Thursday

14th Dec 2017

Report: Bribe money for contracts not prosecuted enough in EU

  • 'The growing momentum behind anti-bribery enforcement is making it harder to get away with the use of graft to win business' (Photo: europarl.europa.eu)

Obtaining lucrative contracts in Europe by companies or individuals still involves, in some cases, bribing foreign public officials.

The prosecution and investigation into such illicit acts has improved somewhat when compared to previous years, according to a report released on Thursday (6 September) by the Berlin-based NGO, Transparency International (TI).

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

But some member states, like Estonia, Greece, the Czech Republic, Ireland and Poland, have shown no discernible improvement at all.

None of the five member states have yet to investigate or prosecute any case involving the bribery of foreign public officials in efforts by companies to secure contracts or avoid local regulations.

"The lack of enforcement and the lack of cases and the lack of investigations has been stagnating. It's never been better. It's always been equally bad in terms of no enforcement of these kinds of conventions that prevent foreign bribery," said Jana Mittermaier, director of Transparency International Brussels’ office.

TI looked at laws dealing with corruption, money laundering, tax evasion, fraud, or violations of accounting and disclosure requirements. The report did not look at cases involving domestic companies and their respective public officials.

Signatory governments of a 1997 anti-bribery convention by the Paris-based economic club, the OECD, are required to outlaw the practice.

Mittermaier said the Greek government, for example, has not enforced the convention due to a lack of financial resources for the prosecution and investigation that "often require very specialised expertise."

"These foreign bribery cases don't only happen outside the European Union, they also happen inside the European Union," said Mittermaier. She raised as an example of some EU companies vying for the contractual rights to mine gold in Romania.

In Europe, only Denmark, Germany, Italy, Norway, Switzerland, and United Kingdom are actively enforcing the convention with 10 or more cases under investigation.

While Italy may be investigating cases, a statue of limitations introduced by the government of former leader Silvio Berlusconi in 2005 means many of them are simply dismissed.

The Germans, meanwhile, currently have 43 active cases under investigation. Last year, the Munich prosecutor's office charged a former board member of Siemens AG with breach of trust over attempts to win a project in Argentina by paying off officials.

Siemens AG had allegedly paid some €21.4 million to government officials to secure contract rights to produce digital identity cards in the 1990s.

A Siemens AG spokesperson in Munich told this website that the company had been granted the contract in 1998 but was later cancelled in 2001 by the Argentinian government. He said Siemens took Argentina to court and won a €172 million plus interest settlement. Argentina is appealing.

He was not aware of the charge brought against the former Siemen border member cited in the TI report but noted that the company is complying with Argentian authorities who are currently investigating allegations of bribery for the contract.

He also noted that the company introduced rules in 2006 and 2007 that would ensure bribery would not happen.

"The company installed complete compliance systems to make sure that no bribery happens and that only clean business is only good business for Siemens," he said.

The Munich prosecutor, also in the same year, charged two former executives of Ferrostaal AG for allegedly bribing Greek and Portuguese officials to secure the sale of submarines between 2000 and 2007.

Other pending investigations in Germany involve Philips Electronics and Tognum AG which is jointly owned by Rolls-Royce PLC and Daimler AG.

For its part, the European Commission claims corruption costs the EU as whole some €120 billion in lost revenue annually. Commission reports cite the value of 20 to 25 percent of the public contracts is lost to corruption.

Romania wants EU signal on Schengen membership

Bucharest expects other member states to decide on its accession to the passport-free area before it takes the rotating EU presidency on 1 January 2019 - amid criticism of a controversial new justice reform.

Germany says China using LinkedIn to recruit informants

Germany's spy agency says the Chinese state is trying to recruit high-ranking German officials via social media outlets like LinkedIn. It accused Chinese intelligence of setting up fake profiles to lure them into becoming informants.

Germany says China using LinkedIn to recruit informants

Germany's spy agency says the Chinese state is trying to recruit high-ranking German officials via social media outlets like LinkedIn. It accused Chinese intelligence of setting up fake profiles to lure them into becoming informants.

News in Brief

  1. Dutch takes Germany to court over road taxes
  2. Russia sanctions hit Germany hardest
  3. Italy likely to hold national elections on 4 March
  4. ECB expected to continue pumping money into markets
  5. Report: Pro-Kremlin trolls targeted Scottish referendum
  6. MEPs vote to allow phosphate additives in kebabs
  7. Babis government sworn in in Czech Republic
  8. Russia looks to crypto-currencies to evade EU sanctions

Stakeholders' Highlights

  1. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  2. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  3. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  4. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  5. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  6. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  7. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  8. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  9. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  10. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  11. EPSUEU Blacklist of Tax Havens Is a Sham
  12. EU2017EERole of Culture in Building Cohesive Societies in Europe

Latest News

  1. Tusk migration note prompts institutional 'hysteria'
  2. Migration looms over summit, as Africa pledges fall short
  3. Brits in EU-27 are uncertain, alone and far from protected
  4. 2018 fishing quotas agreed - but Brexit muddies waters
  5. Medical HQ to spearhead EU military push
  6. Facebook to shift ad revenue away from Ireland
  7. EU renews glyphosate approval, pledges transparency
  8. Romania searching for EU respectability

Stakeholders' Highlights

  1. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage
  2. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  3. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  4. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  5. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  6. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  7. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  8. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  9. Dialogue PlatformThe Turkey I No Longer Know
  10. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives
  11. EPSU-Eurelectric-IndustriAllElectricity European Social Partners Stand up for Just Energy Transition
  12. European Friends of ArmeniaSignature of CEPA Marks a Fresh Start for EU-Armenia Relations