Western Balkans Competitiveness Outlook 2024: Serbia

7. Anti-corruption policy

Abstract

An effective anti-corruption policy is essential for promoting fair competition. This chapter, along with four sub-dimensions, explores the effectiveness of the prevention, investigation and prosecution of corruption cases. The first sub-dimension, anti-corruption policy and risk management, assesses the planning, co-ordination and monitoring of anti-corruption policies, including corruption risk assessments and corruption proofing of legislation. The second sub-dimension, prevention of corruption, focuses on anti-corruption public-awareness as well as the effectiveness of the legal framework regarding corruption prevention bodies, conflicts of interest, and whistleblower protection. The third sub-dimension, business integrity and corporate liability, explores the robustness of the framework for businesses integrity and regulatory mechanisms, as well as the liability of legal persons. The fourth sub-dimension, investigation and prosecution, assesses the capacities of specialised anti-corruption investigative and prosecutorial bodies in investigating and prosecuting high-level corruption cases.

Key findings

Serbia’s legal and institutional anti-corruption framework has changed little since the Competitiveness Outlook 2021 assessment (Table 7.1). The economy has robust measures in place for assessing corruption risks and has made efforts to further strengthen the verification of assets and income reports and to oversee compliance with rules for beneficial ownership declaration. However, limited resources of anti-corruption bodies are a key factor preventing stronger progress in Serbia’s fight against corruption.

Table 7.1. Serbia’s scores for anti-corruption policy

Dimension	Sub-dimension	2018 score	2021 score	2024 score	2024 WB6 average
Anti-corruption	6.1: Anti-corruption policy and risk assessment			3.2	2.4
	6.2: Prevention of corruption			3.3	2.9
	6.3: Business integrity and corporate liability			2.3	1.9
	6.4: Investigation and prosecution			2.3	2.4
Serbia’s overall score		2.6	2.9	2.9	2.5

Notes: Scores for 2024 are not directly comparable to the 2021 scores due to changes in the scoring methodology of this indicator. Sub‑dimension 6.3 as well as several indicators in the other sub-dimensions is scored for the first time in this assessment. Therefore, changes in the scores may reflect the change in methodology more than actual changes to policy.

The key findings are:

• Serbia previously integrated the planning of its anti-corruption policy with its accession negotiations with the European Union (EU). However, the main strategic document, the Action Plan for Negotiations of Chapter 23,1 has been lagging behind in its implementation. 33% of anti-corruption activities were not carried out as planned in 2022, and 24% were not fully implemented at the end of 2023. Serbia has been preparing a new national anti-corruption strategy (2024-28) and accompanying action plan, both pending adoption.

• The Law on Prevention of Corruption (LPC), in force since 2020, provides a basic framework regarding conflicts of interest for public officials. However, it has several gaps, including, among others, the exclusion of chiefs of political cabinets and government advisers; a vague exemption from the obligation to disclose a conflict of interest; and the absence of post-employment restrictions for public officials directly elected by citizens.

• The law establishes the liability of legal persons for all criminal offences, but the maximum fine of approximately EUR 42 500 is exceptionally low relative to the potential scale of large corruption transactions for certain corruption offences.

• While the number of convictions for high-level corruption increased in 2022, none of these cases resulted in a final confiscation of assets between 2020 and 2022. Overall, the available statistics and information about the prosecution and adjudication of high-level corruption remain very limited.

• There are signs pointing to resource constraints in anti-corruption bodies. The Agency for Prevention of Corruption (APC) is significantly understaffed, and the Prosecutor’s Office for Organised Crime (POOC) operates with limited human resources, insufficient technical equipment, and insufficient premises.

1. The chapter of the European Union acquis on judiciary and fundamental rights.

State of play and key developments

The perceived level of corruption in Serbia has increased slightly since 2018. On a scale from ‑2.5 (worst) to +2.5 (best), Serbia’s score in the World Bank’s Control of Corruption indicator has slightly deteriorated from -0.40 in 2018 to -0.46 in 2022 (Table 7.2). Transparency International’s Corruption Perceptions Index reflects a similar change. On a scale from 0 (highly corrupt) to 100 (very clean), Serbia’s score decreased from 39 in 2018 to 36 in 2023, falling below the Western Balkan regional average and declining in its global ranking among the 180 countries and territories ranked.

Table 7.2. Serbia’s perceived anti-corruption policy performance in 2018-23

	2018	2019	2020	2021	2022	2023
Control of Corruption Indicator
SRB (percentile rank)	40.48	37.62	37.14	35.71	35.38
SRB (score)	-0.40	-0.45	-0.45	-0.46	-0.46
WB6 (score)	-0.41	-0.45	-0.44	-0.41	-0.38
Corruption Perceptions Index
SRB (rank)	87/180	91/180	94/180	96/180	101/180	104/180
SRB (score)	39	39	38	38	36	36
WB6 (score)	38.67	37.67	37.5	38.67	38.67	39.50

Notes: Percentile rank (0-100) indicates the rank of the economy among all economies in the world. (0 corresponds to the lowest rank, and 100 corresponds to the highest rank.)

Sources: World Bank (2023[1]); Transparency International (2023[2]).

According to the Balkan Barometer, most people in Serbia agree that the government fights corruption successfully. Although the share increased significantly in 2021 when it reached 55% (RCC, 2021[3]), compared to only 28% in 2020 (RCC, 2020[4]), the evidence of changes is inconclusive, as it consists of only a single data point without any follow-up data regarding the sustainability of the trend. Therefore, it is not possible to confirm that Serbia has reached a turning point in its efforts to combat corruption.

Sub-dimension 6.1: Anti-corruption policy and risk assessment

For several years Serbia integrated planning of its anti-corruption policy framework with accession negotiations with the European Union, but implementation has been moving slowly. The Action Plan for Negotiations of Chapter 23 is the most recent strategic document, originally adopted in 2016, revised in July 2020 and implemented until 2023. Based on the Action Plan, the government adopted in 2021 an additional planning document titled the Operational Plan for Prevention of Corruption in Areas of Particular Risk. The Agency for Prevention of Corruption (APC) has been monitoring the implementation of both the Operational Plan and the sub-chapter “Fight against corruption” under the Action Plan. In 2022, the APC published an impact assessment of strategic anti-corruption documents, including the National Anti-Corruption Strategy 2013-18 and accompanying Action Plans as well as the Action Plan for Chapter 23 (2016-20) and its sub-chapter “Fight against corruption”, and found that these policies have failed to reach the desired effectiveness. For example, the public’s trust in institutions’ ability to safeguard public interests did not see an increase (APC, 2022[5]), and the implementation of the sub-chapter “Fight against corruption” has been lagging with only 61% of the 87 activities assessed by the APC being implemented in 2022 (APC, 2023[6]). Similar to the slow implementation of the Action Plan’s anti-corruption sub-chapter, only three of the 15 measures set out in the Operational Plan have been implemented (APC, 2023[7]). According to the latest official report, the share of fully implemented anti-corruption activities of the Action Plan for Chapter 23 reached 76% (99 of 130) at the end of 2023 (Ministry of Justice, 2024[8]).

In 2023, Serbia started preparations for a new national anti-corruption strategy and action plan for 2023-28. The working group preparing the draft strategy comprises 41 members and includes representatives of public institutions as well as non-governmental organisations (NGOs). As of mid-December 2023, the government had published preparatory materials such as an assessment of sectors (healthcare, education, taxation, customs, the police, local self-government, public sector management, infrastructure and spatial planning, financing of political parties and lobbying, privatisation, public procurement, protection of whistleblowers, and competent authorities for the suppression of corruption) that will be covered by the planned strategy (Ministry of Justice, 2023[9]). However, in the absence of a published draft strategy, Serbia faces an interruption in the continuity of its anti-corruption policy framework. Several reports also highlight the lack of effective co-operation between the advisory Anti-Corruption Council and the government (European Commission, 2023[10]).

There is a generally high level of compliance among public bodies in Serbia regarding the development and renewal of integrity plans, including the implementation of corruption risk assessments. The Law on Prevention of Corruption (LPC) requires all public bodies to develop integrity plans and the APC’s Manual for Creation and Implementation of an Integrity Plan outlines that such a plan should be based on a corruption risk assessment, including the determination of the level of risk, and the selection of prevention measures (APC, 2021[11]). The APC provides continuous support to public bodies regarding the preparation of integrity plans and has developed a digitalised system to monitor their adoption. In 2023, 99% of public institutions complied with the legal requirement to draw up integrity plans during the third cycle of the development, implementation, monitoring and evaluation of plans, which started in 2021 (APC, 2023[12]). However, a 2020 report by the APC, formerly known as the Anti-Corruption Agency (ACA), found that integrity plans were primarily prepared to comply with formal requirements, with authorities paying limited attention to the plans’ actual content and meaning (ACA, 2020[13]). Despite this finding, there have been no further conclusions published by the APC on this matter, and independent evaluations of risk assessment practices remain absent.

The corruption proofing of legislation has a firm legal basis in the Law on Prevention of Corruption (LPC). The LPC envisages the anti-corruption assessment of legislation by granting the APC the authority to propose the adoption or changes of regulations and provide opinions on draft laws in areas particularly at risk of corruption or that regulate issues covered by international anti-corruption treaties. This means that potentially any law or bylaw can be subject to corruption proofing. The APC hosts the Unit for Analytics and Norms responsible for corruption proofing and has developed the Methodology for Corruption Risk Assessment in Regulations (APC, 2021[14]). However, the APC, in its 2022 annual report recognised the need to increase the number of employees working on assessing regulations (APC, 2023[12]). While the agency has also provided training to a limited number of other public bodies, corruption proofing remains mainly concentrated within the APC, with other central authorities having neither the obligations nor skills for such activities. In 2023, APC’s competition for grant allocation to civil society projects focused on the analysis of risks in acts of local government. Prior to the LPC’s adoption in 2020, the APC had already assessed regulations on a regular basis, although that was not yet part of its explicitly prescribed duty. In 2020, its activity dropped to 2 assessments, but regained traction with 15 opinions on proposals and draft regulations in 2021 and 19 opinions in 2022, before again decreasing to 8 opinions in 2023. As noted in the CO 2021 assessment, most of the APC’s recommendations from the proofing remained unimplemented and there is no overview of the implementation of the recommendations available. However, the APC reported that the government in 2023 proposed to abolish a law on the (re-)construction of line infrastructure projects following a critical assessment by the APC, suggesting that corruption proofing of legislation can have some practical impact.

Sub-dimension 6.2: Prevention of corruption

The Agency for Prevention of Corruption (APC) is the main corruption prevention body and has multiple preventive and oversight competencies, but it lacks adequate resources to achieve its objectives in practice. Its competencies include, among others, supervising the implementation of strategic documents, making decisions regarding conflicts of interest, performing lobbying-related tasks, submitting criminal notifications, requesting the initiation of misdemeanours or proposing the initiation of disciplinary proceedings, and verifying reports on assets and income. The APC has several safeguards of independence, including transparent procedures for appointing the director and five members of the APC’s council. The National Assembly (NA) appoints the director and members of the council from candidates who have achieved at least 80 out of 100 points in a public competition conducted by the Judicial Academy. In specifically defined cases, the NA also has the authority to dismiss the director before the expiry of his or her mandate (maximum two terms of five years). The director of the APC submits the agency’s proposed budget to the Ministry of Finance and the law contains general guarantees of funding and financial independence: the APC has autonomous control over its funds, and the government may not suspend, delay, or limit the allocated funds without the director’s consent. In practice, however, the budget of the APC has stagnated at around EUR 2.5 million per year between 2020 and 2023, and the agency is operating with a staff shortage. As of July 2023, the APC had 84 specialists and 18 administrative or technical staff members, significantly below the target capacity of 163 employees by the end of 2022 (APC, 2023[12]). While recent reports by international organisations do not specifically emphasise challenges related to the independence of the APC, concerns from domestic organisations have been raised about the political neutrality of the previous APC director (in office until 2023) and the handling of cases involving ruling party officials (Transparency Serbia, 2023[15]). Transparency Serbia also argues that the transparency of verification processes of the APC is insufficient given that decisions in cases of reprimand, misdemeanour reports and criminal charges, transferrals to the public prosecutor and final decisions of misdemeanour and criminal courts are not published.

The Law on Corruption Prevention (LPC) provides a basic framework for conflict of interest for public officials. Public officials are defined as any elected, appointed or nominated person in public authority. However, the LPC, including obligations to submit asset and income declarations, does not apply to the prime minister’s or deputy prime ministers’ chiefs of cabinet and government or special advisers (GRECO, 2022[16]), or persons appointed by ministers such as principals of schools. Moreover, employees of state-owned enterprises who are not officials are not subject to any conflict-of-interest regulations (Transparency Serbia, 2023[15]). The definition of conflict of interest comprises actual, potential, and apparent conflicts. A public official is required to notify their immediate superior and the APC about a conflict of interest and suspend proceedings if a conflict is suspected, unless there is a risk of delay. The latter is vaguely formulated, providing room for potential abuse of this exemption. Following notification, the APC issues an opinion and proposes measures to eliminate the conflict if one is identified. In addition, the APC may also initiate a procedure ex officio to decide whether a conflict of interest exists. The LPC sets principles and criteria for work performance and other activities outside the public office, and empowers the APC to assess these situations and provide binding opinions on a case-by-case basis. However, the LPC provides little guidance on how conflicts of interest shall be resolved, granting the APC considerable discretion. Experts have also criticised the exemption of public officials directly elected by citizens from post-employment restrictions (GRECO, 2022[16]).

The APC is responsible for addressing violations of the LPC and may issue a reprimand, publicly announce the violation, or publicly recommend the person’s dismissal from public office. The APC imposed 54 such measures in 2020, 63 in 2021, and 55 in 2022 and 19 in 2023 regarding situations of conflict of interest or nepotism. In some of the cases, the APC also submitted requests to the competent bodies for the initiation of misdemeanour proceedings. Notably, no sanctions were imposed for breaches of post-employment rules in 2018-23, and there is no practice of invalidating decisions or contracts because of violations of conflict-of-interest regulations.

The Law on Corruption Prevention (LPC) also stipulates that public officials are subject to asset and interest disclosure upon the commencement and termination of public office, and when significant changes of assets or income have occurred. This provision also covers public officials’ spouses or common-law partners as well as minor children if living in the same household. The APC verifies the accuracy and completeness of the declared data based on an annual verification plan or if the APC suspects a false declaration. It also has direct access to datasets kept by several authorities, but exchanges data with the Tax Administration and certain other state bodies in writing. The APC may also obtain data on the accounts of public officials from banks and other financial institutions. In 2023, the APC concluded a co-operation agreement with the National Bank of Serbia aimed at electronic exchange of data from the registers kept by the Bank. The scope of declarable data was increased in 2021, including cash savings and digital assets. However, the declaration does not explicitly cover beneficial ownership of entities or assets when not based on formal ownership. Moreover, the publicly available information does not provide a comprehensive picture of an official’s economic situation. Broad categories of data are exempt from public disclosure, such as sources and amounts of income from non-public sources, amounts of savings or ownership of financial instruments. The system of measures and sanctions is similar to that in cases of conflict of interest, including reprimands, public announcements of violations, public recommendations for dismissal, and fines for misdemeanours. In addition, a public official who does not report assets and income or provides false information with the intention of concealing information shall be punished by imprisonment. Since 2019, the number of referrals to the competent prosecutor's offices based on suspicions that officials have not reported assets or have provided false information has been decreasing (Table 7.3).

Table 7.3. Criminal complaints filed with public prosecutor’s offices in 2019-23

	2019	2020	2021	2022	2023
Number of referrals	25	13	7	6	11

Source: Based on data provided by Serbia’s authorities in the context of the Competitiveness Outlook 2024 assessment.

The APC imposes large numbers of reprimands in relation to asset declaration, totalling 365 such actions in 2022 and 178 in 2023, in a sign of active enforcement. However, the usefulness of the system for detecting signs of inexplicable wealth is unclear, given the lack of data about the substance and outcomes of the cases referred to the public prosecutor’s offices.

The legal framework for the protection of whistleblowers is comprehensive and extends to both the private and public sectors but falls short of fully meeting international good practice. The Law on Protection of Whistleblowers, adopted in 2014, contains multiple protection provisions for whistleblowers. It states that whistleblowing can be carried out by internal or external reporting or public disclosure. However, the conditions for protection in cases of public disclosure are narrow: essentially in cases of imminent danger, but not when there is a risk of retaliation, or there is a low prospect of the breach being effectively addressed as envisaged in the EU Directive 2019/1937 on the protection of persons who report breaches of European Union law. While the Law may not explicitly address the protection of anonymous whistleblowers in cases of reprisal, such protection likely extends to anonymous whistleblowers. The Regional Anti-Corruption Initiative (RAI), which supports the fight against corruption in Southeast Europe, found that several elements in the Law should be made clearer or amended to ensure full compliance with EU Directive 2019/1937 (RAI, 2021[17]). For example, it recommends removing the requirement for whistleblowers first to demonstrate “the probability” that a detrimental act against them constituted retaliation before the burden of proof shifts to the party accused of retaliation. The RAI’s analysis also advocates the possibility of whistleblowers seeking protection through an administrative procedure and the court procedure. While whistleblowers are entitled to seek protection from the court, the current protection system falls short of fully providing all the support envisaged in the EU Directive 2019/1937; which includes effective assistance from competent authorities before any relevant authority involved in the protection against retaliation, financial assistance, and other measures such as psychological support. For instance, the Law on Free Legal Aid does not recognise whistleblowers as a special group; they are entitled to free legal aid only when they fulfil general conditions.

Serbia continues to have a high level of whistleblowing activity, although it is gradually decreasing. The number of whistleblower cases received in court has been falling but remains considerable (Table 7.4). At the end of 2022, 39 whistleblower protection cases were pending in courts where the proceedings had lasted three years (European Commission, 2023[10]), suggesting unreasonably long durations.

Table 7.4. Whistleblower cases received in court in 2018-21

	2018	2019	2020	2021
Number of referrals	122	152	117	99

Source: Ministry of Justice (2023[18]).

The government has continued to foster anti-corruption public awareness and education. In 2021, it launched a campaign under the motto “For functions without corruption”, which aimed to raise public awareness about the importance of fighting corruption. In addition, the APC has published several manuals and guides in 2021, including the Manual for Developing and Implementing the Integrity Plan, the Conflict-of-Interest Handbook, and the Model Guide for the Implementation of the Code of Conduct for Members of Parliament, as well as other forms of promotional materials such as video clips (APC, 2021[19]). The APC is also active in terms of both online and traditional training. For example, it has developed a distance training platform for “Ethics and Integrity” available for officials and employees in public authorities, with over 40 000 participants in 2021 and over 100 000 in 2022. Moreover, between 2021 and 2023, the APC held several training sessions on the LPC and the Law on Financing of Political Activities, as well as on monitoring of anticorruption strategic documents addressing not only public officials but also representatives from civil society organisations, the media and political entities. Since its establishment, the APC has conducted 15 public competitions based on which 30 civil society projects were financed from the state budget. On the other hand, there was no targeted financing in support of awareness-raising and education activities, and the effectiveness of measures that promote anti-corruption public awareness and education is not evaluated.

Sub-dimension 6.3: Business integrity and corporate liability

Serbia’s Law on Companies does not specifically address business integrity or management of corruption risks in companies. However, it sets out general principles of oversight such as the duties of the board to perform internal supervision over the company's operations and establish risk management policies. The Chamber of Commerce and Industry has adopted the Code of Business Ethics (2006), the Corporate Governance Code (2012), and the Code of Business Ethics of the Professional Management Organisers (2018) to promote integrity practices among its members. In particular, the Corporate Governance Code recommends that the company board develop and implement a code of ethics and an integrity plan, which should contain measures to prevent and eliminate the possibility of corruption. However, no data on the implementation or impact of these documents is available. Apart from the APC, Serbia also lacks a designated institution, such as a business ombudsman, responsible for receiving complaints from companies about corruption-related matters.

According to the Law on the Central Records of Beneficial Owners adopted in 2018, the Agency for Business Registers (ABR) publishes information on beneficial owners of legal entities on its website free of charge and in a searchable form (Serbian Business Registers Agency, 2024[20]). The definition of a beneficial owner reflects the definition in the EU anti-money laundering directives. The ABR checks whether the entity has recorded the beneficial ownership data within the stipulated time while other competent state authorities check, among other things, whether the entity has recorded accurate data. The Law envisages criminal liability as well as fines for legal entities and their responsible persons in cases of non-compliance. In 2022, the ABR filed 2 121 requests to initiate misdemeanour proceedings, and misdemeanour courts made 1 904 decisions (ABR, 2023[21]). At least in quantitative terms, the enforcement is demonstrating a comparatively good track record.

Serbia has established the liability of legal persons for all criminal corruption offences in law with no major developments since the CO 2021 assessment. According to the Law on Liability of Legal Persons for Criminal Matters adopted in 2008, a legal person shall be held accountable for criminal offences that have been committed for the benefit of the legal person by a responsible individual within the scope of his/her authority. Moreover, a lack of supervision by the management can also trigger corporate liability. The liability of legal persons is autonomous, i.e. a legal person shall be liable even though criminal proceedings against the responsible individual have been suspended or the indictment has been rejected. If, due to certain reasons, it is not possible to initiate or conduct criminal proceedings against the responsible individual, the proceedings may be initiated and conducted only against the legal entity.

The law envisages both fines and the termination of the legal entity as penalties, as well as other possible legal consequences such as a ban on participation in public procurement. For legal entities, the level of fines is determined based on the maximum number of years that an individual would receive. The upper limit of fines for corruption offences such as active bribery, which carries the maximum prison sentence of up to five years (Article 368 of the Criminal Code), is approximately EUR 42 500, which is extremely low relative to the potential scale of large corruption transactions. Courts may impose a suspended sentence, taking into account, among other things, measures taken by the legal entity to prevent and detect the crime and measures taken against the responsible individual after the crime. Thus, while the law does not explicitly envisage due diligence or compliance as a defence or a mitigating circumstance, taking such preventive measures may serve as a basis for suspended sentencing. No evaluation of the legal framework for corporate liability has been carried out, leaving a gap in understanding its impact and effectiveness in combating corruption offences.

Sub-dimension 6.4: Investigation and prosecution

While there has been a rise in convictions in 2022 resulting from the investigation and prosecution of high-level corruption, none of these cases resulted in a final confiscation of assets between 2020 and 2022 (European Commission, 2023[10]). According to the Law on Organisation and Competences of State Bodies in the Suppression of Organised Crime, Terrorism and Corruption, which was adopted in 2016, the Prosecutor’s Office for Organised Crime (POOC) and the Section for Combating High-Level Corruption (SCHLC) within the Criminal Police Directorate’s Service for Combating Organised Crime (SCOC) are competent to investigate and prosecute high-level corruption offences. The law defines the anti-corruption competency of these bodies as fighting the abuse of official authority, trading in influence, and passive and active bribery involving officials performing a public function based on election, nomination or appointment by the National Assembly, the president of the Republic, the government, the general session of the Supreme Court, the High Council of the Judiciary or the High Council of Public Prosecution. Overall, statistical data on the repression of high-level corruption remains very limited. Based on indictments from the POOC, Serbian courts rendered first-instance judgements in relation to high-level corruption against 26 individuals in 2022 (Table 7.5). Final convictions were delivered regarding 11 individuals in 2020, 19 in 2021, and 21 in 2022.

Table 7.5. Serbia’s first-instance judgements in relation to high-level corruption in 2017-22

	2017	2018	2019	2020	2021	2022
Number of first-instance judgements	50	41	30	22	99	26

Sources: Based on data provided by Serbia’s authorities in the context of the Competitiveness Outlook 2024 assessment and European Commission (2020[22]).

Serbia has two specialised anti-corruption investigative bodies, but information on their resources and performance records remains scarce. According to the law, the Ministry of Interior (MoI) comprises two police units, one responsible for combating organised crime (the Service for Combating Organised Crime/SCOC) and one for combating corruption (the Department for Combating Corruption). The latter is competent for fighting corruption-related offences other than those involving high-level officials. Both units can apply special investigation measures based on court orders. The SCOC acts upon requests of the POOC’s Chief Public Prosecutor. The Minister of Interior appoints and dismisses the head of the SCOC with an opinion obtained from the chief prosecutor. Otherwise, the police units generally do not have special guarantees of independence, which causes a risk of undue interference. The general procedures and conditions of the MoI apply to the selection, appointment, and dismissal of officers and the determination of the budget and salaries. The units submit regular reports to superior officials, which are not published.

There are several specialised anti-corruption prosecutorial and judicial bodies in Serbia. The relevant prosecutorial body is the POOC, which co-ordinates the work of special anti-corruption departments within four higher public prosecutor's offices. The law is rather general regarding criteria for the POOC’s public prosecutors. Namely, when proposing or selecting prosecutors, priority is given to those who possess the necessary professional knowledge and experience in the field of fighting against organised crime and corruption. The State Prosecutorial Council (SPC) holds a competition for the post and submits a list of suitable candidates to the government, which in turn submits a proposal to the National Assembly (NA). The NA appoints the Prosecutor for Organised Crime for a term of six years. The chief public prosecutor of the respective higher public prosecutor's office appoints the head of the special anti-corruption department who has no fixed term. Thus, the law provides stronger safeguards of independence and transparency for the POOC than for the anti-corruption departments.

The capacity of the specialised prosecutorial bodies has increased slightly. In 2021, the number of public prosecutors in the POOC rose to 23 from 21 in the period 2018-20. The budget of the POOC has also been increasing, from around EUR 2.6 million in 2020 to around EUR 3.8 million in 2023. As of 2023, 48 anti-corruption prosecutors worked in the special departments, rising from 45 in 2020. Nevertheless, external assessments deem that the POOC operates with limited human resources, insufficient technical equipment to carry out special investigative measures, and insufficient premises. The co-ordinating role of the POOC vis-à-vis the special anti-corruption departments is arguably inadequately regulated, and it is insufficiently accountable to the public (European Commission, 2023[10]).

Serbia also has specialisation of courts for organised crime and corruption cases. Special departments for organised crime operate in the High Court and in the Court of Appeals in Belgrade, and special anti-corruption departments in High Courts in Belgrade and three other cities.

Overview of implementation of Competitiveness Outlook 2021 recommendations

Serbia’s progress in implementing past Competitiveness Outlook 2021 Recommendations has been limited (Table 7.6). Notably, there have been no significant developments in several areas, including whistleblower protection, corporate liability for corruption offences, and monitoring the effectiveness of the investigation and prosecution of high-level corruption. An amendment of the legislation and extended options to verify reports on property and income represent the area of strongest improvement.

Table 7.6. Serbia’s progress on past recommendations for anti-corruption policy

Competitiveness Outlook 2021 recommendations	Progress status	Level of progress
Create a mechanism to involve civil society in the monitoring of the implementation of the Action Plan for Chapter 23 negotiations	No mechanism was established to systematically involve civil society in monitoring activities. However, the negotiating group for Chapter 23 organises annual meetings with civil society in the context of the National Convention on EU in Serbia. The Agency for Prevention of Corruption (APC) also held a funding competition to support monitoring by the media and NGOs.	Limited
Ensure that reports on property and income of public officials and the data subject to public disclosure are comprehensive, reflecting their full economic position	The scope of declarable data has been increased, and the APC’s access to information has improved. Nevertheless, the data available for public disclosure are still subject to excessive exemptions.	Moderate
Monitor the protection of whistleblowers to identify and mitigate practical obstacles that they face	The Law on Protection of Whistleblowers has not been amended. No efforts were reported to identify and mitigate practical obstacles for whistleblowers.	None
Strengthen corporate liability for corruption offences by significantly increasing the maximum applicable fines	Relevant legal amendments have not been made.	None
Monitor the effectiveness of the investigation and prosecution of high-level corruption by collecting, analysing, and publishing data on, among other things, official position at the time of offence, indictments, final convictions, sentences, and recovered proceeds of corruption	The statistical data collected and provided in the context of this assessment do not reflect the effectiveness of the investigation and prosecution of high-level corruption.	None

The way forward for anti-corruption policy

Considering the limited implementation of the previous recommendations, Serbia should further strengthen its anti-corruption framework and practice by continuing efforts to follow the policy advice of the CO 2021. These policy recommendations, adapted as appropriate in the context of recent developments, are as follows:

• Incentivise public bodies to improve the overall level of implementation of national anti-corruption policy documents. Serbia should try to improve the implementation levels of the forthcoming national anti-corruption strategy and action plan. The effective suppression of corruption requires more than the successful functioning of strategic laws and institutions; it requires comprehensive efforts throughout the whole public sector. Additional incentives for public bodies could include publishing data on the implementation progress of each entity in an easily accessible and visualised manner; integrating the progress of anti-corruption actions into the key performance indicators and performance evaluations of managers within public bodies; and introducing a legal guarantee that all planned anti-corruption actions are secured with adequate state funding.

• Eliminate remaining legal gaps and ambiguities of the Law on Prevention of Corruption (LPC). In particular, the LPC’s application should be extended to include chiefs of cabinets of the top executive leadership and government advisers. The vague exemption (“when a risk of delay exists”) from the obligation to provide a notification about a conflict of interest should be re-evaluated, and methods for resolving conflicts of interest should be clarified in the law. Post-employment restrictions should apply to public officials who are directly elected by citizens, and finally, a practice should be introduced to invalidate decisions or contracts made in situations of conflict of interest whenever possible. In eliminating these ambiguities, Serbia’s authorities can consult the OECD Guidelines for Managing Conflict of Interest in the Public Service, which provides advice on regulating conflicts of interest by, for example, outlining strategies for the resolution or management of a conflict of interest (OECD, 2022[23]).

• Monitor the protection of whistleblowers to identify and mitigate any practical obstacles to whistleblowing. So far, monitoring of the implementation of the Law on Protection of Whistleblowers has primarily focused on quantitative aspects. However, conducting a more in-depth assessment of the challenges faced by whistleblowers would help develop measures to create a supportive environment for whistleblowing. The relevant EU Directive 2019/1937 sets out mandatory as well as optional support measures for whistleblowers, such as providing legal aid and counselling on procedures and available remedies, including on protection against retaliation, and on whistleblowers’ rights. As already noted in CO 2021, Serbia has taken some actions in these areas, but its efforts need to be maintained and strengthened. Elements of France’s guide for whistleblowers could offer some useful inspiration for establishing a more conducive environment for whistleblowing in Serbia (Box 7.1). Serbia should also widen recognised grounds for public disclosure by whistleblowers.

Box 7.1. Guide for Whistleblowers in France

The Defender of Rights, an independent institution to protect citizens’ rights in France, published a guide for whistleblowers in 2023. The guide explains in detail different legal and practical modalities associated with whistleblowing in France, for example regarding:

• the possibility to approach an external authority regardless of the whistleblower’s situation

• the list of authorities that can accept referrals from whistleblowers

• the requirement for external authorities to provide whistleblowers with online access to the relevant rules of procedure and guidelines for reporting (including, for instance, the authority’s jurisdiction, details on whom to submit reports to, what information needs to be provided, precautions to consider, the process for handling reports, and a list of guarantees such as sharing written updates with whistleblowers regarding the assessment of their allegations and response times)

• steps to take after submitting the report, for example, the possibility to consider publicly disclosing the report if whistleblowers have not received a response within the specified timeframe or if they are dissatisfied with the response provided

• the definition of an act of retaliation and the process of establishing relevant facts before a judge

• exemptions from civil liability, such as for harm caused to individuals implicated by the whistleblower report, and limitations on criminal liability, such as when disclosing a secret protected by law

• the option to request financial support from the judge during the procedure (such as funding for trial-related expenses) or, in cases where the whistleblower’s financial situation has significantly deteriorated, seeking payment from the judge to cover their needs

• the option for external authorities to offer temporary psychological and financial support to the whistleblower.

Source: Defenseur des Droits (2023[24]).

• Strengthen corporate liability for corruption offences by significantly increasing the maximum applicable fines. Monetary sanctions should be sufficiently severe to affect large corporations that may engage in corrupt acts, which would yield millions of euros in profits if accomplished undetected. In certain economies, the OECD Working Group on Bribery in International Business Transactions found statutory ceilings of sanctions even up to a few million euros to be insufficient. While such high levels of fines may not appear relevant for an average company, the law should provide the option of applying adequate sanctions in the event of a large business player engaging in corruption. The Working Group has encouraged setting maximum fines as a share of a company’s turnover (OECD, 2022[25]). Serbia should also compile and publish statistics that would allow for assessing the effectiveness of the corporate liability framework.

• Monitor the effectiveness of the investigation and prosecution of high-level corruption by collecting, analysing, and publishing data on, among other things, official positions at the time of the offence, indictments, final convictions, sentences, and recovered proceeds of corruption. Comprehensive and detailed record keeping of investigations, prosecutions and convictions – along with the collection and analysis of relevant statistical indicators and the systematic review of case law – are essential for a fair assessment of obstacles to combat high-level corruption effectively. This also includes addressing challenges related to undue influences on investigative and prosecutorial processes.

• Strengthen the financial and human capacity of anti-corruption bodies, particularly the Agency for Prevention of Corruption (APC) and Prosecutor’s Office for Organised Crimes (POOC). The lack of human resources at the APC is evident, and international evaluations also highlight the insufficient capacity of the POOC (European Commission, 2023[10]). Providing the necessary material resources and specialised staff to anti-corruption agencies is a key requirement in international standards, such as the United Nations Convention against Corruption (Articles 6 and 36).1

References

[21] ABR (2023), Annual Work Report for 2022, Agency for Business Registers, https://www.apr.gov.rs/upload/Portals/0/interna%20dokumenta/06_Godisnji_izvestaj_o_radu_APR_za_2022.pdf.

[13] ACA (2020), Annual Report of the Anti-Corruption Agency for 2019, Anti-Corruption Agency, https://www.acas.rs/storage/page_files/Annual%20Report%202019_1.pdf.

[7] APC (2023), Final Report on Monitoring the Implementation of the Operational Plan for the Prevention of Corruption in Areas of Special Risk, Agency for Prevention of Corruption, https://www.acas.rs/storage/page_files/Zavr%C5%A1ni%20izve%C5%A1taj%20o%20pra%C4%87enju%20sprovo%C4%91enja%20OP.pdf.

[6] APC (2023), Report on the Implementation of the Revised Action Plan for Chapter 23 – Subchapter ‘Fight Against Corruption’, Agency for Prevention of Corruption, https://www.acas.rs/storage/page_files/Report_on_RAP23_2022.pdf.

[12] APC (2023), Work Report: Year 2022, Agency for Prevention of Corruption, https://www.acas.rs/storage/page_files/Annual_Report_2022.pdf.

[5] APC (2022), Report on Anti-Corruption Strategic Document Impact Assessment, Agency for Prevention of Corruption, https://www.acas.rs/storage/page_files/REPORT%20ON%20ANTI-CORRUPTION%20STRATEGIC%20DOCUMENT%20IMPACT%20ASSESSMENT_1.pdf.

[11] APC (2021), Manual for Developing and Implementing an Integrity Plan, Agency for Prevention of Corruption, https://www.acas.rs/storage/page_files/Priru%C4%8Dnik%20za%20izradu%20i%20sprovo%C4%91enje%20plana%20integriteta%20u%20tre%C4%87em%20ciklusu%20(2021).pdf.

[19] APC (2021), Manuals and Guides, https://www.acas.rs/lat/pages/priru%C4%8Dnici_i_vodi%C4%8Di.

[14] APC (2021), Methodology for Assessing the Risk of Corruption in Regulations, Agency for Prevention of Corruption, https://www.acas.rs/storage/page_files/Metodologija%20za%20procenu%20rizika%20od%20korupcije%20u%20propisima.pdf.

[24] Defenseur des Droits (2023), Guide: Lanceur d’Alerte, https://www.defenseurdesdroits.fr/sites/default/files/2023-07/ddd_guide-lanceurs-alertes_maj2023_20230223.pdf.

[10] European Commission (2023), Serbia 2023 Report, https://neighbourhood-enlargement.ec.europa.eu/system/files/2023-11/SWD_2023_695_Serbia.pdf.

[22] European Commission (2020), Serbia 2020 Report, https://neighbourhood-enlargement.ec.europa.eu/system/files/2020-10/serbia_report_2020.pdf.

[16] GRECO (2022), Evaluation Report: Serbia, Groupe d’États contre la corruption, https://rm.coe.int/fifth-evaluation-round-preventing-corruption-and-promoting-integrity-i/1680a7216b.

[8] Ministry of Justice (2024), Revised AP23 with Implementation Status as of 31 December 2023, https://www.mpravde.gov.rs/files/Revised%20AP23%20with%20implementation%20status%20as%20of%2031%20December%202023.docx.

[9] Ministry of Justice (2023), Report on Sectors that will be Subject to the Future National Strategy for Combating Corruption and its Accompanying Action Plan, https://www.mpravde.gov.rs/tekst/39384/nacionalna-strategija-za-borbu-protiv-korupcije-za-period-od-2023-2028-godine-.php.

[18] Ministry of Justice (2023), Report on the Implementation of the Whistleblower Protection Act 2022, https://www.mpravde.gov.rs/files/Izve%C5%A1taj%20o%20primeni%20Zakona%20o%20za%C5%A1titi%20uzbunjiva%C4%8Da%202022%20.pdf.

[25] OECD (2022), Implementing the OECD Anti-Bribery Convention. Phase 4 Report: Portugal, https://www.oecd.org/daf/anti-bribery/portugal-phase-4-report.pdf.

[23] OECD (2022), OECD Guidelines for Managing Conflict of Interest in the Public Service, https://www.oecd.org/gov/ethics/oecdguidelinesformanagingconflictofinterestinthepublicservice.htm.

[17] RAI (2021), Gap Analysis of Whistleblower Protection Laws in the Western Balkans and Moldova, Regional Anti-Corruption Initiative, https://rai-see.org/php_sets/uploads/2021/10/RAI-GAP-Analysis-English.pdf.

[3] RCC (2021), Balkan Barometer, Regional Cooperation Council, http://www.balkaninnovation.com/docs/20/balkan-barometer-2022--public-opinion.

[4] RCC (2020), Balkan Barometer, Regional Cooperation Council, http://www.rcc.int/pubs/95/balkan-barometer-2020-public-opinion-survey.

[20] Serbian Business Registers Agency (2024), The Central Records of Beneficial Owners, https://apr.gov.rs/registers/the-central-records-of-beneficial-owners.1846.html (accessed on 10 July 2024).

[2] Transparency International (2023), Corruption Perceptions Index, https://www.transparency.org/en/cpi/2023 (accessed on 1 March 2024).

[15] Transparency Serbia (2023), Civil Society Report on the Implementation of Chapter ii (prevention) & Chapter v (asset recovery) of the United Nations Convention against Corruption in Serbia, Transparency Serbia, https://uncaccoalition.org/wp-content/uploads/Final-draft-Parallel-Report-Chapters-II-V-Transparency-Serbia-July-2023.pdf.

[1] World Bank (2023), Worldwide Governance Indicators - Control of Corruption, https://www.worldbank.org/en/publication/worldwide-governance-indicators (accessed on 1 March 2024).

Note

← 1.  Articles 6 and 36 of the United Nations Convention against Corruption can be accessed here: https://www.unodc.org/documents/brussels/UN_Convention_Against_Corruption.pdf.