1. EXTRACTS FROM THE EUROPEAN COMMISSION REPORTS ON CROATIA (2005 – 2007), GRECO EVALUATION REPORT (2005) AND GRECO COMPLIANCE REPORT (2007) ON CROATIA (PDF) download >>>
ANALYSIS ON CROATIA BASED ON THE EXTRACTS FROM THE EUROPEAN COMMISSION REPORTS (2005 – 2007) AND GRECO EVALUATION AND COMPLIANCE REPORTS (2005, 2007)
General Statements
Although, European Commission, in its 2004 Opinion, finds that the fight against corruption needs further strengthening, in its Progress Report 2005, the Commission highlights that corruption has actually got worse over the past year. It is emphasized that corruption is widespread and it continues to be a serious problem that affects various aspects of society and that it needs to be further stepped up as it represents a threat to the stability of democratic institutions and the rule of law.
Following year, European Commission stresses that corruption deteriorated, again, over the past year and it represents a serious problem that affects various aspects of society. The Commission finds that corruption in Croatia is aided by a lack of good governance, transparency and accountability in public administration and by a lack of ethic codes and codes of conduct in the public and private sectors, underlining that allegations of corruption remain uninvestigated and corrupt practices usually go unpunished. In conclusion, it is pointed out that the general attitude of the authorities to corruption is reactive rather than proactive, and the Commission invites them, for a second time, to invest greater efforts to prevent, detect and effectively prosecute corruption.
In 2007, European Commission repeats that corruption remains widespread at the political, economic and institutional level, underlining that no indictment or verdict is issued in any of high-level corruption cases. It is stressed, again, that corruption in Croatia is aided by a lack of good governance, transparency and accountability in public administration and by a lack of ethics codes and codes of conduct in the public and private sectors. The European Commission calls, once more, the authorities to invest greater efforts to prevent, detect and prosecute corruption.
Capacities to Fight Corruption and anticorruption policies
In 2005, European Commission and GRECO emphasize that a new National Strategy against Corruption should be adopted, underlining that it is vital that a new multi-annual anticorruption strategy and action plan are implemented with the necessary resolve. Furthermore, it is stated that there is a considerable legislative progress, which must be matched with pro-active enforcement, preventive, and awareness raising measures that yield demonstrable results – especially in the cases of high level and political corruption. The Commission concludes that administrative capacity in the fight against corruption needs to be considerably improved, specific action plans for preventing and fighting corruption in law enforcement agencies should be developed as well as an overall statistical methodology for improvement of monitoring of corruption.
In its Progress Report (2006), the Commission greets adoption of a new anti-corruption programme, however, underlining that it lacks monitoring, its implementation is at an early stage and that for its improvement strong political determination will be needed. Furthermore, it is stated, again, that the legal framework to combat corruption is largely in place; however, greater efforts to proactively prevent, detect and effectively prosecute corruption, especially high level corruption, are needed. European Commission points out, again, that considerable efforts are required to ensure administrative and enforcement capacity, while an overall statistical methodology is needed in order ensure better monitoring of corruption.
Following year, European Commission gives, to some extent, more positive opinion concerning the progress in the area of anti-corruption policies, highlighting that first results are appearing in the fight against corruption. Furthermore, the Commission greets establishing of National Council for the Fight against Corruption, responsible for monitoring implementation of the Programme, and the improvement of the legal framework to combat corruption. However, it is emphasized that the total number of corruption cases prosecuted is limited, law enforcement agencies and that the other state bodies involved in the fight against corruption continue to be more reactive than proactive. In conclusion, the Commmission highlights that the National Council for the Fight against Corruption interprets its mandate in a very restrictive way and does not see it as its role to make any proposals to improve the implementation of the National Programme but merely to monitor it.
International Conventions and obligations
In 2005 European Commission greets ratification of the Additional Protocol to the European Criminal Law Convention on Corruption, as well as, ratification of the UN Convention against Corruption, adding that in 2004, amendments to the Criminal Code entered into force, which aims at further harmonising Croatian legislation with international instruments. It is recommended, strongly, that these instruments should be implemented.
The Commission states, in 2007, that measures to, actively, investigate illicit enrichment in line with the UN Convention against Corruption are not transposed into national legislation.
Judiciary
In its Progress Report (2005), European Commission emphasizes that independent, impartial and efficient judiciary is essential for protection the rule of law, which requires a firm commitment to eliminate external influences over the judiciary and to devote adequate financial resources and training. It is underlined that a code of ethics covering the entire judiciary, which should include provisions on corruption, needs to be adopted.
Following year, the Commission stresses that some of the problems in the judicial system are attributable to judicial appointments based on political suitability rather than on professionalism, highlighting that the lack of impartiality and undue economic influence on the judicial system continue to be risks of corruption. Finally, European Commission concludes that further efforts are required in order to ensure impartiality of the procedures for the appointment of judicial officials and a new Code of Judicial Ethics has to be adopted.
In 2007, the Commission greets adoption of Code of Judicial Ethics, which will enhance the impartiality, and professionalism of the judiciary, however, it emphasizes that it is not clear how breaches of the Code will be punished. Moreover, European Commission states that regarding independence of the judiciary, new rules of procedure for the State Judicial Council introduced a new procedure for the selection of judges, nevertheless, it emphasizes that procedures still lack transparency and objective criteria. Concerning prosecution, it is pointed out that continued presence of two members of Parliament in State prosecutorial council threatens to negatively influence the independence of the prosecutors, while a Code of Ethics for Prosecutors is not adopted.
Public Administration and Business Environment
In 2005, the Commission greets adoption of the Law on the Civil Service, highlighting that there is a need for establishing, in every part of the public administration, a body in charge of investigating corruption, working on the basis of accountable and transparent rules. In conclusion, European Commission points out that a targeted approach towards corruption prevention is required in all parts of the administration, and GRECO is of the opinion that the effectiveness of corruption prevention policies in public administration could be increased by assessing the functioning of the legislative anti-corruption framework, by tackling the backlog in the administrative courts and by defining clearly the legal framework within which civil servants must exercise their functions.
Following year, European Commission stresses that the issue of public administration reform continues to represent a major challenge for Croatia, underlining that the wide discretionary scope in legislation leads to inefficiency and legal uncertainty and facilitates corruption. The Commission concludes that further efforts will be needed from the authorities to develop the professional, efficient, accountable, transparent and independent public administration at central and local level.
The Commission, in its Report (2007), states again that the wide discretionary scope in legislation leads to inefficiency and legal uncertainty and facilitates corruption, emphasizing that the promotion of integrity within the public administration needs to be further strengthened. Furthermore, European Commission notes that in Croatia the speed of activities of the State Privatisation Fund was affected by the dismissal of the management following a major corruption investigation in which eight senior officials of the Croatian Privatisation Fund were arrested.
Public Procurement
Regarding Public procurement, in 2005, European Commission states that even though Croatian public procurement system shares several key concepts with the acquis, their practical implementation tends to differ significantly from EU requirements, highlighting that the Concessions Act is not in line with the acquis and fails to ensure respect of the general procurement principles.
Next year, the Commission, in its Progress Report, states that weaknesses in co-ordination of policymaking and implementation continue to undermine the coherence of the public procurement system.
In 2007, European Commission underlines that major gaps in the application of the basic principles and the overall legal framework on public procurement, particularly on concessions, remain.
Money Laundering
In 2005, European Commission is of the opinion that the fight against money laundering is seriously hampered by corruption, underlining that the enforcement record, in terms of convictions, confiscations, seizures and asset freezes remains limited. The Commission emphasizes that primary legislation should be amended, enforcement of the anti-money laundering defences needs to be reinforced vigourously, and a more pro-active stance in the investigation and prosecution of money laundering and corruption, should be taken. In conclusion, GRECO recommends that the Croatian authorities should encourage the private accountants’ and auditors’ representative bodies to issue guidelines and organise training on the detection and reporting of corruption-related transaction.
Following year, the Commission repeats that monitoring and supervision of reporting entities remains inadequate and the enforcement record is still weak. Furthermore, it is pointed out, again, that increased efforts will be needed to improve anti-money laundering legislation, ensure effective implementation and to strengthen administrative capacity. In conclusion, European Commission states that, in general, there is a need for a more pro-active stance in the investigation and prosecution of money laundering and corruption.
In 2007, European Commission states, for the third time, that monitoring and supervision of reporting entities remains inadequate and the enforcement record remains weak. It is pointed out, again, that further efforts are required for improving anti-money laundering legislation, ensuring effective implementation and in strengthening of institutional capacity. In conclusion, GRECO notes that the information supplied by authorities, regarding the implementation of GRECO’s recommendation, does not make any reference to the provision of guidance and training to private accountants and auditors with a view to encouraging the reporting of corruption instances by these categories of professionals.
Conflict of interest
In 2005, European Commission welcomes adoption of the amendments to the Act on Prevention of Conflict of Interest in the Exercise of Public Office, which aimed at improving transparency. GRECO underlines that there are neither specific statutes that prevent public officials from moving to the private sector nor statutes that prohibit them from misusing government information gained while a public official or misusing their former positions. Furthermore, GRECO points out further that neither law contains clear guidance with regard to the obligation to decline from matters where the interests, income or activities are not prohibited, but where there still remains an actual or apparent conflict with the private interests or activities of the individual and the individual’s public duties.
Next year, the Commission emphasizes that the scope of the Law for the Prevention of Conflict of Interest should be widened to ensure for proper sanctions to be applied, underlining that authorities need to develop public written interpretative guidance of the current prohibitions for public officials in this respect.
European Commission, in 2007, states that the concept of conflict of interest is little understood. Once more, it repeats that the other shortcomings in the legal framework remain to be addressed, emphasizing that sanctions under the Law need to be made more effective, and the supervisory role of the Commission for the Resolution of Conflict of Interest reinforced. It is underlined that there is no public written, interpretative guidance of the current prohibitions for public officials in this respect.
Free access to information
In 2005, in its Evaluation Report, GRECO welcomes adoption of the Law on the Right of Access to Information, underlining that the law’s actual implementation and application is critical in an effective fight against corruption and to general good governance. Furthermore, GRECO stresses that the effectiveness of the provisions of the Law on the Right of Access to Information and its implementation should be assessed and that training on the provisions of the law be provided to all information officers and to public officials who manage programmes that are subject to significant requests for information.
Next year, European Commission points out that, further, clarifications on the Right of Access to Information Law are required.
The Commission, in its Progress Report 2007, states that contradictions between the Law on Access to Information and other acts relating to secrecy in public administration, remain, emphasizing that there is a need for increased transparency. Moreover, GRECO states that there is a lack of concrete information regarding the effectiveness of the relevant legislation in order to be able to form a clear view on how the right in free access to information is being implemented in practice, encouraging the authorities to step up their efforts and to provide further training activities for both information officers and public officials who manage programmes that are subject to significant request for information.
Financing political parties
In 2005, the Commission states that legislation on the financing of political parties, in Croatia, is missing.
Next year, European Commission notes that the legislation on the financing of political parties is presented to Parliament, while expressing its concerns over existence of high level and political corruption.
The Commission, in 2007, greets the adoption of a Law on the financing of political parties, highlighting that proper implementation, monitoring and adequate sanctions where breaches are found, will be crucial.
Customs and Taxation
In its Progress Report (2005), the Commission stresses that there is an urgent need to adopt and properly implement a Code of Conduct for custom officers in order to ensure that cases of corruption are properly investigated and disciplinary actions are taken.
Next year, European Commission notes, again, that a Code of Conduct for custom officers is not adopted and implemented.
Finally, in 2007, the Commission welcomes adoption of a Code of Conduct for custom officers.
Competition
In 2005, European Commission states that in the area of anti-trust implementing rules for the Competition Act are adopted. Moreover, it is emphasized that the Competition Act requires important further alignment, that a single competition regime needs to be created by ensuring application of the Competition Act to all sectors and that the Government’s power to overturn decisions of the General Administrative Procedures Act should cease to be applied. The Commission concludes that the enforcement efforts should focus more on preventing the most serious distortions of competition, also, highlighting the importance of introduction of a system of fines that is sufficiently deterrent.
Following year, the Commission, repeats that the Competition Act requires important further alignment, underlining that a single competition regime still needs to be created to ensure that the Competition Act applies to all sectors and that the possibility for the Government to overturn anti-trust decisions of the General Administrative Procedure Act should cease to be applied. Furthermore, it is underlined, again, that the enforcement record needs considerable strengthening regarding preventing the most serious distortions of competition, highlighting the importance of introduction of a system of fines that is sufficiently deterrent.
According to opinion of European Commission, in 2007, in the area of anti-trust, the shortcomings identified in 2006 were not addressed. Namely, announced legislative changes, needed to make anti-trust control more effective, were not adopted, and an efficient system for imposing fines, which would allow Croatian Competition Agency’s decisions to have a deterrent effect, was not remedied. In addition, Article 266 of the General Administrative Procedure Act, which allows the government to overturn anti-trust decisions, was not repealed. In conclusion, the Commission repeats, for the third time, that the enforcement record should increasingly focus on preventing the most serious distortions of competition.