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Corruption Risks

In the absence of ethics and public accountability, corruption and malpractice are allowed to thrive, which undermines the foundations of a peaceful, prosperous and just society.

Corruption is a major challenge to democracy and the rule of law. It results in decisions and resource allocation that do not reflect the interests of the public and concentrates political power in the hands of the few. It in turn causes political leaders and institutions to lose legitimacy and public trust, which reduces their ability to govern.

Corruption poses a great threat to sustainable development, increasing poverty and inequality. Consequently, strengthening local self-government and their active participation in the fight against corruption is one of the essential preconditions for democratic development. Corruption at the local level is a specific phenomenon and requires a specific approach tailored to municipalities.

Corruption also causes local and regional authorities to be inefficient and ineffective in exercising their duties. It results in decisions being made not on the basis of what is in the interests of society at large, but what is in the self-interest of decision-makers and their associates. It leads to public money being misspent, with contracts being awarded to inferior providers and budgets being misallocated. At its worst, it enables public officials to misappropriate money and resources, using their position to get rich to the cost of those they have a duty to serve.

One of the major challenges for societies worldwide is the development of accountable and transparent systems that provide effective public services. Because of their proximity to the public, local governments are well positioned to deal with this challenge and to fight and prevent corruption at local level.

Under the current trend of decentralisation, local authorities are given not only resources, but also the discretionary power to use those resources. Thus, local governments have the potential to either reduce corruption and improve public services at the local level or, conversely, increase corruption and worsen the quality of service delivery.

Corruption can also result in public officials being appointed on the basis of favouritism rather than merit, meaning that local and regional authorities do not have access to the brightest and best talent. This in turn creates a fertile environment for further corruption and reduces even more the efficiency and effectiveness of the administration.

Inefficient and ineffective organisations, staffed by individuals who gained their positions on the basis of criteria other than merit, result in poor-quality public services and infrastructure, thereby eroding public trust and the legitimacy of public institutions. More importantly, however, they result in significant human costs, including poverty, deaths, illness, and restricted life chances.

Finally, corruption harms economic development. It leads to public money being directed to uncompetitive businesses, rather than those that offer more innovative or cheaper products and services. Uncompetitive markets, coupled with the negative impact of corruption on the quality of local public services and infrastructure, means that businesses do not have a solid foundation (of staff, security, investment, etc.) on which to build. In the end, this may cause private and international investors to avoid investing in an area.

General Domestic Context

During the last decade, the anti-corruption legal framework has been reset to a great extent. A new system aiming to build integrity in the public sector has been enforced and several anti-corruption policy documents, such as the National Anti-Corruption Strategy 2011-2016, National Integrity Anti-Corruption Strategy 2017-2020, the 2030 Development Agenda, and the EU-RM Association Agreement have shaped the agenda of the legislative, executive and judiciary, leading to substantive progress in building an integrity framework in the public sector.

In 2017, a new framework Integrity Law was adopted for building, strengthening and controlling integrity in the public sector. The Law on Institutional Integrity Assessment, reinforced also in 2017, provides the purpose, methods, procedures and legal effects of the institutional integrity assessment of public entities. This Law includes the integrity testing mechanism, which was reshaped after the constitutional contesting in 2015 of the initial version of the law. Now, the law includes judiciary approval for the integrity testing stage of the assessment.

According to the national legislation, the professional integrity of the public agents is derived from the political integrity climate and the institutional integrity. The corruption manifestations described in the subsequent chapters, such as bribery, conflict of interests, embezzlement, fraud, and so forth, are affecting the integrity climate of the local authorities. Between 2017 and 2020 the public sector followed the Action Plan set for the Pillar 2 of the National Integrity and Anti-Corruption Strategy for 2017-2020Government, public sector and local public administration. The local level authorities had to implement Local Anti-Corruption Action Plans in 34 districts.

To assess the progress, the second National Integrity and Anti-corruption Strategy Impact Monitoring Survey was published in February 2020, revealing an integrated indicator for the General objective no.3 of the Strategy: Ethics and Integrity in the Public, Private and Non-Government Sectors, which registered 5.3 points in 2019 and 5.4 in 2017, on an increasing scale from 1 to 10. Mostly, the population and business community have appreciated with average marks the integrity of the public agents and institutions from different fields. Still, the local administration registered slightly higher scores regarding its transparency in decision-making, public finance management, procurement and services, at 25% compared to 16% at the central level and 20% for the legislative and executive powers. Also, the town halls/ local councils (first level local public authorities) have the highest confidence share at 22% (being marked with Enough or Very much confidence) among the public and private institutions in 2019 (26% in 2017). Concurrently, the second level local public administration scored 11% in 2019 and 15% in 2017, and the Government even less – 12% in 2019 and 9% in 2017. According to the same survey, first level local public administration is considered less corrupt with 31% (36% in 2017) of answers by the population as Not at all / slightly corrupt and 21% for the second level of the local administration. The same study reveals that 6% of the respondents have offered informal payments when accessing services provided by the local public administration.

The institutional integrity assessment methodology applied to assess and appreciate the integrity level within the public sector institutions, including at the local level distinguishes internal and external functions and activities of the institutions, that trigger corruption acts. Therefore, the management of information, finance, goods, services and human resources on the internal side and the collection of payments and taxes, contract awarding, investment decisions, permits issuing and control are the external functions that often create vulnerabilities to corruption.

The lack of standard operational procedures within the local authorities combined with the personal and political interests of the locally elected persons, result in corruption deeds involving members of public agents’ families, or politically driven relationships. In 2020, the National Anti-Corruption Centre has investigated 63 cases involving local public authorities, including 23 mayors/ deputy-mayors, 3 public agents from local authorities and 2 secretaries of the local councils.

Lately, there are increasingly more criminal investigations on the management of resources related to the creation/provision of services, infrastructure projects (water, sanitation, lighting) and there is an escalating demand for transparency for these activities by the population, media and CSOs. Another issue still pending on the agenda of the national authorities is the transparent management and criminal investigation of the external funds misuse. Although the fraud, embezzlement and misuse of administrative resources during the electoral campaigns are incriminated and there is a modest progress in criminal cases statistics, there is no integrated database on the allocation of external funds across the local administrative units, nor sound criminal cases were registered involving public officials.

Georgia has made significant progress in the fight against corruption in recent years and, despite its current challenges, is a leader in the region, as evidenced by various international surveys and rankings. In 2005, Georgia ranked 58th out of 130 in the Transparency International Corruption Perceptions Index, and in 2016, it ranked 44th in the same survey.[i] The positive impact of intensive anti-corruption measures has been reflected in increasing confidence in Georgia's economy by local and international businesses, which has led to growing prosperity and the recognition of Georgia as a regional leader in democratic reforms around the world. Nevertheless, the rankings published by international organisations in 2019-2020 indicate a deterioration in the fight against corruption in the country. This situation is also highlighted in the 2018 resolution of the European Parliament,[ii] according to which high-level corruption remains a serious problem in the country. It is also noted by Transparency International's study of anti-corruption mechanisms in Eastern Europe and Central Asia, according to which, despite the need, the government has not yet established an independent anti-corruption agency.[iii]

 

According to the Transparency International Georgia survey on the anti-corruption system of Georgia in 2020 one of the major challenges to the country's anti-corruption system is the informal influence on government activities, concentration of power, and virtually complete control by the ruling party of a large part of public institutions.

In order to prevent corruption, it is important for Georgia to faithfully follow the recommendations of international anti-corruption institutions. As of 2021, almost 70% of the Council of Europe Group of States against Corruption recommendations for the prevention of corruption are not fully implemented.

Strengthening the role of local governments in the development and implementation of anti-corruption policies was identified as one of the commitments in the National Anti-Corruption Strategy adopted in 2015, which was assessed by the Anti-Corruption Network of the Organisation for Economic Cooperation and Development (OECD-ACN) in its fourth round monitoring report. At the same time, corruption at the local level is a specific phenomenon and requires a tailored approach, for which the OECD-ACN has made a recommendation that Georgia facilitate the development and implementation of anti-corruption strategic documents at the local level.

Anti-corruption legislation in Georgia consists of several laws and by-laws. The Law of Georgia on Conflict of Interest and Corruption in Public Institutions establishes the basic principles of detection and prevention as well as the principles of liability of persons who commit corruption. The law also regulates submission and monitoring of assets declarations of officials as well as the basic principles of protection of whistle-blowers and general standards of ethics and conduct.

Within the framework of anti-corruption legislation, the Law of Georgia on State Internal Financial Control sets the rules and principles of implementation of the state internal financial control mechanism, financial management and control, as well as internal audit issues. The budget-related process is regulated by the Budget Code of Georgia, which defines the rules of preparation, review, approval, execution, reporting and control of draft budgets and responsibilities.

The Law of Georgia on State Procurement sets out the general legal, organisational and economic principles of public procurement. The normative act regulates the issues related to the means of procurement, monitoring and control of procurements.

The Criminal Code of Georgia criminalises corruption, which includes crimes such as offering/giving a bribe, accepting a bribe, embezzlement, fraud, etc. These crimes are discussed below in detail.

 


[i] The progress made by Georgia is also recognised in the various international indexes, surveys and reports: International Transparency - Global Corruption Barometer; EBRD - Life In Transition Survey; IFC - Business Perception Survey; World Bank - Ease of Doing Business Survey, GRECO and OCD-ACN reports.

[ii] European Parliament resolution of 14 November 2018 on the implementation of the EU Association Agreement with Georgia (2017/2282(INI))

[iii] Eastern Europe & Central Asia: Weak Checks and Balances Threaten Anti-Corruption Efforts, 2019.

 

Corruption was officially recognised to be a major impediment to Armenia’s political, economic and social development still in 2003, when the government adopted its first anticorruption strategy and action plan, later followed by 4 consecutive strategies and implementation plans. The country ratified the UN Convention Against Corruption, Council of Europe (CoE) Civil Law Convention on Corruption and CoE Criminal Law Convention on Corruption. It joined a number of international anti-corruption initiatives, such as the Organization of Economic Cooperation and Development (OECD) Anti-corruption Network Istanbul Action Plan, Group of Countries Against Corruption (GRECO), Open Government Partnership (OGP). Armenia adopted a number of legal acts to prevent corruption and created several institutions. Nevertheless, for more than 15 years there has been no significant progress in the fight against corruption. This was largely explained by the systemic corruption mostly controlled by the political elites, and hence - the lack of genuine will at the highest level of the leadership of the country to eradicate corruption. 

Armenia achieved a significant progress in the fight against corruption following the so called “Velvet revolution” in April-May 2018, which itself was largely impelled by the people’s aspiration to “confront the existing autocratic corrupt regime and hope for democracy.”

The latest public opinion survey on corruption conducted in 2019 by Transparency International Anticorruption Center (TIAC) and Caucasus Research Resource Center (CRRC) revealed a significant progress compared to a similar study held in 2010.

According to the findings of 2010 survey, 83.7% of respondents believed that corruption is widespread in Armenia and exists in all spheres, whereas in 2019 - only 4.4% of respondents expressed such an opinion. In 2010, 49% of respondents thought corruption was widespread at the top levels, 26% said it mostly takes place at middle levels, and 6% noted that it occurs at lower levels. In 2019, only 16% of respondents thought corruption is widespread among top-level officials, while 43% of respondents noted that it is more prevalent among middle-level officials, and 26% responded that it is more common at lower levels.

As perceived by respondents, the most common forms of corruption (such as embezzlement, kickbacks, political corruption) are currently reduced with the exception of nepotism, which therefore attained a larger proportion within the typology - getting 42% in 2019 from 19.8% in 2010.

According to Transparency International’s (TI) Global Corruption Barometer study in 2016, which assesses the general public’s experience and attitudes towards corruption in countries around the world, only 14% of the respondents of the survey in Armenia rated the anti-corruption efforts of the Armenian Government as fairly well or very well, while 65% rated those as very bad or fairly bad. In response to a similar question in the above-mentioned 2019 survey the vast majority of respondents (81.6%) assessed the Government anti-corruption actions as effective.

Give such developments, in 2018-2019, after many years of signs of stagnation, TI’s Corruption Perception Index (CPI) for Armenia marked an essential increase - by 7 points each year, equalling to a score of 49 and raising the position of the country from 107 to 60 among about 180 countries.

Still, about 90 % of Armenian citizens think that corruption is “a very serious or serious problem,” whereas the overwhelming majority thought that corruption is “an evil and must be eliminated or neutralised”.

Following the “Velvet revolution” of 2018, the new Government came to power with a strong anti-corruption agenda. Though its implementation has not always been smooth, timely and effective, some significant steps are being undertaken with the aim of eradicating corruption.

In June 2019, the Anti-Corruption Policy Council (also known as Anti-Corruption Council) was reorganised with the aim of defining priorities for eradication of corruption and proposing potential solutions. Council also provides opinions on draft policies, programs and legal acts in view of corruption prevention. It is chaired by the Prime Minister, and includes heads of relevant state institutions as well as five representatives of CSOs.

In October 2019, the Anti-Corruption Strategy and its Implementation Plan for the period of 2019-2022 were developed and adopted. The development of the strategy was rather inclusive, as the Ministry of Justice of Armenia took active steps to engage civil society organisations in the development and adoption of the document. Among other priorities, the Strategy focuses on building the system of anti-corruption institutions, such as the Corruption Prevention Commission (to prevent and raise awareness on corruption), Anti-Corruption Committee (to investigate corruption cases), the Prosecutor’s Office Department on the corruption crimes (to oversee the investigation and draw allegations on behalf of the state) and the Anti-Corruption Court (to pass judgements on the corruption cases). The first three of these institutions have been established throughout 2019-2021, while the elaboration of the legal basis for the Anti-Corruption Court is still in process.

In Kosovo*, for many years the fight against corruption has been listed among the top priorities of both the domestic institutions and assistance programmes provided by various international organisations. However, the strong commitment towards combating corruption through the adoption of a number of laws, regulations and strategies have had limited impact in fighting this phenomenon.

Concrete results in the fight against corruption is only a few of the preconditions reiterated in the Kosovo* 2020 Report of the European Commission. The Corruption Perception Index 2020 published by Transparency International shows that Kosovo*, for the second year in a row, has lowered its score and is now ranked at 104 with 36 points (in 2017 its score was 39 while in 2018 it lost two points and in 2019 its score was 36 as well). With the actual score, Kosovo* lags behind the global average of 43, let alone the European average score of 66. This drop in ranking is mainly attributed to the weak rule of law institutions and the level of impunity in corruption cases. The Global Corruption Barometer (GCB) also reports that two-thirds of citizens rank corruption as one of the three biggest problems in Kosovo*.

The number of corruption-related cases brought to justice in Kosovo* is relatively small, while the grand corruption cases that come to a final verdict are scarce. Judges blame prosecutors for poor investigation and weak indictments. Reports from EU Rule of Law Mission (EULEX) and civil society organisations (Kosovo Law Institute, the Balkan Investigative Reporting Network and Group for Legal and Political Studies) reiterate the low profile of defendants in corruption cases in Kosovo*, frequent changes of prosecutors and judges, unclear sentencing policies, recurrent court session adjournments and prolonged proceedings that may lead to statutory limitations. Since the establishment of special departments for dealing with corruption and organised crime in July 2019, the Special Prosecution of Kosovo* has not filed a single indictment against any high-profile individual. The European Commission is also restating that “Kosovo*’s judicial system is at an early stage of preparation” and that “corruption is widespread and remains an issue of serious concern. There is a need for strong political will to effectively address corruption issues, as well as a robust criminal justice response to high-level corruption.” However, it recognises some progress with the new system for the disciplinary liability of judges and prosecutors, and progress in the rollout of an electronic case management system and central criminal record registry.

The Anti-Corruption Strategy and Action Plan 2018-2022, drafted by the Anti-Corruption Agency (the core administrative institution responsible for preventing corruption in Kosovo*), was finally adopted by the government in May 2019 but failed to gain the support of the Assembly of Kosovo* due to a perpetual political crisis. The Action Plan aims at conducting a follow-up on previous similar strategies dating back to 2004 by sustainably reducing corruption, strengthening institutional integrity, promoting good governance and properly implementing measures enlisted in the Action Plan. More specifically, the Anti-Corruption Strategy and its Action Plan include measures to combat the illegal financing of political parties and terrorism, the informal economy, money laundering and financial crimes.

In November of 2020, the Anti-Corruption Agency has finalized the Anti-Corruption Strategy 2021-2023. Several local and international reports on corruption in Kosovo* have been taken into account during the drafting process of this strategy. Based on the research done, this strategy is divided into four sectors, which are considered sectors with problems and major challenges in the fight against corruption. These four sectors are: Political Sector, State Administration and Local Governance, Law Enforcement and Judiciary and Public Procurement and Public Finance Management. The main objectives of this Strategy are to develop a “zero tolerance” approach against corruption, building integrity, responsibility and transparency in the work of public administration bodies, strengthening the citizens’ trust on public institutions, improving legislation and strengthening institutional capacities for prevention and fight against corruption as well as raising public awareness and education in the anti-corruption area.

According to the European Commission’s 2020 Progress Report for Albania (covering the time period May 2019 - October 2020), the country has made good progress in the fight against corruption. Albanian authorities strengthened operational, coordination and monitoring capacities in the fight against corruption, thus meeting the condition for the first Inter-Governmental Conference.

Albania has continued its efforts towards the establishment of a solid track record on investigating, prosecuting, and trying corruption cases. Although the vetting of the members of the judiciary is an administrative process, it is relevant to assess the concrete results by Albania to fight corruption. These have included the dismissal from office of several high-ranking magistrates, including at Constitutional Court and High Court level. In 2019, there were two final convictions for passive corruption of judges, prosecutors, and other officials of the judiciary.

In 2019, there were 262 first-instance convictions involving lower or middle-ranking officials compared to 294 first-instance convictions in 2018. In 2019, there were 246 final convictions at appeal level involving lower or middle-ranking officials compared to 289 final convictions in 2018. Further efforts towards establishing a solid track record in the fight against corruption have been made, although it remains a long-term objective that continues to require further structured and consistent efforts. While the number of ongoing investigations remains high, to date, final convictions in cases involving high-level officials remain limited. The newly established specialised anti-corruption bodies (SPAK- Special Anti-Corruption and Organised Crime Structure and the Anti-Corruption and Organised Crime Courts) are expected to significantly strengthen the overall capacity to investigate and prosecute corruption.

The establishment of the Special Prosecution Office on Corruption and Organized Crime in December 2019, one of two entities constituting the Special Structure on Anticorruption and Organized Crime, resulted in 327 new criminal investigations and 65 requests sent to court as of November 2020. While prosecutors made significant progress in pursuing low-level public corruption cases, including corrupt prosecutors and judges, prosecution of higher-level suspects remained rare due to investigators’ fear of retribution, lack of resources, and corruption within the judiciary itself. In September, the appellate court remanded the conviction of a former interior minister for retrial. In November the Special Prosecution Office filed charges against a former prosecutor general for hiding assets and seized several of those assets in December.

In the Law On the Organization and Functioning of Institutions to Fight Corruption and Organized Crime, the Special Prosecution Office carries out the criminal prosecution and represents the accusation on behalf of the state at the Court of First Instance against corruption and organized crime, at the Court of Appeal against corruption and organized crime, and at the High Court as well, it takes measures and supervises the execution of criminal decisions, as well as performs other duties charged by law.

The Special Prosecution Office performs its functions independently, through special prosecutors, who are appointed by the High Prosecution Council in accordance with this law.

The National Bureau of Investigation, as provided in Article 5 of the law, is a specialized structure of the Judicial Police, which investigates criminal offenses in the criminal jurisdiction of the Special Prosecution, according to the provisions of the Code of Criminal Procedure.

The National Bureau of Investigation is composed of investigators and Judicial Police Services according to this law.

The head of the National Bureau of Investigation, investigators and the services of the Judicial Police are directed and controlled by the prosecutors of the Special Prosecution.

One of the important formal legal efforts to address is the issue of corruption and organized crime is the Inter-Sectoral Strategy against Corruption 2015-2023.

In this Strategy there are defined a set of General Indicators and Specific Objectives consisting of a triple approach: prevention, suppression, and awareness. This strategy’s vision is “Transparent Albanian institutions with high integrity that guarantee qualitative and incorruptible service and have gained the citizens trust.”

In April 2020, the Ministry of Justice reported that 12 out of 18 objectives of the Anti-corruption Strategy and 53 out of the 97 measures were fully implemented during 2018. However, an ALSAI (Albanian Supreme State Audit Institution) Performance Audit Report on “The implementation of the anticorruption strategy” found several loopholes in the Strategy and its Action Plan related to the relevance of the objectives, incoherence between the Strategy and Action Plans, lack of involvement of the non-state actors in the implementation, and lack of institutional memory in the implementation.

However, overall, corruption remains widespread and is a serious concern.

Bribery

Bribery is the promise, offer, acceptance or solicitation of a personal advantage (e.g. gift, loan, reward, favour, etc.) in exchange for an unethical or illegal action. Bribery results in decisions not being taken in the public interest, which reduces public trust in institutions and leads to poor public services.

International standards

The following international conventions and standards relate to bribery:

Domestic context

Less than half of Albanian citizens (44%) claim to have had experience with bribery in 2015. Bribery is more prevalent in rural areas than in urban areas and bribes are given in the form of cash and in-kind contributions. Mostly, bribes are paid to facilitate bureaucratic procedures, or to avoid deficiencies and bottlenecks in the public sector. The most common reasons for paying bribes cited by businesses are: to “speed up business-related procedures” (39.1 per cent of all bribes), “making the finalisation of a procedure possible” (16.8 per cent), “receiving better treatment” (7.2 per cent), “reducing the cost of a procedure” (6.6 per cent) and “receiving information” (2.8 per cent). At the same time, almost one out of seven (13.5 per cent) bribes paid serve no specific immediate purpose for the businesses paying them, suggesting that these are “sweeteners” given to public officials to “groom” them for future interactions in the interest of the company.

The Government has launched several online portals to report bribery and other forms of corruption.

The results of the above-mentioned public opinion survey on corruption show that since April-May 2018, perceptions of both the amount of bribes and the frequency of bribery cases have changed. Thus, 82.4% of respondents believe that the amount of bribes has decreased significantly or to some extent. About 91% of respondents thought that the frequency of bribery has decreased. A comparison with the results of a 2010 survey on corruption shows that the share of those who avoid bribery has increased from 23% in 2010 to 37.6% in 2019.

The practice of investigating and pursuing bribery-related cases seem to be improved significantly during the latest years.

Receiving/requesting. The official statistics on the results of the investigation of corruption crimes, published annually by the General Prosecution Service of the Republic of Armenia, shows that in 2017, 104 instances of receiving/requesting a bribe were investigated by law-enforcement agencies, with charges brought against individuals in 73 cases. Investigated cases of receiving/requesting a bribe increased in 2018, with a total of 193 cases, whereas 87 were pursued. In 2019, 256 cases of receiving/requesting a bribe were investigated, out of which charges were brought against 136 individuals. In 2020, 224 cases were investigated, whereas only 132 individuals were charged.

Offering/giving. As for offering/giving a bribe, in 2017 41 cases were investigated and charges brought against 103 individuals, compared with 65 cases investigated and 137 persons charged in 2018. In 2019, 42 cases of receiving/requesting a bribe were investigated, out of which 22 were pursued. In 2020, 39 cases were investigated, out of which only 13 were pursued. As it is clear, bribery cases have decreased in recent years while the rate of its prosecution has increased.

Mediating. With regards to mediation in bribery, in 2017 and 2018 seven criminal cases have been investigated, 17 persons were prosecuted. In 2019-2020 only seven cases have been investigated, and 46 persons were prosecuted.

In 2020, 33 instances of receiving/requesting a bribe were registered by law-enforcement agencies out of which in 55% of cases investigation was concluded, compared with 63 registered cases in 2019 out of which 41% were successfully pursued. As for offering/giving a bribe, nine cases were registered and six were successfully pursued in 2021, compared with 10 registered and six successfully pursued cases in 2019.

According to the Business Bribery Risk Index published by Trace International, in 2020 Georgia was ranked 28th among 200 countries, which determines business-related corruption risks. The risk score remained the same as that of 2019, but worsened compared to 2017, when Georgia was ranked 25th among 200 countries with the risk score of 23 out of 100. Out of four assessed areas (Opportunity, Deterrence, Transparency, Oversight), the worst situation was observed in Georgia in terms of deterrence of corruption.

According to the 2020 Corruption Perceptions Index published in January 2021 by Transparency International, Georgia was ranked 45th out of 180 countries with the score of 56. The index worsened compared to the previous years as in 2018 Georgia was in 41st place with the score of 58.

Despite positive trends with regard to petty corruption, public opinion polls show that Georgian citizens consider complex forms of corruption a challenge. In particular, 63% of Georgian citizens think that abuse of power by public officials is common. As for the reasons behind the abuse of power by public officials, Georgians believe that their goals include employing family members and relatives (92%), protecting their own business (90%), embezzling public funds (81%), and getting bribes in exchange for “settling” problems (60%). In addition, as per the Caucasus Barometer results, 3% of respondents named corruption as the most important national problem in the country.

 

Bribery remains one of the most frequent forms of corruption in Kosovo*. According to Transparency International, the bribery rate in Kosovo* is at 10%. Bribery remains widespread in almost all areas of the public sector, thus undermining the proper functioning of public institutions and affecting the vital interests of citizens of Kosovo*. Citizens are continuously exposed to situations where they have to pay a bribe to get a good quality service. Usually bribes are paid in cash, but other forms of bribery are frequently used as well, such as gifts. In addition to its spread in the public sector, bribery is also found in the private sector, especially in the business sector. Most businesses that are in direct or indirect contact with a public official have been asked or have offered to pay a bribe in order to get a service. The rate of bribery among those businesses which had contacts with public officials is 3.2%.

An impact assessment report of the National Integrity and Anti-Corruption Strategy 2017-2020 indicates that the estimated volume of bribe accounted for in 2019 was 516 million Moldovan Lei (MDL): MDL 319.4 million from the general population and MDL 197.3 million from economic units. In 2017 the same indicator accounted for MDL 405 million.

The same study shows that the general incidence of informal payments is relatively low. According to the survey data, 7% of the respondents from the general population and 4.7% of the business units have recognized that they have offered informal payments during 2019. The average number of times a person from the general population offered a bribe is 5.4 times per year (as compared to 3.7 in 2017); in case of a business unit it is 3.5 times (as compared to 6.1 in 2017).

Data shows that the maximum amount of the offered bribe has also decreased, as compared to previous years: the value of informal payments varied between MDL 50 and MDL 20,000 both in the case of business units and the general population. In 2017 these amounts varied between MDL 100 and MDL 500,000 in the case of business units, and between MDL 50 and MDL 8,000 in the case of the general population.

Overall, the general population, as per the above assessment, have become less tolerant towards corruption, and now consider any corruption situation to be unacceptable, by stating that they would not agree to give bribes, regardless of the situation and personal benefit.

When it comes to attitude change among the general population vis-à-vis reporting an act of bribery, there is a positive change: about 87% of the survey respondents stated that in encountering such situations they would most probably/certainly report the corruption acts to the anti-corruption agencies through different means.

International and national surveys on the perception and experience of corruption in Ukraine indicate that bribery is widespread in the country. In 2017, 25.5% of Ukrainians claimed to have paid a bribe over the past year. Those who paid a bribe mainly did it to access public health services (46.3%), higher education institutions (22.5%) and local public authorities (13.6%). At the same time, 29% of Ukrainians replied that they refuse to pay bribes.

Another survey on corruption perception in the private sector shows that 67% of business representatives perceive bribery as the most widespread form of corruption in Ukraine.

Legislation

Based on Article 244 of the Criminal Code, the active corruption of persons exercising public function is defined as «promising, direct or indirect proposal, offer, or giving, to a person, who exercises public functions, of any irregular benefit for himself or a third person in order to act or not act in relation to his duty, is punished by imprisonment from six months up to three years».

As per Article 245 of the Criminal Code, the commission of this same offence by high state officials and local elected representatives is considered an aggravating circumstance and, thus, the penalty in this case is imprisonment from one to five years.

As regards passive corruption committed by persons that exercise public functions, it is defined in Article 259 as follows: «Soliciting or taking, directly or indirectly, any kind of irregular benefit or of any such promise up to the value of 50 000 Albanian lek (ALL) or the equivalent in foreign currency, for himself or for a third person, or accepting an offer or promise deriving from an irregular benefit, by a person who exercises public functions, in order to act or not act in the exercise of his duty, is punishable by imprisonment of from two up to three years. The same act, when the irregular benefit or the promise of such a benefit is over the value of ALL 50 000 or the equivalence in foreign currency, is punishable by imprisonment of from three up to eight years ». As with active corruption, and as stipulated in Article 260, the penalty for passive corruption by high state officials or local elected officials increases from four up to twelve years.

The Criminal Code of Armenia sets a number of penalties for the bribery.

Article 311 of the Criminal Code establishes liability for passive bribery, which is – receiving or demanding or accepting a promise or offer to receive money, property, property rights, securities or any other advantage by an official in person or through an intermediary, for the purpose of performing or not performing any act within the scope of his / her authority for the benefit of the bribe-giver or the person represented by him / her. This crime should be punished with a fine amounting 300-500 times the minimum salary, or imprisonment of up to 12 years, and are also barred from holding certain positions or engaging in certain activities for a maximum term of 3 years, with or without confiscation of property (depending on aggravating circumstances).

Active bribery is criminalised in Article 312 of the Criminal Code, which states that a person is punishable for promising, offering or providing money, property, property rights, securities or any other advantage to an official in person or through an intermediary, for the purpose of performing or not performing any act within the scope of his / her authority for the benefit of the bribe-giver or the person represented by him / her. The same article states that providing a bribe to an official is punishable by a fine amounting 100-400 times the minimum salary, or with the arrest for a term of 1-3 months, or imprisonment for a term of up to 7 years. The law also states that the bribe-giver is exempted from criminal liability if the extortion of bribe took place and the bribe-giver no later than within three days after the committed crime voluntarily informed the criminal prosecution authorities about the bribery and supported the disclosure of the crime.

Article 313 of the Criminal Code also establishes liability for the mediation in bribery, which is to facilitate a bribe-giver or bribe-taker in reaching an agreement on a bribe or on implementing an agreement that has already been reached. Intermediary in bribery should be punished with a fine amounting 100-400 times the minimum salary, or with the arrest for a term of 1-3 months, or imprisonment for a term of up to 5 years.

Crimes related to public office are regulated by Chapter 39 of the Criminal Code of Georgia. According to Article 338 of the Code, taking/requesting a bribe in a monetary or other form is punishable by imprisonment of six to 15 years, depending on the gravity and circumstances of the crime. It is important to observe that in this article aggravating circumstances are considered to be the following: holding high public office, taking a large sum (over 10 000 Georgian Lari (GEL)), group intent, repetition of the offence, multiple instances, receiving a bribe through extortion or by an organised group.

According to Article 339 of the Criminal Code, the punishment for offering/giving a bribe may be a fine, community service, house arrest or imprisonment, also depending on aggravating circumstances such as facilitating another criminal act or committing a group act.

 

In Kosovo*, bribery as a form of corruption is regulated and sanctioned with the Criminal Code of Kosovo*. It recognises corruption in the private sector and the public sector. Differences between bribery in these two sectors lie in the person to whom the bribe is offered or accepted from, and in the punishment that is imposed. In both cases, the Criminal Code penalises both active and passive bribery.

In the public sector active bribery happens when someone “promises, offers or gives, directly or indirectly, any undue gift or advantage to an official person, for himself or herself or for another person, so that the official person acts or refrains from acting in accordance with his or her official duties or in violation of his or her official duties”. Whereas passive bribery happens when an “official person requests or receives, directly or indirectly, any undue gift or advantage, for himself, herself or for another person, or accepts an offer or promise of such gift or advantage, so that the official person acts or refrains from acting in accordance with his or her official duties or in violation of his or her official duties”.  

According to the Criminal Code, active bribery in the private sector is punished by a fine and imprisonment of 6 months to 8 years and passive bribery is punished by a fine and imprisonment of 1 to 15 years (Article 421 and 422). In the private sector, both active and passive bribery is punished also by a fine, imprisonment of 6 months to 5 years and the gift or advantage gained will be confiscated (Article 309 and 310).

Article 43 of the Integrity Law no. 82 establishes disciplinary, civil, administrative or criminal liability for corruption offences. The next articles no. 44, 45 and 46 list all corruption acts, corruption connected acts, and corruptible deeds. Public agents, including foreign ones, private individuals, and corporate entities shall bear liability, pursuant to the provisions of the Criminal Code, for the commission of corruption acts. The legislation of the Republic of Moldova currently prohibits, among others, active corruption, bribe giving, corruption of voters, passive corruption, bribe taking, receiving illicit remuneration for carrying out works related to population servicing; traffic of influence, event manipulation, arranged bets, illegal financing of political parties or electoral campaigns, violation of financial means’ administration within political parties or electoral funds, conflict of interest, abetting personal assets and interests, illicit enrichment, embezzlement of public patrimony, embezzlement of means from foreign funds, use of means from internal loans or foreign funds contrary to their destination.

Currently, regulations on gifts in public administration are stipulated in the following normative acts: Law No. 25 on the Code of Conduct of the Civil Servant of 22 February 2008; Law on Integrity No. 82 of 25 May 2017, and the Government Decision on the legal regime of gifts No. 116 of 26 February 2020.

Additionally, Law No. 325 (2013) on Institutional Integrity Assessment sets forth the regulatory purpose, principles, means, methods, procedures, and legal effects of institutional integrity in the context of public entities. Article 2. of this law stipulates that “The assessment of institutional integrity is carried out for the purpose of: (a) enhancing the accountability of the leaders of public entities and organisations in order to develop, maintain, and strengthen the climate of professional integrity within the public entities; (b) ensuring professional integrity of public agents, preventing and combating corruption within the public entities; (c) the identification, assessment, and elimination of corruption risks within public entities; (d) increasing the number of tip-offs relating to manifestations of corruption admitted by public agencies.”

Article 16 of the Law on Integrity No. 82 of 25 May 2017 sets forth the legal regime of gifts. It stipulates that the leaders of public entities, as well as public agents, are prohibited from soliciting or accepting gifts (goods, services, favours, invitations, or any other advantages). Such requests or acceptance of inadmissible gifts constitute acts of corruption within the meaning of criminal legislation and of the provisions of Chapter VI of the current law.

Additionally, the Government Decision No. 116/2020 on the Legal Regime of Gifts stipulates that the total allowed value of the gifts offered out of politeness or on the occasion of certain protocol actions amounts to a maximum value of MDL 1,000 for one year. The current decision stipulates that a commission for recording and assessing gifts must be established within all public entities, in which public agents operate in the framework of Article 3 of the Law of Integrity No. 82/2017. The Government Decision No.134 of 22 February 2013 is repealed by the Government Decision No. 116/2020.

The National Anti-Corruption Centre has launched the “reLAWed” online platform with the aim to provide people with the possibility to get involved in the process of improving the legal framework, take action, identify and notify/communicate about deficient or interpretable normative acts, which have generated or may generate acts of corruption, abuse, or other illegalities.

Although the perception of bribery is very high, the term “bribery” was eliminated from the Ukrainian law and replaced with the notion of “unjustified benefits” (nepravomirna vyhoda). The Law No. 1700-VII “On Prevention of Corruption” of 14 October 2014 provides the following definition: «Unjustified benefit means money or other property, preferences, advantages, services, non-monetary assets, and any other benefits that are being illicitly promised, offered, delivered, or received by the person, who is authorized to perform public or local self-government functions». This definition expands bribery to the non-monetary forms of received benefit.

In line with the Article 368 of the Criminal Code of Ukraine, receiving or providing unjustified benefits can be punished by a fine, community work, deprivation of the right to hold certain office positions or engage in certain activities, or imprisonment, depending on the degree of the crime.

Case Law

In 2016, the police announced the arrest of the mayor of Bërzhitë. He was found guilty of passive corruption for accepting a bribe of EUR 4 500 for the issuance of a parking permit to one of the hotels of the area. An arrest warrant was issued for him, and he was found guilty in absence and sentenced to 5.4 years in prison. The ex-mayor of Bërzhitë submitted a petition for release to the Tirana District Court on 7 April 2016, justified with the cause that he suffered from a severe respiratory disease. No further information has been announced by the Courts since then.

In 2019, a judge of the Court of General Jurisdiction of the Kotayk Region of the Republic of Armenia was accused of bribery. He was accused of demanding and receiving a bribe in large scales through the intermediary. Avoiding to take the bribe which amounted AMD 1 224 400 in person, and in order to reduce the risk of being exposed, the judge turned to his close friend, member of the RA Chamber of Advocates for help, who promised to help him in advance. The judge was arrested and sentenced to 7 (seven) years with confiscation of property.

On August 9, 2021 the National Security Service of the Republic of Armenia issued a statement, according to which cases of bribery and other official crimes committed by the former head of Artashavan community were revealed. During March-July 2017, by making unilateral decisions, the head of Artashavan community organised fish auctions through false documents, as a result of which 67 hectares lands owned by Artashavan community were alienated to a company, for which he received about AMD 67 000 000 bribe.

The officers of the anti-corruption agency under the State Security Service of Georgia detained G.G. - the Kobuleti Municipality governor of the Mukhaestate village - for bribery in large quantities. The investigation established that G.G. promised a citizen of Turkey to provide space for a nut processing factory and demanded GEL 20 000 for the assistance. G.G. received a part of the demanded money, GEL 4 000. The law enforcers detained G.G. on the fact of bribery. As of summer 2021, investigation is on-going on the fact of bribery in large quantities (article 338, part II of the Criminal Code of Georgia, which envisages from 7 to 11 years of imprisonment).

 

In September 2020, the Kosovo* Police arrested the Construction Inspector of the Municipality of Pristina for committing the criminal offence of “taking a bribe”. He was accused of requesting a €12 000 bribe from the owner of a construction company in order to issue a permit to continue construction work. The accused pleaded guilty to bribery and the Basic Court of Pristina sentenced the accused to 1 year in prison and a fine of €3 000.

Back in 2019, the Mayor of Floreni, a village in the Anenii Noi district, along with a local councillor, were detained by National Anti-Corruption Centre officers and anti-corruption prosecutors in two criminal cases, based on passive corruption and peddling. The Mayor and the local councillor were suspected of having demanded from a local businessman MDL 350,000 to legalise his possession of a piece of land he had been using for several years. According to the dossier of this case, the suspects were planning to influence members of the local council to issue a decision to lease the land, of which the businessman would then abusively take full possession. In order to give him legitimate rights over the land, the two are said to have proposed to the businessman to lease him the lot and then to give him the possibility to buy it. The money was sent in three instalments, under the control of National Anti-Corruption Centre: MDL 200,000, MDL 10,000 and MDL 140,000. Two cases were initiated for passive corruption and for influence peddling.

 

Investigations of the National Anti-Corruption Bureau of Ukraine address several cases of bribery. For instance, in October 2016, the head of a village council faced charges of illegally demanding and partially receiving an unjustified benefit of approximately US$ 100,000 for granting the exploitation of 600 ha of land to an entrepreneur. The NABU finished the investigation, and the Special Anti-Corruption Prosecutor prepared an indictment and brought the case to the Zarichnyi regional court of Sumy, which is yet to reach a final verdict.

On 17 August 2016, the Malynsk raion court of Zhytomyr region passed a judgement on a case involving the head of a regional council and the head of a state administration. They were accused of extorting and receiving an unjustified benefit in the amount of 40 000 Ukrainian hryvnia (UAH) from a farmer who wanted to rent a land for agricultural purposes. Both defendants were sentenced to two and half years of imprisonment. However, on 13 November 2017, the Zhytomyr regional court of appeal overturned the initial verdict and initiated a new criminal procedure under original jurisdiction.

Conflict of interest

A conflict of interest is where an individual is in a position to derive personal benefits from the actions or decisions they take in an official capacity. Conflicts of interest – either if they are actual, perceived or potential – result in decisions that are, or are considered to be, unfair and self-interested. This reduces public trust in institutions and results in worse outcomes for the public.

International standards


Conflict of interest is also covered by the following international standards and guidelines:

 

Domestic context

Study findings suggest that the management and prevention of conflict of interest in Albania has been deficient due to the frequent amendments of the regulatory framework and lack of law enforcement. The reported cases of conflict of interest focus almost exclusively on the conflicts of interest of financial or economic nature. Local governments, as a result of the decentralisation process and their increased interactions with the public, have been increasingly exposed to the risk of conflict of interest. The cases of conflict of interest are mostly related to building permits, procurement, and use of public spaces. One of the efforts to address this issue is also the approval of the Inter-Sectoral Strategy against Corruption 2015-2020.  In 2014, legislative amendments in laws related to the declaration of assets and the conflict of interest were approved, increasing the number and frequency of audits from the High Inspectorate of Declaration and Audit of Assets and Conflict of Interest (HIDAACI).

Conflict of interest in Armenia is a major phenomenon given the small size of the society and family connections as well as poor awareness and recognition of the issue, inadequate regulations and practices of management.

Conflict of interest is regulated for the public sector - for public officials and public servants. Though the issue was somehow regulated by of the Law on Public Service and was under the supervision of the Commission on Ethics of High-Ranking Officials since 2011, still in 2014, a survey amongst the public officials showed that there was a lack of understanding of the issue. Only 56 % of respondents understood the definition of conflict of interest, and 61 % thought that a civil servant has a right to make a decision in a situation of conflict of interest.

According to the Law on Corruption Prevention Commission passed in 2017, in November 2019,  the Commission on Ethics of High-Ranking Officials was replaced with the Corruption Prevention Commission (hereinafter – also CPC), which possessed a broader scope of jurisdiction and more enhanced mechanisms in respect with regulation of conflict of interest matters, including the oversight of compliance of public officials with incompatibility requirements and limitations, assurance of unified practices, revealing conflict of interest through examination of declarations of assets and income, education and awareness raising, etc.

CPC: The main function of CPC in regards to the conflict of interests is the detection of conflict of interests and violations of ethics rules by persons holding public office (except for the Members of Parliament, Judges and members of the Supreme Judicial Council, prosecutors, investigators), heads of communities, their deputies, heads of administrative districts of Yerevan community, their deputies. CPC does not deal with situational cases of the conflict of interest. Instead, those are dealt by supervisors of respective institutions.

The major mechanism for CPC’s control of conflict of interest is the collection, verification and analysis of declarations and data related to assets, income, expenditures and interests of public officials. Declarations submitted by the relevant officials and public servants electronically are published on the website of CPC at www.cpcarmenia.am with an exception of personal data. The current system of declarations is being modernised to ensure interoperability with several state databases (police, real estate, companies, tax) to ensure more effectiveness.

Ethics commissions of public servants - follow up applications on the incompatibility requirements and other restrictions, violations of the code of conduct and situational conflict of interest cases and develop proposals to the respective institutions or officials to prevent or to eliminate conflict of interest situation in question.

Integrity officers within institutions – consult the public servants of their institutions on the incompatibility requirements and other restrictions, code of conduct, suggest measures to resolve conflict of interest related issues; manage the statistics on incompatibility requirements and other restrictions, violations of the code of conduct and conflict of interest cases.  

In present, the integrity officers’ institute is not functioning yet because of the lack of relevant by-laws and regulations.

Although conflict of interest represents a significant challenge for the Georgian integrity system, there is practically no administrative data related to such instances. Civil society organisations and investigative media often display cases of possible conflict of interest; however, law enforcement agencies fail to follow up on such cases.

Despite the fact that there are no public perception surveys related to conflict of interest in Georgia, there has been significant public interest to address these challenges. Specifically, the scope of the Law of Georgia on Conflict of Interest and Corruption in Public Institutions has been expanded over the years and now covers various representatives of central, municipal, legislative, judicial and independent public agencies. Besides mayors, their deputies and heads of the structural units of city halls are also regarded as public officials according to the Local Self-Government Code,[i] which makes them subject to the regulations of the Law of Georgia on Conflict of Interest and Corruption in Public Institutions.

In addition, in 2017 a monitoring mechanism of asset declarations was established. The electronic system for randomly selecting declarations was developed and the first commission for monitoring of asset declarations was set up. The commission selects declarations of high officials to be monitored in addition to those selected randomly by a machine. The composition of the commission is determined by the head of the Civil Service Bureau. Civil Servants may not be members of the Commission. Annual monitoring of asset declarations of high-ranking officials has been conducted since 2017.[ii] The monitoring results and respective reports are available on the website of the Civil Service Bureau of Georgia.

In spite of the establishment of the monitoring mechanism of asset declaration and broadening the scope of the Law of Georgia on Conflict of Interest and Corruption in Public Institutions a number of challenges remain. There is no dedicated agency with the functions of policy development, oversight of the implementation of conflict of interest regulations, including the application of sanctions, methodological guidance, and individual counselling. Despite allegations brought to the public by the media and non-governmental organisations, there is no practice of sanctioning high officials for violation of conflict of interest rules.


[i] Organic Law of Georgia Local Self-Government Code, Article 52, Legislative Herald of Georgia, published on 19 February 2014.

[ii] In 2017, 284 asset declarations were monitored; in 2018, a total of 448; and in 2019 the number was increased to 607.

 

Despite the fact that Kosovo* has a clear legal framework to combat conflict of interest, this phenomenon continues to be present in public authorities. Conflict of interest is punished by the Criminal Code of Kosovo* as a criminal offence and the Law on Prevention of Conflict of Interest in Discharge of a Public Function for cases that do not constitute a criminal offence.

Kosovo*'s legal framework includes other laws aimed at combatting corruption, such as: Law on the Prevention of Money Laundering, Law on the Protection of Whistle-blowers, Law on Prevention of Conflicts of Interest in Discharge of a Public Function, and Law of Extended Powers on Confiscation of Asset. In addition to laws, Kosovo* has adopted strategic documents in order to strengthen the fight against corruption. Among them are: National Strategy for Development 2016-2021, State Strategy against Corruption and Action Plan 2018-2022, Strategic Plan of the National Audit Office 2018-2021 and Anti-Corruption Strategy 2021-2023.

The Anti-Corruption Agency has been operating in Kosovo* since 2010. This agency was established by the Law on Anti-Corruption Agency, which regulates its organisation and functioning. The Agency has competencies related to reporting, detection and investigation corruption. The Agency conducts a preliminary investigation procedure in cases of suspected corruption in the performance of official duties or based on information received from natural and legal persons. One of its main responsibilities is to supervise and prevent cases of conflict of interest. In 2020, the Anti-Corruption Agency handled more than 160 cases of conflict of interest,  a number slightly lower than the year before (167 cases in 2019). Out of 160 cases, 27 of them were cases reported in the local government.

According to the art.10 of the Integrity Law no.82 of 25.05.2017, the climate of institutional integrity, among others, is cultivated by observing the legal regime of conflicts of interest.

The Law no. 133 of 17.06.2016 on the declaration of assets and personal interests, in art.11, establishes the general principles of avoiding conflicts of interest, which must be observed by the subjects of the declaration, in the process of fulfilling their duties:

  • serving the public interest with impartiality and objectivity;
  • ensuring transparency and public control of the activity;
  • individual responsibility and personal example.

At the same time, the Integrity Law no. 82 of 25.05.2017, in art.14 provides the obligations of the public agent and the head of the public entity related to the identification and treatment of conflicts of interest.

The control of conflicts of interest is carried out by the National Integrity Authority (ANI) in accordance with the provisions of the legislation regulating the NIA statute and of the legislation regarding the declaration and control of assets and personal interests.

Among the most recent developments in the regulation of the conflicts of interests is the establishment of an e-declaration system by the National Integrity Authority which became mandatory in January 2018, together with a mechanism for filing civil servants’ assets and conflict of interest statements. Compared to 2017, 2018 saw the number of declarations double thanks to the e-declaration system. Due to the e-Integrity information system, 65 232 declarations of assets and personal interests of civil servants were submitted in 2021, of which 6 052 statements were repetitive. The number of subjects of the declaration of assets and personal interests registered in the system was 57,028 in 2021.[iii]

The public agents must submit their electronic declarations annually through the on-line service available on the official website of the National Integrity Authority (ani.md) using the electronic signature issued for free, through the Special Telecommunications Centre, in the manner established by the Government.

 

Local authorities’ exposure to conflict of interest in Ukraine is considered to be very high and widespread because, unlike for Members of the Parliament, local councillors can combine their representative functions with other employment or entrepreneurship. At the same time, a survey of local authorities conducted in Cherkasy region in 2015 showed that only 15% of staff and local councillors fully understood the meaning of conflict of interest and its regulation.

Legislation

According to Article 3 of the Law No. 9367 “On the Prevention of Conflicts of Interest in the Exercise of Public Functions”, as amended, conflict of interest is a «situation of conflict between the public duty and the private interests of an official, in which he has direct or indirect private interests that affect, might affect or seem to affect the performance, in an incorrect way of his public responsibilities and duties».

Article 29 of the above stated law provides restrictions on mayors and chairmen of regional councils, who cannot be chairmen of CSOs, conduct economic activities, be members in managerial organs of private or civil society sectors, and possess shares or capital in a commercial company. The central authority responsible for the implementation of this law is the HIDAACI. In Article 44, this law provides a range of administrative penalties. Based on the type of conflict of interest, the fines range from ALL 30 000 to 500 000. The Law also stipulates disciplinary measures in Article 45.

Conflict of Interest is mentioned also in Article 4 of the Law No. 9131 “On the Rules of Ethics in the Public Administration”, Article 46 of the Law No. 152/2013 “On the Civil Servant”, and Article 26 of the Law No. 9643 dated 20.11.2006 “On Public Procurement”. Other related secondary legislation and HIDAACI regulations are important pieces of legislation related to Conflicts of Interest. Conflict of Interest is not provided as a criminal offence in the Albanian Criminal Code, even though it is mentioned in many laws, such as the law No. 9367 “On the Prevention of Conflicts of Interest in the Exercise of Public Functions”.

According to the definition of the conflict of interests of public officials (except judges, deputies, prosecutors, investigators, members of the community council) given in the article 33 of the Law on Public Service, conflict of interest is a situation in which a person holding office performs an action or makes a decision in the exercise of their powers, which can reasonably be interpreted as being driven by their personal interests or that of a person affiliated with them.

The Law establishes some sets of incompatibility requirements and other restrictions for public officials and servants.

Incompatibility requirements: It is forbidden for them to hold positions that are not conditioned by their status in other state or local self-government bodies, any position in commercial organisations, to engage in entrepreneurial activity, to perform other paid work, except for scientific, educational and creative work․ It is also forbidden for them to accept a gift or agree to accept it later.

Other restrictions for public officials and servants include a ban on the following:

  • representing the third party within the organisation where an official holds a position;
  • entering into transactions on behalf ot the state with persons in close kinship and in-law relations;
  • use the official position for the support of political parties, non-governmental organisation and religious organisations;
  • receiving honorarium for publications or speeches related to the official responsibilities;
  • using material-technical, financial and informational resources, other state and/or community assets and office-related data for personal or not-official purposes;
  • working together with persons in close kinship or in-law relations;
  • being hired by an employer under his / her immediate supervision within one year after leaving the official position.

The Law on Public Service states that in the case of conflict of interest, person holding public office is obliged to submit a written statement to his / her superior or direct supervisor on the circumstances of the conflict of interest. The written statement is subject to immediate examination. The person holding public office should not take any action before receiving instructions from the supervisor. In case of not having a superior or direct supervisor, the person holding public office may submit a written statement to CPC, which proposes to take steps to resolve the situation, including to make a statement on the existence of conflict of interests in a particular situation.

Conflict of interest cases of public servants are supposed to be pursued by the supervisors guided by the consultation of relevant institutions’ integrity officers and shall provide solutions to the conflict-of-interest situation. The responsibility for declaration of the conflict of interest lies with relevant public servants. If not declared, the cases can be reported through whistle-blowing mechanisms and followed up respectively.

Oversight and proceeding of conflict of cases during decision-making or action-taking by public officials or public servants is somewhat decentralised. As the Law on Public Service does not regulate the conflict of interest for MPs, judges, prosecutors, investigators and members of the community council, those are accordingly left to the jurisdiction of the respective laws – such as the Law on Guarantees for Activity of RA National Assembly Deputies (MPs), the Constitutional Law on the Judicial Code, Law on the Prosecutor's Office, the Law on the Special Investigation Service, the Law on the Investigative Committee, and the RA Law on Local Self-Government. None of those, however, contains any definitions of conflict of interests.

MPs: Article 4 of the Law on Guarantees for Activity of RA National Assembly Deputies (MPs) stipulates the conflict of interests for MPs as following: “…guided by his personal interests or the interests of his affiliated person means taking the floor with a legislative initiative, submitting a draft resolution, statement or address of the National Assembly, submitting proposals regarding an issue put into circulation in the National Assembly, as well as taking the floor at a sitting of the National Assembly or its committees, asking questions or participating in voting, which, although are legal in themselves, but the MP knows or is obliged to know that it leads or contributes, or reasonably may lead or contribute also:

  1. to the improvement of his/her property or legal status and the property or legal status of his/her affiliated person;
  2. to the improvement of the property or legal status of a non-profit organisation, of which the MP or his affiliated person is a member;
  3. to the improvement of the property or legal status of a commercial organisation with the participation of an MP or his affiliated person;
  4. to the appointment to the office of his affiliated person;
  5. to his election or appointment to an office, with the exception of the offices specified in paragraph 5 of Article 2 of this Law, as well as his speech as a candidate for an office elected by the National Assembly.”

In the case of a conflict of interests, an MP is obliged to take the floor with a statement regarding the conflict of interests, and when taking the floor, shall submit their written statement regarding the conflict of interests with a description of the nature of interests.

Judges (including Members of the Supreme Judicial Council): The Constitutional Law on the Judicial Code regulates the conflict of interest for judges as well as Members of the Supreme Judicial Council. Article 70 (Code of Conduct of Judges during Acting in Official Capacities) part 2 point 7 of this law provides the code of conduct for this group of officials stating that the Judge shall not allow conflict of interest, shall exclude any influence of family, public or other type of relations to influence exercise of his / her official authorities. Hence, the conflict of interest for judges is formulated as a code of conduct and non-compliance will generate liability.

Prosecutors: Conflict of interest for prosecutors is regulated by the chapter on Code of Conduct of the Law on Prosecution. According to Article 72 (General Code of Conduct of Prosecutors) part 1 point 6 of this law, the prosecutor shall be autonomous and impartial, independent from influences from the legislative and executive and other state and local government institutions, public and political organisations, mass media outlets, private interests, public opinion and other external influences, pressures, threats and other interference, shall be free from the concerns to be criticised.  

Investigators: The Law on Investigation Committee does not contain provisions on the conflict of interest. Article 10 part 1 of this law prescribes that the servants of the Committee are governed by the Law on Public Service, which skips regulating the conflict of interest of investigators. There is no regulation on conflict of interest in the Law on the Special Investigation Service.

Members of Community Councils: Article 21 part 2 point 6 of the Law on Local Self-Government states that the Member of Community Council shall not take part in voting of a decision, which relates to his / her interests or the interests of persons in close kinship or in-law relations with him (parent, spouse, child, brother, sister).

To summarize, in spite of a wide volume of develop regulations, the Armenian legislation still has a number of deficiencies as does not ensure complete and holistic definition of the conflict of interest, and does not ensure effective mechanisms for the exposure and management of conflict of interest and liability measures for all the public officials and public servants.

In Georgia there is a special Law on Conflict of Interest and Corruption in Public Institutions. The scope of the law extends to declaration of economic interests, as well as whistle-blower protection, receiving gifts, principles of public ethics, conflict of interests and corruption. Sanctions envisaged by this law are only administrative and include monetary fines (up to GEL 1 000) and disciplinary actions such as warning and contract termination. Conflict of interests of Georgian public officials is monitored by the Civil Service Bureau through a declaration monitoring system. The law on conflict of interest and corruption in civil service obliges civil servants to inform their superior on ad hoc conflicts of interest and with the superior’s written consent, a decision is made on conflict of interest in individual cases. A public servant has to declare the person related to them, who works in the same public institution where the public servant works, within one month from the appointment or election to the relevant position, and then before February 1 of each following calendar year.

The law does not provide for special regulations on MPs, judges, prosecutors, members of government, members of local and regional councils. The law, however, exempts MPs, president, prime-minister and members of parliaments and heads of governments of autonomous republics from declaring ad hoc conflicts of interest (Article 11.4). There are no special codes of ethics or other legal acts regulating conflict of interest for members of regional and local councils.

The Criminal Code of Georgia also provides for sanctions for accepting illegal gifts by a public official. According to Article 340 of the Code, such actions are punishable by a fine, community service, deprivation of the right to hold a position and/or imprisonment.

 

In Kosovo*, conflict of interest as a corruptive phenomenon is regulated by the Criminal Code and more specifically by the Law on Prevention of Conflict of Interest in Discharge of a Public Function.

The Criminal Code regulates the situation when a conflict of interest causes a criminal offence. According to this Code, a conflict of interest is defined as the situation in which "an official person participates personally in any official matter in which he or she, knew or reasonably should have known, that he or she, a member of his or her family, or any related legal person, has a financial interest”. Based on the Code, conflict of interest is punished by a fine and imprisonment up to 3 years.

Conflict of interest is regulated in more detail by the Law on Prevention of Conflict of Interest in Discharge of a Public Function. The Law defines conflict of interest as “the situation in which, because of the circumstances, an official has a private interest which influences, might influence or seems to influence the impartial and objective performance of official duties”. This Law regulates conflict of interest as a form of corruption in cases where it does not constitute a criminal offence. The Law determines the principles, rules and procedures regarding the permitted and prohibited behaviour of officials during the performance of public duty. It also sets out the punitive measures in cases where the principles and provisions of this Law are not respected.

Article 23 to the Law on Prevention of Conflict of Interest regulates that any violation of those obligations that does not constitute a criminal offence is considered as a misdemeanour, punishable with a fine from €600 up to €15 000. Besides the fine, protective measures can be taken such as the prohibition of exercise of public functions for a period of 6 months to 2 years.

To facilitate the fight against conflict of interest in Kosovo*, the Council of Europe PECK 2 published a toolkit on Managing Conflict of Interest (2019). This toolkit was designed to assist officials and public institutions in recognizing the conflict of interest and complying with requirements of the Law on Prevention of Conflict of Interest in Discharge of a Public Function.

The legal framework providing the legal regime of conflicts of interest includes:

According to Law no. 133 of 17.06.2016 on declaring assets and personal interests, a conflict of interest arises when the subject of the declaration has a personal interest that influences or could influence the impartial and objective exercise of his/her obligations and responsibilities under the law.

The Law no. 133 of 17.06.2016 on the declaration of assets and personal interests states in art. 13 the following categories of conflicts of interest:

  • Potential - in this case the subject of the declaration has the obligation to declare a potential conflict of interest, and the hierarchically superior manager advises on avoiding the occurrence of a real conflict as an effect of the potential one.
  • Real - in case of a real conflict of interest, until the adoption of a decision on the case, the subject of the declaration is obliged to inform the head or the hierarchically superior body about the real conflict of interest and to refrain from adopting a decision on the case. At the same time, art. 14 of the Law regulates in an exhaustive way the method for solving the real conflict of interests.
  • After the fact - in this case, the head of the entity will inform the National Integrity Authority about the situations in which the persons working in the public organisation that she or he leads have admitted conflicts of interest, in order to sanction them.

As for the legal effect of acts issued, adopted or concluded with the violation of the provisions on conflict of interest, the Law (art. 15) establishes that they are annulled unless their annulment would harm the public interest.

Failure to declare and resolve the conflict of interests is sanctioned as a contravention (art. 313 of the Contravention Code of the Republic of Moldova, Law no. 218 of 24.10.2008), and the exercise of duties in the public sector in a conflict of interest is sanctioned criminally (art. 326 of the Criminal Code of the Republic of Moldova, Law no. 985 of 18.04.2002).

The Law “On Prevention of Corruption” differentiates between the potential (Article 1.8) and the real conflict of interest (Article 1.12). While the former indicates the potential for the private interest of the officials to affect impartiality in decision-making, the latter indicates that a contradiction between the private interest of the person and public functions as a civil servant or representative has already occurred. The violation of the law only occurs in decision-making when a conflict of interest has not been properly reported and resolved.

Since the definition of private interest is not limited to financial or material interests, such corruption risks as nepotism and patronage (provided below) are considered as subtypes of conflict of interest and they are regulated by the same legislation.

Prevention and regulation mechanisms on conflicts of interest are provided in the Chapter V (Articles 28-36) of the Law “On Prevention of Corruption”, in Article 59-1 of the Law “On Local Self-Governance in Ukraine”, and in the practical manual of the National Agency on Corruption Prevention (NACP).  The two main steps for prevention are: first, a decision-maker must report a conflict of interest, and second, abstain from taking decisions on issues under conflict of interest.

At local level, the special permanent commissions of local councils (Article 59-1 of the Law “On Local Self-Governance in Ukraine”) are responsible for consulting, monitoring and controlling the prevention and regulation of conflict of interests.

When a real conflict of interest is revealed, the NACP exhorts action from the authority involved. If the conflict of interest is not resolved within 10 days, the NACP reports an administrative violation.

According to the Article 172.7 of the Administrative Code of Ukraine, in the case of a real conflict of interest, a fine can range from 100 to 800 non-taxable minimum income, equivalent to UAH 1 700 and UAH 13 600, and the deprivation of the right to hold certain offices or engage in certain activities for one year. Information on corruption-related offences is collected in a single open database of individuals involved in corruption (corruptinfo.nazk.gov.ua), which damages the image of the perpetrator.

Case Law

The High Inspectorate of Declaration and Control of Assets and Conflict of Interest (HIDAACI) has started an administrative investigation into a suspected conflict of interest against the former mayor of Mallakastër.

The HIDAACI investigation followed the media coverage about a tender held by the municipality of Qendër Mallakastër in 2012 – which was won by a company owned by the brother of the former mayor.

The HIDAACI started the administrative investigation for the verification, treatment and resolution of the suspected case of conflict of interest and, since the suspected case of conflict of interest is in the field of public procurement, the Inspectorate also referred the case for further follow-up by structures of the Public Procurement Agency, the institution responsible for the implementation of the law on public procurement.

In a written response, the former mayor denied being in a situation of conflict of interest regarding this tender, arguing that the procurement procedure was controlled by the Supreme State Audit Institution.

No further information about the continuation of the investigation has been announced by the HIDAACI.

There have been several cases applied to the Corruption Prevention Commission (CPC) to investigate the actions of public servants, but CPC usually concludes that there is no any violation.

On 5 December, 2019 several online media resources published articles making concerns about the violation of incompatibility requirements by the mayor of Yerevan, who after assuming his post has retained his shares in several commercial organisations. On 9 December, 2019 the CPC made a decision to initiate proceedings on the basis of violation of incompatibility requirements by the mayor of Yerevan. The CPC found that the evidence collected as a result of its investigation, including the defendant’s explanation, provided grounds to conclude that there was no breach of the incompatibility requirements. Though the formal interpretation of the law shows that not transferring the shares to trust management is a violation of incompatibility requirement, due to the fact that these companies did not actually operate, the CPC concluded that there is no breach of the incompatibility requirements in the substantive sense of the law.

On 30 July 2020 the CPC has initiated proceedings against the Minister of Health on the basis of an incidental conflict of interest. The basis of the proceedings was the note of data.hetq.am, where the CPC was informed that the Ministry of Health had signed service contracts with "Mibs" company, the director of which is the Minister’s wife. Under these contracts, "Mibs" company was obliged to provide hospital services, reimbursement of e-health expenses, computed tomography service. The Ministry of Health has not announced a tender for any of the purchases made from the company of the Minister's wife. Five of the contracts were procured by one person, one was a non-procurement procedure, and one procedure was marked "EU", which is not explained in the procurement site methodology. On 30 November 2020, the CPC has concluded that the contracts signed between the Ministry of Health and “Mibs” LLC in 2019-2020 on the basis of orders issued by the Minister of Health did not lead to his private interest, therefore, there is no conflict of interest.

In another case, on 26 October 2020, the CPC issued a conclusion on the illegal engagement of MP G.T. in entrepreneurial activities. In its conclusion, the CPC specifically mentioned: … “[the participant of the proceedings carried out such actions related to the actual commercial company, the authority for which was already delegated to the trust manager.] … [the examined facts show that the actions under the authority of the trust manager were carried out by the actual official, specifically by participating in the general meeting of commercial companies on 23 June 2020 and 02 July 2020 as the Chair and signing the minutes]”. The CPC also established that such behavior was manifested also during the period preceding the above-mentioned facts and concluded that in addition to a formal violation of the RA Law on Public Service, G.T. has also violated the content of the incompatibility requirements.

In the recent years, there have been no judicial proceedings related to conflicts of interest of public officials. Still, there are examples of alleged conflict of interest cases reported by non-governmental organisations and the media. For instance, there were cases of conflicts of interest within the Ministry of Culture, in which companies connected with high-ranking officials at the Ministry of Culture received a total of GEL 2 421 743 from various public agencies through simplified public procurement contracts as well as direct funding. There were also allegations against other officials, on acceptance of prohibited gifts by high level officials, business interests of ministers and deputy ministers. There was another report by the media regarding the member of the Parliament who allegedly purchased (through an auction) real estate from a municipality that belonged to a district represented by him in the legislative body. In addition, civil society organisations have reported several alleged cases of conflict of interest in municipal public institutions. In one example, an individual has entered into a contract with the City Hall and was appointed as the Head of the Infrastructure, Transport and Amenities Department before the expiration of the contract. Although the person in question received payment one day before the appointment to the above-mentioned position, his contract was still valid and there was a two-year guarantee for the rendered service.

 

In July 2020, the University of Pristina “Hasan Prishtina” opened a call for applications for the position of Rector of the University. The Rector of the University is elected by the Steering Council of the University of Pristina. During this process, the Professional Commission verifies whether the candidates running for the position of rector meet the required conditions. The Commission eliminated one of the candidates running for this position due to the fact that he used to work as a member of the University’s Steering Council. The candidate left that position before running for the position of rector. The Commission emphasised that candidate’s running and potential election as rector would violate the provisions of the Law on Prevention of Conflict of Interest in Discharge of a Public Function. The Steering Council of the University of Pristina sent the case to the Anti-Corruption Agency for evaluation and opinion. The Anti-Corruption Agency decided that this candidate should be eliminated..

According to the NIA Analytical Study “Judicial practice on contravention cases of conflict of interest” published in 2019: “in the first year of activity of integrity inspectors within the National Integrity Authority, 109 contravention cases were issued, of which 77 of contravention lawsuits, and 25 contravention files were sent to the court”. At the same time, according to the same Study ”10 acts of finding regarding the observance of the conflicts of interests’ legal regime, published on the website of the National Integrity Authority remained final as they were not contested within 15 days from their receipt, 3 of them were completed by termination of the control procedure, because no violation of the conflicts of interest’ legal regime was found by the integrity inspectors. Out of the total published acts, 4 were initiated by the National Integrity Commission, subsequently being examined in control procedures by NIA”.

 

Conflict of interest is mostly prevalent in decisions concerning the use and ownership of land or business ownership by public officials. For instance, a member of a village council participated in voting session on a decision that allowed his son to use the land. The Berdiansk city court imposed a fine amounting to UAH 1 700 as a penalty.

Embezzlement

Embezzlement is the illegal appropriation of money, goods or other resources by an official to whom they have been entrusted. This results in the loss of public money, which reduces the capacity of authorities to act in the interests of the public, resulting in worse services and outcomes for people. It also undermines public trust in government.

International standards

As one type of corruption, embezzlement is covered by the following international standards and guidelines:

Domestic context

Only 8.2% of civil servants perceive embezzlement as very prevalent. In addition, according to public servants, embezzlement is one of the less witnessed corrupt practices. Despite of this perception given by public officials in the study, the practice shows that there are many cases of embezzlement reported by the Supreme State Audit. Moreover, there are some cases reported which have been successfully examined and ruled by the judiciary.

Data shows that embezzlement was the most frequently committed financial crime in Georgia, with 2,155 cases recorded from 2004 to 2014. During the mentioned period, the largest number of embezzlement cases was recorded in 2006, with 386 cases. Afterwards, this number decreased by approximately 50% and later increased in 2012 to 219 registered instances. Public perceptions related to embezzlement have not yet been researched in Georgia. In the statistics for 2019 and 2020 published by the Ministry of Internal Affairs, no separate figures were shown for each type of financial crime, and the total number of registered crimes was 217 in 2019 and 232 in 2020.

In 2017, house arrest from 6 months to 2 years was introduced for embezzlement without aggravating circumstances in addition to a fine and imprisonment.

 

In addition to its negative impact on the implementation of national and municipal budget, embezzlement can also have grave consequences for the business sector and economic performance and can become a barrier to private and foreign investment, trade and economic development. Private companies may also be affected further by the impact of crime on their operations. This can range from extortion by organised criminal groups, to serious fraud and embezzlement of funds by managers, each of which has the potential to cause serious damage to the business environment in which companies operate and to increase the cost of doing business.

The Republic of Moldova has known a number of cases in which ghost companies stole Moldovan budget funds, ‘laundered dirty money’, embezzled budget money from public procurement, stole from the budget under the cover of litigations, etc.

An IMF Report from March 2020 points out the lack of progress in recovering fraudulently-acquired assets in the Republic of Moldova, specifically from perpetrators involved in the ‘grand theft’ of US$ 1 billion from the Moldovan banking system between 2012 and 2014. “Little progress has been made to recover assets stolen during the 2014 fraud when several money-laundering operations facilitated the theft of around 12% of GDP from the Republic of Moldova’s largest banks”, says the report.

With reference to the local level, according to National Anti-Corruption Center data in the field of prevention and combating corruption in the local public administration, in the first nine months of 2018, 60 criminal cases were started. Out of these, two criminal cases (3%) refer to the embezzlement of foreign property and specifically embezzlement of financial means in the process of performance of construction and repair works.

Embezzlement is widespread in Ukraine, especially in the field of public procurement, which is one of the most corruption-prone areas in the country. For instance, the OECD Monitoring of the Istanbul Anti-Corruption Action Plan from 2015 estimated that about 75% of funds allocated for procurement had been embezzled through various schemes between 2010 and 2014, amounting roughly to UAH 150 billion.

Legislation

As defined in Article 248 of the Criminal Code, abuse of office is understood as the «deliberate accomplishment or non-accomplishment of actions or failures to act, in violation to the law and constituting the failure of a person, who carries out public functions, to do his duties regularly, in cases when it has led to bringing him or other persons unjust material or non-material benefits or when it has brought damages to the legitimate interests of the state, citizens, and other legal entities, when it does not constitute another criminal offence, is punishable with imprisonment up to seven years».

In addition, based on article 246, «appropriating a public title or office accompanied with the actions pertinent to the holder of the title or office, constitutes criminal contravention and is punishable by a fine or up to two years of imprisonment. If the act is committed for embezzlement purposes or has encroached the freedom, dignity or other fundamental rights of the citizen, it is punishable by a fine or up to five years of imprisonment».

Embezzlement is mentioned also in Article 57 of the Law No. 152/2013 “On the Civil Servant”, and in Article 13 of the Law No. 9131 “On the Rules of Ethics in the Public Administration”.

Georgian legislation[i] defines embezzlement as misappropriation of someone else’s property or property right if this property or property right was under their rightful possession. Aggravated circumstances for the embezzlement are present when the act is committed by a group, repeatedly, using official position, with large amounts, etc.


[i] Article 182 of the Criminal Code of Georgia.

 

Embezzlement is considered a criminal offence and it is regulated by the Criminal Code of Kosovo*. According to Article 418 of the Code “an official person, who intentionally obtains an unlawful material benefit for himself, herself or another person, appropriates property entrusted to him or her because of his or her duty or position shall be punished by a fine and imprisonment of six (6) months to five (5) years.”

In cases when the damages of this offence are greater, the law provides for other sentences of imprisonment. When the loss exceeds €5 000, the offender will be punished by a fine and imprisonment of 1 to 8 years, whereas when the loss exceeds €50 000 the offender will be punished by a fine and imprisonment of 3 to 12 years.

The Criminal Code of the Republic of Moldova (Law No. 985-XV of 18 April 2002) currently sets the provisions and sanctions related to embezzlement.

The misappropriation of foreign property (i.e. the misappropriation of the assets of another person) entrusted to the administration of an individual is punishable by a fine of up to 850 conventional units (they are used when calculating penalties for tax crimes; at the moment it is set at MDL 50) or by imprisonment for up to three years, in both cases with or without deprivation of the right to hold certain positions or to practice certain activities for a term of up to three years. Where committed by use of an official position, as per Article 191(d), embezzlement is punishable by a fine in the amount of 850 to 1,350 conventional units or by imprisonment for two to six years, in both cases with the deprivation of the right to hold certain positions or to practice certain activities for up to five years.

Embezzlement falls under the category of economic crimes or crimes against property in the Criminal Code. According to the Article 191, paragraph 2, the penalty for embezzlement in public office can reach 5 years’ imprisonment or 3 years’ deprivation of the right to hold certain public offices or engage in certain activities. Depending on the embezzled amount, the penalty increases up to 12 years’ imprisonment, and 3 years’ deprivation of the right to hold certain public offices or engage in certain activities, and confiscation of property.

Case Law

The Special Prosecution Against Corruption and Organized Crime (SPAK) decided on 6 July 2021 the measure "Arrest in prison" for the mayor of Lushnja. After a one-year investigation by SPAK, this mayor was arrested as suspected of committing the criminal offence of “Embezzlement”, along with 10 other officials of Lushnja municipality; they are suspected to be involved in corrupt affairs for the tender of 24 million ALL that would rehabilitate the irrigation canal in the two villages Bishqethëm and Bitaj. While the investigation finds out how the equality in the tender was violated by the Bid Evaluation Commission and the Procurement Unit, SPAK claims that the mayor abused his office in other cases, such as the mismanagement of the fuel owned by the municipality, which was used for the needs of children of mayor’s friends and some of his officials.

The Prime Minister dismissed the mayor of Lushnja with the decision no.407 on 6 July 2021.

About the continuation of the criminal proceedings, the case is still ongoing in the Anti-Corruption and Organised Crime Court.

The officers of Anti-corruption Agency of State Security Service of Georgia in cooperation with the Tbilisi Municipality City Hall detained the former head of Administration of LEPL “Agency for Development of Municipal Services” on facts of misappropriation of another person's property in large quantities through of the use of one’s official position and appropriation of another person’s property in large quantities by deceit; a factual owner of Ltd. “Techracer” was also detained on the fact of providing assistance in unlawful appropriation of other person’s property using official position.
 
Investigation established that the former head of Administration of LEPL “Agency for Development of Municipal Services”, purchased 23 computers from LTD “Techracers” for an increased price, while unlawfully appropriating the difference through assistance provided by the director of LTD. “Techracer” and a factual owner of the same company.
 
 
Furthermore, the former head of the Agency’s Administration, upon his own recommendation, in August 2019 employed two persons at the LEPL “Agency for Development of Municipal Services”, who, in prior agreement with him, did not carry out their responsibilities, did not go to the office and had handed out their salary cards to the former head of Administration; the latter has unlawfully appropriated the sum of money in the amount of GEL 29 000 transferred in the name of the mentioned persons.

Investigation is carried out on the facts of  fraud in large quantities, embezzlement in large quantities by using of official position, misappropriation of other person’s property in large quantities by deceit and providing assistance in unlawful appropriation of other person’s property in large quantities by using official position (Article 180, paragraph III, sub-paragraph “A” and “B”, Article 182, paragraph II, sub-paragraph “D” and paragraph III, sub-paragraph “B” which envisage from 7 to 11 years of imprisonment). Investigation is carried out by the Anti-corruption Agency

 

The Basic Prosecution Office of the municipality of Mitrovica, in 2019, filed charges against a cashier who was working at the Mitrovica Post. He was accused of embezzling €1 270.68 while he was performing his duty. The defendant pleaded guilty to the criminal offence. The Court of Mitrovica sentenced the defendant to 6 months in prison and a fine of € 500.

Another example is the sanction of a Kosovo* member of parliament. He was supposed to start his sentence on 9 March 2020, but he asked to postpone due to health issues. The court postponed it twice for four months. Following the Appeals Court’s final verdict on 1 July, he should have begun serving his sentence but failed to report to a detention centre. In August, an arrest warrant against him was issued. He gave himself up on September 29 and started to serve his sentence on 1 October.

In February 2020, Chisinau City Hall received the results of an independent external audit on the repair of the Ștefan cel Mare boulevard. Data from the report showed that EUR 7 million had been laundered during the repair of this boulevard with acts of embezzlement reported too. The mayor of Chișinău stated that a series of legal procedures on this matter have been taken. The repair of the Ștefan cel Mare boulevard started in 2015, as part of a project aimed at restoring six streets in the capital. Although the works on the boulevard were finished in 2017, the certificate of acceptance was not signed as deficiencies were discovered, with the asphalt being badly deformed in more places.

 

In April 2017, a mayor was sentenced for embezzlement. Back in 2013, he had commissioned a private firm to repair a road in the village. The mayor issued a payment transfer to the firm, even though the road was yet to be repaired. By the court’s verdict, the mayor was banned for two years’ from occupying any public offices or engaging in the work of local authorities. He was exempted from 3 years’ imprisonment and received two years’ probation instead. On 6 October 2017, the Vinnytsia regional court of appeal overturned the initial verdict and initiated a new criminal procedure under original jurisdiction.

Fraud

Fraud is the use of deceit in order to gain an unfair or illegal advantage. Fraud erodes public trust in government and reduces the capacity of government to act. It often results in the loss of public money, which harms public services and the ability of governments to address the public's needs and aspirations.

International standards

As one type of corruption, fraud is covered by the following international standards and guidelines:

Domestic context

Based on study results, 36.7% of civil servants perceive fraud as a more or less prevalent corrupt practice in the Albanian civil service. Men dominate among those having witnessed embezzlement, fraud and influencing of unfair decisions. Measures to stamp out fraud are contained in the New Customs Code, which as regards Customs offenses and penalties, is based on the proposal of the European Commission and on best practices of EU member states. The new tax administration IT-system allows a simplification of processes and reduces the opportunities for fraud and corruption. As per the Law No. 112/2015 “On Public Financial Inspection”, the Anti-Fraud Coordination Service (AFCOS) is appointed in Albania to facilitate the co-operation with relevant institutions in the European Union.

According to the official statistics on the results of the investigation of corruption crimes, published by the General Prosecution Service of the Republic of Armenia, in 2017 there have been 21 registered cases of fraud committed by persons using official position, with charges brought against individuals in 18 cases.

Registered cases of fraud increased almost ten times in 2018, with a total of 206 registered cases. Despite the increase of registered cases in 2018, charges were put forward in only 63 cases.

In 2019, 236 cases of fraud committed by persons using official position were registered by the General Prosecution Service of the Republic of Armenia, out of which only 86 were pursued.

In 2020, 179 cases of fraud committed by persons using official position were registered, out of which only 38 were pursued.

As it is clear, this type of crime has increased in recent years while the rate of its prosecution has decreased significantly. The 2019-2022 Anti-Corruption Strategy and its Action Plan does not include any activities related to combating fraud.

In 2014 there were 974 registered cases of fraud, with charges brought against individuals in 639 cases. Registered cases of fraud decreased by 12.22% in 2015, with a total of 855 registered instances. Despite the decrease of registered cases in 2015, charges were put forward in only 477 cases. According to the information published by the Ministry of Internal Affairs 1493 cases of alleged fraud were registered in 2020 out of which 314 (21.03%) were successfully investigated compared to 1846 alleged cases registered in 2019 out of which  421 (22.81%) were successfully investigated.  As it is clear, this type of crime has increased in recent years while the rate of its successful prosecution has decreased significantly.

There are no publicly known efforts undertaken by law enforcement agencies to prevent instances of fraud. In addition, the 2019-2020 National Anti-Corruption Action Plan does not include any activities related to combating fraud.  The New Anti-Corruption Action Plan for 2021-2022 has not been elaborated yet.

 

In Kosovo*, fraud is part of the group of official corruption offences and criminal offences against official duty. Fraud in public office, like other forms of corruption, continues to be an obstacle to Kosovo*'s institutional and sustainable development. Fraud in public institutions and officials affects the loss of public money, distortion of public expenditures and may prevent foreign investment. All these actions negatively affect the effectiveness and efficiency of government actions. In most cases, fraud is committed in conjunction with other offences such as embezzlement and abuse of official position. Cases of fraud are found in those who hold important public positions such as mayors or public officials. Despite its spread, according to the 2016 Public Pulse survey on Corruption, fraud remains as one of the least common forms of proven corruption (14%) by citizens.

During the past couple of years, the Republic of Moldova has been severely affected by what was called the ”theft of the century”. In late 2014 a huge corruption case hit the Republic of Moldova, the infamous ”one-billion-dollar bank fraud”. The scandal, involving three of the largest banks of the country, Banca de Economii, Banca Socială and Unibank, holding approximately one third of the country’s assets at the time, put the fragile Moldovan economic and banking system severely at risk, robbing the country of at least one billion dollars, around 15% of its annual GDP. Expert analysis and investigations showed that this operation was conducted in a highly coordinated, structured way and was made possible thanks to the support of key financial and political institutions. Experts argue that little or no progress has been made in recovering the assets from the bank fraud. There is no indication as to whether the Republic of Moldova requested the mutual legal assistance of foreign jurisdictions on starting the recovery of the stolen assets.

Legislation

Based on Article 143 of the Criminal Code fraud is defined as «stealing property through lies or abuse of trust is punishable by a fine or up to five years of imprisonment. This very act, when committed in complicity in the detriment of several persons, or more than once, is punished by imprisonment from two to six years and, when it brings about serious consequences, it is sentenced by imprisonment from five to ten years».

The Criminal Code of the Republic of Armenia sets provisions and sanctions related to fraud, through Chapter 21 Article 178, stating: “1. Swindling, i.e. theft of a significant amount or misappropriation of somebody’s property rights by cheating or abuse of confidence, is punished with a fine in the amount of 200-500 minimum salaries, or with arrest for the term of up to 2 months, or with imprisonment for the term of up to 2 years”. Part 2 of the above-mentioned article establishes criminal liability for committing similar actions by a person using official position. When committed by use of an official position, fraud is punishable by a fine in the amount of 500-1000 minimum salaries or by imprisonment for a term of 2-5 years. Part 3 of the same Article states that the similar actions, committed on a large scale or by an organised group, shall be punished by imprisonment from 4-8 years with or without confiscation of property.

The Criminal Procedure Code of the Republic of Armenia, Article 190, states that the preliminary investigation of the cases on crimes under Article 178 of the Criminal Code of the Republic of Armenia is carried out by police investigators.

According to Article 180 of the Criminal Code of Georgia, fraud is defined as taking possession of property or such rights belonging to another, with a purpose of illegal appropriation. Criminal sanctions for fraud include a fine, community service and/or imprisonment, depending on the gravity of the case.

There are several law enforcement agencies that have jurisdiction over pursuing instances of fraud, including the Ministry of Interior (Investigative and criminal divisions), Investigation Service of the Ministry of Finance, and Office of the Prosecutor of Georgia.

 

Fraud is punishable under the Criminal Code of Kosovo*. According to Article 323, fraud is defined as the presentation of false facts, concealment of facts or the use of other fraudulent methods for the purpose of unlawful gain or material damage to another. A person who commits fraud will be punished by a fine and imprisonment of 3 months to 5 years. This article regulates the situation when the object of fraud is to obtain an unlawful benefit from public funds or a public institution. In this case, the offender will be punished by a fine and imprisonment of 2 to 8 years.

The Criminal Code regulates fraud in office as a form of criminal offence. According to Article 419, a public official commits fraud when s/he obtains material benefits for himself/herself or someone else, by creating, using or presenting a false statement of an account. A fraud also happens when a public official deceives an authorized person into making an unlawful disbursement of money, transfer of property or other rights. The Criminal Code punishes fraud with a fine and imprisonment of 6 months to 5 years.

The Criminal Code of the Republic of Moldova (Law No. 985-XV of 18 April 2002) currently sets the provisions and sanctions related to fraud, through Chapters VI and X.

Fraud is punishable by a fine between 550 and 850 conventional units, by community service ranging from 120 up to 240 hours, or by imprisonment for up to three years. When committed by use of an official position, fraud is punishable by a fine in the amount of 850 to 1,350 conventional units (C.U. are used when calculating penalties for tax crimes) or by imprisonment for two to six years, in both cases with the deprivation of the right to hold certain positions or to practice certain activities for up to three years. Point (4) of the same Article states that “the actions mentioned in paragraphs (1) - (3) committed on a large scale shall be punished by imprisonment from 7 to 10 years with the deprivation of the right to hold certain positions or to practice specific activities for up to 5 years”.

 

Case Law

In 2016, the Krujë Prosecutor’s Office indicted a former mayor of Krujë municipality and four other local public officials for theft through abuse of office. The defendants had allegedly misused emergency funds allocated by the Ministry of the Interior, amounting to ALL 20.5 million, for the channelisation of a stream to avoid flooding. As a result of the investigation, the prosecutor informed that the real value of the project is much lower, thereby concluding that the former mayor and the private company which won the procurement process have stolen over ALL 8 million. The District Court of Krujë sentenced the former mayor to two years in prison and then he was placed on probation for a period of three years. In addition, the court decided to deprive him of the right to exercise public functions for a period of three years. The case is currently ongoing in the Supreme Court.

On 7 May 2019, the Prosecutor of the RA Ararat Region Prosecutor's Office initiated criminal proceedings against H.G. - the head of Jrahovit community of Ararat region since 2010. Permanently endowed with the authority to carry out organisational-managerial, administrative functions, to manage the property and financial resources of Jrahovit community, using his official position, H.G., in the period from February 2013 to November 2014, embezzled AMD 2 011 857 from the financial means of Jrahovit community of Ararat region through misappropriation and misuse, as well as committed official falsification by compiling and signing false orders, employment contracts, fake work-time calculation bulletins, drawing up a fake official document and presenting it to a state body and fraudulently stole a considerable amount of AMD 396 000 from the RA state budget. He was found guilty and sentenced to an imprisonment for 4 years.

On 24 June 2020 the officers of the Anti-corruption Agency of the State Security Service of Georgia detained a staff scientist of LEPL “Union of cultural, arts, educational institutions” of Kutaisi City Hall. Investigation established that the detainee demanded GEL 800 from a citizen and took GEL 400 in advance in exchange for starting employment in Kutaisi City Hall. Investigation is ongoing into the fact of attempted fraud that might have caused substantial damage, which envisages imprisonment for a term from 4 to 7 years.

 

In 2017, the Kosovo* Police arrested a former Director of Budget and Finance in the Office of the Prime Minister. He was arrested on the suspicion of committing the criminal offence of fraud. According to the Prosecution’s indictment, the accused met several times with the injured party E.M., who had been sentenced to three years imprisonment by the Court of Appeals of Kosovo*. The accused promised the injured party that, because of his position, he can influence the Court of Appeals to abolish his sentence. In order to get his sentence abolished, the accused asked for €10 000. After the injured party gave him the money that he asked for, the Court of Appeals did not abolish the sentence. According to the injured party, after he realised that he had been deceived, he asked for his money to be returned to him, but the accused did not return it and he even asked for additional €10 000. The injured party informed the Police of the fraud and co-operated with them to get the accused arrested. Following his arrest and detention, the Office of the Prime Minister suspended the accused pending a final court decision. In 2019, he was sentenced to 1 year in prison and a fine of €5 000.

In May 2020, a criminal case against V.P. was opened with charges including the creation of an organised criminal group, extortion, and fraud. The Republic of Moldova will seek his extradition from the United States. As former head of the Democratic Party, V.P. fled the country in June 2019 after being forced out from Parliament as part of a government shakeup. He has been linked to what is known as the ‘theft of the century,’ a scandal involving the disappearance of more than USD 1 billion – totalling nearly one-eighth of the Republic of Moldova’s GDP – from the country’s largest banks between 2012 and 2014.

The charges against V.P. are based on ”indisputable evidence” from the international investigative firm Kroll. The report documented how companies and individuals with connections to a 28-year-old businessman took control of three major banks during the period of the scandal, in which money was funnelled overseas through dubious loans, shell companies, asset swaps, and shareholder deals. The businessman I.S., then allegedly issued massive loans to his companies during a three-day period in November 2014, according to the report, which was later leaked and published by an opposition lawmaker. I.S., who is currently believed to be in Israel, was charged in 2016 and later convicted of money laundering and embezzlement in connection with the theft. Also in 2016, the former Prime Minister V.F. was found guilty of taking bribes related to the theft. He was released early in December 2019 after serving three years in prison. Prosecutors said that through I.S., V.P. allegedly withdrew USD 100 million from the former state bank Banca de Economii. The funds were subsequently covered from the reserves of the National Bank in order to buy the insurance company Asito, a hotel, a fashion business, and a personal jet.

 

Nepotism

Nepotism is the exploitation of an official position to unfairly benefit a family member or friend (e.g. through giving a job or favour). Nepotism, and other forms of favouritism, results in local and regional authorities not having access to the brightest and best talent. This in turn creates a fertile environment for further corruption and reduces the efficiency and effectiveness of the administration.

 

International standards

As one type of corruption, nepotism is covered by the following international standards and guidelines:

Domestic context

Data show that recruitment procedures in Albania’s public sector suffer from lack of transparency. More than 36% of applicants who did not get a job think that somebody else was employed due to cronyism or nepotism, while an additional 25% believe that somebody else was hired due to bribery. Nepotism prevails among the most witnessed corrupt practices at the workplace, which may be because Albania is a country where social networks are very strong. Due to that, many nepotistic practices in Albania are based on the personal relationships and the network of social interactions.

In Armenia, favouritism in the form of nepotism and cronyism is considered a governing problem – widespread at both central and local levels.

According to public opinion survey of 2019, 87-98 % of respondents did not encounter corruption when dealing with government officials. At the same time, 42% - the largest portion of respondents - thought that the most common current form of corruption is favouritism, including nepotism and cronyism. In comparison to the data from 2010, the prevalence of favouritism within other forms of corruption is now about 22 % higher than before and obviously more noticeable.

Nepotism is a significant challenge present in a majority of public institutions in Georgia. In most of the cases, public officials employ their relatives in various public institutions both at the central and local levels. Civil society organisations often report specific cases where family and friends of high-level public officials are employed in public agencies. According to a 2019 survey, 59% of interviewed individuals think that officials in Georgia abuse power and 91% of those think that officials do it to give employment of relatives and friends.

 

One of the main concerns of the citizens of Kosovo* continues to be nepotism. Most citizens have been victims or witnesses of nepotism, especially during the employment process. Opinion polls done by Public Pulse XIX, show that 21.9% of respondents consider that employment in the public sector is merit-based while 78.1% consider that employment in the public sector is not based on merit. It also shows that the respondents consider the following main factors to gain employment in the public sector: party allegiance 23.3%, family connections 23.2%, bribe 20.3%, education 11.2%, friends 8.9% and to a lesser extent vocational training 6.6%, professional experience 4.1% and appearance 2.1%.  As a result, we find unprofessional employment of people who do not meet the necessary criteria for that position. This ongoing problem has shaken citizens' trust in the work of government bodies.

Clientelism and nepotism tend to be persistent in the Republic of Moldova year after year. The most negative effect of maintaining clientelism and nepotism in the country is endemic corruption.

The most prevalent form of corruption in the Republic of Moldova, according to experts, is favouritism in public procurement (83%), followed by nepotism in appointing public officials (48%) and conflicts of interests (48%). Experts also believe that there is a high concern amongst citizens about the prevalence of favouritism in public procurement, thus reflecting a much higher awareness of the public regarding institutional distortions in the Republic of Moldova. A Transparency International report states that “the level of tolerance for corruption is very high. The public considers that corruption and nepotism are culturally bound and cannot be reduced.”

The same report suggests two important measures that might help the country address the issue of nepotism:

  • Elaboration of a mechanism of declaration of incomes and ownership for high-ranking public officers and their relatives while undertaking and being freed from the position.
  • Reduction of staff in public sector, and the de-politicisation of the government, by introducing an obligatory system of professional promotion on the basis of performance and competitiveness.

In the 2016 Ukrainian Municipal Survey, 56% of respondents respectively indicated that nepotism is a “significant problem” and 29% identified it as “somewhat a problem”. Nepotism in Ukraine is close to the phenomenon of kumivstvo (the “godparent relationship”) or to cronyism. In the case of cronyism, the exchange of favours and privileges is based on close friendship ties.

Legislation

In Albania, there is no specific law on nepotism. However, Article 5 (“Private Interests”) of the Law No. 9367 “On the Prevention of Conflicts of Interest in the Exercise of Public Functions” mentions private interests of an official as those interests that conform with, contain, are based on or come from relationships of family or cohabitation, of friendship, and any other juridical civil relationship, among others.

On 27 January 2006, two decisions of the Council of Ministers were approved. The decision of the Council of Ministers No.43 “On avoiding nepotism and influence of power on the hiring and career of personnel of the public administration” and the decision of Council of Ministers No.44 “On avoiding nepotism in the public administration” which provides:

“Employees related to each other by family relationship, cognation or marriage are prohibited from exercising their duties within a public institution. The cause for the termination of employment is the existence of any of the following connections:

a) family ties: spouse / cohabitant, son, daughter, and their children.

b) cognation relations: parents, siblings and their children, aunts or uncles.

c) family relationship: parent, child, brother / sister of the spouse, as well as spouse / cohabitant of the children”.

However, these decisions were deemed as incompatible with the Constitution.

 The Constitutional Court found that the above-mentioned decisions imposed a restriction on the right to work for the citizens.  The right to work is guaranteed under Article 49 of the Constitution.

“Everyone has the right to earn a living by lawful employment, which he has chosen or accepted. They are free to choose the profession, the job, as well as the system of his professional qualification.”

Also, Article 17 of the Constitution guarantees that:

1. Restrictions on the rights and freedoms provided for in this Constitution may be imposed only by law for a public interest or for the protection of the rights of others. The restriction must be in proportion to the situation which has dictated it.

2. These restrictions may not infringe the essence of the freedoms and rights and in no case may they exceed the restrictions laid down in the European Convention on Human Rights.

The Constitutional Court considers that this provision, in the way it is formulated, has not left the possibility of delegation to any state authority other than the Parliament, as a representative body. The expression "only by law" means that if it is necessary to limit a right provided for in the Constitution, then this assessment is at the discretion of the legislator and not to other bodies, including the Council of Ministers.

The unconstitutionality of the decisions not only lies in the fact that the decisions of the Council of Ministers have an effect on previously established relationships, but also because of violation of the principle of proportionality, as employees affected by these decisions were not provided with another job

Related to the regulations made by the decisions of the Council of Ministers regarding the retroactive effects, it should be noted that even if these restrictions were made by law, according to the criteria of Article 17/1 of the Constitution, the principles mentioned above should be applied.

For these reasons, these decisions are invalidated as incompatible with the Constitution.

With the invalidation of these decisions of the Council of Ministers, the legislation on nepotism remains weak, as the only related legal provision is Article 5 (“Private Interests”) of the Law No. 9367 “On the Prevention of Conflicts of Interest in the Exercise of Public Functions”, as amended. Nepotism is not foreseen as a criminal offence in Albania but it is considered an administrative offence and it is punished by a fine varying from 50’000 ALL to 300’000 ALL.

Currently, there is no legislation that would explicitly prohibit or criminalise nepotism in Armenia. Nevertheless, the necessity of fair hiring practices is stipulated in the Law on Public Service of Armenia, which also provides several indirect regulations and limitations of nepotism.

Article 32 of the Law on Public Service prohibits public officials to be in direct subordination or have under direct subordination any persons related to them by close kinship or guardianship. Failure to comply with the prescribed restrictions will result in disciplinary action for public officials and public servants. The provisions on disciplinary liability do not apply to officials holding political office and may be applied to officials holding autonomous positions only in cases provided by law.

Article 39 of the "Content of the Declaration" chapter of the Law on Public Service defines the general data on the declaring official, his / her family composition and persons related by close kinship and guardianship. Article 42 of the Law on Public Service (Declaration of Interest) requires the incumbent to declare participation in commercial or non-commercial organisations, management of commercial or non-commercial organisations, representation in administrative or supervisory bodies, transfer of a commercial organisation's share to trust management, membership in parties and their management, representation in the supervisory or administration bodies, information on his / her or his / her family members’ representation, as well as information on the agreements concluded with the Republic of Armenia or the communities by the organisations with their participation.

Article 32 of the Law on Public Service also sets prohibitions for the persons holding public office and public servants, as a representative of the state, to conclude property transactions with persons related to them by close kinship or guardianship, except for the cases provided by the legislation of the Republic of Armenia.

Currently there is no legislation that would explicitly prohibit or criminalise nepotism. Nevertheless, the necessity of fair hiring practices is stipulated in the Law on the Civil Service of Georgia and can also be derived from the Code of Conduct regulation adopted by Government Decree in 2017.

Currently, Kosovo* does not have a specific law that regulates or prohibits nepotism. Nevertheless, Article 414 of the Criminal Code is used to prosecute and punish nepotism as a form of corruption. This article punishes an official person in cases when s/he takes advantage of his/her position or authority to acquire any benefit for himself/herself or another person, to cause damage to another person or to seriously violate the rights of another person. Thus, this article is used in those cases when a public official abuses his or her position by hiring a family member or friend, offering an employment that exceeds his/her competencies and violates the rights of other applicants.

Article 414 is also used in conjunction with Article 219 of the Criminal Code. This article establishes the violation of employment and unemployment rights as a criminal offence. Based on this article “anyone who denies or restricts to other persons the right to employment under the same conditions, as defined by law, shall be punished by a fine or by imprisonment of up to two (2) years”. Since nepotism results in the violation of a person’s right to employment on an equal footing with others, Article 219 is also used to detect and punish this form of corruption.

The provision of any support, preferences, privileges or creation of advantages to some individuals or legal entities in decision-making undertaken during the exercise of the position of public agent, whenever these actions are carried out for the benefit of the relatives is called nepotism. The Law on Integrity No. 82 of 25 May 2017, introduced a policy for the Avoidance of favoritism through Article 15. Therefore, for the purpose of ensuring the serving for the public interest with impartiality and objectivity, the public agents shall avoid favoritism in their professional activity.

The public agent shall not admit favoritism in his/her professional activity, observe the obligations in line with the provisions set forth in art.13 of the same law, whenever the situation leading to favoritism meets the elements of a conflict of interest. The head of the public entity, of the superior public entity shall not admit intentionally favoritism practices in the professional activity of the public agents, should report the cases of favoritism to the National Anti-Corruption Center.

The Law on Assets and Personal Interest Declaration No.133 of 17 June 2016, as well as the legislation on access to information and other normative acts do foresee the publication of key data, including information about public service enrolment and leadership of public organisations, allowing citizens to monitor and to inform accordingly the National Integrity Authority of any misconduct.

According to the Evaluation Study on the Impact of National Integrity and Anti-Corruption Strategy 2017 developed by UNDP, hiring and promoting public servants at work is usually done on the basis of merit (according to 84% of public officials) and based on the evaluation of employee performance (72%). However, one in five public officials states that favouritism (relationships with the right people) and political affiliation are often practiced. The level of knowledge of the legal/illegal situations regarding the employment and promotion of public agents based on merit and professional integrity is very low. Thus, only 7% of public officials provided correct answers to all possible situations of corruption in the process of hiring and promoting public officials on the basis of merit and professional integrity.

In Ukraine, there is no specific law on nepotism. However, the Law “On Prevention of Corruption” and the Law “On Public Service” provide several indirect regulations and limitations to nepotism.

Section 27 of the Law “On Prevention of Corruption” prohibits public officials to be in direct subordination or have in direct subordination any close persons. In case such subordination occurs, an official is obliged to report and undertake measures to resolve the situation, as in the case of conflict of interest. Accordingly, the subordinated person is required to either change the position to avoid direct subordination to the close person, or to resign.

Case Law

At the moment there are no examples of relevant case law.

The names of members of the current government are often linked to corruption through nepotism. For example, there were repeated publications about the business interests of the Minister of Health of the Republic of Armenia and her spouse. In particular, it is known that the company owned by Minister’s husband has signed 240 contracts with 44 state institutions in recent years, worth about AMD 606 700 000, more than half of which - 137 contracts during her spouse’s tenure as Deputy Minister.

In April 2021 the Investigative Journalists of Armenia (Hetq) published an investigation revealing nepotism in the RA Government. Deputy Prime Minister friends and their friends have been appointed to various positions in the "Road Department" SNCO since 2020. One of them has been appointed as a General Director of the SNCO. The childhood friend of the General Director of the "Road Department" SNCO has been appointed as a Deputy General Director of the SNCO. Another friend of his has been appointed as an Advisor to the General Director of the SNCO.

Relatives of several members of the parliament were employed at the Georgian National Communications Commission (GNCC) after the members of the parliament assumed office. Transparency International Georgia has identified around 70 cases of alleged nepotism in municipalities of Georgia – spouses, children and parents of local public officials were employed either inside the same public institution or in municipal agencies related to the public officials. For example, in 2017, the spouse of the Chairwoman of Oni Municipal Council was appointed as manager of club relations at N(N)LP Oni Sports School, a Non-Entrepreneurial (Non-Commercial) Legal Person under the governance of the municipality.

 

In 2018, the Anti-Corruption Agency filed a criminal complaint with the Basic Court in Peja, against the Mayor of Klina. He was accused of nepotism for employing his daughter at the Family Medicine Centre in Klina. Before starting the recruitment process, the Mayor formed a Commission to carry out the procedures for establishing the recruitment process for this position. According to the prosecution, the Mayor knew beforehand that his daughter applied for that position. Then, the Commission elected the Mayor’s daughter for that position. In 2020, the Basic Court of Peja found the Mayor of Klina guilty and fined him €4 000 and banned him from holding public office for two years.

The Chișinău Court of Appeal found the head of the Culture Department of the Ocnița District Council guilty as per Article 313 (1) of the Contravention Code. Being subject to the declaration of assets and personal interests, by virtue of her position, she failed to declare the conflict of interest in relationship with her daughter, a subordinate employee exercising the function of artist-instrumentalist/violinist of the folk music orchestra of the Ocnița District Council.

A sanction was imposed in the form of a fine of MDL 2250, with the deprivation of the right to hold a position in a public organisation for a period of three months. She appealed against the decision of the Chișinău Court of Appeal and on 14 May 2019, the court rejected her appeal as it was deemed groundless.

 

An administrative case in the Vasylivka raion court became an example of nepotism. The head of the department of culture and tourism of a raion state administration did not report her husband’s direct subordination, who was the director of the town’s Centre for Culture and Leisure. She also employed her son. Additionally, she assigned her husband a payment for his work from the raion budget. At the same time, the husband assigned a payment to his wife, since she has a position of responsibility in the abovementioned centre. On top of that, their daughter co-ordinated an administrative department of the centre. In total, the court imposed a fine in the amount of 300 non-taxable minimum incomes, equivalent to UAH 10 200. The charges were based on Article 172-7, paragraph 1 and 2 of the Administrative Code about decision making under conditions of real conflict of interests.

Misuse of administrative resources in election campaigns

The misuse of administrative resources[i] during the electoral processes involves unlawful or abusive behaviour on the part of politicians and civil servants, who use human, financial, material, in natura and other immaterial resources to influence the outcome of elections, and thus undermine the fairness of the election itself.

[i] For the purpose of this etool, «administrative resources are human, financial, material, “in natura” and other immaterial resources enjoyed by both incumbents and civil servants in elections, deriving from their control over public sector staff, finances and allocations, access to public facilities as well as resources enjoyed in the form of prestige or public presence that stem from their position as elected or public officers and which may turn into political endorsements or other forms of support», as defined in: “Report on the Misuse of Administrative Resources during Electoral Processes”, Study No. 585/2010, European Commission for Democracy through Law (Venice Commission), Council of Europe, 16 December 2013, Strasbourg. Available here

International standards

The misuse of administrative resources during electoral processes is covered by the following international standards and guidelines:

Domestic context

The misuse or abuse of administrative resources (sometimes referred to as “public resources” or “state resources”) during parliamentary and local election campaigns in Albania has been one of the most recurrent concerns over the last two decades, as reported by international election observers. In the context of the parliamentary elections of 2017, the Parliament convened an extraordinary session on 22 May 2017 to take actions related to the electoral process. Among other measures, a political agreement between the two main parties led to the establishment of an inter-ministerial structure in the form of a Task Force to prevent the abuse of public officials in the electoral process. Also, to prevent the risks of the misuse of administrative resources, penalties were introduced for public servants who might be involved in campaigning.

Although significant steps have been made at national, local and regional levels, elections have their own characteristics, which make them especially vulnerable to the misuse of administrative resources. Therefore, specific actions may be required for local and regional elections.

At the local and regional levels, elected representatives usually have personal ties to the territorial community in which the election takes place. Likewise, their relation to public employees and civil servants working for the municipality is often particularly close.

Moreover, local elected representatives and/or employees frequently have functions which are relevant during the electoral campaign, such as the allocation of places for campaigning. Municipal employees may also have tasks related to the preparation of the elections, for instance, as members of polling station commissions.  Such functions may give them possibilities of interference in favour of the incumbent or the party/parties in power, which may be problematic in local and regional elections.

Public trust in elections in Armenia used to be very low. According to a Gallup survey in 2011, only 13% of women and 12% of men believed in the honesty of elections. The OSCE Office for Democratic Institutions and Human Rights (ODIHR) final report on the 2017 parliamentary elections in Armenia urged authorities and political parties to increase public trust in elections. Low level of trust in the electoral system was mostly explained by the widespread electoral fraud lasted for about two decades both at the national and local levels to achieve the favourable results. Reports of both national and international observation missions kept recording multiple violations and making recommendations for policy change.

Major turn in the electoral practices happened only after the velvet revolution of 2018, when the new political leadership developed a favourable legislative framework and supported environment for the expression of the free will of citizens.

The Organization of Security and Cooperation in Europe (OSCE) Office for Democratic Institutions and Human Rights (ODIHR) final report on the 9 December, 2018 early Parliamentary elections, found that the election held enjoyed the protection of fundamental freedoms and were widely enjoyed by the public trust. The delegation of the Parliamentary Assembly of the Council of Europe (PACE) too concluded that the mentioned elections were held with due regard for fundamental freedoms and enjoyed broad public trust that needs to be preserved through further electoral reforms. For the first time in many years the elections were assessed by the major local observer initiatives – Akanates and Independent Observer, as truly competitive, free and fair.

The national and international observation mission reports on the Snap Elections to the RA National Assembly on 20 June 2021 showed that numerous manifestations of abuse of administrative resources several political parties or alliances, including coercion to participate in or refuse to participate in rallies and obstruction of the exercise of the voter’s free will took place. The OSCE / ODIHR Statement of Preliminary Findings and Conclusions of 20 June 2021 Early Parliamentary Elections in Armenia, found that allegations of the misuse of administrative resources also persisted throughout the campaign. Nevertheless, the elections were generally assessed as competitive and free that allowed for the full exercise of the citizens will.

The misuse of administrative resources is one of the major problems reported with regards to Georgian elections over the past years both by local and international observers. When reporting such cases, local observers are highlighting the following category of violations:

  • Misuse of enforcement administrative resources;
  • Misuse of legislative administrative resources during electoral processes;
  • Misuse of institutional administrative resources during electoral processes;
  • Misuse of financial administrative resources during electoral processes;
  • Pre-election changes to the municipal/state budgets to allow scaling up of social, healthcare and infrastructural projects.

To overcome the mentioned challenges, there is a need for legislative changes and their proper implementation in the practice, which requires strong political will from the ruling party.

 

In 2017, amendments to the Election Code of the Republic of Moldova changed the electoral system from fully proportional to a mixed one. Under the new system, 50 Members of the Parliament are elected through proportional representation from closed party lists in one national constituency and 51 Members of the Parliament in single member constituencies through the first-past-the-post system. In order to win seats in the national constituency, a party must receive at least 6% of the valid votes, while an electoral bloc needs at least 8%. ODIHR and the European Commission for Democracy through Law (Venice Commission) have consistently recommended lowering the thresholds.

The Social Impact report on the Accountability in Moldova USAID-funded project (February 2020) states that “voters in the Republic of Moldova have little confidence that the political parties represent their interests.” According to the Public Opinion Barometer in 2019, over 50% of Moldovans believed that no political party or civic formation represented their interests, and only 49% reported voting during the 2019 parliamentary elections.

The latest local elections in the Republic of Moldova took place in October 2019, and according to a Promo-LEX report, 898 mayors’ offices and 11,580 offices of first-level and second-level local councillors (100 fewer than in 2015) were to be taken up in the last general local elections. The term of office for local elected officials is four years.

Overall, the pre-election period was characterised by dominant themes such as the oligarchisation/capture of the state and the efficient management of administrative-territorial units, as opposed to geopolitical issues and the pro-Russian or pro-EU vectors of discourse prevalent in previous local elections. 

In the context of general local elections and new parliamentary elections, considerable attention was given to several issues concerning the misuse of administrative resources – for example, the use of public assets and/or public office for electoral purposes. At least eight cases have been reported in this category, three of which covered the ACUM electoral bloc, two – the PSRM, the other two – the PDM and one case – the PCRM. Electoral assemblies organised at state institutions with their employees during their working hours remain to be a persistent practice of electoral candidates. During the electoral period, at least 152 cases were reported of candidates holding such meetings.

In its report from October 2019 the ENEMO International Election Observation Mission raised concerns regarding allegations of misuse of administrative resources, namely the involvement of mayors’ office workers, as well as independent candidates using their official positions to influence the election campaign. Another concern was the use of mayoral property and resources for campaigning.

Legislation

On 22 May 2017, in the above-mentioned context of reforms, the Parliament of Albania approved amendments to the election legal framework. These amendments were adopted to the Law No. 8580, “On Political Parties”, the Law No. 97/2013 “On Audio-visual Media”, and the Criminal Code. The amendments introduced new requirements to campaigning, campaign finance, and advertising in broadcast media, as well as established new electoral offences and increased sanctions for existing ones. However, the reform process lacked transparency and consultation with stakeholders, and the late timing created significant difficulties in the implementation of key aspects of the election administration.

The amendments to the Law No. 8580 “On Political Parties” aimed to limit campaign spending. They largely constrained the use of electoral promotion materials at urban level and prohibited paid political advertising in media outlets, television, and radio channels. Furthermore, Article 88 of the Electoral Code of Albania prohibits the use of public resources for the support of electoral subjects.

In line with the amendments to the Law No. 8580 “On Political Parties”, the revision of the Law No. 97/2013 “On Audiovisual Media” determined the prohibition of paid political advertising in media outlets during the electoral period. However, the legal framework still fails to regulate political advertising, paid or unpaid, hidden or direct, beyond the electoral period, as well as in written and online media within or beyond the electoral campaign.

As regards the Criminal Code, Articles 325-332 (Chapter X) provide for 15 criminal offences which threaten the freedom and integrity of free elections.[i] The new criminal offenses introduced in 2017 include the abuse of public function for electoral activities, the use of other peoples’ identification documents, and more detailed prohibitions on vote-buying and vote-selling. Article 328/a (Using the public function for public electoral activities) is of a particular relevance:

«The use of the public goods, the function or the state activity or of the financial or human resources by an employee, who carries out a state duty, to favour a political party or a candidate in the elections constitutes a criminal offence and is punishable by imprisonment of one year to three years».

 


[i] The 15 criminal offences affecting free elections are: Obstructing electoral subjects (325), Falsification of election material and election results (326), Intentional damaging of electoral material (326/a), Violating voting secrecy (327), Voting more than once or without being identified (327/a), Active corruption in elections (328), Using the public function for public or electoral activities (328/a), Passive corruption in elections (328/b), Intimidation or abuse against participants in election (329), Obstructing voters (330), Abandonment of the duty by the members of electoral commissions (330/a), Violating the voting rights (331), Obtaining or using the identification documents illegally (331/a), Abuse of military authority (332), and Abuse of police authority (332/a).

Armenian legislation on the regulation or prohibition of use of administrative resources during the election campaigning, remains deficient, even though the legal framework has been recently modified and largely improved.

Article 23 of the Electoral Code of Armenia establishes restrictions for the election campaign, including the prohibition of the use of administrative resources. The code states that candidates who are public servants shall not campaign when undertaking official duties. They also cannot abuse official position in the interest of their party. The law also restricts the use of resources that are given to public officials to implement their official duties. It is forbidden to use the premises, means of transport, means of communication, material and human resources provided for the performance of official duties for the purpose of pre-election campaign.

Article 48 of Election Code of Georgia prohibits use of administrative resources during the election campaign in support of or against any political party or candidate. It includes support such as use of administrative buildings, means of communication, information services, and other kinds of equipment as well as transportation owned by public institutions. Article 49 of the same Code also includes prohibition of the use of budgetary funds, office, or official position, which covers the following circumstances:

a) getting any career subordinate or otherwise dependent person involved in an activity that may support to presentation and/or election of a candidate;

b) collecting signatures and conducting canvassing during business trips funded by state authorities or municipality bodies;

c) getting engaged in campaigning during working hours and/or in the course of performing official duties.

In addition, from the 6th day before and including Election Day, it is prohibited to implement such projects/programs that have not been previously included in the State Budget. It is also restricted to increase welfare benefits (pensions, hardship allowances, allowances, etc.) envisaged in the adopted state budget.  

According to local NGOs observing elections, the Georgian legislation provides a narrow definition for the misuse of administrative resources during electoral processes, which frequently leaves a number of issues beyond regulation. For instance, according to their assessment, an administrative body may implement several activities that do not explicitly violate the law, however they might still provide goods to particular segments of the society in a way to significantly influence their voting behaviour.

 

The legislation in the Republic of Moldova on the use of administrative resources during the election period, and election campaigning in particular, is deficient according to a Promo-LEX report. Even though the legal framework has been modified, the problem of explicit and full regulation of the use of administrative resources still remains unsolved.

Article 52 (7) of the Electoral Code on Electoral Campaign stipulates that candidates may not use public means and goods (administrative resources) during electoral campaigns, while public authorities/institutions and other related institutions may not send/grant public goods or other benefits to candidates unless a contract is concluded to this end, providing equal terms to all candidates. According to Article 22 (2) of the Central Electoral Commission General Duties, the Central Electoral Commission has the right to access the information held by public authorities at all levels, including access personal data, in compliance with the legislation on personal data protection.

The Criminal Code of the Republic of Moldova has two important articles in this regard: Article 181 (1), Corruption of Voters, which is punishable by a fine ranging from 500 to 850 conventional units or by imprisonment between 1 to 5 years; and Article 181 (2), Illegal financing of political parties or electoral campaigns, violation of the management of financial means of political parties or electoral funds, which stipulates the penalties applied for the falsification of reports on the financial management of political parties and/or of reports on the financing of electoral campaigns with the intention to substitute or hide the identity of the donors.

According to experts, the legal framework should provide a clear jurisdiction in case of electoral complaints on the misuse of administrative resources both by candidates and third parties, to provide an effective enforcement mechanism that would prevent potential violation.

Case Law

During the pre-electoral period of the 2017 Parliamentary Elections (January-February 2017), some decisions of the municipal council raised suspicions of abuse of state resources as the number of persons receiving social assistance benefits, which are intended for families with very low incomes, in particular people with disabilities, increased.

The Central Election Commission (CEC) released the mobile phone application ‘Vote 2017’ as an instrument to report corruption. In total, 22 cases were reported through this mobile phone application in relation to vote integrity and freedom, out of which 19 were submitted on Election Day (25 June 2017). In addition, through the telephone line established by the CEC, the official reports confirmed that in the period from 25 to 28 June, a total of 240 cases were reported. None of these cases was forwarded to the prosecution and the CEC explained that the reported cases were incomplete. Moreover, the majority of ministries made available alternative reporting mechanisms, such as phone lines, and public officials assigned for the specific purpose of receiving cases of corruption during the electoral campaign and voting. In general, the number of reported cases was low, but the Ministry of Interior was an exception, with 484 cases reported for penal offences related to electoral processes. Based on official communications with the prosecution offices of the judicial district courts, there was a low number of procedural materials submitted for criminal offences that threatened the freedom and the integrity of the election, and there is no information about the phase of the investigations or any imposed penalties.

Regarding administrative penalties for the participation of employees of local government units in electoral activities, only 45 municipalities responded to the Task Force established for the 2017 election. According to the related summary report prepared by the Task Force, the municipality of Skrapar dismissed two employees and suspended one for participating in electoral activities during working hours. Other municipalities did not specify the reasons for dismissal. Only some of these cases were related to local officials, such as the mayor of Vlorë municipality, who was suspected of «obstructing electoral subjects». Yet, there is no information about further investigations and penalties imposed by the responsible authorities.

During the Parliamentary Elections of April 2021, despite a robust legal framework in place to prohibit the misuse of administrative resources and minimising the advantage of incumbency, ministers continued to campaign during official engagements.

On 8 June 2021 the Deputy Governor of Lori Province visited Katnaghbyur and Urasar villages of Stepanavan consolidated community during working hours, in order to campaign for the ruling “Civil Contract” Party. He had a meeting of a campaign nature with the teachers and other residents in the school hall, asking the pupils who had not yet finished their lessons at that time to get out of the school building.

In another case, on June 9, by the decision of Goris community deputy mayor, 115 residents were provided with financial assistance in the amount of AMD 6 130 000 from the community budget. In the list of beneficiaries there are also residents of Tegh and Tatev communities. It is noteworthy that compared to the previous quarters, the volumes of financial aid in Goris community have sharply increased.

One more example of misuse of administrative resources is that on 12 June 2021 the heads of “Gazprom Armenia” CJSC’s Stepanavan and Tashir regional stations forced their employees to participate in rally of “Armenia” Alliance. The employees of Tashir station were also forbidden to participate in the rallies held by the “Civil Contract” Party on 10 June 2021.

The Office for Democratic Institutions and Human Rights (OSCE) mentioned several cases of misuse of administrative resources during the 2017 Local Elections. For instance, there was a confirmed case from Batumi, when the Batumi City Court warned an official from the Ministry of Finance and Economy of the Autonomous Republic of Adjara for posting pictures of a Georgian Dream (GD, an incumbent political party) campaign event on the official Facebook page of the institution. Also, the Tbilisi City Hall aired a public social advertisement showing achievements of the incumbent administration. Moreover, only the GD mayoral candidate was invited and promoted during several opening events by the City Hall.

In addition, Transparency International Georgia (TI-G) raised the issue of mobilisation of people employed in budgetary organisations on a mass scale for election events of the ruling party. The organisation argued that even though such a mobilisation is not regarded as a direct violation of law, such cases increase polarisation and politicisation of the civil sector.In general, TI-G submitted a total of 16 complaints to the Central and various District Election Commissions regarding the use of administrative resources. Out of which only two were granted. According to TI-G’s report, complaints were mostly about the illegal campaign of civil servants during working hours and use of official positions by several municipal authorities.

Furthermore, the monitoring report of another local non-governmental organisation observing elections, International Society for Fair Elections and Democracy (ISFED), maintained that despite legal restrictions, a large number of municipalities made changes to their budgets to allow scaling up of social, healthcare and infrastructural projects during the latest local election.

 

On 6 June 2019, a candidate submitted a statement (zayavleniye) to the Găgăuzia Central Electoral Commission and to the Ministry of Education on misuse of administrative resources. The complainant posited that the Head of the Education Department obliged all school headmasters to report on the number of personnel that participated in the elections of the Governor (Bashkan) and threatened with dire consequences, including job dismissal, to those who would not vote on 30 June in the Elections of the Governor of Găgăuzia.

According to the Electoral Code (Article 66), a complaint may be filed on an action or inaction of a candidate. Since the complainant's statement concerned the actions of the Head of the Education Department, the Central Electoral Commission found it inadmissible. However, according to the Electoral Code, if the subject of a complaint does not fall within competences of an electoral organ to which it was submitted, the complaint should be forwarded to a competent organ within two calendar days (Article 67.5). The misuse of administrative resources and assistance in it are criminal offences punishable by a fine ranging from 4,000 to 6,000 conventional units57 (MDL 200,00 to 300,000), and three years of imprisonment, along with deprivation of holding certain offices and of engaging in certain activities for two to five years (Criminal Code of the Republic of Moldova, Article 181 (2)).

 

Extortion

Extortion is the use of coercion to obtain money, goods, services or some other advantage from an individual or institution. Beyond the damage it does to the victim, extortion reduces public trust in government and can discourage business growth and investment in the area.

International standards

As one type of corruption, extortion is covered by the following international standards and guidelines:

Domestic context

Extortion has been a problematic criminal activity in Albania and, though not in very high numbers, it is a criminal form that has assumed organised features. In the cases adjudicated by the First Instance of Serious Crimes Court during the time period 2008-2012, about 18% of the judgements had to do with extortion.

While the prevalence of extortion for businesses in Albania amounts only 0.5%, the data from the United Nations Office on Drugs and Crime report on Business, Corruption and Crime in Albania shows extortion is a cause for concern. Extortion is a very serious crime in which the perpetrators try to obtain money or other benefits from a company by threatening or intimidating managers or employees. In some cases, extortion is also presented as the offer of “protection” from damages to property or persons. Sometimes extortion can be linked to organised crime groups, who have the power and the means to make a credible threat towards a business with potentially dire consequences if their demands are not met.

On the Research Report of Gender and Corruption in the Albanian Civil Service, among the corrupt practices scoring highest under the “not prevalent” response appear to be extortion. Women more often than men see extortion (including sexual extortion) as not prevalent (22.9% of the women as compared to 16.7% of the men) or little prevalent (33.3% of the women as compared to 31.3% of the men). Likewise, more men than women believe that extortion is highly prevalent in the Albanian Civil Service (6.3% men vs. 4.2% women).

The 2020 Crime & Safety Report on Albania published by OSAC (Overseas Security Advisory Council) states that the Albanian government is making a concerted effort to improve the country’s law enforcement capabilities and reduce corruption. Organized crime has a noted impact on Albania, with a network of criminal organisations involved in drug trafficking, extortion, bribery etc.

The government’s efforts towards the fight against corruption and increased public trust are to some extent “reflected” in the statistics on applications to initiate criminal proceedings on the fact of extortion.

Thus, according to the Summary information on the statistics on offences committed in 2018, published by the Police of the Republic of Armenia, in 2018 only 67 citizens applied to the law-enforcement bodies with a statement on the initiation of a criminal case on the fact of extortion. In this respect, 55 criminal cases were initiated, and in 11 cases law-enforcement bodies refused to initiate a criminal case on the fact to the absence of the body of crime.

In 2019, 92 citizens applied to the law-enforcement bodies with a statement on the initiation of a criminal case on the fact of extortion. 78 criminal cases were initiated, and in 12 cases the law-enforcement bodies refused to initiate a criminal case on the fact to the absence of the body of crime.

In 2020, the number of applications on initiation of criminal cases on the fact of extortion increased to 173. In this respect, 148 criminal cases were initiated, and only in 18 cases law-enforcement bodies found an absence of the body of crime.

Extortion is one of the less widespread crimes in Georgia. According to the information published by the Ministry of Internal Affairs, 79 cases of alleged extortion were registered in 2020 out of which 20 (25%) were successfully investigated compared to 113 alleged cases registered in 2019 out of which 51 (45%) were successfully investigated. As the figures show, registered cases of extortion have reduced significantly in 2020 compared to the previous year. However, the proportion of investigated cases also went down.

 

In the Monitoring Survey on the National Integrity and Anti-Corruption Strategy Impact conducted in 2019 by UNDP, participants were asked to answer the question whether, during the last 12 months, they encountered any corruption cases coming from public agents. The share of answers provided by the population and businesses that have encountered any of the mentioned cases does not exceed 6% in the study. Extortion of funds (obtaining money by force) was indicated by 2% of the respondents among the general population and by 1% among businesses. It can be observed that there have been few cases, and in comparison with the previous study, there has been a decrease in the share of affirmative answers for all the answer options (Misappropriation and fraud, Use of working time for personal purposes, Requesting favours of any form, Favouritism, bribe, abuse of power, traffic of influence).

According to the National Anti-Corruption Centre, in 2018, there were a total of 700 corruption acts, of which 42 involved mayors, and the most affected communities were Chişinău, Bălţi, UTA Găgăuzia, Cahul, Criuleni, and Soroca.

In 2017, 26% of those who reported giving a bribe did so due to direct extortion. Another 27% were indirectly asked for a bribe. 25.7% reported giving a bribe in order to persuade public officials to fulfil their duty.

Legislation

Based on Article 109/b of the Criminal Code, “Forcing through blackmail or violence for submission of the wealth (Extortion)”, is defined as «Causing a person, through blackmail or violence, to do or not do a certain action, in order to unjustly gain wealth or any other benefit, for themselves or for third persons, is sentenced with imprisonment from two to eight years.

The same act, when committed by using or by threatening to use a gun, torture, inhuman and humiliating acts which have caused harm to the health, are sentenced by imprisonment of from seven to fifteen years.

When the crime has caused the death of the person, it is sentenced by life imprisonment».

The Criminal Code of Armenia (Article 182) defines extortion as a threat to publicize defamatory information or information inflicting significant damage to the person’s or his relatives’ rights or legal interests, the threat to use violence against the person or his relatives, or to destroy (damage) the property owned or managed by the person, his relatives or other persons, with a demand to surrender the property rights, or other actions involving property. Extortion is punished with a fine of 400-800 times the minimum salary, or with arrest for up to 3 months, or with imprisonment for a term of up to 4 years. If aggravating circumstances have been revealed, extortion shall be punished with imprisonment for the term of up to 10 years.

Article 311 of Armenian Criminal Code (Bribery), part 3 establishes criminal liability of receipt of a bribe, committed by extortion, which is punished by imprisonment for a term of 4-10 years, with or without confiscation of property. Article 200 of Armenian Criminal Code (Commercial Bribery), part 4 establishes criminal liability of receipt of a commercial bribe, committed by extortion, which is punished by a fine of 300-500 times the minimum salaries, or deprivation of the right to hold certain positions or engage in certain activities for a term of up to 5 years, or by imprisonment for a term of up to of 5 years.

Besides the above-mentioned types of extortion, the Criminal Code of Armenia establishes liability for commitment of other specific types of extortion, such as:

  • Article 234. Theft or extortion of radioactive materials;
  • Article 238. Theft or extortion of weapons, ammunition, explosives or explosive devices;
  • Article 269. Theft or extortion of drugs or psychotropic substances;
  • Article 311.1, part 3. Receiving illegal remuneration through extortion by a public servant or by a person holding public position;
  • Article 311.2, part 3. Using real or perceived influence through extortion (Trading in influence).

Article 181 of the criminal code of Georgia determines extortion as a request for the transfer or use of another's property or property rights, accompanied by the use of violence against the victim or his or her close relative, or the destruction or damage of their property, or the threat of dissemination of information that can harm their rights. The crime is punishable with a fine or restriction of liberty from two to four years. The maximum sentence for extortion committed in aggravated circumstances is the restriction of liberty up to nine years.

 

The following articles from the Criminal Code of the Republic of Moldova set the legal framework in this field:

  • Article 324 (1) on Passive corruption; 
  • Article 325 (1) on Active Corruption;
  • Article 326 (1) on Influence peddling;
  • Article 327 (1) on Abuse of power or official misconduct, and;
  • Article 328 (1) on Excessive power or exceeding work attributions.

The Criminal Code (Article 354, note 5) defines extortion as a «demand to provide unjustified benefit with a threat to take actions or omit to act using one's position, authority granted, power, or service position in relation to the person who provides unjustified benefit, or deliberate creation of conditions under which a person is compelled to provide unjustified benefit in order to prevent harmful consequences for his/her rights and legitimate interests». In line with Article 368, paragraph 3 of the Criminal Code of Ukraine, extortion of unjustified benefits can be punished by imprisonment between five to ten years and deprivation of the right to hold certain offices or engage in certain activities for three years, and confiscation of private property.

Case Law

In October 2019, the State Police notified the public about the operation “Repeaters” executed by the Serious Crimes Against Life and Property Sector in the Local Police Directorate of Tirana, under the direction of the Prosecutor of the Court of First Instance for Serious Crimes. Two people were arrested and one more was declared wanted. They were suspected of being authors of several cases of extortion (forcing through blackmail and violence for submission of wealth).

The investigation materials were forwarded to the Prosecutor’s Office at the First Instance Court for Serious Crimes to continue the prosecution procedure.

No further information has been made public related to this case from the national instances or the media.

On November 9, 2012, the RA Special Investigation Service initiated the criminal case on the grounds of the crime envisaged by Article 311, Part 3, Clause 2 of the RA Criminal Code (Bribery committed by Extortion of bribe). A.M.,  senior investigator of Arabkir Investigation Division of the General Investigation Department of the RA Police, has deliberately demanded from H.A., the suspect of a criminal case under his investigation, a bribe of AMD 200 000 in order for H.A. not being prosecuted for crime of using drugs, which at that moment has already been decriminalised. The accused official was found guilty and sentenced to an imprisonment for 4 years, without confiscation of property.

In another case, in 2019 the head of Arshaluys community of Armavir region has been charged by the RA Investigative Committee with extortion (two episodes), extortion in particularly large amounts and abuse of official authority. In February 2019 a decision was made to temporarily suspend the office of the head of Arshaluys community. After receiving the consent of the prosecutor, on March 1, 2019 the above-mentioned decision was sent to the Governor of Armavir Region to fulfill the requirements of the decision.

At the moment there are no examples of relevant case law.

Three officials, including a mayor, a former mayor and a local councilor from Gotesti, Cantemir district, allegedly extorted almost MDL 600,000 from an economic agent. According to the National Anticorruption Center, such action was aimed at favouring a decision of the Local Council in exchange of money, which would in turn, favour the businessman to receive around MDL 6 million for the renovation of the local Youth Center. At the same time, National Anti-Corruption Center representatives specify that the three officials would have claimed the equivalent of 10% of the MDA 6 million in several installments, the amount that the Local Council was to allocate to the winning company, in order to include this on the agenda of the draft decision. Currently, two people are detained in prison and under criminal investigation, and another without being detained. All three risk up to 10 years in prison, a fine and deprivation of the right to hold public office.

In 2014, the Cherkasy regional court of appeal rendered its judgement on the head of a city council, who had colluded with his deputy. They were accused of extortion of unjustified benefits in the form of a 30% share in a private entrepreneur’s firm. The share was transferred to the deputy head’s wife. In return, defendants gave to an entrepreneur a permit to open a trailer shop in the city. Both defendants were banned for three years from occupying any public offices in state authorities. They were exempted from five years imprisonment and received three years’ probation instead.

Clientelism

Clientelism is the promise and acceptance of a personal benefit (e.g. gift, loan, reward, favour, job, etc.) in exchange for political support. It is often based on an unequal relationship between a patron (e.g. political leader) and client (e.g. voter). Clientelism results in decisions that reflect the special interests of a few, rather than the wider public interest, leading to unfair and unjust outcomes.

International standards

As one type of corruption, clientelism is covered by the following international standards and guidelines:

Domestic context

Concerns over accountability, transparency, and the capacity of local governing bodies to deliver quality services remain a pressing matter in Albania. Clientelism is a phenomenon widespread throughout the Western Balkans, but it manifests itself in various forms and ways, which are difficult to identify and scientifically verify.

Besides employment, the inclusion of families within the social aid scheme in the months prior to elections is a form of clientelism, especially important for low-income families. Cases of decision-making by local institutions which increased the number of persons receiving social aid during the pre-election period in 2017 indicate the persistence of this form of political clientelism.

Albanian legislation on parties is restrictive for regional, local, and religious parties, and prohibits ethnic parties. However, if the lobbying phenomenon continues to develop as it is expected, the relevant legislation and the current parties’ profile will need to be reviewed. As long as the state continues to be the biggest employer, clientelist methods will continue to damage the quality of administration and other public sectors. Simultaneously, the negative effect is twofold: those who benefit are identified with the party in power, those who lose are identified with the competitive alternative of the current party in government and expected to repeat in case of victory of their team, the same selective and clientelist process.

Clientelism occurs pretty widely in Armenia as the officials are often abusing their positions to exert influence on their subordinates to receive services that benefit their private interests. This may also take place in the private organisations, where the employees are dependent. This phenomenon is largely driven by the poor conditions of the labor market, whereas many people appear to be vulnerable to external pressures and eager to maintain or get jobs.

Clientelism may particularly take place during the elections in a form of vote buying, contribution to specific political party’s campaign, etc. Patronal voting - a distinct form of clientelism – has been rather widespread a few years ago.

In 2017, a study on the political behavior of the Armenian voters showed that the major part of electorate sided with the ruling Republican Party of Armenia and a tycoon-sponsored Prosperous Armenia Party on the basis of “a familial or relational proximity with the party, which then helps them further their economic mobility.” Hence, this creates patronal networks around these parties.”

The snap parliamentary elections held in December 2018 - merely 1.5 years after April 2017 elections - provided completely different results, as the Republican Party of Armenia, strongly ruling since 2007, did not even pass the threshold to get the seats in the parliament.

Though some signs of patronal voting still exist, this phenomenon has been considerably declined since the revolution of 2018.

Clientelism is not a widely used term in Georgia. At the same time, law enforcement agencies don’t pay adequate attention to the problem of clientelism. Despite the number of allegations made by the civil society of vote-buying during almost every election no investigation has been carried out on the matter. No such crime has been registered by the Ministry of Internal Affairs in recent years (recent elections were held in 2018 and in 2020).

 

Clientelist ties in the Republic of Moldova are most often based on party affiliations. A regional report from 2018 on party organisation and clientelism in transition countries, indicates that parties in the Republic of Moldova appear to be the more clientelism-oriented among the three investigated countries (Georgia, the Republic of Moldova and Ukraine). The Republic of Moldova’s Democratic Party is the most clientelist party out of the 15 investigated in the study. Additionally, in the Republic of Moldova, the territorial coverage of the parties is the main driver for clientelism. The same study indicates that if public funding is a source for clientelism, there should be mechanisms to control the amount of financial resources allocated to parties and how political parties spend them. Like Georgia and Ukraine, which were also investigated in the above-mentioned study, the Republic of Moldova lacks the scrutiny of public funding to parties, and this may be one reason for which clientelism keeps flourishing.

Today, clientelism is still a risk in the following situations:

  • The mixed electoral system voted by the parliament on 20 July 2017. The new voting system provides for 50 deputies to be elected on proportional party lists, while another 51 will be elected in uninominal constituencies (only the candidate who wins the greatest number of votes in an uninominal constituency will make it to Parliament). Political analysts and civil society have long argued that uninominal voting would encourage clientelism, nepotism, and the allocation of local resources based on clientelism.
  • Political loyalty/clientelism determines the selection of civil servants at the higher levels of government.
  • The political affiliation and party migration of local elected officials in order to increase the chances of the respective municipality receiving more funding from national investment funds. The new Law on Local Public Finances, implemented in 2015, has considerably reduced the political criteria in the distribution of investment funds from national level to municipal level. Before 2015, Members of the Parliament usually proposed amendments to the annual state budget law so that localities that are politically-friendly to the incumbents get more public resources and the opposition less. Another strong reason for clientelism and the political migration of mayors is to avoid the selective pressure of representatives from opposition parties; criminal investigations have started many times without solid evidence. The ratio of mayors from opposition parties against which criminal investigations have been initiated, compared with the ones from the ruling parties, is instructive.
Legislation

According to Article 328 of the Criminal Code “Active Corruption in Elections” provides that “offering or giving money, material goods, the promise of a job or other favours in any form, to the voter or other related persons, in order to obtain the signature for the nomination of a candidate in the election, to vote in a certain way, to participate or not to vote, or to engage in illegal activities in support of a candidate or political party, constitutes a criminal offense and is punishable by imprisonment of one to five years.”

The Law on Public Service bans public officials and servants from using their official position to provide actual benefits or privileges to political parties, public organisations, including religious groups. Article 311-2 of the Criminal Code of Armenia bans the use of real or alleged influence for personal or group interests. Such kind of actions is punished with fines of 200-400 times the minimum salary, or with imprisonment for a maximum term of 10 years, with or without confiscation of property.

Generally, there exist many loopholes and there are not concrete enforcement mechanisms to provide guarantees against clientelism.

According to Article 164​1 of the Criminal code of Georgia offering, promising, transferring or rendering money, securities (including a financial instrument), other property, property rights, services or any other advantage for electoral purposes, directly or indirectly, or accepting it with prior knowledge, or to make a fictitious, hypocritical or other transaction for the purpose of avoidance legal restrictions, if the value of such transaction does not exceed GEL 100 is punishable by a fine, if the value of such a transaction exceeds GEL 100 then it is  punishable by up to three years in prison or a fine.

 

One of the most significant examples of clientelism in the Republic of Moldova is related to the allocation procedures for public resources from national investment funds to first-level local governments. Public resources are used as a ‘lure’ to ensure independent candidates’ loyalty toward the political majority.

There were cases where mayors from other political parties were ‘forced’ to join the ruling party, having been promised the chance to benefit from capital investments. Currently, there are efforts in place to address the above issues through Law No. 68 of 5 April 2012, on the Approval of the National Decentralisation Strategy, and the Action Plan on the Implementation of the National Decentralisation Strategy for the years 2012-2018.

Given that clientelism is seen as a dominant trend when it comes to the allocation of funds to local authorities – particularly capital investments – it is important that the following core principles outlined in the World Bank’s guidebook to capital investments for local governments are being referred to by local authorities in negotiations with national authorities and in drafting their local budgets:

  • Local government does not spend its limited resources on ‘frivolous’ investment in projects that should not be government business (for example, speculative commercial real estate);
  • All needs are compared objectively;
  • Prudent long-term fiscal policy is exercised;
  • Innovative solutions at project level are considered;
  • Individuals have effective channels through which to express their preferences.
Case Law

A clientelist and corrupt relationship has been established between political parties and a number of citizens in Albania: “you give me a job- I give you my vote”.

During the pre-electoral period of the 2017 Parliamentary Elections, the police in Korça arrested a man who, according to their report, promised employment to a young individual in exchange for his vote for the Socialist Movement for Integration (in Albanian language ‘LSI’). The police found in his automobile the voters’ lists, contacts, telephone numbers and ALL 20 000 which, according to the executor’s office, would have been used to buy votes for LSI. Call registrations of the arrested individual were seized by the police and submitted to the prosecutor’s office as proof and evidence of vote buying.

On 28 June 2017, the Korça District Court imposed the security measure of “prison arrest” for this individual. One month later, on 24 July 2017, the Korça Court of Appeals decided to release the suspected person with the argument that there was no danger of escaping and that he could not destroy the evidence of investigation.

The Prosecutor’s Office sent the case to the court, but after several court hearings, the prosecutor of the case decided to withdraw the criminal case.

On 16 May 2019 the Investigator of the Criminal Investigation Department of the Criminal Investigation Department of the RA Police initiated criminal proceedings against A.B. for the fact that in 2017 in the pre-election stage of the regular elections to the National Assembly he demanded from the voter to participate together with all his family members in the elections to be held on 2 April 2017, and to vote for his candidate, promising to give a bribe, in that case - to provide for free a state-sponsored referral, preferential medical care and services. A.B. was found guilty and sentenced to a fine in the amount of AMD 2 000 000.

In another case, H.A. has been charged and sentenced to a fine in the amount of AMD 2 500 000 for the fact that in 2017 in the pre-election stage of the regular elections to the Yerevan Community Council, gave bribes to the voters in order to vote for the Republican Party of Armenia.

In 2020, the National Security Service of Armenia brought charges against former MP G.T. under Article 154.2 of Armenia’s Criminal Code, for vote buying, accepting a bribe in return for a vote, violating the ban on charity during elections, or obstructing the free will of the voter in the 2017 Parliamentary elections. The basis of these charges is an accusation by the Prosecutor General of RA that G.T. lead an organised group that bought more than 17 000 votes for his Prosperous Armenia Party during April 2017 parliamentary elections. Investigators uncovered piles of handwritten and signed letters from prominent MPs from G.T.’s political team formally pledging to provide him with a desired number of votes by any means necessary for the 2017 parliamentary election.

At the moment there are no examples of relevant case law.

 

Political clientelism undermines the economic development of the Republic of Moldova by deviating public resources from their most efficient usages. Political affiliation matters when the funds for investment are distributed through various national investment funds. There have been attempts to demonstrate such violations back in 2012-2013, with the help of open data, when the BOOST database on public spending was launched. It allowed citizens to see budget allocations per each district (raion), and it was clear that the district a former Prime Minister was originally from, Hâncești, was the one with the largest budget in 2014. However, these efforts have not yet led to any prosecutions.

Patronage

Patronage is the use of an official position to appoint a person in a public office based on favouritism, often in exchange of political support. It can be closely linked to the concepts of clientelism, cronyism and nepotism. Patronage results in decisions being made not on the basis of what is in the interests of society at large, but what is in the self-interests of the decision maker and their associates. It violates the boundaries of legitimate political influence and the principles of merit, and leads to public money being misspent.

International standards

As one type of corruption, patronage is covered by the following international standards and guidelines:


Since the misuse of administrative resources during electoral processes is the most widespread manner to use patronage as a form of corruption, the following international standards are of relevance:

Domestic context

The most common corrupt practices in Albania that seem to contribute to the high levels of perceived corruption include favouritism, such as nepotism and patronage.

During electoral periods, patronage networks employ vote-buying/selling as a method to collect votes in exchange for different forms of favours/support.

In order to decrease the levels of patronage in Albania, several changes were made to the Electoral Code related to employment during election campaign. Considering the electoral campaign of the parliamentary elections of April 2021, not much progress has been made. 

After the entry into force of the new law on civil service in 2017, important improvements have been made within the civil service system in Georgia. The new law introduced qualitatively new approaches to practices aimed at establishing a unified public service in the country based on career advancement, merit, political neutrality and impartiality. To fight patronage in civil service, detailed rules on transparent recruitment of employees have been introduced by the law. To ensure impartial career, advancement the assessment system of employees has been implemented.

 

Reporters wrote on anticoruptie.md that 2018 was marked by several controversial appointments and promotions to senior positions in certain major state institutions of the country. Some of them raised questions about the criteria for promotion. Experts qualified these appointments as political decisions, and explained that the government had merely rotated some people from one job to another.

The Survey on Anti-Corruption Strategy Impact Monitoring from 2019 measured public agents’ perceptions with regards to measures needed to be taken to eliminate favouritism situations in the public sector. Of those surveyed, 62% (69% in 2017) thought that the superior hierarchical leader should be announced, 37% (41% in 2017) considered that cases of favouritism should be reported to the National Anti-Corruption Centre, and 32% in both surveys advocate for denunciation at the National Integrity Authority. Survey results show that most public agents declare that the requirements of the institutional integrity are respected in the institutions they work in.

Among the main causes of non-declaration of conflicts of interest by public agents are the lack of knowledge of the procedure (47% in 2019, 54% in 2017) and the gain of personal benefits (financial, material or other) (33% in 2019, 42% in 2017).

The results of the survey indicate that public agents have a high level of knowledge regarding legal/illegal situations in the regime of conflict of interests and the non-admission of favouritism: about 87% (77% in 2017) of public agents offered correct answers to all possible situations of corruption concerning the regime of conflict of interests and non-admission of favouritism.

Patronage is considered to be widespread and poorly regulated in Ukrainian politics. The situation, when a politician provides an executive position to a person based on a personal relationship rather than merit, creates a vicious circle of favouritism. The favour of giving the job creates pressure to return the favour and blurs the boundary between political office and executive positions. In other words, due to patronage, bureaucracy loses its impartiality but remains difficult to prove at the same time.

Legislation

The Electoral Code of Albania in Article 3, under “General Principles”, paragraph 7, provides: “Except as otherwise provided by law, it shall be prohibited to provide electoral subjects with the opportunity to use equipment, funds and materials that are public property, as well as with other individuals who are working in the public administration of any level”.

The Electoral Code of Albania also includes regulations such as: “During the election campaign, employment, dismissal from work and job transfers, in public entities or public institutions are prohibited, except in justified cases.

Also, it is prohibited for the employees of the state administration that during the working hours and within the premises of the state institutions, to participate in activities of a political nature, or that benefit a political party or candidate in the election campaign. An employee of the state administration is prohibited from using public goods, state function or activity or public financial, material, human resources, in order to favour a political party, coalition or candidate in elections.

The employee of the state administration has the right to participate in the political or electoral activities of an electoral subject or candidate, only after the official working hours and outside the premises of the state institutions.

Patronage as such is not mentioned in the national legislation, however, the law on civil service regulates appointment, career development, dismissal, incentives, and disciplinary responsibility of a civil servant. The law on conflict of interest and corruption in civil service provides some provisions on ethics and integrity. The Government decree approving the rules of ethics of civil servants introduces principles such as impartiality, professionalism, independence and accountability of a civil servant.

 

The Law on Integrity No. 82/2017 provides a definition for favouritism, which consists of the “support provided by the public agent whilst exercising his function to the natural persons or legal entities when solving their problems, regardless of the motives, which is not provided for by normative acts and does not meet the elements of a conflict of interests or the elements of an offence”.

Article 15 on Avoidance of favouritism stipulates the following:

1. For the purpose of serving public interest with impartiality and objectivity, favouritism practices in public entities are inadmissible.

2. A public agent is obliged to reject favouritism in his/her professional activity;

3. The head of the public entity is obliged:

  • to not knowingly admit favouritism practices in the professional activity of the public agents from the entity he/she leads;
  • to report cases of favouritism to the National Anti-Corruption Centre.

The Law No. 889 “On Civil Service” of 10 December 2015 obliges civil servants to be politically impartial. Article 10 of the Law states that civil servants must implement legal directives independently of their own political views or the political affiliation of the authority. Besides, civil servants of the highest category are not allowed to be members of a political party or to be members of the local council. It is prohibited for all civil servants to be involved in political campaigns or in events organised by political parties, or to use public office for any political purposes. Article 10.3 of the abovementioned law explicitly prohibits the use of administrative resources and reduces corruption risks related to patronage.

Case Law

At the moment there are no examples of relevant case law.

There are no registered cases of patronage in Georgia, however, claims were made by civil society organisations, mostly in recent years, which were related to cases of employment of public officials’ family members in public service which involved a high risk of nepotism. The majority of these instances were identified in the local self-government bodies, such as employment of public officials’ family members at municipal Non-Entrepreneurial (Non-Commercial) Legal Persons (N(N)LP), including those of the officials of Borjomi Municipality, Kutaisi City Council, as well as Ambrolauri Municipality.

 

According to the website “Anticorupţie” (anticoruptie.md), S.R. favoured into the position of Minister of Health, Labour and Social Protection despite being suspected of numerous illegalities in their previous position. From November 2017 to April 2018, S.R. served as acting General Mayor of Chisinau, having been appointed by the former interim Mayor. During the term of office, S.R. was accused of having committed abuses and rigging public tenders. In May 2018, during the electoral campaign for local elections, several representatives of civil society accused the Constituency Electoral Council of Chișinău and the Central Electoral Commission of violating the provisions of the Law on Access to Information, as well as other laws, admitted by S.R. in the race for the General Mayor’s office. Over 2,000 falsified signatures, with no identity data, of deceased persons, as well as other errors, were found in the subscription lists of the candidate. For S.R. to enter the electoral contest, five deceased persons had “signed”, as well as 430 people who do not live in the relevant community and 898 who failed to indicate their ID details.

 

Cases of illicit political influence on appointments and the work of executive public officials rarely reach the court since they are difficult to prove. The following case gives an example in which a former minister perceived that illegal political influence was undermining his impartiality.

In 2016, a former Minister for Economic Development and Trade reported the illegal influence of Members of Parliament on the work of his ministry. The National Anti-Corruption Bureau of Ukraine investigated the case and submitted an indictment against the executive director of a national company for illegal influence exerted by him on the former Minister. According to the allegation, the aim of the “said” influence was to become the Deputy Minister of Economic Development and Trade. The case is still ongoing in Kyiv’s Solomianskyi court and the court arraignment has been postponed several times.

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