Commission Report (2002): Latvia

anti-corruption measures

The Corruption Prevention Programme of 2001 has been largely implemented and important pieces of legislation concerning the fight against corruption have been passed. The Law on the anti-Corruption Bureau entered into force in May 2002. It gives the Bureau, which is to start its operations before the end of 2002, the power to initiate criminal proceedings and to conduct investigative and operational activities. The Bureau is also responsible for checking officials` income declarations and auditing party finances. The adoption of the law and the appointment of the Head of the Bureau by the Government are positive steps. It is now of vital importance that, following confirmation of this appointment by Parliament, the Bureau swiftly become operational.

In April 2002, Parliament passed the Law on the Prevention of Conflict of Interest in Activities of Public Officials replacing the existing Law on Corruption Prevention. The law, which entered into force in May 2002, specifies in more detail the circle of public officials who are subject to regulations on conflict of interest and designates the newly established anti-Corruption Bureau as the institution responsible for implementing the law. The law lays down restrictions on assuming outside employment, accepting gifts and donations, etc. Since June 2002 public officials have not been allowed to hold more than one position in state institutions. This has led to resignation of officials from the board of public companies.

An important step in the fight against corruption was the adoption of amendments to the Law on the Financing of Political Organisations in June 2002. Parties are now required to publish the names of donors together with the amount and date of donations on the Internet before and after the elections. The maximum allowable donations from a single donor within a calendar year has been reduced from LVL 25 000 (EUR 41 736) to LVL 10 000 (EUR 17 857). Parties are no longer allowed to accept donations from companies in which the state or a municipality has holdings. The law also prohibits loans and provision of free services to political parties.

The adoption of the law represents a positive step in the promotion of transparency in party financing. However, the enforcement of the law will require the anti-Corruption Bureau to build up quickly its capacity to effectively check the financial declarations submitted by the parties. As the checking of financial declarations will pose major administrative challenges for the Bureau, adequate financial and human resources will have to be provided.

Several other pieces of legislation were adopted which also affect the fight against corruption. In January 2002, the Law on Procurement for Government and Municipal Needs entered into force and the Public Procurement Surveillance Bureau was established in order to enforce transparency, surveillance and review mechanisms in the public procurement procedure. In April 2002, amendments to the criminal law adopted by Parliament introduced provisions including criminal liability for trading in influence and offering bribes, and defined a public official. The amendments also aim to complete the legal framework for the implementation of the Council of Europe Criminal Law Convention on Corruption. Further training, particular for public officials in charge of public procurement, should be provided.

In order to increase the efficiency of Latvia`s anti-corruption policy further and to ensure better co-ordination with the policies for fighting other forms of crime, the Corruption Prevention Council has been merged with the Crime Prevention Council to form the Corruption and Crime Prevention Council. The new Council and its secretariat are to co-ordinate the activities of the institutions involved in preventing and combating corruption at the highest political level. It is chaired by the Prime Minister. The budget of the Council`s secretariat has, however, been significantly reduced, and it remains unclear how the functioning of the secretariat will be financed.

However, despite the recent steps taken, the institutional set-up continues to be scattered among a number of institutions which are to a greater or lesser extent directly involved in the fight against corruption, including the anti-Corruption Bureau. Their competencies continue to overlap and the lack of co-ordination continues to significantly weaken the effectiveness of the fight against corruption in Latvia. The establishment of the new anti-Corruption Bureau could offer a chance to overcome these shortcomings, thanks to its institutional independence and investigative power, provided it can be given a clearly co-ordinating role and establish a clear corruption prevention strategy. Besides the question of competencies, the success of the Bureau largely depends on the political will to fight high-level corruption and state capture and to supply the Bureau with sufficient funding and human resources.

During the reporting period, particular emphasis has been put on the fight against corruption in the customs and police services. The Customs Officials' Code of Ethics and Conduct was approved in October 2001, and it is now important for the State Revenue Service to implement the Code and the Action Plan for the prevention of corruption.

Since 2001, territorial customs units have performed regular high corruption-risk analyses, opinion polls have been carried out, hot-lines have been put in place and 15 internal audits have been carried out leading to a total of 161 disciplinary measures and four dismissals in 2001. In the police sphere, a series of activities have taken place, including better control of document flow, rotation of road-traffic police officers, an internal audit of the State Police, and selective inspections of the territorial police boards. In 2001, 15 police officers were detained for delinquent behaviour and seven were sentenced. In 2001 a total of 56 cases of abuse of official status, 53 cases of ``passive bribery'' (bribe-taking) and 12 cases of ``active bribery'' (bribe-giving) were detected in state institutions. Five persons were sentenced for the abuse of official status, 11 for passive bribery and six for active bribery.

The Civil Service Code of Ethics, which came into force in January 2001, continues to be applied, and training on ethics in the civil service has been intensified at the Latvian School of Public Administration.

In addition, an active seminar policy was pursued in co-operation with international donors to raise public awareness and involvement in corruption prevention. Seminars have been held for judges, prosecutors, policemen and representatives of the mass media. At the Latvian School of Public Administration 276 civil servants attended training courses on conflict of interest in 2001 and 264 during the first five months of 2002. In 2001, 92 civil servants were trained in corruption prevention (by May 463 individuals had attended these courses).

Latvia ratified the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of Proceeds from Crime in 1998 and the Council of Europe Criminal Law Convention on Corruption in February 2001. The necessary changes to criminal law were adopted by Parliament in April 2002. Latvia is involved, jointly with Estonia and Lithuania, in the Baltic anti-Corruption Initiative, with the support of the OECD Secretariat. The Government has applied for accession to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Council of Europe Civil Law Convention on Corruption has not yet been signed (see Chapter 24 -- co-operation in the field of Justice and Home Affairs).

Latvia joined the Council of Europe Group of States Against Corruption (GRECO) in June 2000. As a member of GRECO, Latvia received a GRECO evaluation mission in December 2001. According to the evaluation report that was made public in March 2002, the scale of the problem of corruption in Latvia is difficult to quantify, but public perception is that corruption is a worrying phenomenon that affects the activities of some public institutions in Latvia such as customs, traffic police and judicial authorities. The report added that the seriousness of the problem appeared to be recognised at the highest political level and that the Government seemed to be more committed to further improving the legal framework and its implementation, but that the real challenge was changing attitudes and behaviour. The report noted that Latvian society`s mentality vis-à-vis corruption was changing and that people increasingly reported to the police or other law-enforcement agencies cases of suspected corruption, but that dissatisfaction with the rate of progress of reform had bred suspicion and resentment. The report indicated that this raised two real challenges for institutions combating corruption: to gain the trust of the public and demonstrate effectiveness by producing results. It added that there are at present in Latvia a range of institutions that contribute to the fight against corruption, and that their efforts are fragmented, with an obvious lack of direction and co-ordination. In conclusion, GRECO addressed fifteen specific recommendations to Latvia, which it is strongly encouraged to follow up.

Overall, since the last Regular Report, Latvia has made further progress in the fight against corruption. The legislative framework has been improved, foreseeing the strengthening of the institutional set-up, and both public awareness and the involvement of civil society are on the increase. However, further efforts are needed to clarify and consolidate the institutional set-up and to provide the new anti-Corruption Bureau with the necessary means to effectively ensure its independence. The Latvian Government should remain strongly committed to further combating high-level political corruption and state capture. The effective implementation of the existing anti-corruption legislation will be vital for overcoming the public's continuing mistrust of the judiciary and the public administration and for gaining the confidence of private investors.

---

Next: 1.2. Human rights and the
Up: 1.1. Democracy and the rule
Previous: The judicial system