Conflict of interests

2005

The Law on Conflict of Interests has been implemented with difficulty and contains problematic provisions allowing members of parliament to be members of boards of public companies. This legislation needs to be reviewed in line with international standards. [2]

Amendments to the Law on Prevention of Money-Laundering and the Law on Conflict of Interest were adopted on 16 March 2005. Although the Law on Conflict of Interest was amended following a recent decision of the Constitutional Court concerning one of its provisions, concerns remain on the possibility of MPs to be members of companies’ managing boards. As concerns the Commission established to regulate conflict of interest, it has no monitoring or reporting powers.[4]

At the beginning of August, a new draft Law on Conflict of Interest drafted by an ad hoc parliamentary Committee and experts from the CoE was presented to the CoE experts’ appraisal and is now before the Parliament. It is hoped that conditions for a wider public participation and discussion inter alia with the civil society be facilitated.[5]

As concerns the new draft Law on Conflict of Interest, the present version incorporates recommendations made by the Council of Europe and the Organization for Economic Co-operation and Development/Sigma, while adequately complying with international norms and reflecting the local political and administrative context.[6]

2006

A number of new pieces of legislation were drafted and enacted by Parliament, in particular the Law on Conflicts of Interest, the Law on the National Auditing Institution, the Law on Public Procurement, the Law on Political Party Financing and the Criminal Code. [9]

An analysis of the Montenegrin legislation related to the prevention of conflicts of interest indicates that the system suffers from several shortcomings. Firstly, the GET noted that two different laws are applicable in this field: the Law on Conflicts of Interest with regard to public officials and the Law on Civil Servants with regard to civil servants (as for the definition of public officials and civil servants see footnotes 11 and 13). It is clear that conflicts of interest are regulated in much more detail for public officials than for civil servants: in fact, Article 49 of the Law on Civil Servants only provides for a generic enumeration of basic activities that could undermine civil servants’ impartiality when they exercise their public functions. Secondly, the Law does not impose any restrictions on the president and other members of the Commission with regard to their membership of political parties or of elective bodies, such as municipal assemblies. Thirdly, the Law allows the highest-ranking politicians, members of the government and other high-ranking officials to serve on the board of companies with predominant state or municipal capital and to simultaneously negotiate the privatisation of state property on behalf of the state. In the GET’s view, this situation can give rise to serious conflicts of interest. In the light of the aforesaid, the GET recommends to expand the application of the Law on Conflicts of Interest to include all public officials who perform public administration functions, including public officials as referred to in Article 2, paragraph 2, of the Law on Civil Servants. The GET also recommends that legislative or other measures be taken to ensure that all public officials and civil servants are prohibited from acquiring inappropriate benefits for themselves or their relatives through holding a position as member of the board in State owned companies. Finally, the GET recommends to seek ways of reducing the potential of political influence in the decisions taken by the Commission for the determination of conflicts of interest.[10]

The GET recommends to introduce clear rules/guidelines for situations where public officials move to the private sector (“pantouflage”) in order to avoid situations of conflicts of interest.[11]

As already detailed in the descriptive part of this report (paragraph 78), according to the Law on Conflicts of Interest, public officials are allowed to keep gifts not exceeding the amount of 50 Euros. The GET considers this minimum value to be high, especially if compared to the current average salary in Montenegro (200 Euros). Therefore, the GET recommends to lower the value of any gifts that may be accepted by public officials to levels that clearly do not raise concerns regarding bribes or other forms of undue advantage.[12]

2007

Conflicts of interest remain a concern, as there have been delays in implementing the new legislation and the results so far have been limited.[16]

The law on conflicts of interest has been adopted but its implementation has brought so far limited results.[17]

The GET recommends to introduce clear rules/guidelines for situations where public officials move to the private sector (“pantouflage”) in order to avoid situations of conflicts of interest.[21]

GRECO takes note of the measures listed by the Serbian authorities. It is aware that the rules contained in the Law on the Prevention of Conflicts of Interest were already in place at the time of adoption of the Joint First and Second Round Evaluation Report (paragraph 81); they largely focus on standards and procedures for the outside employment of officials during public service. Accordingly, GRECO welcomes the ongoing legal reform process reported to further regulate this issue, notably, through the introduction of additional post-service restrictions, in the draft Law on the Anti-corruption Agency. It encourages the authorities to proceed swiftly with the adoption of the draft.[24]

2005

The adoption of the law on the conflict of interest has been a positive step. Its consistent implementation needs to be ensured. [26]

2006

The GET is of the opinion that the current system does not meet its intended purpose to deal with conflicts of interest in a credible manner. Consequently, the GET recommends to introduce an effective system for reviewing financial declarations (including random verifications) by the respective Civil Service Agency at each level of government and the Election Commission, and to allow that such declarations be used in a preventive manner by providing individual counselling on the prevention of conflicts of interest.[30]

The GET noted that the existing legislation does not contain any provisions establishing a system of regular/periodic rotation of staff most exposed to the risks of corruption. [31]

2007

2007

2005

Neither at state nor at regional or local level any general system of rotation exists for positions vulnerable to corruption.[37]

The rules on conflicts of interest differ from one text to another and from one category of public officials to another; the rules on incompatibilities and accessory activities are not satisfactory and some groups are not covered. [38]

The GET noted however, with satisfaction, that the High Inspectorate for Declaration and Control of Assets (cf. paragraph 34) was meant to monitor that law once adopted. As the Inspectorate will also have other important functions, such as the prevention of conflicts of interest, and the assessment of new draft laws, it is advisable to confer to the Inspectorate the necessary means to perform its duties effectively and independently.[39]

The issue of conflict of interest has also been dealt with in greater detail, in particular through the preparation of specific legislation in this field.[40]

2006

2007

The law on conflicts of interest needs to be further clarified. A proposed change to the parliament’s rules of procedure to allow its members’ immunity to be lifted on a case-by-case basis has still not been adopted. The HIDAA lacks mechanisms to investigate declarations. [43]

2005

In July 2004, amendments to the Act on Prevention of Conflict of Interest in the Exercise of Public Office and to the Act on Financing Presidential Electoral Campaigns were adopted. [46]

Neither law contains clear guidance with regard to the obligation to recuse 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 (or spouse) and the individual’s public duties. The GET was aware that the criminal corruption provisions could potentially be used to reach conduct where the conflicts raise a question of abuse of office or a bribe, but was concerned that those to whom those provisions applied may not be aware that is the case.[48]

2006

In February 2006, Parliament adopted the conclusions of its Investigative Commissions into two Members of Parliament, concluding in one case that the person concerned was in conflict of interest during his ministerial mandate. However, there has been no follow up to these conclusions. Investigative Commissions appear to be used partly as a political tool rather than a serious means to tackle conflicts of interest.[50]

2007

The obligation to submit assets declarations was extended to all judges and to State Prosecutors and their deputies in January 2007. [52]

Other shortcomings in the legal framework remain to be addressed. Sanctions under the Law for the Prevention of Conflict of Interest need to be made more effective, and the supervisory role of the Commission for the Resolution of Conflict of Interest reinforced. There is no public written, interpretative guidance of the current prohibitions for public officials in this respect. As regards assets declarations, there is in practice often confusion over what exactly is to be declared and supervision is lacking.[53]

2005

The same Commission started its work by collecting reports on the assets of public office holders. In 2004 the obligation to submit an assets declaration was extended to civil servants in the state administration. The legislative programme provided for by the programme is being progressively implemented.[55]

Under this Law, a large number of officials and elected representatives are under an obligation to submit a declaration of assets to the State Commission when they are nominated or elected. The Law was amended in 2004 to extend this obligation to civil servants in the State administration. This obligation has been partly implemented and a few charges have been brought for failure to submit the declaration of assets. [56]

The Constitution and the Law on Prevention of Corruption provide the legal framework to prevent conflicts of interest of public officials; some additional rules for special categories of public officials have been established in other laws, e.g., Law on the Election of Deputies and the Law on Civil Servants as well as in sectorial codes of ethics, see below.[58]

This autonomous and independent body established by law is clearly an important factor for a continuous fight against corruption. The State Commission has both a preventive role and investigative powers, the latter with regard to conflicting interests of public officials.[59]

2006

While, according to the State Anti-Corruption Commission, almost all officials have submitted asset declarations, sentences delivered to officials failing to fulfill this obligation have been lenient. A fully effective checking of the property declarations would require strengthening the bodies involved. [61]

Tangible progress in reducing the discretionary rights of ministers and other officials has yet to be achieved. Incompatibility rules still lack clarity, and control and enforcement mechanisms are weak. Conflict of interest remains to be regulated and monitored. For instance, there is no clear policy as regards the employment of former members of the government. [62]

The discretionary powers of ministers and other officials in the administration have been reviewed.[63]

Misdemeanours procedures have been initiated against 30 Members of Parliament for not having submitted their declaration of assets in the delay foreseen by the Law on Prevention of Corruption. Relations between the State Anti-Corruption Commission and the Public Prosecutor have improved and are more constructive. [64]

2007

The amendments[66] reinforced the obligation on all appointed and elected officials to declare their assets, and made it obligatory for these to be published on the State Anti-Corruption Commission website.[67]

A number of misdemeanour procedures were brought against officials who failed to submit asset declarations following the elections in 2006 and a few court decisions have been issued. There were court decisions in a number of high profile cases, including those of a former Deputy Minister, a former Customs Director, judges, lawyers, notaries, and police officers. [68]

Although a large number of officials have declared their assets, the commission’s capacity to publish them is limited, checking remains weak and sanctions lenient. [69]

Furthermore, there has been limited follow-up to the review of discretionary powers of ministers and other officials in the administration.[70]

The amendments also strengthen the obligation of all appointed civil servants and elected deputies to declare their assets, and make publication of these declarations on the State Anti-Corruption Commission website obligatory.[71]

A law on conflict of interest was adopted which sets out measures and activities for establishing, preventing and sanctioning cases of conflict of interest when performing activities of public interest. The State Anti-Corruption Commission was given the responsibility of dealing with cases. [72]

The commission has continued to monitor the asset declarations of elected and appointed officials and has strengthened its cooperation with the Public Revenue Office. Misdemeanour procedures were brought against 86 current and former appointed and elected officials (including government ministers and MPs), directors of public companies and supervisory board members who failed to meet their legal obligations following the 2006 elections. 16 court decisions were issued. [73]

Limited follow-up has been given to the review of discretionary powers of ministers and other officials in the administration.[74]

2004

2005

The GET noted that it is a well established practice in a number of countries to use periodic declarations of assets, income and liabilities by public officials as an effective tool for deterring corruption, as well as a means by which to promote public confidence in public officials and government decision-making. The GET noted in this respect that the LPO appears to provide a basis for an appropriate financial disclosure system and a conflicts of interest control mechanism, both of which are accompanied by sanctions in cases of non-compliance. The GET also welcomed measures taken by the Bulgarian authorities to promote awareness in the field of conflicts of interest by organising training.[79]

2006

According to this code, the officials concerned must declare and register their financial interests, they are prohibited from participating as partners in companies and are not allowed to work as freelancers, they are accountable for the management of the resources entrusted to them and they must take the necessary measures to prevent corrupt practices in the bodies for which they are responsible.[80]

Following amendments in April 2006 to the Law on publicity of the property owned by persons occupying high state positions, the National Audit Office will be obliged to publish annually a list of people who did not comply with the obligation to declare their property. The fines for non-compliance were increased.[81]

The implementation of the Law for Publicity of the Property of Persons Occupying High State Positions requires the National Audit Office to enhance its capacity to verify asset declarations. The recent amendments to the law require prior permission for publication of asset and income declarations in the media. [82]

The legislative framework for the fight against corruption has been improved with the adoption of amendments to the laws on political parties and on publicity of property owned by high level officials. All ministers have published their asset declarations on the internet.[83]

Based on the findings of this report, the benchmarks to be addressed are as follows: … Report on internal inspections of public institutions and on the publication of assets of high-level officials.[84]

As part of the programme for the implementation of the strategy for transparent governance and for preventing and counteracting corruption, amendments to the ‘law on the publication of the assets of persons occupying high public positions’, were adopted in August 2006. They will enter into force in January 2007. The law now authorises the National Audit Office with support of other public bodies to carry out inspections to confirm the accuracy of declarations submitted to the National Audit Office by persons occupying high public positions. Furthermore, the recent amendments widened the range of persons obliged to declare their assets. All ministers have published their asset declarations on the internet.[85]

2004

There is however, still room for improvement to make it possible in practice to monitor declarations on conflict of interest, by aligning the conflict of interest legislation with EU best practices, introducing sanctions for incorrect or incomplete declarations of interests, addressing the transfer of assets to relatives and lowering the burden of proof before an investigation can be launched into whether assets were obtained illegally. [87]

Romania should also increase public awareness of the negative consequences of corruption and potential conflicts of interest.[88]

2005

Romania should also increase public awareness of the negative consequences of corruption and potential conflicts of interest. [91]

The Government was also considering a draft Law on the creation of a National Integrity Agency responsible for investigating and supervising declarations of assets and interests, as well as the regulations governing incompatibilities. [93]

Many of the provisions on conflicts of interest, incompatibilities and ancillary activities in the civil service have not yet been harmonised. [94]

Nor is there any authority responsible for supervising legislation on conflicts of interest, despite the fact that a draft Government Decision still provides for the setting up of a National Integrity Agency with powers of supervision in the field of conflicts of interest and declarations of assets and interests. The GET finds the rules on conflicts of interest and incompatibilities and the supervision of such rules insufficient. [95]

Consequently, the GET recommends to extend the scope of the existing rules on conflicts of interest and incompatibilities and make them applicable to all public officials exercising an activity involving prerogatives of public authority, and to introduce an appropriate system for supervising the application of these rules, including in the field of abusive migration by public officials to the private sector. [96]

The GET noted during the visit that the system for supervising declarations of assets is not effective, in particular, because the investigatory commission is only seldom applied to, the level of evidence required to initiate that process is very high and because of the absence of a preliminary and independent administrative review of these declarations in order to identify actual or apparent violations of the law, unjustified fluctuations in the public officials’ financial situation, conflicts of interests, incompatibilities and prohibited gifts.. Lastly, there is also no appropriate system for verifying declarations of interest. Consequently, the GET recommends introducing an effective system for supervising declarations of assets and interests. [97]

2006

Legislation establishing an independent agency to verify wealth declarations has not yet been adopted. Amendments to the Criminal Procedure Code introducing liability for legal persons are still pending in Parliament. The Parliament rejected a request made by DNA to search the property of a Member of Parliament. In February 2006, the Senate tried to prevent DNA from investigating Members of Parliament. [99]

Romania must pursue results in the fight against corruption at all levels; to prevent and fight corruption within law enforcement agencies and to adopt legislation on the financing of political parties, to be able to verify wealth declarations and to introduce the liability of legal persons.[100]

Based on the findings of this report, the benchmarks to be addressed are as follows:  Establish, as foreseen, an integrity agency with responsibilities for verifying assets, incompatibilities and potential conflicts of interest, and for issuing mandatory decisions on the basis of which dissuasive sanctions can be taken. [101]