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The preventive role of the judiciary in protecting the financial interest of the European Union.
A comparative analysis for improved performance
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I.
INTRODUCTION
1.
PREAMBLE AND PROJECT BACKGROUND
1.1.
DESCRIPTION OF THE ACTION
The fight against corruption and fraud at the level of the European Union has two dimensions: one is
related to the protection of the financial interest of the Union as a whole, the other one focuses on the
protection of the interests of European citizens in their capacity as contributors to the European budget,
who are entitled to good administration and access to good quality products and services.
In this context, most of the cases that affect the financial interests of the EU are directly linked to
procurement procedures within projects and programmes. As such, the public procurement procedures
have been of great concern for the various EU and national institutions and a radical reform of the system
was initiated at EU level and started its transition to national levels in 2014 after the adoption of
Directives 2014/24/EU, 2014/23/EU and 2014/25/EU
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.
The judiciary plays a crucial role in this context. Despite various efforts of the administrative bodies, often
financial interests are protected through sanctioning measures, rather than through preventive ones.
While judicial sanctioning is the most efficient option, it is much more expensive and time consuming
than prevention, and often can be reached only after several administrative steps have been processed.
However, the judiciary does not have only a sanctioning role. Through its practice and rigorous reasoning
of the rulings, it can play an important preventive role when ensuring predictability and consistency. As
such, judicial solutions can have a dissuasive effect both regarding those in breach of the law, but also to
third parties potentially tempted to break the law, if sanctions are not deterrent.
In most of the European national laws, criminal sanctions applied to legal persons for corruption, fraud
or other illegal activities affecting the interest of the Union can range from financial penalties and fines
to dissolution. When sanctions are of financial nature, accessory penalties can be applied in order to
prevent legal persons’ participation to other illegal activities that can cover the costs of the previous
sanction. This is the case with the application of debarment from public procurement as accessory
criminal penalty. Yet, the use of this instrument is still limited, thus putting pressure on contracting
authorities to decide whether to exclude or not an entity based on its statutory declaration which is
difficult to verify and prove false.
The present research aims at raising awareness among judicial professionals, European and national
policy makers and administrative regulatory bodies regarding the role of the judiciary in protecting the
financial interests of the Union, especially by implementing effective preventive tools against the
fraudulent legal persons, such as the exclusion, ban or prohibition from public procurement as accessory
criminal penalties.
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DIRECTIVE 2014/24/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 26 February 2014 on public
procurement and repealing Directive 2004/18/EC; DIRECTIVE 2014/23/EU OF THE EUROPEAN PARLIAMENT AND
OF THE COUNCIL of 26 February 2014 on the award of concession contracts; DIRECTIVE 2014/25/EU OF THE
EUROPEAN PARLIAMENT AND OF THE COUNCIL of 26 February 2014 on procurement by entities operating in the
water, energy, transport and postal services sectors and repealing Directive 2004/17/EC.