Progress slow in EU anti-fraud campaign

Date: 18/09/1997

By Simon Coss

DESPITE EU governments' tentative first steps towards stamping out cross-border fraud, anti-corruption campaigners claim companies and civil servants who engage in the practice have little reason to fear prosecution in the immediate future.

The Union's progress in tackling the problem will be reviewed at a conference in Brussels next Thursday (25 September) organised by Transparency International (TI), an international non-governmental organisation based in Berlin.

“The problem at the moment is that criminal law is only applicable nationally,” explained Dieter Frisch, TI founder member and former head of the European Commission's Directorate-General for development (DGVIII).

This means that a person or company in one country cannot be prosecuted there if they take part in corrupt activities in another. Some firms have even been known to offset bribes paid abroad against tax bills at home.

Frisch and his co-founders, who have all had experience of working with the developing world, decided to set up TI in 1993. “We all found that corruption was proving a major obstacle to development and, in addition, we received many complaints from the business community that it was hindering free competition,” he explained.

TI's original aim was to help developing countries and the central and eastern European states to tackle the matter. But Frisch soon found that there were also serious problems within the Union itself.

Since 1994, Europe's justice and home affairs ministers have signed a number of conventions and protocols designed to combat corruption. The first real advance came in June 1995 with the adoption of a convention to outlaw fraud against the EU's budget. A second convention dealing with fraud by national and EU officials against both Union and member state funds was approved this May.

However, both must be ratified by all 15 national parliaments, a process which could take several years.