European Union on anti-corruption programmes: Everyone singing from the same songbook?
Lawmakers in the EU are seeking to strengthen and harmonize anti-corruption efforts in member nations. Authors Simon Airey, Fabio Cozzi and Nicolette Kost De Sèvres explore recent developments among member nations (and one non-member nation) in a recently published report.
This was done in light of the fact that in September 2022, EU Commission’s President Ursula von der Leyen announced the EU commission’s plan to crack down on corruption, and a set of draft measures followed in 2023, including the draft of a directive on combating corruption and establishment of a dedicated sanctions regime. The proposed directive aims to update and harmonize EU anti-corruption frameworks, definitions, and penalties for breaches, which currently vary across member nations. While the directive is subject to change as it goes through the EU’s legislative process, the latest draft states that members will have 18 months to transpose the final directive into their domestic law. However, the authors take five key takeaways from the publication of the proposed directive.
Firstly, the directive has been published at a time when there have been several significant developments in the white-collar space globally, including in particular i) the recent development of new corporate “failure to prevent” offenses in the UK (covering inter alia fraud, false accounting, and money laundering), ii) the Monaco memo in the U.S. and iii) the March 2023 updates to the DOJ’s “Evaluation of Corporate Compliance Programs.” The proposal should therefore been seen as part of the efforts of the European Commission to maintain focus on the fight against corruption and participate further in the increasing international alignment on these issues.
Secondly, while the directive indicates increasing harmonization of anti-corruption requirements across the EU, it prescribes only minimum standards. EU Member states will, therefore, be able to implement or maintain stricter obligations. Additionally, as the proposal takes the form of a directive, members will be afforded a degree of freedom as to how they choose to implement its provisions. It will, therefore, be important for companies with operations across several EU members to consider any differences or nuances that apply under local law. To the extent that such differences exist, companies may need to adopt a “highest common denominator” approach of designing policies and procedures that meet the requirements of those jurisdictions with the strictest obligations.
Thirdly, in terms of enforcement, harmonization across the EU, which seems broadly to align with the UK and the U.S., will make it easier for law enforcement agencies around the world to cooperate in the investigation and prosecution of multinational companies that engage in corrupt activities in or from the EU. It also sends a clear message to jurisdictions with high levels of corruption that the EU will not tolerate misconduct that is damaging to EU interests.
Fourthly, these new rules also reflect the recent initiatives of members that focus on the prevention of corruption as opposed to focusing solely on prosecuting corrupt acts (i.e., “repressing” them). The harmonized concept of prevention is stated to be “the detection and elimination of the causes of and conditions for corruption, through development and implementation of a system of appropriate measures, as well as deterrence against corruption-related acts.” In that regard, special reference is made to the creation of bodies “specialized in the prevention of corruption,” in addition to those “specialized in the repression of corruption.”
Lastly, companies within the scope of the directive and relevant national laws may benefit from adopting the harmonized definitions of public, private, active and passive bribery and related offenses within the directive. This may become even more important if the rule is enacted and companies find themselves subject to the supervision of newly established bodies (or under increased scrutiny from existing agencies with a renewed focus on anti-corruption).
Overall, the authors conclude that multinational companies should seek to harmonize their own approach to compliance and prevention in the various countries in which they operate, while at the same time considering key differences where they exist. This requires a constant cycle of risk assessment, monitoring and review but is one that need not be overly burdensome once the basic processes are in place.
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Thursday, 21 March 2024
Thursday, 20 March 2025