months to 15 years and in the private sector from three months to 12 years. Embezzlement in the public sector can lead to sentences of from three months to 15 years and for private sector offences three months to 20 years. Illicit enrichment carries terms of between six months and 15 years.

Opaque procedures

As part of the EU's sweeping corruption crackdown, member states would be required to have an anti-corruption agency and cooperate with a new EU anti-corruption network. The law, which would apply to public institutions and private companies, would also seek to end what EU officials see as "opaque" procedures for lifting immunity from prosecution for certain individuals. Another of the network's key tasks will be to support European Commission efforts to map out areas across the EU where corruption risks are high.

Whistleblowers are recognised for their crucial role in helping expose corruption, wherever it rears its ugly head. Special protection is proposed in the hope it will encourage more people to come forward with their suspicions about shady dealings in their institution.

"These proposals will cover the corruption crimes agreed internationally under the UN Convention Against Corruption," says EU home affairs commissioner Ylva Johansson. "They will complement our new proposal on asset recovery and help support a culture of integrity with activities for corruption prevention. It is also the first time that we bring public sector corruption and private sector corruption under one umbrella law. With this proposal, we aim at tightening the net around the corrupt."



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