Corruption and internal Union law A. Criminalising corruption in the public sector

The first major step towards the criminalisation of corruption at EU level was the adoption of legislation criminalising it in the public sector. This was achieved after the entry into force of the Maastricht Treaty, which for the first time gave the Union express powers to legislate in criminal matters under the third pillar. The legal instruments used to criminalise corruption in the public sector were Conventions, the third-pillar instru-ment with the clearest legally binding effect in the Maastricht Treaty. The

* Professor, School of Law, Queen Mary, University of London.

context in which these instruments were adopted was the need to fight fraud affecting the financial interests of the European Union. Fighting fraud was high on the EU political agenda in the 1990s, as exemplified by legislative action at EU level and the European Commission’s promotion of uniform EU criminal law via the Corpus Juris ; it was also demonstrated dramatically by the fall of the Santer Commission in the late ’90s and the establishment of a re-vamped EU anti-fraud office, OLAF.¹

The first instance of the criminalisation of corruption in the public sector at EU level was the adoption of two protocols to the 1996 EU Fraud Convention.² The First Protocol to the Convention³ recognised from the outset that “the financial interests of the European Communities may be damaged or threatened by other criminal offences, particularly acts of cor-ruption by or against national and Community officials, responsible for the collection, management or disbursement of Community funds under their control”.⁴ The Protocol criminalised passive corruption in the public sec-tor, defined as “the deliberate action of an official, who, directly or through an intermediary, requests or receives advantages of any kind whatsoever, for himself or for a third party, or accepts a promise of such an advantage, to act or refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties in a way which damages or is likely to damage EC financial interests”.⁵ It also criminalised active cor-ruption in the public sector, defined as “the deliberate action of whosoever promises or gives, directly or through an intermediary, an advantage of any kind whatsoever to an official for himself or for a third party for him to act or refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties in a way which damages or is likely to damage EC financial interests”.⁶ In addition to criminalising

1 For details, see V. Mitsilegas, EU Criminal Law, Hart, 2009.

2 Convention drawn up on the basis of Article K.3 of the Treaty on the European Union, on the Protection of the European Communities’ Financial Interests, OJ C 316, 27 No-vember 1995, p. 49.

3 Protocol drawn up on the basis of Article K.3 of the Treaty on European Union to the Convention on the protection of the European Communities’ financial interests, OJ C 313, 23 October 1996, p. 2.

4 Preamble, recital 4.

5 Article 2(1).

6 Article 3(1).

corruption, the Second Protocol to the Fraud Convention⁷ criminalised the laundering of proceeds of corruption⁸ and made legal persons potentially liable for fraud, active corruption and money laundering.⁹ Legal persons do not necessarily incur criminal liability under the Protocol, but they must be punished by “effective, dissuasive and proportionate sanctions”.¹⁰

The adoption of the EU Fraud Convention and its Protocols was fol-lowed by the adoption of EU legislation devoted specifically to establish-ing a criminal law framework against corruption in the public sector.

Another Maastricht third-pillar Convention, the 1997 EU Convention on Corruption,¹¹ was justified on the grounds that it was necessary to go fur-ther than the Fraud Convention in order to improve judicial cooperation in criminal matters of this nature.¹² While keeping the emphasis on the fact that acts of corruption involving national or Community officials are likely to damage EC financial interests,¹³ the Convention went a step fur-ther than the Protocol to the Fraud Convention as regards the criminali-sation of corruption in the public sector : while the main elements of the offences of passive and active corruption remained the same as in the Pro-tocol, criminalisation of public sector corruption in the Corruption Con-vention was no longer conditional upon the acts in question being such as to “damage or be likely to damage EC financial interests”.¹⁴ Thus the Convention broadens the criminalisation of corruption in the public sec-tor by disassociating it from fraud against EU financial interests and thus arguably creating free-standing corruption offences.¹⁵

Thus the 1997 EU Convention on Corruption introduced a broad criminalisation of public sector corruption. Not only does it (as aforesaid) remove the need for corruption to be linked expressly to fraud against the

7 Second Protocol, drawn up on the basis of Article K.3 of the Treaty on the European Union, to the Convention on the Protection of the European Communities’ financial interest, OJ C 221, 19 July 1997, p. 12.

8 See part C below.

9 Article 3.

10 Article 4.

11 Convention, drawn up on the basis of Article K.3(2)(c) of the Treaty on the European Union, on the Fight against Corruption Involving Officials of the European Communi-ties or Officials of Member States of the European Union, OJ C 195, 25 June 1997, p. 2.

12 Preamble, recitals 2 and 4.

13 Preamble, recital 3.

14 Article 2 on passive corruption and 3 on active corruption.

15 The Convention also includes a provision on the criminal liability of company directors.

Union budget, but, moreover, criminalisation (as with the Protocol to the Fraud Convention) is not conditional upon obtaining a specifically busi-ness advantage ; the focus is on “advantages of any kind whatsoever” and on the breach of official duty itself. This is a departure from the criminali-sation of corruption in the OECD Convention on the Bribery of Foreign Public Officials, of which Article 1 criminalises such bribery “in order to retain business or other improper advantage in the conduct of interna-tional business”.¹⁶ For passive corruption to be criminal, a request for an advantage is enough ; for active corruption to be criminal, the promise of an advantage is enough. No further action is required. The Explana-tory Report on the Convention¹⁷ also adopts a broad interpretation of the criteria for criminal liability, pointing out that the Convention makes no distinction between direct and indirect means of corruption, or between passive and active corruption.¹⁸ It adopts a similarly broad interpretation of the concept of “advantages of any kind whatsoever”, the offer or ac-ceptance of which is a key element in criminal corruption. According to the Explanatory Report, this “is a deliberately broad concept, embracing not only material objects…but also anything that might represent an in-direct interest, such as settlement of the corrupted person’s debts, work on property belonging to him, etc. This list is not exhaustive. The concept of advantage, requested, received or promised, covers all kinds of material or intangible advantages.”¹⁹

The 1997 EU Convention on Corruption confirmed the broad crimi-nalisation of corruption in the public sector at EU level and provided the basis for the harmonisation of Member States’ criminal law in this field.

However, two major obstacles to the achievement of meaningful harmoni-sation can be discerned, one involving the substance of the Convention and one involving its form. With respect to the substance, considerable leeway is left to Member States to define the ratione personae scope of the Convention. According to Article 1(c) of the Convention, “national offi - cial” means an “official” or “public officer” as defined in the national law

16 Article 1(1) in fine, emphasis added. For a commentary see I. Zerbes, “The Offence of Bribery of Foreign Public Officials”, in M. Pieth / L. A. Low / P. Cullen (eds), The OECD Convention on Bribery. A Commentary, Cambridge University Press, 2007, pp. 45-172 at pp. 150 et seq.

17 OJ C 991, 15 December 1998, p. 1.

18 Points 2.2 and 3.2 respectively.

19 Point 2.4.

of the Member State in which the person in question performs that func-tion for the purposes of applicafunc-tion of the criminal law of that Member State. The provision adds that in the case of proceedings initiated by one Member State against an official of another Member State, the former shall not be bound to apply the definition of “national official” except insofar as that definition is compatible with its own national law. This leaves plenty of room for divergent definitions of who, in each Member State applying the Convention, is or is not a national official. The right of each Member State to define the term is confirmed by the Explanatory Memorandum to the Convention.²⁰ Moreover, the ratione personae scope of the Convention is substantially curtailed by the fact that, as noted in the Explanatory Report to the Convention, members of Community institutions are not covered by the definition of Community officials, but rather come under article 4 of the Convention.²¹ The latter introduces the principle of assimilation as regards acts of government ministers, elected members of parliament, the members of the highest courts of Member States, and the members of their Courts of Auditors in the exercise of their functions.

The formal obstacle to achieving harmonisation in this field is linked with the fact that the legal framework for the criminalisation of corrup-tion in the public sector at EU level brings together a Convencorrup-tion and two Protocols to another Convention, all instruments adopted after the entry into force of the Maastricht Treaty. Hence the framework is com-plex and fragmented. Moreover, the form of legislative intervention, via the quintessentially intergovernmental legal instrument of a Convention (which, unlike first-pillar instruments and post-Amsterdam third-pillar Framework Decisions, requires subsequent ratification by Member States before it can enter into force) further complicates the required harmonisa-tion. In its second report on implementation of the Fraud Convention, the

20 According to the Explanatory Report on the Convention, “Where a national official of the prosecuting Member State is involved, this clearly means that its national defini-tion is applicable. Where, however, an official of another Member State is involved, this means that the definition in the law of that Member State should normally be applied by the prosecuting Member State. If the person concerned would not have had the status of official under the law of that State, that definition may not be de-cisive […] It should be noted that in general the reference to the law of the official’s Member State means that due account can be taken of specific national situations regarding the status of persons exercising public functions” (point 1.4).

21 Point 1.2.

Commission²² noted in this context that “De facto the current system of protection, based on conventions, creates a multi-speed situation. It re-sults in a mixture of different legal situations in terms of the binding ef-fect of the PFI instruments in the individual Member States’ internal legal order.”²³ This assessment would apply equally to the relevant corruption instruments (two of which are in fact covered by the Commission’s report).

It is striking that no legislative action was undertaken by EU institutions after the entry into force of the Amsterdam Treaty to replace or consolidate the existing anti-corruption legal framework with a stronger and more co-herent legal instrument under the third pillar. This contrasts starkly with the practice of replacing a number of weak Maastricht third-pillar ments (Joint Actions or Conventions) with stronger, binding legal instru-ments such as Framework Decisions and Decisions after Amsterdam.²⁴ What is even more striking, and perhaps reflects the importance which Member States attach to legislation against the corruption of public offi-cials, is that reform of this aspect of the criminal law on corruption did not become a priority even after the abolition of the third pillar and the entry into force of the Lisbon Treaty. Thus we find the post-Lisbon EU entering the second decade of the twenty-first century with a weak criminal law against public sector corruption that dates back to the mid-1990s.