Bogdan Bibicu 
Wolf Theiss, Bucharest
bogdan.bibicu@wolftheiss.com

Context

On 14 September 2022, European Commission President, Ursula von der Leyen, gave the State of the European Union address, highlighting, among other topics of interest, that the battle against corruption is set to be strengthened within the European Union by means of a new set of regulations. ‘If we want to be credible when we ask candidate countries to strengthen their democracies, we must also eradicate corruption at home. That is why in the coming year the Commission will present measures to update our legislative framework for fighting corruption.’[1] The statement came following an alarming report that estimated the loss suffered by the EU economy due to corruption at approximately €120bn per year.

One of the first steps towards implementing the new anti-corruption rules was taken on 3 May 2023, when the European Commission proposed a new Directive aimed at the harmonisation of anti-corruption provisions. The draft of the Directive is expected to be discussed and adopted by the European Parliament and Council.

The draft Directive is also intended to be joined by a draft Regulation aimed at combating corruption by implementing a harmonised sanctions regime for Member States, which would also facilitate the prevention and eradication of serious acts of corruption. The draft Regulation proposal is yet to be made available.

Objective

The main objective of the proposed Directive, as it reads in the draft project, is to establish ‘minimum rules concerning the definition of criminal offences and sanctions in the area of corruption, as well as measures to better prevent and fight corruption’.[2] As such, it aims to harmonise the criminal legislation of Member States by imposing minimum standards regarding the interpreting of corruption concepts and the criminalisation and penalty levels for corruption-related offences. This, however, does not limit Member States insofar as their ability to implement higher standards, with the goal that such provisions serve to establish ‘an EU network against corruption, bringing together law enforcement, public authorities, practitioners, civil society and other stakeholders, will act as a catalyst for corruption prevention across the EU and will develop best practices and practical guidance’.[3]

Minimum standards

Article 83(2) of the Treaty on the Functioning of the European Union is the legal basis allowing the European Commission ‘to establish minimum rules with regard to the definition of criminal offences and sanctions in EU policy areas which have been subject to harmonisation measures, if this is essential to ensure the effective implementation of such policy areas’.[4] The harmonisation of criminal offences and their sanctions will be achieved, inter alia, by establishing minimum standards for Member States to implement within their own national legislations. As a practical example, the Commission established a maximum term of imprisonment of at least six years for the offence of bribery in the public sector for natural persons.

Furthermore, the Directive also proposes fines for legal entities that would amount to at least five per cent of their total turnover for the business year. Thus, significant developments in the area of criminal liability for companies are also expected. This is an area that thus far has not been covered at all in some Member States.

At the same time, Member States will not be prohibited from applying higher, stricter measures through the implementation of, for example, longer periods of imprisonment or higher fines, for the purpose of combating corruption.

Increased attention to the public sector

There is no shortage of cases where tendencies in financial criminality and corruption are shaped by the public officials of Member States. The Commission had this tendency in mind when it imposed obligations on the 27 Member States to combat corruption within the public sector by setting longer prison sentences for public officials, as well as implementing rules that would allow for greater transparency in terms of the assets of public officials and regulating the interaction between the private and the public sector. These new rules will also allow for easier access to information of public interest and in terms of organising informational campaigns to combat the current tendency of corruption in the public sector. The fight against corruption within the public sector will require Member States to ensure that privileges and immunity are subject to being lifted during criminal trials, and that laws shall include transparency criteria that would guarantee the impartiality and professionalism of the authorities, regardless of the position held by the public official under investigation.

Some practical needs derived from the proposed Directive

In order to achieve the targets established by this Directive at EU level, Member States need to enforce, if not identical, similar provisions in the sphere of corruption-related crimes, the liability of public officials, other individuals or companies and sanctions. Considering the fact that, at this time, there are numerous differences between Member States' criminal legislation (eg some Member States do not cover the crime of trading in influence in their national law, and only eight states cover the crime of illicit enrichment). Sanctions also tend to vary sometimes, such as, for example, the length of imprisonment in Member States for the crime of obstruction of justice: this can range between one year to life in prison depending on the jurisdiction etc.[5]

Enforcement matters

Harmonising Member States' legislation should contribute to, and strengthen, the efficiency of international law enforcement authorities, such as the European Public Prosecutor's Office, Europol, OLAF and Eurojust, and also serve to facilitate extradition and sanction enforcement between Member States. Harmonised minimum standards for sanctions and liability should also streamline the work of prosecutors in combating cross-border financial criminality throughout the EU. The new proposed Directive will also bring changes to criminal liability for companies, an area not currently covered at all in some Member States. Unfortunately, the current draft Directive does not address non-trial resolutions (NTRs) as an alternative to settling corruption cases, as recommended by the OECD in December 2021 for example.

Time frame and next steps

The Directive will be discussed and go through the process of being adopted by the European Parliament and the Council. It remains to be seen if other elements, such as NTRs, will also be addressed. The timeframe for this is still to be confirmed. Moreover, once adopted by the Member States, transposition of the Directive into the various national legislations will take place by the deadline set forth in the draft Directive, which is set at 18 months in the current draft. Additionally, the current draft Directive provides that, after 12 months following implementation, Member States will report every two years on how they actively implement Article 3 (regarding the measures that must be taken in order to fight corruption from a preventive perspective) and Article 6 (regarding training measures for competent authorities in order to combat corruption).

Notes

[1]          See https://ec.europa.eu/commission/presscorner/detail/ov/speech_22_5493.

[2]          Article 1 of the proposed Directive.

[3]          See https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2516.

[4]          See https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A234%3AFIN.

[5]          See Figures 1 and 2 of the proposed Directive.