18 February 2000
Role of parliaments in fighting corruption
Committee on Economic Affairs and Development
Rapporteurs: Mr Leers, Netherlands, European People's Party, and Mr Tallo, Estonia, Socialist Group
The report, drawn up against the background of recent corruption scandals in a number of Council of Europe member states, argues that parliaments, as the primary expression of the people's will, also have a primary duty to fight corruption.
It suggests a series of measures, including transparency in the funding of political parties and election campaigns, a code of conduct for members of parliament and close scrutiny of their sources of income and possible conflicts of interest.
Finally, the report calls for rapid ratification of various international conventions against corruption, and in particular those of the Council of Europe itself. "Each generation", the report stresses "has to fight not only for its freedom but also against corruption, which undermines the very foundation upon which that freedom rests. Parliamentary democracy is no guarantee against corruption, but it is the only form of government that has a chance of vanquishing it."
I. Draft resolution
1. A parliament is a country's central institution, in its capacity as the primary expression of the people's will and therefore has a paramount responsibility for combating corruption in all its forms, especially in public life but increasingly also in the economy at large. Parliaments must undertake this task for the general morality of society, but also for its lasting economic progress which vitally depends on honesty and trust. As Europe – and the world – come together, this struggle becomes both more complex and urgent. The Council of Europe, its Parliamentary Assembly and national parliaments must be in the forefront of promoting good governance in Europe and world-wide and of raising awareness of the dangers of corruption.
2. The fight against corruption is rendered all the more difficult as economic competition between companies, countries and groups of countries intensifies, including in the field of industrial espionage; as sums involved increase along with the size of deals; and as public morals may loosen. If parliaments as the last bastions against corruption are themselves affected by it, the battle may well be lost.
3. The Assembly, recalling inter alia its Resolution 1147 (1998) on the threat to Europe of economic crime and the joint Council of Europe-World Bank Conference on the Role of Parliaments in Fighting Corruption it organised in Riga in March 1999, welcomes the Council of Europe's intensifying efforts to fight corruption. It in particular welcomes the Council's 1999 Criminal Law Convention on Corruption, its new Civil Law Convention on Corruption and the Guiding Principles for the Fight Against Corruption drawn up in 1998 by the Council's Multidisciplinary Group on Corruption. It calls for the rapid ratification by all Council of Europe states and beyond of these Conventions and their early entry into force.
4. The Assembly also encourages the Council of Europe to step up co-operation with, in particular, the OECD on its Convention on Bribery of Foreign and Public Officials in International Business Transactions and with the European Union on its Convention on Corruption Involving Officials of Communities or Officials of Member States of the European Union, as well as within the Joint Council of Europe-EU Octopus Programme.
5. The Assembly asks its Committee on the Honouring of Obligations and Commitments by Member States of the Council of Europe (Monitoring Committee) also to assess the progress made in the fight against corruption, considering the latter's negative impact on the upholding by countries of Council of Europe standards.
6. In order successfully to fight corruption, parliaments in their capacity as a country's supreme political authority and instance of control should, where applicable:
a. ensure that state institutions – including parliaments themselves – are so transparent and accountable as to be able to withstand corruption or permit its rapid exposure;
b. instil in parliaments' own ranks the notion that parliamentarians have a duty not only to obey the letter of the law, but to set an example of incorruptibility to society as a whole by implementing and enforcing their own codes of conduct;
c. introduce an annual system for the establishment of assets of parliamentarians and their close associates;
d. create clear and fair legislation, including efficient public supervision, as regards the funding of political parties and election campaigns. The proper declaration of sources of income and of potential conflicts of interest is particularly important;
e. safeguard the strength of civil liberties, in particular press freedom and the ability of citizens to form associations for informing the public, including through freedom-of-information acts;
f. protect the independence of the judiciary and the media;
g. have all public expenditure, revenue collection and public procurement checked either by an independent auditing body or, where necessary for state security or other reasons, by a competent parliamentary instance;
h. take special measures to protect the position and career prospects of 'whistle-blowers', that is to say, officials who unmask and report cases of corruption; and establish, where this has not yet been done, a code of conduct for civil servants and public officials;
i. enact legislation providing for adequate and precise sanctions against those who engage in corruption;
j. as far as possible, simplify regulations, permits, administrative procedures and the like, since these open up possibilities to exact or receive bribes;
k. resolutely fight organised crime, seeing its role as a main vehicle for corruption;
l. enhance competition in economic life through clear and fair legislation, by taking a firm stand against monopolies and oligopolies, by reducing subsidies to companies and economic sectors, and by enhancing public scrutiny over the launching and implementation of public projects;
m. in view of the growing international dimension of corruption, support international co-operation instruments such as those outlined in paragraph 3 above;
n. engage civil society in an ongoing debate on corruption from school onwards and involve it in the progress made in the fight against it.
II. Explanatory memorandum by the Rapporteurs
II. PARLIAMENTS AND GOOD GOVERNANCE
III. CAUSES, CONSEQUENCES AND REMEDIES
IV. CONTRIBUTION BY PARLIAMENTS
V. CONCLUDING REMARKS
1. Corruption is presumably as old as organised society, at least as old as the time when organised society first established public institutions for its preservation and development. Aristotle, for one, discusses it at some length.1 Today - when the public sector is considerable in the complex societies that are ours - the opportunities for corruption to occur have certainly increased. Whether corruption itself has increased is probable, but it could also be that society's means of detecting it have also augmented. We may feel that our societies are more corrupt, because we discover more of the phenomenon. At any rate, it is vital that we uncover corruption wherever it occurs, both for the general morality in our societies and for their social, economic and political development. It is also vital for continued European co-operation and development, as otherwise cross-country trust, and with it investment and other contacts, will suffer.
2. The above considerations led the Committee on Economic Affairs and Development of the Council of Europe's Parliamentary Assembly and the World Bank, through its World Bank Institute, jointly to organise a conference on the theme "The Role of Parliaments in Fighting Corruption", kindly hosted by the Parliament of Latvia in that country's capital, Riga. The conference must be considered a great success, gathering as it did not only members of the Parliamentary Assembly - and in particular the members of the Economic committee's Sub-Committee on International Economic Relations) but also many other parliamentarians from Latvia and other Council of Europe member states. There were also numerous representatives of academic life, the media, business, the diplomatic corps, international organisations, as well as governmental experts in the legal and other fields. We thank them all as well as our perfect hosts.
3. The purpose of this report is to present some of the most important conclusions from the Riga Conference, for the attention of the Parliamentary Assembly as a whole. Meanwhile, the proceedings of the conference have been published as a separate document (AS/Ec (1999) 12). We have not wanted to discuss the situation in individual countries, as then some readers might object either to the description given or ask why some countries have been singled out while others have been omitted. Our report is, instead, forward-looking. Finally, the Rapporteurs wish to thank their colleagues on the Committee on Economic Affairs and Development for their valuable comments. (It is, for instance, at their proposal that the present version of the report includes, in an Appendix, a number of Council of Europe and other conventions dealing with corruption, as well as the state of signature and ratification for each.)
4. Corruption - which can be defined as the "use and abuse of public power for private gain" - should at long last be recognised for what it is: a cancer on the bodies of our individual countries and on the international community as a whole. At a time when the global economy - with instant communications and movements of funds across the globe permitted by modern technology - is becoming a reality, corruption has become a phenomenon of not only national but also international concern. An institution such as the Council of Europe, which exists to further democracy, human rights and the rule of law, has to take a lead in fighting this scourge.
5. The tone for dealing with the subject was set at the opening of the conference, when Mr Juris Sinka, Chairman of the Latvian delegation to the Parliamentary Assembly of the Council of Europe, reminded us that corruption can never be eliminated, but only kept at bay, springing as it does from the selfishness and desire for material gain that seem to form part of human nature. And Mrs Helle Degn, Chairperson of the Committee on Economic Affairs and Development of the Parliamentary Assembly, drew attention to the need for us parliamentarians to be in the forefront of this struggle. We have to set an example firstly through our personal behaviour, which determines whether citizens will have confidence in us and through us in democracy. And secondly through the legislation that we develop, as concerns not only corruption directly but also institutions and laws and policies in all fields. Corruption can only be suppressed through true separation of powers between the legislature, the executive and the judiciary - with an independent press ready and allowed to 'nose about'.
6. The current situation as regards corruption in Europe and the world raises two questions in particular. Firstly, whether the use of public office for private gains always means corruption. Your Rapporteurs think it does, for unless those who govern do so exclusively for the good of society, public trust in them, and in democracy itself, will suffer. The second question is whether corruption can ever be 'functional' in the sense of promoting development. Again, the Rapporteurs do not believe this can ever be the case, since economic development so critically depends on a social contract of trust between various economic actors, including the public at large. In a corruption-free society citizens can go about their business knowing that they contribute to the public weal – say, in exercising economic activity, in contributing to culture and the arts, caring for the elderly or educating the young. Where such trust does not exist, however, everybody becomes suspicious. Greed and egoism replace the legitimate quest for the betterment of one's condition.
7. This report will not enumerate all the various instruments set out at European or world level to fight corruption. For this the reader is referred to the Assembly's Resolution 1147 (1998) on the threat to Europe from economic crime (Rapporteur: Mrs Degn; Doc. 7971). However, it is worth mentioning the Council of Europe's "Multidisciplinary Group on Corruption" (MGC), established within the Council of Europe following a Conference of European Ministers of Justice held in Valetta in 1998. The GMC in 1998 formulated twenty Guiding Principles for the Fight against Corruption, as well as a comprehensive Programme of Action Against Corruption. Both these texts recognise the special role and responsibilities of elected representatives and members of government in this cause.
8. There followed, also in 1998, the establishment of the "Group of States Against Corruption" (GRECO), a body called upon to monitor the observance of the Guiding Principles and the implementation of national legal instruments adopted in pursuance of the Programme of Action Against Corruption. GRECO started operating in October 1999 with 21 member States.
9. Furthermore, in January 1999, twenty-one Council of Europe member states signed a new Criminal Law Convention on Corruption. It is unique in the sense that it is the first truly world-wide instrument meant to combat the phenomenon. It usefully supplements similar documents established elsewhere, such as those dealing with "illicit payments" (the United Nations), "bribery of foreign public officials in international business transactions" (OECD), "corruption involving officials of the European Communities or officials of members states of the European Union" (the European Union). Whilst the OECD is concentrating on trying to 'clean up' international commercial transactions, the Council of Europe seeks to defend and promote the rule of law and the impartiality and fairness in public administration. The Rapporteurs hope that this new Council of Europe convention will as soon as possible be recognised within the whole Council of Europe area and beyond. (It is an open convention, which to date has been ratified by 1 country and signed by 30 countries)
10. In September 1999, the Committee of Ministers of the Council of Europe adopted a Civil Law Convention on Corruption, the first international legal instrument providing for civil remedies for victims of corruption. It was opened for signature at the 105th Ministerial Session in November 1999 and signed by 12 countries on this occasion. (see Appendix). A Model Code of Conduct for Public Servants is under preparation.
11. Finally, mention should be made of the Joint Council of Europe-European Union Octopus Programme, which in its current second phase enjoys funding of the order of 2.45 million Euros. One important aim of the Octopus Programme is to enable various countries in central and eastern Europe to wage a successful struggle against corruption as several of them prepare their accession to the European Union. The Council of Europe, for its part, sees the project as a contribution towards consolidating democratic institutions and institutional reform. Ultimately, however, international co-operation or action can never replace that at national level. Cleaning up must begin at home.
II. PARLIAMENTS AND GOOD GOVERNANCE
12. Corruption takes many expressions: bribery, extortion, influence peddling, nepotism, fraud, "speed money" (to be explained below), theft pure and simple and embezzlement. What is considered corruption in one country may not be considered so in another. However, under the pressure of globalisation, definitions of corruption will have to come together, along with the sanctions foreseen for their different expressions. Corruption can take the form of kick-backs or bribes for the purpose of winning contracts, 'buying' a judge or a tax inspector, side-stepping regulations. It can be outright theft; the misappropriation of public assets or funds; protection against disclosure, through which favours can be demanded from the person protected. Or it may be the peddling of influence, such as through the financing of political parties or election campaigns.
13. Some observers suggest that, in countries with cumbersome regulations such as, for instance, certain countries in transition, some types of corruption could in fact enhance efficiency and economic development. Thus, they argue, if a country's government or parliament have decided on a certain policy direction, corruption may in certain circumstances permit a different and better course to be followed. Related to this argument is the one that holds that corruption is a necessary lubricant for the squeaking machinery of an inert administration. Corrupt officials may deliberately provoke administrative delays so as to entice the impatient victims to pay money in order to speed things up (hence, "speed money").
14. However, these arguments do not hold water. Corruption exercised in order to correct official policy will lead to general confusion and "schizophrenia" in state practices. If corruption is considered necessary to speed up the bureaucracy, then this constitutes a waste of resources, favouritism and an ever-slower bureaucracy. One remedy is to reduce red tape as far as possible and thus deprive the corrupt of finding an excuse for delays, and to make as transparent as possible whatever red tape remains.
15. One of your Rapporteurs called parliamentary democracy and government the "sole bastion against chaos, arbitrariness and dictatorship". He went on to ask participants how, with this in mind, legislation, institutions and surveillance might be improved. Parliaments are the institutional bridge between state and society. Theirs is the main responsibility for ensuring that state institutions are accessible, accountable and transparent.
16. Corruption is contagious. Once an official has accepted a first bribe, he or she is likely not to be able to refuse further ones, for fear that the corrupters will otherwise reveal his or her first. Gradually, the official in question will consider corruption as something normal, something that others do as well. With material gain comes added appetite.
17. Some may question what they consider excessive zealousness on the part of some countries in making punishable even seemingly petty offences. However, at the Riga conference, low-level corruption - often linked to inadequate pay of officials - was considered by many as being just as harmful as high level corruption, and hence as worthy of being combated. When slight offences start permeating the system and go unpunished, the state may lose a degree of control, credibility and legitimacy, because its citizens begin to lose respect for the rule of law.
III. CAUSES, CONSEQUENCES AND REMEDIES
18. Corruption is a two-way street. A public official may accept, solicit or extort a payment. Or a private agent may offer payment in exchange for a promise to circumvent the law for his or her personal advantage or to improve a company's competitive position. Corruption is therefore often a sign of shortcomings at the interface between the public and the private sector. It is also often a sign of shortcomings in the political, social, legal or economic system. World Bank surveys have shown that the spread of corruption is closely linked to failed policies and failing public institutions.
19. In general, the Riga conference showed us, corruption seems to flourish where state institutions are weak; where loopholes in governmental policies or regulatory regimes provide scope for it; and where watchdog institutions - the parliament, the judiciary or civil society, notably the press - are marginalised or suffer corruption themselves. Although corruption is especially likely to occur in the interaction between the public and the private sphere, its causes are also highly linked to a country's political and legal development, its socio-economic conditions and its administration. The keeping at bay of corruption appears strongly related to the strength of civil liberties, in particular press freedom and the ability of citizens to form associations for information to the public. Corruption can be said to vary in inverse proportion to the extent of civil liberties. In other words, the better-developed civil society is and the more citizens can make their voices heard and influence the government, the less room there will be for corruption.
20. By the same token, without civil liberties a government will have little incentive to reform. It was the tragedy of the communist system that civil society - as it manifests itself in independent associations - was severely suppressed, in some countries for close to half a century and in others for even longer. Once civil society has been crushed, it is very difficult to build it up.
21. The way in which economic, political and electoral processes are organised is also of great importance. The proliferation of regulations, permits, monopolies and taxes can provide fertile ground for corruption. In many instances the simplest way to remedy corruption may therefore be to simplify - or as the case may be legalise - an activity which is prohibited or seriously proscribed, provided that this is possible from other societal points of view. Public supervision and fair rules are also needed as regards the funding of political parties and election campaigns.
22. The OECD estimates that some $80 billion change hands world-wide every year through corruption. Whatever the sum, this is money that could have been used for productive purposes. Moreover, the fact that it is being used to corrupt means that we cannot be certain that the best investment or project was chosen by the public authority concerned, with obvious consequences for economic development as witnessed in many countries that lag behind in their development. Sometimes corruption can have a direct effect on the public, such as when building permits are granted without checks that constructions can resist earthquakes.
23. Once corruption has become systemic, the likelihood is reduced that it will be unearthed and punished, thus reducing any apprehension that those already corrupt or potentially corrupt may have about getting caught. A lack of transparency, weak laws and light penalties will add to the problem. Poor accountability coupled with poor legislation and an inadequate judicial system will frustrate those who try to uncover corruption. When bribes are large, the chances of being caught slim and penalties modest, many people will succumb to the temptation. It may therefore often be preferable to design a framework that can better withstand corruption than to prosecute individuals who in a better system might not even have been exposed to the temptation.
24. Sometimes organised crime becomes an intermediary between the public sector - also at regional level - and the business world. Mafiosi elements in some such countries serve as the chief negotiators in a complex system of arranged contracts and kickbacks to corrupt officials. Business people have to play along if they want to obtain the contracts or even avoid physical harm.
25. The temptation to succumb to corruption practices is in many countries enhanced by poverty or by insufficient pay. Insecurity over one's future, for instance due to insufficient social protection, may sap not only morale but also morals. This is why fair remuneration of public servants is important in order to enhance their ability to say no to corruption. Fair pay also increases the cost to caught offenders if they lose their job. Some countries with this in mind offer their public servants wages above many private sector salaries as well as performance-related incentive payments. Other countries do their best to at least preserve the level of salaries in the public sector in periods of budgetary constraints.
26. Some participants in the Riga Conference saw a relationship between high taxation and corruption. The thinking here is that when an honest person is too heavily taxed, the temptation to accept bribes increases. Others disagreed with this analysis, however, pointing to certain Nordic countries with high taxation and very low corruption. At this point the Chairman of the working session in question quoted Hamlet as he inveighed against "the law's delay, the insolence of office and the spurns that patient merit of the unworthy takes".
27. In certain countries officials 'buy' their appointment in order to obtain the posts through which they can extract bribes. In other words, an 'investment' is made in the expectation of a return on profit. The jobs of tax or customs inspectors are particularly sought after, as are the heads of water and electricity companies. It also seems as if bribes are shared between officials to a greater extent in high-corruption countries, perhaps also in an effort to win over potential 'whistle-blowers'.
28. When corruption becomes endemic, bribes lose much of their moral stigma in the eyes of those concerned. They blur the borderline between honesty and dishonesty, truth and lies. In the absence of moral markers, the system becomes truly sick. In the capital of one transition country, the Rapporteurs learned that traffic policemen could not be persuaded to take leave, the reason being that, in the absence of proper salaries, they could only live off the fines they arbitrarily imposed on motorists.
29. There was wide recognition at the Riga Conference that transition countries face particular challenges in keeping organised crime and corruption at bay. The legacy of the communist system, including the nomenklatura tradition, weighs heavily, especially in countries where the political, legal and economic systems have evolved less well. Countries vary widely in this regard. In some, power remains in the hands of limited groups with undue influence - financial and industrial oligarchies exercising pressure on the government, the administration, the judiciary and even parliament. The privatisation process itself has opened up opportunities for personal enrichment on the part of public officials. In extreme cases, which have made the headlines in recent months, millions or even billions of dollars ended up in the wrong pockets.
30. The EBRD - in its 10-year jubilee Transition Report published in November 1999 - refer to two types of corruption taxes 'imposed' on companies in many corruption-plagued transition countries in central and eastern Europe. The "time tax" denotes how much time company executives have to spend on political contacts to ensure their business operations, while the "bribe tax" describes the percentage of their earnings they have to pay in corruption money. The burden is particularly heavy on smaller companies, the ones that indeed should have stood for economic renewal and growth. (No doubt this will be covered more in the next report of the Committee on Economic Affairs and Development on "EBRD and the State of Transition in Central and Eastern Europe.)
31. Constructive pressure and expert assistance from the international community are very important for overcoming this problem. This is the thinking behind the projects mentioned at the outset. The experience of the World Bank and others in a number of transition countries is that those which have made good use of the international advice offered, notably in their legislation, tend to be less exposed to corruption.
32. The World Bank has identified a number of "indices" which it sees as highly related - whether positively or negatively - to the spread of corruption. The first is the index of "distortion due to policies". It varies according to the proliferation of regulations, permits and red tape, all of which obstruct the proper functioning of the market. The second is the index of "judicial predictability". The more consistent are the rulings of courts, the more people will expect laws to be applied, and the less corruption there will be.
33. A further index identified by the World Bank is that of "temptation" in the civil service. In other words, the lower the pay of a civil servant, the more tempted he or she will be to accept a bribe. A final index is that of "merit", that is the possibility for meritorious civil servants to make a career even as they show independence, such as in unmasking corruption. Many of the countries in transition are still suffering from the legacy of the nomenklatura, nepotism and protection. If public officials, especially in the lower ranks, are forced blindly to obey their superiors, their relationship risks becoming incestuous and conducive to corruption.
34. The OECD for its part has developed the notion of an 'ethics infrastructure'. It has several components. A strong political will is needed on the part of politicians to maintain honesty in government. Strongly related to this is a nation's culture. As we have seen, some countries do not tolerate even the most minor amount of public money to be spent for private purposes. In others, the legacy of history is such that nobody seems really to care or even expects politicians or economic actors to behave immorally.
35. Furthermore, there is the legal framework. Those potentially corruptible will only behave honestly if laws against corruption are clear and unambiguous. (But here we must recall the words of Aristotle at the outset that good laws are worth nothing unless they are obeyed.) Thirdly, the OECD says, remuneration for civil service must be such that employees are not unduly tempted to accept bribes. Finally, society has to have a process for promoting the objective of a more corruption-free society. This mechanism includes parliaments, the judiciary, the media and civil society at large.
36. Furthermore, in October 1999 Transparency International published its first ever "Bribe Payers Perception Index". The index, which is set out in an Appendix to this report, ranks the leading exporting countries in terms of the degree to which their companies are perceived to be paying bribes. On a scale from 0 to 10 – where 10 represents negligible bribery and 0 a very high level of bribery – China (including Hong Kong) scores the worst, with 3.1. It is followed by South Korea, Taiwan, Italy and Malaysia. Japan, France and Spain follow, while Singapore, the United States, Germany and Belgium follow. The United Kingdom scores a relatively low 7.2, followed by the Netherlands, Switzerland, Austria to close to 8. By this measurement, based on a survey of nearly 800 business executives conducted in 14 emerging market countries, Canada, Australia and Sweden were rated as the least likely to pay bribes abroad, with values at over 8 on the 10-point scale.
IV. THE CONTRIBUTION BY PARLIAMENTS
37. This presentation has shown that corruption is a multi-faceted phenomenon that cannot be cured by any one particular policy. It is a long, indeed eternal, battle that will require constant political will to win the day. The effort has to start in time, before the rot is allowed to affect the whole political class and public sector. Otherwise the agents and the objects of corruption will unite in their efforts to preserve the status quo. Many experts on corruption therefore believe that incentives for reform will first have to be introduced. As many people as possible should be involved in the diagnosis of corrupt systems. Punishing some major offenders may be a good start.
38. A successful fight against corruption presupposes political commitment at the highest levels. High-level steering committees comprising the government, the judiciary, civil society, industry and the business world can ensure an overall approach to the problem. Working parties on ways to improve transparency and financial control can assist this undertaking. Information gained in this process must as far as possible be shared with the media and civil society.
39. Strategies for curbing corruption should emerge as a result of an analysis of the causes behind it. The emphasis should be on prevention and timely diagnostics. "Vulnerability assessments" and routine or surprise checks on public and private institutions are important tools. Parliaments should exercise their control function by initiating judicial enquiries. The uncovering of corrupt circuits must include parliaments' own ranks. Parliamentary self-discipline and self-criticism are crucial.
40. To the extent that corruption can arise as a result of too many rules, laws and regulations, parliaments will have a primary duty to streamline and simplify. Transparency has to be introduced at every step, such as through an obligation to declare sources of income and potential conflicts of interests. Judicial procedures may have to be accelerated. The compatibility between different laws may have to be examined. State subsidies and exemptions - always a potential source of corruption - may have to be reduced if not eliminated. Since much corruption occurs as public projects are being implemented, it is important that the citizenry be allowed to supervise their implementation. The Canadian experience -the Conference was told - is that only if public procedures, where corruption can arise, are carried out in an open, transparent and accountable manner, can the phenomenon be controlled.
41. The electoral system may have to be improved. The aim should be to prevent influence peddling through monetary or other rewards. An independent supervisory body should be empowered to carry out checks on election campaign funding, expenditure and assets of political parties. (This was emphasised by several Committee members, some of whom referred to a major party financing scandal that had just erupted in a member country.) There also seems to be a relationship between corruption and the length of time that political parties or individuals stay in power. This points to another advantage of democracy, namely the likelihood of regular change in government.
42. Parliaments are also responsible for carrying out civil service reform. Many public sector employees are demoralised by inadequate pay and the feeling that their achievements go unrecognised in either remuneration or career prospects. It is important that public employees be allowed to propose solutions for the improvement in their working environment. A merit-based recruitment and promotion system that shields employees from favouritism is important, as are credible financial controls to prevent the arbitrary use of public resources.
43. That the notion of “negligence in the use of public funds” might be interpreted differently by the general public is attested by recent public opinion polls conducted in Sweden. These have shown that legislation and public opinion may differ significantly in their judgement as to what is right and wrong. Thus, accepting money in return for contact mediation between politicians and businessmen, allegedly abusive use of official credit cards or the non-payment of certain taxes were all regarded by the public as immoral although nothing in the law supported the accusations of corruption or embezzlement that were levelled. The officials concerned, who in these cases merely exploited legal loopholes and ill-defined rules, were nonetheless forced to resign. This illustrates how important personal integrity is in the exercise of public functions. Not only must politicians or public servants abide by the law but they are expected also to respect many unwritten rules. Yet, for the sake of greater clarity, rules and regulations that are lacking in precision should be improved. Drafting a national code of conduct for civil servants may also be very helpful.
44. In our age of instant mobility of information and capital across borders, corruption has gained an additional advantage over national authorities, as the latter are by definition geographically constrained and are not always inclined to work together closely enough at international level. It is therefore urgent to supplement efforts at national level with those at international level. Transparency International and the OECD devote considerable efforts to unmasking corruption in international business transactions, including those from developed market economies to developing countries. The conclusion and entry into force in early 1999 of the OECD's Convention on Combating Bribery of Foreign Public Officials in International Business Transactions therefore mark welcome progress.
45. National anti-corruption programmes can be greatly helped by international co-operation. The sharing of experiences and "best practices" is useful even though they may not be wholly transferable due to the partly unique situation in any given country. Anti-corruption workshops or the hiring of anti-corruption consultants are also important, as is the use of international investigators to track down ill-gotten deposits overseas.
46. However, the best barrier against corruption is a well-functioning parliament. It must ensure transparency and accountability at all levels. Parliament is the link between the government and civil society. Our parliamentarians are like traffic wardens on a two-way street. They must inform their electorate about parliamentary and governmental actions; and they must channel public requests in the opposite direction.
47. The reasons why parliamentarians as individuals are so important is that they will only be able to require of the personal integrity of others if their own is without blemish. Parliamentarians must therefore be completely open about the sources of their election funds, their personal assets and income, and from what sources these derive. Their position as mediators between civil society and the executive is crucial. In adopting laws that protect civil liberties and secure freedom of information, or in drafting rules that protect those who denounce corruption, parliamentarians can create a context within which corruption cannot develop.
48. Several of the Riga participants spoke out in favour of the kind of system used in countries such as the United Kingdom and Ireland. The basic principle, which is part of these countries' constitutions, is that all public expenditure and public procurement must be checked by an independent body. Every penny spent by parliament is so on behalf of the citizens. As such, it must be subject to an audit. This is perhaps the single most efficient measure that the Rapporteurs can recommend. A British member of the Committee said that his country has three layers of protection against corruption: laws proper, rules of parliament and party rules.
49. In Canada, parliamentarians must disclose their assets and there are strict limits on donations. The names of donors have to be given and they can only be citizens, not corporations. There are codes of conduct and various measures to prevent conflicts of interest. Ministers may have to sell their assets and those of their family, or place them in the hands of an administrator. A body answerable to the Prime Minister is responsible for ensuring that there are no conflicts of interest or even their semblance. An Italian member of the Committee informed it that members of that country's parliament now have to declare their entire income and economic interests. She also felt that education on the need to fight corruption should start already in school and be kept up through regular society-wide campaigns.
50. Then there is the vital need for an independent and inquisitive press. It is the role of the press to make sure that citizens are never in awe of state authority, but rather that state authority is in awe of citizens. Maximum transparency should characterise budgets, revenue collection, and statutes of public bodies and proceedings of the legislative branch. Any financial operations should be audited by an independent authority. And whatever unaudited, secret or extra-budgetary funds may be considered necessary must be accessible for scrutiny by a competent parliamentary instance. Freedom-of-information acts have been introduced in a number of countries to good result. The more information that is made available to the press, and through it to the citizens, the greater the possibilities for the general public to keep officials on a short leash.
51. But information may not be enough. Means of making that information bite must also be available. Individuals and organisations must be able to complain when they encounter corruption. Independent "whistle blower" institutions that register complaints and monitor developments may be called for. However, the best instrument is a well-functioning parliament. If that is in place, many of these "second best solutions" will not be needed.
52. Where wrongs are detected, proper investigation, prosecution and sanction must be available. The principle must be that everyone - from the highest to the lowest in the land - should be held accountable for their actions. The sanction must be proportional to the offence. Each type of infringement should if possible be matched by a specific sanction. Court decisions should be published.
53. Unless the political will and courage to act are there at the highest level, the rest of society will be unable to do much. Among the worst that can happen is a conspiracy to conceal corruption among the dominant segments of society. Should even the parliament and, heaven forbid, the press be implicated, the result will be even worse. In certain countries democratisation is bringing to power new leaders who at least proclaim that they will curb corruption and improve the public sector. It can only be hoped that they are not caught up in the system they were elected to reform.
54. The global economy could be a help in this regard. Not only has it made the move of "dirty money" easier, but it is also subjecting countries and regions to previously unimaginable international investor scrutiny. Investment will no longer go to corrupt countries - with the exception perhaps of some corrupt tax havens - at least not in amounts sufficient to enable them to grow as fast as non-corrupt economies. (The relationship between democracy and lasting economic development has been eloquently set out in another report by the Committee on Economic Affairs and Development. See Doc. 8458; Rapporteur Mr Elo.)
55. It was no coincidence that Latvia served as the host country for the conference. Latvia, as all transition economies, has had to face particularly severe challenges also in the corruption field. It has entered into a very close co-operation with the World Bank to root out the phenomenon. Great progress has been observed. However, the Riga Conference showed that progress reached is one thing, public perception is another. A recent public opinion poll conducted by Transparency International showed that Latvians still perceive their country as more corrupt than other nations. However, for a small country like Latvia - as for other smaller countries in transition or not - it is essential to stamp out corruption in order to attract good quality foreign investment.
V. CONCLUDING REMARKS
56. It has been our endeavour in this report to show that the fight to keep corruption at bay is of a long-term nature, in fact one without end. It requires a comprehensive approach enjoying solid parliamentary support. Parliamentary example and self-scrutiny are primary elements in this process. Parliaments should set an example of integrity. It must hold the government accountable for all its actions, including the use of public money and the work of officials. They should also encourage the accession by their respective governments to recently developed international standards, particularly Council of Europe Conventions against corruption and money laundering, their participation in multilateral monitoring mechanisms such as GRECO, and their firm involvement in assistance and institutional building programmes such as Octopus. National parliaments must react were they to find that their government lacks in activity in the various international fora where corruption is being raised, and in particular where such inactivity manifests itself in a reluctance to accept international commitments or to help to develop international co-operation mechanisms.
57. A parliament is, or at least should be, the central institution of power in a democracy, since it is the institution in which the people have vested their power as citizens. Therefore, the role of parliaments in fighting corruption is absolutely central. Parliaments must fight corruption through the legislation it passes, through its monitoring of the behaviour of parliamentarians themselves as well as of government officials, representatives of the judiciary, the public service at national, regional and local level and, increasingly, companies. Another method is to make increased use of the hearing system, to which the media must have access.
58. We have agreed that parliaments that must pass clear anti-corruption laws. The question is only what kinds of laws and what these laws should regulate. They should be directed against taking bribes and using favours. The role of parliament is increasingly one of creating an environment in which corruption is made difficult. That means that legislation must also aim at greater openness and transparency, an obligation to declare sources of income and so on. Not least the latter is important, for then any bribery - which because of its nature obliges the recipient to keep it secret - can be punishable by law for the sole reason that the income has not been declared.
59. Beyond parliaments, civil society and the business community must be encouraged to establish various codes of conduct. Major companies do so, and even if such codes are not always respected, they at least provide a moral guideline, for some even a moral obligation, to refuse either to accept or give bribes.
60. The Council of Europe is a unique forum, where parliamentarians from over 40 different countries – often with rather different cultural characteristics – meet within the Parliamentary Assembly, and where experts meet within the organisation's intergovernmental work programme in the legal and other fields. Whatever the cultural differences between these countries, the latter have for a long time shared certain basic values as to public probity. The organisation, to the extent that it manages to reinforce this notion of probity, has a valuable contribution to make toward a reduction in corruption, and hence toward greater economic prosperity and more international trade, investment and contacts in general across our continent.
61. In addition to conventions and their monitoring and their gradually being made stricter, the Council of Europe could also promote codes of conduct in close co-operation, for example with the OECD which has vast experience in this field. Even though corruption exists in all European countries, it appears to be more pervasive in the some. In central and eastern Europe, for example, new laws have replaced those of the communist era, but the new laws do not always function as intended or are not always observed. The reasons for this are both complex and simple: complex because a number of behavioural patterns tend to cause the laws to be ignored; and simple because of a general lack of understanding of the principles upon which the laws governing any democratic state should be based.
62. Corruption is always an indication of poor governance and weak institutions. Fighting corruption must therefore encompass continuous reform of state administration and institutions. Countries suffering from severe corruption should approach the problem in successive steps. These include:
- undertaking a comprehensive diagnosis of the scope, causes and consequences of corruption;
- launching reforms of the political, legal and social and economic systems in order to strengthen good governance;
- engaging civil society in a debate about corruption and involving it in the progress of anti-corruption measures.
Parliament, the executive, the judiciary, the media, the civil society, as well as economic life are all vital participants in the process. Although corruption involves both the public and the private sector, the former must be dealt with as a priority. It is the duty of parliament to make legislation that will reduce unaccountable official discretion. Parliaments must also work to improve legislation concerning election campaign financing and the funding of political parties, formulate guidelines regarding conflicts of interest, and establish codes of conduct for elected representatives and public officials.
63. This world is not, and can never be, perfect. As long as human being are what they are - and we must accept our weaknesses just as we pride ourselves of our strengths - all we can do is to try to keep corruption at bay hourly, daily and yearly. Each generation has to fight not only for its freedom but also against corruption, which undermines the very foundation upon which that freedom rests. As we have seen in many countries, parliamentary democracy is no guarantee against corruption, but it is the only one that has a chance of vanquishing it. That is the fundamental meaning of the Riga Conference and of this report.
INTERNATIONAL CONVENTIONS ON CORRUPTION
Council of Europe legal instruments for the fight against corruption
The Criminal Convention on Corruption
The Convention was adopted by the Committee of Ministers in November 1998 and opened for signature in January 1999. It was signed by 30 countries (Albania, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Georgia, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Moldova, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Sweden, Ukraine, and the United Kingdom) and ratified by 1 country (“the former Yugoslav Republic of Macedonia”) (information as of 9 November 1999).
The Criminal Law Convention on Corruption aims at a co-ordinated criminalisation of a wide range of corrupt practices, and sets out to harmonise national legislation and improve international co-operation, in order to make facilitate the prosecution of those who offer or accept bribes or to speed up proceedings. It covers the following forms of corruption and corrupt behaviour normally considered as specific types of corruption:
• active and passive bribery of domestic and foreign public officials;
• active and passive bribery of national and foreign parliamentarians and members of international parliamentary assemblies;
• active and passive bribery in the private sector;
• active and passive bribery of international civil servants;
• active and passive bribery of domestic, foreign and international judges and officials of international courts;
• trading in influence;
• money-laundering of proceeds from corruption offences;
• accounting offences (invoices, accounting documents, etc.) connected with corruption offences.
The Civil Law Convention on Corruption
The Convention was adopted by the Committee of Ministers in September 1999. Opened for signature on 4 November 1999, the Convention was signed by 14 countries (Bulgaria, Cyprus, Denmark, Estonia, Georgia, Germany, Iceland, Ireland, Italy, Luxembourg, Moldova, Norway, Romania, and Ukraine) (information as of 24 January 2000).
It requires Contracting Parties to provide in their domestic law "for effective remedies for persons who have suffered damage as a result of acts of corruption, to enable them to defend their rights and interests, including the possibility of obtaining compensation for damage".
The Convention, divided into three chapters that cover measures to be taken at national level, international co-operation and monitoring of implementation, and final clauses, deals with:
• compensation for damage;
• liability (including State liability for acts of corruption committed by public officials);
• contributory negligence: reduction or disallowance of compensation, depending on the circumstances;
• validity of contracts;
• protection of employees who report corruption;
• clarity and accuracy of accounts and audits;
• acquisition of evidence;
• court orders to preserve the assets necessary for the execution of the final judgement and for the maintenance of the status quo pending resolution of the points at issue;
• international co-operation.
The two Conventions will come into force when they have been ratified by 14 states.
The Model Code of Conduct for Public Officials
The proposed Code aims (1) to define the ethical climate that should prevail in the public service, (2) to spell out the standards of ethical conduct expected of public officials and (3) to inform members of the public what to expect of public officials in conduct and attitude when dealing with them.
For more information: http://www.coe.fr/corruption
OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
The OECD Convention to combat bribery went into effect on 15 February 1999.
Of the 34 signatory countries the following ones have ratified the Convention (information as of 25 October 1999):
• Australia (18 October 1999)
• Austria (20 May 1999)
• Belgium (27 July 1999)
• Bulgaria (22 December 1998)
• Canada (17 December 1998)
• Germany (10 November 1998)
• Greece (5 February 1999)
• Finland (10 December 1998)
• Hungary (4 December 1998)
• Iceland (17 August 1998)
• Japan (13 October 1998)
• Korea (4 January 1999)
• Mexico (27 May 1999)
• Norway (18 December 1998)
• Slovakia (24 September 1999)
• Sweden (7 June 1999)
• United Kingdom (14 December 1998)
• United States (8 December 1998)
The Convention makes it a crime to offer, promise or give a bribe to a foreign public official in order to obtain or retain international business deals. A related text effectively puts an end to the practice according tax deductibility for bribe payments made to foreign officials. The Convention commits 34 signatory countries, including all the world’s biggest economies, to adopt common rules to punish companies and individuals who engage in bribery transactions. So far, eighteen countries have already changed their domestic laws in accordance with the Convention, including Austria, Australia (without ratification), Belgium, Bulgaria, Canada, Finland, Germany, Greece, Hungary, Iceland, Japan, Korea, Mexico, Norway, Sweden, the UK and the US.
Further information on OECD action against corruption: http://www.oecd.org/daf/nocorruption
UN instruments for the fight against corruption
The UN General Assembly, in December 1996, adopted the International Code of Conduct for Public Officials (Resolution 51/59 Action against corruption and International Code of Conduct for Public Officials) recommending it to Member States as a tool to guide their efforts against corruption.
According to the Code a public office is a position implying a duty to act in the public interest. As a consequence the ultimate loyalty of public officials shall be to the public interests of their country. The code also focuses on several issues concerning the conduct of public officials, such as: (a) Conflict of interest and disqualification; (b) Disclosure of assets; (c) Acceptance of gifts or other favours; (d) Confidential information; (e) Political activity. Concerning the conflict of interest and disqualification, the Code states that:
- Public official shall not use their official authority for the improper advancement of their own or their family's personal or financial interest. They shall not engage in any transaction, acquire any position or function or have any financial, commercial or other comparable interest that is incompatible with their office, functions and duties or the discharge thereof;
- Public officials shall, in accordance with laws or administrative policies, declare business, commercial and financial interests or activities undertaken for financial gain that may raise a possible conflict of interest;
- Public officials shall at no time improperly use public moneys, property, services or information that is acquired in the performance of, or as a result of, their official duties for activities not related to their official work;
- Public officials shall comply with measures established by law or by administrative policies in order that after leaving their official positions they will not take improper advantage of their previous office.
The United Nations Declaration against Corruption and Bribery in International Commercial Transactions recognised the importance of promoting social responsibility and appropriate standards of ethics not only in the public sector, but also in private corporations, "including transnational corporations, and individuals engaged in international commercial transactions, inter alia, through observance of the laws and regulations of the countries in which they conduct business, and taking into account the impact of their activities on economic and social development and environmental protection".
The Declaration also urged Member States:
- to combat all forms of corruption, bribery and related illicit practices in international commercial transactions;
- to criminalize bribery of foreign public officials in an effective and co-ordinate
- to develop or maintain accounting standards and practices that improve the transparency of international commercial transactions;
- to develop or to encourage the development, as appropriate, of business codes, standards or best practices that prohibit corruption, bribery and related illicit practices in international transactions;
- to examine establishing illicit enrichment by public officials or elected representative as an offence;
- to co-operate and afford one another the greatest possible assistance in connection with criminal investigations and other legal proceedings brought in respect of corruption and bribery in international commercial transactions;
- to enhance co-operation to facilitate access to documents and records about transactions and about identities of persons engaged in bribery in international transactions;
- to ensure that bank secrecy provisions do not impede or hinder criminal investigations or other legal proceedings relating to corruption, bribery or related illicit practices in international commercial transactions, and that full co-operation is extended to Governments that seek information on such transactions.
At its sixth session, the Commission on Crime Prevention and Criminal Justice (Vienna, 28 April - 9 May 1997) recommended the adoption by the General Assembly of the draft resolution on "International co-operation against corruption and bribery in international commercial transactions". The resolution stressed the threat posed by the bribery of public officials by individuals and enterprises to the international commercial transactions. The draft resolution also urged Member States "to criminalize, in an effective and co-ordinated manner, the bribery of public office holders of other States in international commercial transactions and encourages them to engage, as appropriate, in programmatic activities to deter, prevent and combat bribery and corruption (...)". During the Commission great attention was given to preventive measures, in particular to the establishment or strengthening of already existing auditing institutions or agencies having the authority and the capacity to scrutinise public expenditure, to the elaboration and introduction of code of ethics for certain categories of professions, to measures to ensure accountability and effective disciplinary action, to measures to guarantee the independent status of officials working within the public sector or in charge of fighting against corruption and bribery, and educational programmes to promote ethical values and training programmes for law enforcement officers. Particular importance was attached to measures taken at the national level to promote transparency in the expenditure of public funds by allowing or encouraging public access to and monitoring of the related decision-making process.
Global Programme against Corruption: an outline for action (published in February 1999) has been drawn up by the Centre for international Crime Prevention of the Office for Drug Control and Crime Prevention of the UN Secretariat jointly with the UN Interregional Crime and Justice Research Institute. It provides a thorough global study of the corruption phenomena and of anti-corruption measures. Considering that “comparable information is indispensable to combat corruption and to promote accountability, transparency and the rule of law” it endows “the international community with procedures and methodologies to assess the efficacy of measures taken and in facilitating the promotion of compatible efforts against corruption”.
Further information: http://www.uncjin.org/Special
EU measures to combat fraud and corruption
The 'Unité de Co-ordination de la Lutte Anti-Fraude' (UCLAF) was created in 1988 following the recommendations of a Commission report concerning means by which the fight against fraud on the Community budget could be intensified. UCLAF was part of the Secretariat-General, reporting to the European Commission, until its replacement by the ‘Office de Lutte Anti-Fraude (OLAF) following the vote in the European Parliament in May 1999. OLAF has taken over many of the UCLAF’s functions described below.
The primary duty for the fight against fraud remains the responsibility of the individual Member States, who are responsible for the front line enforcement and verification work which is essential in deterring, discovering and stopping fraud. Every Member State is obliged under the terms of Article 209a (Maastricht Treaty) to take the same measures to counter frauds on the Community budget as they do to protect their own financial interests.
UCLAF was responsible in the Commission for all aspects of the fight against fraud on the EU budget. UCLAF's operational mission was primarily to support Member States where they needed co-ordination with other Member States and the relevant services of the Commission.
UCLAF fulfilled its operational mission mainly by investigation into suspected fraud cases with the aim of both establishing the sums at risk to be recovered and preparing a case suitable for submission to public prosecutors in the Member States. While UCLAF had the power to request that investigations be carried out by the competent services of the Member States involved, UCLAF could also take the lead in an investigation, while maintaining co-operation with the Member States concerned. This course of action was taken when the investigation could not be carried out effectively without co-ordination with other Member States; for example, where elements of an important fraudulent operation appeared to exist in various Member States simultaneously, or where evidence had to be obtained outside the Community.
Furthermore, UCLAF could assist Member States in focusing their verification and control efforts on high-risk sectors and areas of activity based on past experience of frauds in these areas, and ongoing information-gathering efforts. This information was transmitted to government officials with anti-fraud responsibilities in the Member States by means of training seminars, often undertaken in co-operation with Directorates-General with a specific interest in the budget area under discussion.
To collect and analyse this information, UCLAF maintained a database of information regarding suspected fraud under inquiry by the Commission (pre-IRENE), as well as a database of investigation cases reported to the Commission by the Member States (IRENE) which holds over 20 000 cases mainly reported to UCLAF within the last years. In addition, the customs and agricultural services had a direct means of communication between themselves and with UCLAF thanks to the SCENT computer network, which greatly facilitated co-operation.
However, UCLAF had no independent criminal investigative powers, i.e. the power to arrest and question suspects, to search premises and seize documents, or to compel potential witnesses to attend and answer questions or supply documents. This remained the domain of the Member States, who were obliged under the provisions of Article 209a, paragraph 1, of the Maastricht Treaty to take the same measures to counter fraud affecting EU financial interests as they did for their own national budget.
UCLAF's other core activities:
• Mutual assistance
Member States were obliged under the terms of the Maastricht Treaty (Article 209a, paragraph 2) to organise close and regular co-operation to protect the financial interests of the EU between the competent departments of their administrations with UCLAF's assistance. This took place within the framework of both regulations and administrative arrangements. Meetings between UCLAF investigators and representatives of the investigative services of the Member States to decide and co-ordinate anti-fraud operations took place nearly every week. The Advisory Committee on the Fight Against Fraud (Cocolaf), a committee of high officials from the relevant services of the Member States (mainly customs, finance and agriculture), met regularly to discuss progress in the fight against fraud, the work programme of UCLAF and other related matters.
UCLAF provided training and information seminars for control and investigation staff, prosecutors and judges, and other interested parties at all levels in the Member States.
UCLAF provided information and analysis to EU institutions such as the European Parliament and the Court of Auditors, and the media, based on data gathered from the Member States concerning fraud cases discovered and closed investigations. Important documents included the ‘Annual report on the fight against fraud’ and the regularly updated Strategy Paper (Work Programme). This activity served both to inform the debate on anti-fraud measures and to heighten the awareness of decision-makers and members of the general public concerning the problem of EU fraud.
The Commission took the initiative in proposing legislation to eliminate gaps in anti-fraud legislation in both the criminal and administrative domain throughout the Community. Negotiations were brought to a successful conclusion for a convention on the 'approximation' of criminal law in the Member States concerning fraud to the detriment of Community finances (which is awaiting ratification in the Member States), and a regulation extending administrative sanctions which already existed in the agricultural domain (which passed into law).
Further legislative initiatives concerned a regulation giving the Commission an overall legislative framework for undertaking on-the-spot inspections in all budgetary domains (providing a general legal framework for UCLAF's investigation work), a first protocol to the convention to 'assimilate' the treatment of European Union officials with that of their national counterparts regarding the criminal offence of corruption, and a second protocol which included the criminalisation of money laundering of the proceeds of fraud on the EU budget, and measures to simplify judicial co-operation.
The Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union (Council Act 97/C 195/01 of 26 May 1997 drawing up, on the basis of Article K.3 (2) (c) of the Treaty on European Union)
Of the 15 signatory countries the following ones have ratified the Convention (information as of 9 November 1999):
• Finland (18 December 1998)
• Sweden (10 June 1999)
• United Kingdom (11 October 1999)
The Convention is the first legal instrument adopted at international level that makes bribes paid abroad a criminal offence; not only does it enable Community officials to be charged but it also enables acts of corruption vis-à-vis foreign officials to be made a criminal offence. The Convention establishes the Member States' commitment to take the necessary measures to ensure that both active and passive corruption as defined by the Convention are made a criminal offence at national level. This refers to acts of corruption committed both by Community or national officials and, under certain conditions, by Ministers, members of national parliaments, members of the highest courts and the courts of auditors, and members of the Commission, the European Parliament, the Court of Justice and the Court of Auditors of the European Communities respectively in the exercise of their duties.
With regard to penalties the Convention provides that each Member State shall take "the necessary measures to ensure that the conduct referred to is punishable by effective, proportionate and dissuasive criminal penalties, including, at least in serious cases, penalties involving deprivation of liberty which can give rise to extradition", which will take place after ratification by the fifteen Member States.
The Convention also contains provisions on the criminal liability of heads of businesses, the determining of the judicial authority which has jurisdiction over an offence that has been committed, extradition and prosecution, the application of the "ne bis in idem" rule (whereby a person cannot be tried twice in respect of the same facts) and the Convention's entry into force.
The Convention on the protection of the European Communities’ financial interest (signed in 1995) and its three Protocols (signed respectively in 1996, 1997 and 1996)
Of the 15 signatory countries the following ones have ratified the Convention (information as of 9 November 1999) and its Protocols:
• Germany (24 November 1998), except the second and third Protocols
• Austria (21 May 1999), except the second Protocol
• Finland (18 December 1998), except the second Protocol
• Sweden (10 June 1999), except the second Protocol
• United Kingdom (11 October 1999)
Further information on EU action against corruption: http://europa.eu.int/scadplus/leg/lvb/
The Inter-American Convention against Corruption
Adopted in March 1996 by the Organisation of American States, this convention entered into force in June 1997. Of the 26 countries that have signed the convention 17 have also ratified it (information as of 9 November 1999).
This Convention is open for accession by any country that is not a member State of the Organisation of American States. The Convention is applicable to the following acts of corruption (committed or having effects in a state that is party to the Convention):
- The solicitation or acceptance, directly or indirectly, by a government official or a person who performs public functions, of any article of monetary value, or other benefit, such as a gift, favour, promise or advantage for himself or for another person or entity, in exchange for any act or omission in the performance of his public functions;
- The offering or granting, directly or indirectly, to a government official or a person who performs public functions, of any article of monetary value, or other benefit, such as a gift, favour, promise or advantage for himself or for another person or entity, in exchange for any act or omission in the performance of his public functions;
- Any act or omission in the discharge of his duties by a government official or a person who performs public functions for the purpose of illicitly obtaining benefits for himself or for a third party;
- The fraudulent use or concealment of property derived from any of the acts referred to in this article; and
- Participation as a principal, co-principal, instigator, accomplice or accessory after the fact, or in any other manner, in the commission or attempted commission of, or in any collaboration or conspiracy to commit, any of the acts referred to in this article.
Source: Inter-American System of Legal Information of the Organisation of American States
Further information: http://www.oas.org/EN/PROG/Juridico/english/
Other sources of information:
Bribe Payers Index
The index ranks the leading exporting countries in terms of the degree to which their companies are perceived to be paying bribes. The scale is from 0 to 10, where 10 represents negligible bribery and 0 a very high level of bribery. Based on a survey of nearly 800 business executives conducted in 14 emerging-market countries.
1 China (including Hong Kong) 3.1
2 South Korea 3.4
3. Taiwan 3.5
4. Italy 3.7
5. Malaysia 3.9
6. Japan 5.1
7. France 5.2
8. Spain 5.3
9. Singapore 5.7
10. United States 6.2
11. Germany 6.2
12. Belgium 6.8
13. Britain 7.2
14. Netherlands 7.4
15. Switzerland 7.7
16. Austria 7.8
17. Canada 8.1
18. Australia 8.1
19. Sweden 8.3
Source: Transparency International
Reporting committee: Committee on Economic Affairs and Development.
Budgetary implications for the Assembly: none.
Reference to committee: Order No. 540 (1998)
Draft resolution unanimously adopted by the committee on 20 January 2000.
Members of the committee: Degn (Chairperson), Valleix, Bloetzer, Elo (Vice-Chairmen), Akgönenç, Aliko, Andreoli, Attard Montalto (Alternate: Agius), Billing, Blaauw, Blattmann, Bojars, Bonet Casas, Braun, Brunhart, Calner, Clinton-Davis, Cunliffe (Alternate: Davis), Cusimano (Alternate: Turini), Durrieu, Eyskens, Frey, Freyberg, Galvao Lucas, Gonzalez Laxe, Graas, Gül, Gusenbauer, Gylys, Hempelmann (Alternate: Behrendt), Hoffmann, Kacin, Kestelijn, Kirilov, Kittis, Kuznetsov, Lazarenko (Alternate: Kosakivsky), Leers, Liapis, Linzer, Lotz, Mateju, Mitterrand, Niculescu, Obuljen, Pereira Coelho, Popescu, Popovski, Prokes, Puche, Ragnarsdottir, Rigo, Rutskoy, Sarishvili-Chanturia, Schmitz, Shuba, Sorocean, Squarcialupi, Stepova, Stoyanova, Tallo, Townend (Alternate: Colvin), Vasile, Verivakis, Wielowieyski, ZZ .. (Alternate: Connor).
N.B. The names of those members present at the meeting are printed in italics.
Secretaries of the committee: MM. Torbiörn, Mezei and Ms Ramanauskaite.
1 Aristotle, in his "Politics", observes: "Formerly …. everyone would take his turn in services, and then again, somebody else would look after his interests, just as he, while in office, had looked after theirs. But nowadays, for the sake of the advantage which is to be gained from the public revenues, and from office, men want always to be in office. One might imagine that the rulers, being sickly, were only kept in health while they continued in office; in that case we may be sure that they would be hunting after places. The conclusion is evident: that governments which have regard to the common interest are constituted in accordance with strict principles of justice, and are therefore true forms; but those which regard only the interest of the rulers are all defective, and perverted forms, for they are despotic, whereas a state is a community of freemen" (Book III). Aristotle goes on to say: "We must remember that good laws, if they are not obeyed, do not constitute good government. Hence there are two types of good government: one is the action of obedience of citizens to the laws, the other part is the goodness of the laws which they obey; they may obey bad laws as well as good." (Book IV)