Progress and results in the field of corruption prevention and combating

Periodic Update (September 2005)

We take action against corruption for the good of society and the national interest with the full force of law and public support, in order to achieve integrity in the exercise of power vested in officials of State.

(Mission Statement of the Bureau)

During the accounting period (from August 2004 until August 2005) significant questions have been resolved concerning joining of Latvia to the number of international legislative acts. The Council of Europe Civil Law Convention on Corruption was approved by Saeima on 17 February 2005. Cabinet of Ministers approved joining United Nations Convention against Corruption and was signed by the representative of Latvia in New York on 19 May 2005. The Government of Latvia supported joining European Council Criminal Law Additional Protocol and it was forwarded to the Parliament for ratification.

Significant work has been done in improvement of control over income of physical persons. With the leading role of Corruption Prevention and Combating Bureau project of concept "On improving control over income of physical persons" has been prepared and submitted to the Government. Implementation of the Concept will contribute to effective control over income and property status of physical persons.

In order to eliminate inequality between political parties and voting groups in local government elections, draft laws "On Pre-election Campaigning", "Financing of Voting Groups", "On Political Parties" and a number of other normative acts which regulate activity of political parties and voting groups have been prepared; some of these legislative documents are being under examination of Saeima or Cabinet of Ministers, other legislative acts already entered into force.

Progress in implementation of the National Programme for Corruption Prevention and Combating for 2004-2008

Main priorities during the first year of program implementation (since 3rd August, 2004) and the results achieved:

1) Issue of income declaration by physical persons and possible solutions.

To improve efficiency of control system over income for natural persons and to solve currently acknowledged problems detecting the origin of illicitly acquired means the Bureau initiated creation of working group comprising officials from state institutions as well as nongovernmental community. The working group has elaborated the Concept "On improving control over income of physical persons". The Concept suggests three variants of how to improve control over the income and property status of physical persons. The first variant presupposes to extend the area of authority of the State Revenue Service, to introduce the principle of legal presumption (marked physical persons will need to prove the lawfulness of their income or assets), amelioration of the mechanism of sanctions etc. The second variant, in addition to the measures set forth in the first variant, presupposes to introduce the obligatory annual declaration for all citizens and residents of Latvia and in some cases, for non-residents as well. The third variant presupposes to introduce the obligatory declaration of income and assets for residents of a certain level of income. Director of Corruption Prevention and Combating Bureau asked the Cabinet of Ministers to support the second variant, which would bring about greater economic effect and be more significant in terms of improvement of general social and economic security of the state and prevention of corruption and money laundering. The Concept is to be examined by the Government. The Prime Minister recently has expressed support to the second variant of the Concept. The second variant was recently supported by Crime Prevention Council, consisting of the members of the Government, Prime Minister, the head of Anti-Corruption Commission of the parliament and the Prosecutor General.

2) Introduction and improvement of internal anti-corruption activities, including elaboration of anti-corruption plans in state institutions.

Almost all institutions of public administration have elaborated and introduced plans of anti-corruption activities and have started to implement these plans. All institutions generally had a number of internal regulations in place, however very little of those addressed anti-corruption matters. Institutions in questions concentrated on including anti-corruption issues into internal regulations. According to the law "On Prevention of Conflict of Interest in Actions of Public Officials" the head of an institution is responsible to ensure to ensure that a state or municipal institution has internal anti-corruption measures in place. Corruption Prevention and Combating Bureau during the accounting period through education activities, official letters and consultations reminded the managing staff of institutions of public administration of their responsibility to assure the implementation of anti-corruption measures in their organizations and prevention of situations of conflict of interest.

3) Calling into being values of ethics and codes of conduct.

The work on improvement of the system of internal control within institutions of governance and strengthening of ethics in public administration and local authorities has been started. Most of ministries have laid down standards of behaviour and criteria of ethics (Codes of Ethics) and formed Ethics Commissions to ensure observation of standards of behaviour.

4) Ensuring legitimate and expedient allocation of funding of European Union and international institutions and organizations.

The scope of persons working with European Union funds has been identified. It has been recommended to assign these persons the status of public officials to make it easy to prevent conflict of interests and corruption in the process of allocation of European Union funds. Regular and effective cooperation with OLAF (European Anti-Fraud Office) has been established.

5) Improvement of legal framework of control over financing of political parties.

CPCB this year took part in control over pre-election campaigning during municipal elections, in March 2005. These were first elections in which there had been defined a limit of money which political parties or voting groups cannot exceed for spending on pre-election campaigning. CPCB is continuing to check the parties' election declarations and evaluation of elections and is going to publish the results in due time.

CPCB has elaborated or took part in elaboration of a number of normative acts in order to improve accountability of and control over activity of political parties. CPCB has prepared a project of regulations to be approved by the Cabinet of Ministers "Order according to which after the request of Corruption Prevention and Combating Bureau information on a persons' income, savings and assets is to be submitted". These regulations will enable CPCB, for example, to clarify the source of donations to political parties from physical persons. On 8, August 2004 The Cabinet of Ministers has approved the regulations "Order, according to which assets illegally gained by political organizations (parties) are to be transferred to the state." On 22, March 2005 Cabinet of Ministers has announced regulations prepared by CPCB on "Rules on annual political parties' financial declarations, pre-election period financial declarations, notifications about planned pre-election expenditures and election declarations on incomes and expenditures and declarations on gifts".

There are a number of draft laws which have been elaborated in order to fulfill the purpose of improvement of transparency of activity of political parties or voting groups: Draft Law on Pre-election campaigning, Draft Law On Political Parties, Draft Law on Financing of Voting groups. Draft Law on Pre-election campaigning, Draft Law On Political Parties have been forwarded to Saeima for examination Draft Law on Pre-election campaigning contains regulations of pre-election campaigning in media, defines, in particular, the hidden advertisement, the volume of free advertisement, demands from the political parties to follow the principles of ethics in pre-election campaigning. It is important that the bill would be approved by the Saeima in due time, before pre-election period (before parliamentary elections in autumn 2006) begins.

6) Control over the use of assets belonging to state and municipalities.

Corruption Prevention and Combating Bureau has prepared a draft law On Leasing the Assets of the State and Local Authorities. The purpose of the draft law is to introduce a clear regulation in leasing of assets belonging to state and local authority in the interest of society and prevent corruptive actions. As it was acknowledged, regulation which is effective at the moment does not ensure realization of principles of transparency and equality of tenderers.

Within the context of the Programme main priorities for 2005 have been:

1) introduction into legal system provisions for (legal) lobbying;

2) to continue working with state institutions in order to strengthen internal efforts against corruption;

3) to continue following up procedures used working with EU funds;

4) introduction of legal liability for providers public services (teachers, physicians).

Current situation, results

In 2004 - 2005 fairly good progress has been made in terms of implementation of the Bureau's functions in corruption prevention and combating.

There have been 29 criminal cases in the competence of the Bureau in 2005 to date. 21 criminal cases have been passed to the Prosecutor's Office for criminal prosecution against 41 persons. Most of the criminal cases were initiated for accepting or offering bribes, for using official position in bad faith. Among persons against whom criminal cases have been initiated there are: police officers, deputy candidates in municipality elections, head of pharmacy commerce company.

In 2004 there were altogether 30 criminal cases in the competence of the Bureau, in 2003 - 18 criminal cases (in 2003 Bureau was not in operation for full year).

The progress has been possible due to increased staff number and also improved professional level of personnel.

In 2004 the Bureau has examined 516 declarations of assets of state officials in regard to the restrictions and prohibitions imposed on them by the law "On Prevention of Conflict of Interest in Actions of State Officials"; in 2005 507 declarations.

Within the given authority to bring administrative charges against public officials for violation of restrictions provided in the respective law, a fine was imposed against 80 state officials in year 2004 per total amount of 5385,00 LVL and against 47 so far in 2005 for total amount of 3365,00 LVL.

In 2005 137 in-depth examinations have been carried out in various institutions. In 9 cases a decision was taken that state officials have to pay caused looses to the state budget. Most common violations have been combining offices and taking decisions for private benefit and benefit of family members or relatives.

Implementing an extensive examination of the political parties' finances it was detected that a number of parties have received donations in contradiction with the Law on Financing of Political Organizations (Parties). According to the law these illegal donations received by the parties have to be paid to the state. The Bureau receives declarations of parties' financial activities (declaration on expenditure of pre-election campaigns, election expenditure declaration, and annual financial declaration) and compiles and analyses the processed information provided in financial declarations of political organisations (parties) and their associations as well as monitors legitimacy of received declarations and parties' donations.

In 2004 it was detected that 15 parties received illegal donations in total amount of 133 231,90 LVL (almost 190 000 EUR). In 2005 the public was informed that 6 parties received illegal donations and 10 499 LVL should be paid back to State Treasury as illegal donations.

In 2005 in 18 cases a decision to impose administrative charges against representatives of political parties was adopted, and as an administrative charge a fine was imposed in total amount of 3365 LVL. For comparison, in 2004 in 15 cases a decision to impose administrative charges was made, in 12 cases a fine was imposed as an administrative charge in total amount of 4 225,00 LVL.

Comprehensive report on results of examination of political parties financing and detected breaches in 2003 was published in March 2, 2005.

In 2004 according to the court decisions 2 parties had to pay back illegally received donations; activities of 7 parties were stopped temporarily with an obligation to avert detected breaches; activities of 2 parties were terminated. In 2005 according to the court decisions activities of 2 parties were stopped temporarily and activities of 2 parties were terminated.

The Bureau has made an agreement with public policy centre "Providus" to cooperate in examining pre-election campaign for local elections, held in spring 2005.

Summary on results of activity of Corruption Prevention and Combating Bureau 2003-2005