Background
The harmonisation effort follows a two-pronged approach, with new rules being laid down in two legislative instruments:
- a proposal for a Regulation introducing a sanctions regime targeting corruption, which would establish a dedicated sanctions regime to target serious acts of corruption worldwide and thus enabling EU Member States to target serious acts of corruption worldwide, no matter where they occur; and
- a proposal for a Directive on combating corruption by criminal law, which would strengthen and harmonise the criminalisation of corruption and the attached penalties across the EU, in an effort to prevent corruption and build a culture of integrity throughout the EU.
The text of the Regulation has not yet been made public and is currently still to be adopted by the Council. The proposed Directive, on the other hand, was published by the European Commission last week (see press release).
The proposal for a Directive on combating corruption would tighten the existing framework1 by closing the gaps between Member States’ different approaches to criminalisation and penalty levels, through minimum harmonisation (meaning Member States would still be allowed to take a stricter approach). In a nutshell, the proposal makes all offences under the UN Convention against Corruption mandatory as a matter of EU law.
Harmonisation of scope and definition of public and private corruption offences
An EU Commission survey of national law on bribery and corruption offences evidenced a stark disparity in the scope of Member States’ criminal law, with some having criminalised a much narrower set of conduct than others. For instance, at least 17 Member States currently do not criminalise illicit enrichment, and at least two do not criminalise trading influence. In addition, many differences in the scope of the relevant criminal offences exist.
To create a level playing field across the EU, the proposal requires the harmonisation of the definitions of the criminal offences of both public and private corruption, as well as the criminalisation of a range of or different types of conduct.
Accordingly, Member States will have to make sure that committing, inciting, aiding and abetting not only bribery in the public and private sectors is punishable as a criminal offence when committed intentionally, but also
- embezzlement/misappropriation
- trading in influence
- abuse of functions
- obstruction of justice, and
- illicit enrichment.
Member States will also need to criminalise the attempt of committing embezzlement/misappropriation, abuse of functions, obstruction of justice and illicit enrichment.
Penalties and liability for natural persons and legal entities
Furthermore, if adopted, the proposal would oblige Member States to ensure that bribery and corruption offences are punishable by “effective, proportionate and dissuasive” penalties.
The main novelty arguably concerns the liability of legal persons. Indeed, Member States will need to ensure that their national laws hold legal persons criminally liable for any of the aforementioned corruption offences when committed for the benefit of the legal person by a natural person who has a leading position within the legal person. The leading position can be based on a power of representation, the authority to take decisions or the exercise control. Legal persons will also be held liable if the offence was committed due to a lack of supervision or control.
In addition, Member States must take the necessary measures to ensure that the aforementioned criminal offences are punishable by at least certain maximum terms of imprisonment (Member States can still opt for higher maxima):
| Natural Persons | Legal persons | |
| Bribery in the public sector | a maximum term of imprisonment of at least 6 years | E.g. criminal or non-criminal fines, the maximum of which is at least 5% of the total worldwide turnover in the business year preceding the decision imposing the fine;exclusion from public benefits, aid and public tenders;disqualification from the exercise of commercial activities;withdrawal of authorisation to pursue activities in the context of the offence;placing under judicial supervision;judicial winding-up;temporary or permanent closure;etc. |
| Bribery in the private sector | a maximum term of imprisonment of at least 5 years | |
| Obstruction of justice | a maximum term of imprisonment of at least 6 years | |
| Misappropriation/Embezzlement | a maximum term of imprisonment of at least 5 years (but Member States can opt for a non-criminal sanction if the offence involves damage/an advantage of less than EUR 10,000) | |
| Trading in influence | a maximum term of imprisonment of at least 5 years | |
| Abuse of functions | a maximum term of imprisonment of at least 5 years | |
| Illicit enrichment | a maximum term of imprisonment of at least 4 years | |
| Potential addition penalties | E.g. fines;removal/suspension/re-assignment from public office; disqualification from holding a public office/public service function;disqualification from holding office in a state-owned legal person and/or from the exercise of commercial activities in the context of which the offence was committed;withdrawal of authorisation to pursue activities in the context of the relevant offence;exclusion from access to public funding; etc. |
The penalties for natural and legal persons are also subject to a harmonised list of aggravating and mitigating circumstances.
Note that, as mentioned above, this proposal would also amend the Directive on the fight against fraud on the Union’s financial interests by means of criminal law. The same regime (differentiated maximum imprisonment terms, liability for legal persons, etc.) would also be adopted for the offences caught by that Directive.
Higher standards for the public sector
To ensure that the public sector is held accountable to the highest standards of integrity, the proposal requires Member States to take measures to ensure, among other things:
- the highest degree of transparency and accountability in public administration and decision-making
- open access to information of public interest, and
- disclosure and management of conflicts of interests in the public sector.
Member States will also have to put in place one or more independent and qualified bodies or organisation units specialised in the prevention of corruption and in the repression of corruption.
In addition, national officials and members of law enforcement will have to follow specialised trainings on corruption.
Enforcement
Finally, the proposal foresees a series of measures that will need to be adopted by Member States to ensure effective investigations and prosecution of corruption. This includes, for example, harmonised rules on limitation periods and cooperation between Member States’ authorities, the Commission, Europol, Eurojust, OLAF and the EPPO.
Moreover, any person who reports any of the corruption offences will be protected under the Whistleblowing Directive 2019/1937.
An overhaul of national criminal law?
The Commission depicts this proposal as “a milestone in the fight against corruption at national and EU level.” It is fair to say that the regime proposed by the Commission may bring about substantial changes to national criminal law. For instance, the requirement to introduce criminal sanctions for legal persons may be rather novel in some Member States. The same is true for the severity of sanctions. The proposal may also require a change to criminal procedural law, e.g. regarding statute of limitation periods.
Next steps
The proposed Regulation introducing a sanctions regime targeting corruption will have to be discussed and adopted by the Council. The proposed Directive on combating corruption will have to be negotiated and adopted by the European Parliament and the Council before it can become EU law. Under the ordinary legislative procedure, the average timeline from Commission proposal to formal adoption is around 18 months. If and when adopted, Member States will have to transpose the Directive into national law within 18 months after adoption.
For further information on the proposals, do not hesitate to reach out to the key contacts mentioned on this page or to your usual Linklaters’ contact.
See also the accompanying Q&A, Factsheet, Joint Communication and Webpage on the fight against corruption.
1Consisting of (i) the Council Framework Decision 2003/568/JHA, (ii) the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union, and (iii) the Directive (EU) 2017/1371 on the fight against fraud to the Union’s financial interests by means of criminal law
For further information, please contact:
Stefaan Loosveld, Partner, Linklaters
stefaan.loosveld@linklaters.com
