International newsletter of the HATVP – October 2022
In October, the European Court of Auditors published its annual activity report for 2021, in which it recommends changes for the European Union’s agencies in terms of auditing mobility between the public and private sectors.
The European Ombudsman is calling for stricter rules on overseeing the transfer of European Central Bank staff to the private sector, particularly in the financial sector.
Finally, the Council of Europe’s Group of States against Corruption (GRECO) has issued compliance reports on Montenegro and Croatia.
EUROPEAN UNION (EU)
On 4 and 5 October, the European Anti-Fraud Office (OLAF) jointly organised a conference with the Anti-Fraud Coordination Services (AFCOS) of the Member States and the EU candidate countries entitled “Fighting Fraud Together”, in order to strengthen cooperation and exchange best practices. This conference was an opportunity to discuss the proper use of European funds in order to fight against fraud, especially digital fraud. As fraud is becoming an increasingly cross-border phenomenon, OLAF and AFCOS recommend increased transnational cooperation, exchanges of information, and mutual support during investigations. (European Anti-Fraud Office, 6 October 2022)
On 27 October, the European Court of Auditors published its Annual Activity Report for 2021, which looks back at the audits carried out in Member States and third countries, and also makes recommendations for reforms. In particular, the Court notes that the oversight rules concerning revolving door practices in EU agencies are not sufficient. In order to avoid conflicts of interest and to ensure the integrity of EU institutions, it recommends strengthening the rules on overseeing private sector mobility of its staff. Indeed, members of the scientific committees and boards of directors of such agencies are not subject to the same obligations as staff members, who must inform their agency if they intend to take up employment in the private sector within two years of leaving. The report calls for the establishment of a regulatory framework specifying a minimum set of rules for all such structures, given that only nine such agencies currently have internal requirements in this area. (European Court of Auditors, 27 October 2022)
In a 28 October press release, the European Ombudsman called on the European Central Bank (ECB) to tighten its rules on staff leaving for the private sector, particularly when such moves are to the financial sector. Indeed, in the context of an inquiry conducted on its own initiative into the revolving door phenomenon involving ECB members, the European Ombudsman examined 26 cases of proposed transfers, 25 of which were to the private sector, including to banks and entities falling within the ECB’s field of supervision. As the ECB is currently revising its ethical framework, the Ombudsman calls on the institution to include a strict waiting period in its rules and to extend the ban on lobbying by former senior ECB officials of their former colleagues to one year. (European Ombudsman, 28 October 2022)
INTERNATIONAL ORGANISATIONS
On 25 October, the Council of Europe’s Group of States against Corruption (GRECO) published its 5th round evaluation report on Montenegro, focusing on the prevention of corruption and the promotion of integrity in central government (top executive functions) and law enforcement agencies. The report recalls that corruption remains a concern in Montenegro; according to Transparency International’s Corruption Perceptions Index, Montenegro ranked 64th out of 180 countries in 2021. Furthermore, the country’s accession to the European Union depends in part on progress in the area of the rule of law, including issues related to corruption. The report makes a number of recommendations, including the introduction of an integrity check prior to the appointment of ministers and secretaries of state in order to identify and prevent potential conflicts of interest, the adoption of a code of ethics for senior executive positions, and the clarification of the tasks of the Agency for the Prevention of Corruption (ASK), in particular so that it can investigate suspicions of lobbying automatically, and so that it can monitor declarations of assets and income. (Council of Europe, 25 October 2022)
In addition, on 28 October, GRECO published its second compliance report of the 4th evaluation round for Croatia. The 4th round concerns members of parliament, judges, and prosecutors. The report recalls that Croatia is one of the only EU member states whose parliament does not have a code of conduct, which is one of the main recommendations of GRECO. GRECO states that a draft text is currently being prepared. The report also highlights the positive role of the Commission in resolving conflicts of interest through awareness raising, training, and counselling. Finally, GRECO recommends reviewing the procedures for the selection and reappointment of the President of the Supreme Court in order to promote transparency and minimise the risk of undue political influence, among other things, by giving the National Council of the Judiciary a more decisive role in the selection procedure. (Council of Europe, 28 October 2022)
NON-GOVERNMENTAL ORGANISATIONS
On 11 October, Transparency International published its biannual report, entitled “Exporting Corruption”, which assesses the compliance of 47 major exporting countries with the with the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The report notes a weakening of law enforcement against international corruption-related crime, due in part to numerous gaps remaining in each country’s legislation and judicial systems. Since the previous report, only Latvia and Peru are reported to have performed better, and only the United States and Switzerland are reported to have “actively” enforced foreign bribery measures. In particular, the NGO recommends improving access to information on foreign bribery cases and compensation for victims and whistleblowers. (Transparency International, 11 October 2022)
GEOGRAPHIC AREAS
On 4 October, the Hungarian Parliament adopted a series of measures to ensure the nation’s compliance with the European Commission’s requirements, and avoid the loss of 7.5 billion in EU funds. These measures include the establishment of an “independent integrity authority” to monitor the use of EU funds and investigate fraud, conflicts of interest, and corruption. Another measure is the creation of an anti-corruption working group, composed of at least ten representatives of civil society, which would assess the country’s anti-corruption measures and make recommendations, ultimately for the publication of an annual report. The European Commission will assess these measures on 19 November, which may require a qualified majority vote of the Member States, i.e., at least 15 out of 27 Member States, representing at least 65% of the EU population. (La Croix, 4 October 2022; Acteurs Publics, 14 October 2022)
Australia
On 14 October, following the commissioning of a review of the Queensland public service, the Premier of Queensland presented a reform proposal to the Queensland Parliament in order to create a new Office of the Integrity Commissioner, independent of the government, to oversee lobbying. Furthermore, this bill seeks to make unregulated lobbying, i.e., not registered in the lobbyist registry, an offence punishable by a fine of over $28,000. (The Canberra Times, 14 October 2022)