International institutions can serve as auxiliaries of anti-corruption reforms and can provide crucial assistance to domestic stakeholders advocating for reforms. This chapter describes the various mechanisms used by international institutions to support Eastern European countries in their efforts to combat high-level corruption and the restrictive measures used against high-level officials who engage in corruption, including through sanction regimes or the revaluation of existing residency abroad through investment programmes or “golden passport” regimes.
Combatting High-level Corruption in Eastern Europe
Insights and Solutions
Report
Table of contents
Share
Facebook
Twitter
LinkedIn
7. The role of the international community in the fight against high-level corruption
Copy link to 7. The role of the international community in the fight against high-level corruptionAbstract
7.1. Efforts of international institutions in combatting high-level corruption
Copy link to 7.1. Efforts of international institutions in combatting high-level corruptionInternational institutions can serve as auxiliaries of anti-corruption reforms, however, this is contingent on the existence of domestic political ownership and impetus to implement anti-corruption reforms in the first place. In this context, international institutions can provide crucial assistance to domestic stakeholders advocating for reforms, by initiating and supporting the introduction of new anti-corruption instruments, providing technical expertise and material resources, and also protecting anti-corruption institutions and the results of anti-corruption reforms in the fight against narrow interest groups seeking to limit the effectiveness of these reforms.
The national political priorities related to co-operation with or integration into the relevant international organisations and efforts to secure economic support from international financial institutions have been used as leverage for encouraging, advancing or saving reforms aimed to strengthen the against corruption in Eastern Europe.
The most common form of co-operation between states and international organisations is participation in mutual evaluation of compliance with international standards that result in developing recommendations on strengthening anti-corruption legislation, institutions and enforcement and implementing best practices (e.g., OECD WGB assessment and ACN monitoring, UNCAC Review Mechanism and GRECO evaluation). Such mutual monitoring also provides an opportunity to gain valuable experience and train anti-corruption professionals with expertise that goes beyond the national context. Finally, peer monitoring under the umbrella of international organisations is often supported by specialised technical assistance projects focused on reforms in the areas that demand the most attention.
As the President of GRECO stressed in his introduction to the Group’s 2023 annual report, GRECO considers that States should ensure that their institutional and legislative integrity frameworks apply fully and directly not only to high-level civil servants but also to ministers, their political advisers or other politically appointed persons, and even, depending on the constitutional systems, to certain Heads of State. Similarly, as regards law enforcement agencies (police and/or gendarmerie forces), more should also be done to ensure that corrupt behaviour and integrity failings are adequately addressed at all levels within the hierarchy and that undue interference of the governmental power within the policing activities is effectively prevented.1
The EU enlargement process is another powerful tool incentivising anti-corruption transformations and presents opportunities to focus on combatting high-level corruption, given that European integration is one of the key priorities for some countries in the region. As the European Commission notes in its communication of 8 November 2023, “Ukraine, Moldova and Georgia have a historic window of opportunity to bind their future to the European Union strongly. Accession is and will remain a merit-based process fully dependent on the objective progress achieved by each enlargement partner. Therefore, the enlargement countries will have to act with determination to implement the necessary reforms and make tangible and irreversible progress, starting with the fundamentals of the EU accession process. The rule of law, particularly the independence and functioning of the judiciary and the fight against corruption, fundamental rights, the economy, the functioning of democratic institutions and public administration reform continue to be the cornerstones of the enlargement policy”.2
Currently, the Eastern European EU candidate countries are Albania, Bosnia and Herzegovina, Georgia, Moldova, Montenegro, North Macedonia, Serbia and Ukraine.
With respect to the EaP countries that were recently granted EU candidate status (Georgia, Moldova and Ukraine), the European Commission the European Commission noted that “corruption, including high-level corruption, continues to be widespread across enlargement countries, and entanglement of public and private interests remains an issue of concern […] elements of state capture persist, with threats to democratic stability, high-level corruption and undue influence by oligarchs being observed, alongside attempts by organised criminal networks to infiltrate the economic and political systems, administrations, and media. These challenges need to be urgently addressed through systemic and comprehensive approaches. A key indicator of success will be a credible track record of proactive investigations, prosecutions and final convictions related to corruption, organised crime and money laundering”.3
Today, European integration is one of the key priorities for Ukraine and Moldova, which presents great opportunities to stimulate changes in their political arenas and to create a demand for limiting the level of grand corruption.
The EU Visa Liberalisation Action Plan was also an extremely effective tool for implementing painful anti-corruption reforms in Ukraine and Georgia. Establishing new anti-corruption institutions and introducing an electronic register of asset declarations in Ukraine were largely possible due to Ukraine's partnership with the EU in terms of introducing a visa-free regime for short-term travel.
At present, such a mechanism can be launched between the EU and the Armenian government, which simultaneously opens up opportunities for co-operation between the EU and Armenia, including in the fight against corruption, which can be one of the conditions for the visa liberalisation action plan.4
Box 7.1. Visa Liberalization Action Plan for Ukraine
Copy link to Box 7.1. Visa Liberalization Action Plan for UkraineThe EU launched the Visa Liberalisation Dialogue with Ukraine in October 2008. The dialogue was based on the Visa Liberalisation Action Plan (VLAP), which was presented to Ukraine in November 2010. The VLAP included a number of anti-corruption conditions.
The benchmarks concerned both the policy and institutional framework, the legislation and the effective and sustainable implementation of this framework.
The criteria for granting Ukraine a visa-free travel regime included, in particular:
To establish an operational and independent National Anti-Corruption Bureau, a specialised anti-corruption prosecution office and a National Agency for Prevention of Corruption, with clear guidelines for inter-agency co-operation.
To set up a specialised anti-corruption prosecutor's office and ensure its independence.
To adopt legislation on procedures concerning the seizure of assets and special confiscation with a view to making the Asset Recovery Office fully effective.
To put in place procedures to ensure: the timely publication of all current asset declarations; effective verification of assets and conflicts of interest of public officials; full operability and accuracy of central electronic databases, including on asset declarations and beneficial ownership; and a unified web portal disclosing public expenditure.
To establish a national Asset Recovery Office and an effective inter-agency co-ordination to establish an asset recovery record.
To adopt legislation reflecting the GRECO recommendations on party and electoral campaign funding.
After fulfilling the key requirements of the VLAP in 2016, Ukraine was granted a visa-free regime for travel to the EU. However, the European Commission monitored compliance with the criteria set out in the VLAP for a certain period of time. This aimed to prevent a possible setback in the anti-corruption reforms implemented under the VLAP.
Source: European Commission, European Commission welcomes the Council adoption of visa liberalisation for the citizens of Ukraine.
International assistance, including through international organisations, may serve as an effective instrument for supporting anti-corruption efforts across the region. Such assistance includes financial aid, sharing of useful experience, best practices, knowledge, and technologies.
Finally, international financial institutions, such as the World Bank and the International Monetary Fund, also play a pivotal role in driving essential anti-corruption reforms within the region by integrating specific conditions into their financial support agreements with recipient countries.
As the IMF Managing Director stated in the context of the Executive Board discussion of the Extended Fund Facility Arrangement for Ukraine, “steadfast reform momentum to enhance anti-corruption and governance frameworks, including ensuring the effectiveness of anti-corruption institutions, will be essential to help contain fiscal risks, enhance growth, and support the path to EU accession.”5 Thus, financial support agreements present a unique opportunity to target high-level corruption by including measures to tackle this form of corruption as a condition of these agreements.
7.2. Restrictive measures on high-level officials engaged in corruption
Copy link to 7.2. Restrictive measures on high-level officials engaged in corruptionAlthough the initiative to impose restrictive measures on persons involved in serious corruption is relatively new, it is becoming increasingly widespread among countries with established democratic traditions.
The United States was the first state to apply targeted sanctions for corruption crimes in accordance with the Global Magnitsky Human Rights Accountability Act and Executive Order 13818 of 2017, allowing the freezing of assets, restrictions on business transactions, and travel bans to the United States on persons who directly or indirectly engaged in corruption offences. In 2023, the Global Magnitsky sanctions related to engagement in corruption were recently applied to individuals in Bulgaria6 and Moldova,7 and visa restrictions applied to four representatives of the judiciary in Georgia.8 In 2023, the United States became the first country to impose visa restrictions on persons who facilitate and enable high-level corruption and their immediate family members.9
There are ongoing discussions in the EU in relation to the imposition of sanctions against persons involved in serious corruption offences. As of 2023, the EU has used geographical sanctions to target cases of high-level corruption. In three cases, the EU applied sanctions against leaders and high-ranking officials from authoritarian regimes, which had been toppled by popular uprisings, in order to facilitate the recovery and restitution of stolen assets, namely in Egypt, Tunisia and Ukraine.10
In May 2023, the European Commission made proposals to apply the sanctions regime to foreign persons involved in serious corruption, in particular by expanding the Common Foreign and Security Policy (CFSP) sanctions toolbox. It aims at creating a blacklist of people from non-EU nations involved in corruption to be followed by travel bans and asset freezes like the US Magnitsky Act.11
Another form of international response to high-level corruption is cutting the ability for corrupt high-ranking officials to obtain citizenship and residency abroad through investment programmes. These programmes, sometimes referred to as “golden visa” and “golden passport” schemes, through which countries grant wealthy individuals citizenship or permanent residency in exchange for investment, can provide the criminally wealthy with a range of opportunities to conceal and move significant illicit funds across borders and can act as a gateway to financial systems that would otherwise be inaccessible without citizenship or residency (OECD/FATF, 2023[1]). In the EU, the European Commission noted that investor citizenship and residence schemes present a risk given that they can help hide or facilitate financial and economic crimes, including corruption (European Commission, 2023[2]). Thus, the Commission considers investor citizenship schemes, under which citizenship of a Member State, and thus EU citizenship, is systematically awarded in exchange for pre-determined payments or investments, and without a genuine link with the awarding Member State, to be in breach of EU law.
If applied effectively, such an approach would address a sensitive issue for many countries, namely the fact that a number of persons involved in high-level corruption are hiding in the territory of the European Union, using, among other things, schemes with “golden passports” or “golden visas.”
Finally, impunity of large-scale corruption cases and the global reach of corruption have prompted ongoing discussions regarding the establishment of an international anti-corruption court, although the concept has not yet garnered consensus among the global expert community.
References
[2] European Commission (2023), Proposal for a directive of the European Parliament and of the Council on combatting corruption, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A234%3AFIN.
[1] OECD/FATF (2023), Misuse of Citizenship and Residency by Investment Programmes, OECD Publishing, Paris, https://doi.org/10.1787/ae7ce5fb-en.
Notes
Copy link to Notes← 1. CoE (2024), GRECO 24th General Activity Report (2023), p.7
← 2. 2023 Communication of the European Commission on EU Enlargement Policy p.2, https://neighbourhood-enlargement.ec.europa.eu/system/files/2023-11/COM_2023_690%20Communication%20on%20EU%20Enlargement%20Policy_and_Annex.pdf
← 3. 2023 Communication of the European Commission on EU Enlargement Policy pp 8-9, https://neighbourhood-enlargement.ec.europa.eu/system/files/2023-11/COM_2023_690%20Communication%20on%20EU%20Enlargement%20Policy_and_Annex.pdf
← 4. https://www.eeas.europa.eu/eeas/foreign-affairs-council-press-remarks-high-representative-josep-borrell-after-meeting-7_en
← 5. https://www.imf.org/en/News/Articles/2024/03/21/pr2496-ukraine-imf-executive-board-completes-third-review-eff
← 8. https://www.state.gov/public-designations-of-mikheil-chinchaladze-levan-murusidze-irakli-shengelia-and-valerian-tsertsvadze-due-to-involvement-in-significant-corruption/
← 9. The US White House, A Proclamation on Suspension of Entry as Immigrants and Nonimmigrants of Persons Enabling Corruption.
← 10. European Parliament, Towards an EU global sanctions regime for corruption.
← 11. Eurativ (2023), EU to extend sanctions framework to target corrupt foreigners