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Saturday, July 13, 2024

EU Council Agrees on New EU Law to Combat Corruption in Public and Private Sectors

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The European Council today agreed on an EU law that sets minimum standards for defining and sanctioning corruption offences, preventive measures, and rules for more effective investigation and prosecution. The law’s main novelty is that it unifies rules on corruption in the public and private sectors into one legal act for the first time at the EU level.

“Corruption corrodes trust in the public sector, harms the economy, and damages the fabric of our societies. With this new law, we increase our power to combat corruption,” said Paul Van Tigchelt, Belgian Deputy Prime Minister and Minister of Justice and the North Sea.

The new law will replace two separate EU laws – one from 2003 dealing with corruption in the private sector and an EU Convention from 1997 on corruption involving EU officials or officials of EU member states. It will also amend the 2017 directive on fraud and other criminal offences affecting the EU’s financial interests.

Once adopted, the new directive will align measures to combat corruption in the private and public sectors, making the fight against corruption more effective. All EU countries will be obliged to criminalise the same acts of corruption and define these acts in the same manner.

The following offences will now be punishable as a criminal offence throughout the EU: bribery in the public and private sectors, misappropriation, trading in influence, obstruction of justice, and enrichment from corruption offences.

The Council also agreed that member states must put in place effective, proportionate, and dissuasive criminal penalties to sanction these crimes. The criminal offences that will become illegal under EU law will be punishable by a maximum term of imprisonment of at least two to four years, depending on the offence. People convicted for corruption offences may incur additional penalties such as fines, removal from public office, disqualification from holding public office or exercising a public service function, the withdrawal of permits, and exclusion from access to tender procedures and public funds.

Legal persons (i.e., companies) will also face penalties in the form of fines ranging from at least 3% to 5% of their total worldwide turnover or at least €24 or €40 million, depending on the offence.

Member states have jurisdiction over offences committed within their territory, where the offender is a national. In addition, member states may decide to extend their jurisdiction to acts committed outside their territory under certain conditions.

The Council also agreed that member states must take action to raise public awareness regarding the harmfulness of corruption and to ensure transparency and accountability in public administrations in the interest of preventing corruption.

The 27 EU member states must also ensure the establishment of bodies tasked with the prevention and repression of corruption. These bodies need to be able to operate without undue interference and must be equipped with an adequate number of qualified staff and financial resources.

On the basis of this general approach reached today, the Council will be able to enter into negotiations with the European Parliament, which already established its position in February 2024, to agree on a final legislative text.

The EU is a party to the United Nations Convention Against Corruption (UNCAC), the most comprehensive international legal instrument in this field. This legislative proposal will update the EU legislative framework and incorporate international standards that are binding on the EU, such as those in the UNCAC.

A Eurobarometer survey from 2022 shows that 68% of people in the EU and 62% of companies based in the EU considered that corruption was widespread in their country.

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