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1. Introduction: Legality in the European Union

Legality, understood as respect for laws and regulations, represents an essential foundation for the economic and social development of any society, and even more so within the European Union. For European institutions, businesses, and chambers of commerce, understanding the regulatory framework and available tools is crucial to operating in a transparent and competitive environment.

2. The Role of Legality in the EU's Economic and Social Development

Legality is a strategic element for competitiveness and prosperity in the EU. The prevention and fight against crime, including corruption, are considered fundamental to ensuring a high level of security. Corruption is defined by the EU as a "euro-crime" due to its cross-border dimension, threatening citizens and weakening societies.

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It is estimated that:

  • Corruption costs the European Union between €179 and €990 billion per year, up to 6% of its GDP.

  • 70% of Europeans believe corruption is widespread in their country, an increase of 2 points compared to 2022 (Eurobarometer on Corruption 2023).

  • 35% of EU businesses consider corruption a problem for conducting their activities (Eurobarometer 2023).

  • 59% of EU businesses agree with the statement that corruption and the use of connections are often the easiest way to obtain certain public services (Eurobarometer 2023).

 

For chambers of commerce, promoting legality means supporting an environment where businesses can grow, invest securely, and compete fairly, actively contributing to the economic and social development of the entire European Union.

  • A solid and transparent legal environment promotes:

    • Competitiveness and fairness: By ensuring a "level playing field" between all Member States in terms of criminal penalties for corruption, the EU aims to create fairer and more predictable market conditions. This is vital for businesses, which can operate with greater confidence, knowing that competition is based on merit and not on illicit practices.

    • Trust and integrity: The modernization of the EU anti-corruption framework aims to strengthen prevention, increase awareness of the negative impacts of corruption, and stimulate a culture of integrity. This not only improves citizens' quality of life but also strengthens business confidence in public apparatuses and the economic system.

    • Protection of EU financial interests: Protecting the EU budget from fraud and illegal activities (Article 325 TFEU is an obligation for the EU and its Member States. Effective protection ensures that European funds are used correctly, benefiting the real economy and development projects, avoiding distortions that could harm honest businesses.

    • Support for sustainable and digital development: EU priorities, such as building a sustainable, digital, and inclusive future, intrinsically depend on a robust legality framework that ensures transparency and combats illicit practices.

3. Main European Legality Policies

The European Union actively engages in the fight against corruption and the promotion of legality through an evolving legislative and programmatic framework.

3.1. Modernization of the EU Anti-Corruption Framework

On May 3, 2023, the Commission adopted an anti-corruption package that includes a proposal for a new directive on combating corruption. The objective is to update and harmonize EU rules on definitions and sanctions for corruption offenses, in order to ensure high standards against the entire range of corruption crimes. The package also includes corruption prevention measures, which help promote a culture of integrity where corruption and impunity are not tolerated.

  • The set of measures includes new and strengthened rules that criminalize corruption offenses and harmonize sanctions across the EU, as well as a specific foreign and security policy (CFSP) sanctions regime to counter serious acts of corruption worldwide. These new measures place strong emphasis on prevention and creating a culture of integrity, where corruption is not tolerated, while strengthening enforcement tools.

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    The new directive aims to:

    • Intensify corruption prevention: By increasing risk awareness and promoting a culture of integrity.

    • Extend definitions of corruption offenses: Going beyond classic bribery and including, for example, embezzlement, trading in influence, abuse of office, obstruction of justice, and illicit enrichment related to corruption offenses.

    • Introduce minimum criminal sanctions to ensure uniform treatment in Member States.

    • Extend statute of limitations for prosecuting corruption offenses.

    • Ensure adequate investigative tools for law enforcement and prosecutors. This new proposal aims to replace and modernize the pre-Lisbon framework and implement international obligations under the UN Convention against Corruption (UNCAC).

3.2. Legislation Protecting EU Financial Interests

This is a fundamental pillar of EU anti-corruption policy and includes a series of relevant regulations.

For chambers of commerce, informing and training businesses about these policies is essential to ensure regulatory compliance and take advantage of opportunities offered by a more regulated and transparent market.

    • Directive on the fight against fraud to the Union's financial interests by means of criminal law (Directive (EU) 2017/1371): Establishes rules on definitions of criminal offenses and sanctions for fraud, corruption, and other illegal activities affecting EU financial interests.

    • Regulation on a general regime of conditionality for the protection of the Union budget (Regulation (EU, Euratom) 2020/2092): Allows the Commission to propose to the Council the imposition of budgetary measures on Member States where violations of the rule of law principles - including corruption - may affect or seriously risk affecting the sound financial management of the EU budget.

3.3. Sectoral Legislation

Various sectoral regulations contribute indirectly but effectively to the fight against corruption:

  • Prevention of money laundering and terrorist financing (AMLD Directives):

The Anti-Money Laundering Package - known as the AML package - regulates the new discipline on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT). The new rules will enter into force gradually between 2025 and 2029.

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The new anti-money laundering package rests on three pillars:

 

The AML package represents the comprehensive European reform in the fight against money laundering and terrorist financing and introduces new rules, including provisions on beneficial ownership transparency and the establishment of the new European anti-money laundering authority.

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  • Asset recovery and confiscation: EU rules aim at recovering proceeds of crime, including corruption cases, through specific directives and decisions.

  • Protection of whistleblowers (Whistleblowing Directive - Directive (EU) 2019/1937): Adopted in 2019, aims to increase corruption detection and better protect whistleblowers.

  • Public procurement: EU rules in this field are intended to prevent corruption in tender procedures, ensuring transparency and fair competition.

  • Fight against tax evasion: Through directives providing for mutual assistance in the recovery of tax claims and administrative cooperation to combat tax evasion and improve corporate tax transparency.

4. European Bodies

The EU has established several competent bodies to strengthen the enforcement of its legality policies.

  • European Public Prosecutor's Office (EPPO): Has the mandate to conduct criminal investigations and prosecute cross-border corruption cases. This is a key tool to ensure that complex crimes involving multiple Member States do not go unpunished.

     

    European Anti-Fraud Office (OLAF): OLAF investigates cases of fraud against the EU budget and cases of corruption and serious misconduct within European institutions; it also develops anti-fraud policy for the European Commission.

     

    Anti-Money Laundering Authority (AMLA): A decentralized EU agency that will coordinate national authorities to ensure correct and consistent application of EU rules. Its objective is to transform anti-money laundering and counter-terrorist financing (AML/CFT) supervision in the EU and strengthen cooperation between Financial Intelligence Units (FIUs).

     

    European Court of Auditors (ECA): As an independent external auditor of the EU, the European Court of Auditors protects the interests of EU taxpayers. It does not have legal powers, but works to improve the management of the EU budget by the European Commission and reports on the state of the Union's finances. Among its functions, it reports suspected cases of fraud, corruption or other illegal activity to the European Anti-Fraud Office (OLAF).

5. European Initiatives and Networks

For chambers of commerce, European tools and networks offer valuable resources to:

  • Inform businesses: About procedures and risks related to corruption and fraud.

  • Facilitate cooperation: With competent authorities in case of suspected illegal activities.

  • Contribute to integrity and good practices for the European business sector, attracting investments and partnerships.

  • Cooperation between EU countries in asset recovery -- Platform. European Union (EU) Asset Recovery Offices (AROs) are national central contact points that facilitate the cross-border tracing of assets derived from criminal activities.

     

    Network of contact points against corruption -- CARIN Network is an informal network of contact points and a cooperation group dealing with all aspects of asset confiscation.

     

    BORIS and national beneficial ownership registers: Beneficial ownership registers (UBO Registers) are mandatory for EU Member States. Under the IV and V Anti-Money Laundering Directives (AMLD), they require Member States to collect and make available information on the beneficial ownership of companies and other legal entities, in order to increase transparency and prevent the illicit use of such entities. The Beneficial Ownership Registers Interconnection System (BORIS) is a tool to link national central registers containing information on the beneficial owners of companies and other legal entities, trusts and other types of legal arrangements. Access is through the EU e-Justice Portal.

6. Internal Rules for EU Institutions

The EU itself applies strict rules on corruption prevention and transparency internally. These include the EU Transparency Register, a database containing "interest representatives" (organizations, associations, groups, and self-employed professionals) engaged in activities aimed at influencing EU policies and decision-making processes. Its objective is to show the public which interests are represented at EU level, by which entities and on whose behalf, as well as the resources allocated to these activities (including financial support, donations, sponsorships, etc.).

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