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Cecilia Malmström

Commissioner responsible for Home Affairs

Rule of Law and Good Governance - the EU perspective

14th Russia-EU Permanent Partnership Council on Freedom, Security and Justice

Saint- Petersburg, Russia, 19 May 2011

I would like to start by congratulating the organisers and hosts for convening this event and thank them for the invitation to today's legal forum.

I would particularly like to praise the organisers for choosing themes which need courage and determination and will allow for an inspiring discussion today.

"We should have put the establishment of the rule of law first, for everything else depends on it: a functioning economy, a free and fair political system, the development of civil society, public confidence in the police and the courts."

These are the conclusions of Lord Ashdown when leaving his office of High Representative of the international community in Bosnia and Herzegovina.

I fully subscribe to these conclusions. The European Union is first and foremost a Union of values and of the rule of law. The conquest of these values is the result of a long and painful history. They are the hard core of the Union's identity and enable every citizen to identify with it.

Of course, the notion of the rule of law has various meanings in the different Member States of the EU. We find the concepts of état de droit and Rechtsstaat next to the anglo-saxon rule of law concepts. But I will not go into legal theory today, although I know there are eminent lawyers in the audience.

Instead, I want to underline that in the EU, we do not want to impose a single approach to the "rule of law".

There are different traditions in Member States, but there are also a lot of commonalities: a multi-party democracy; an independent, accessible and well-functioning judiciary; an accessible, well-functioning and transparent administration; the respect for and the enforcement of fundamental rights; and an active civil society. "Rule of law" is a prerequisite for a sound and long-lasting economic development.

This is the rock on which to build.

In the EU, implementing the rule of law and practising good governance is first of all a task for our Member States. It is the Member States' institutions and courts which our citizens face first. Where Member States implement EU law, the European Commission monitors.

Beyond that, the EU has its own ambitious catalogue of fundamental rights which are enshrined in the EU Charter of Fundamental Rights.

The Commission is committed to make these rights as effective as possible for the benefit of everyone living in the EU.

The EU must lead by example when it legislates and when Member States implement EU law.

To monitor progress on the implementation of the Charter, the Commission recently published the first Annual Report on the Application of the Charter. The Report presents how the EU institutions and the Member States, when they were implementing EU law, applied the Charter in 2010.

It is also important to stress that where the Charter is not applicable, fundamental rights continue to be guaranteed at national level according to the national constitutional systems. Moreover, all Member States have made commitments under the European Convention of Human Rights. Therefore, as a last resort, individuals may bring an action at the European Court of Human Rights in Strasbourg for violation of a fundamental right guaranteed by the European Convention on Human Rights.

Let me stress also that some of the fundamental rights cases occurring within the EU, built in part on the information provided by non-governmental organisations. This confirms the key role of non-governmental organisations to safeguard fundamental rights.

Journalists and civil society organisations are our 'eyes and ears on the ground', tracking cases and bringing them to the attention of national, international or institutions and of course to the public. Their role should not be undermined…

An independent judiciary protecting the rights of the individuals in criminal as well as civil law is also of key importance. Respect for fundamental rights, legal certainty and confidence in a legal system is crucial for individuals and businesses alike.

This Forum has a leading theme which is law as an instrument of innovative and secure development, not least in the economic sphere. I strongly believe that the rule of law and good governance create the stable and predictable environment which allows businesses to plan and prosper and which attracts investment and not only in the oil and gas business! There is clearly a direct link between capital flight, the investment climate and the rule of law.

Obviously, whatever sophisticated and advanced legal system we would put in place, its fate will ultimately lay in the hands of people who are entrusted with applying it. That is why an efficient set of tools to tackle corruption in all its forms is key to the success of any legal system.

Like everywhere, also within the EU, there is corruption! International research on the extent of corruption shows that the scale of corruption in the EU varies substantially from one Member State to another – but none are entirely corruption free. Even in my hometown Göteborg in southern Sweden there was a big corruption case which was discovered just recently and involved construction companies and local officials.

A coalition of specialised institutions and bodies has estimated that the annual cost of corruption is equal to more than 5% of global GDP (2.6 trillion USD), with over 1 trillion USD paid in bribes each year 1. In the EU, it has been estimated that the costs of corruption amount to around 1% of EU GDP.

There is a growing empirical literature based on comparative country studies, emphasising that corruption distorts competition, lowers investment, capital productivity, capital inflows and many other macroeconomic data relevant to public welfare.

Studies show that corruption is also linked with organised crime. The criminal organisations arrange their cross-border activities from headquarters where corrupt environment is encouraged.

Corruption also undermines the confidence of citizens in public institutions and in the fair operation of the market.

The EU therefore attaches great importance to the fight against corruption, and the EU is active both internally as well as on international arena in the anticorruption field.

Internally, to supplement the work of national police, customs and border authorities, we have already adopted a number of EU instruments such as the European Arrest Warrant; we have provided funding for joint investigation teams to combat cross-border criminality; we jointly use customs controls to assess the security risk of goods entering the EU. The list is of course much longer than that, in particular for the EU countries belonging to the Schengen border free zone.

And there are plenty of examples that cooperation at the European level does help to prevent crime and disrupt criminal networks. One example that struck me is Operation Shovel, involving five different countries in 2010:

The criminal network had its logistic base in Spain, led by Irish and UK criminals involved in a range of activities such as drug and weapons trafficking, money laundering, forgery of public documents and not the least murders!

The operation supported by Europol, the European police agency, has led to 38 arrests, 60 luxury properties on the Spanish "Costa del Sol” were seized, as were 25 cars. Without close, coordinated cooperation across EU internal borders, this criminal network could not have been dismantled. So let me use this opportunity to also stress the need to cooperate with Russia in the fight against organised crime and corruption. It is therefore important that we finalise the operational agreement between Russia and Europol.

But let me come back to the internal measures in the field. A lot has been done in the last decade to support Member States efforts to fight and prevent corruption within a whole range of policy areas, but there is a clear sense that more could and should be done.

As part of a package of initiatives on corruption, the Commission will set up next month a new monitoring and evaluation mechanism called the EU Anti-Corruption Report.

This will allow for periodical evaluation of Member States' efforts against corruption with a view to foster political will, help intensify the anti-corruption measures and reinforce mutual trust among Member States.

It will also identify EU trends, stimulate peer learning and further compliance with EU and international commitments, and facilitate the exchange of best practices. Moreover, an EU reporting mechanism will prepare the grounds for future EU policy initiatives in the area of anti-corruption.

At the same time, the Commission wishes to strengthen co-operation and synergies with existing anti-corruption monitoring mechanisms at international level. The Commission is therefore considering how the EU could best become a party to the Council of Europe's Group of States against Corruption (GRECO). This will help create synergies between the two mechanisms. The Commission values GRECOs assessments and continuously encourages MS and other partners to meet the recommendations issued by GRECO.

The Commission on behalf of the EU is also actively participating in the OECD Anti-Bribery Working Group. In this context, I would like to welcome Russia's efforts to comply with the OECD Convention on Bribery in International Business Transactions, and especially the recent adoption of the anti-bribery legislation.

Finally, we attach great importance to international legal instruments in this field, such as the United Nations Convention against Corruption (UNCAC), which, if effectively implemented, will serve all the Parties as a global instrument to fight this plea.

Beside corruption, the fight against organised crime and in particular confiscation of criminal assets is another element that the EU attaches particular importance to. Only by attacking the incentive that drives organised crime will we be able to fight organised crime effectively; as shown in the operation Shovel that I mentioned before.

The actions and instruments in that area should have a deterrent effect by making known that "crime does not pay".

At present the number of freezing and confiscation procedures in the EU and the amounts recovered from organised crime seem modest if compared to the estimated revenues of organised criminal groups. As an essential horizontal tool to fight organised crime, confiscation has being given strategic priority at EU level.

Five EU existing legal instruments aim at enhancing the possibilities for confiscation and asset recovery. They also provide for mutual recognition of confiscation and freezing orders, setting up of dedicated Asset Recovery Offices in Member States and cooperation between them. The Commission is currently working on a proposal to update and strengthen all these rules.

Naturally the EU is not limiting its actions to its own internal affairs. The EU is a global actor and now, even more with the Lisbon Treaty and the establishment of the European External Action Service. The EU promotes the values behind it stands, including the rule of law and good governance, in the contacts with its partners across the world.

The most natural example of this approach is the accession process i.e. the process for new States to join the European Union. Many see it as a burdensome, lengthy and very technical negotiation. This process however is designed to prepare and ensure that the candidate countries are equipped with the same tools and function on the same basic principles from the very first day of their accession.

In order to beef up the capacity of candidate countries to effectively deal with crime and corruption, financial assistance and transfer of know-how start, at an early stage in their pre-accession process. In order to make progress throughout the negotiation process, specific targets and objectives have to be met and are monitored, in the field of Justice and Home affairs.

This ranges from approximation of legislation with EU standards and international commitments taken by the EU to applying ambitious anti-corruption strategies and showing a convincing track-record in dealing with e.g. court cases including on high level or political corruption.

Beyond the accession process, the very same values are discussed and promoted by the EU in its relation with its neighbours and other partner countries.

The EU actively supports efforts of third countries to beef up the legal framework and the institutional set up.

It also pays particular attention that the financial support it provides to third countries is spent in full respect of the rules on transparency and accountability, including for development aid.

It therefore particularly supports measures that are fostering transparency, good governance and actively support a vibrant civil society, playing a key role as anti-corruption watch dog.

Also some more focused processes like visa dialogues carried out between the EU and some third countries including Russia contribute greatly to improving standards in areas like fight with corruption, organised crime.

Ladies and gentlemen, the EU strongly believes in the rule of law and good governance as basic fundaments of any state. The EU approaches those concepts not just as topics for a theoretical discussion but as concrete aims which should be reached by real actions – within and beyond our borders. Russia has currently a poor rating on the transparency of international corruption index (154 out of 178 countries) and I welcome President Medvedev's intervention on the need to improve the investment climate.

I sincerely trust that events like the one today will contribute to such approach and to further strengthening our cooperation in the view of reaching those aims.

I wish us all a very fruitful and rewarding day of work here in St Petersburg. Thank you.

1 :

International Chamber of Commerce, Transparency International, UN Global Compact, World Economic Forum, Clean Business is Good Business, 2009.

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