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Combating corruption in the private sector

Combating corruption in the private sector

 

SUMMARY OF:

Framework Decision 2003/568/JHA on combating corruption in the private sector

WHAT IS THE AIM OF THE DECISION?

  • It criminalises both active* and passive corruption* in the private sector. Legal persons* may be held liable for such offences.
  • It repeals Joint Action 98/742/JHA.

KEY POINTS

Inclusion of the concept of corruption in national criminal law

  • EU countries are required to penalise acts intentionally carried out as part of business activities:
    • corrupting a person: by promising, offering or giving directly or through an intermediary to a person who in any capacity directs or works for a private sector entity, an undue advantage of any kind, for that person or for a third party in order that that person should perform or refrain from performing any act in breach of that person’s duties*;
    • demanding an undue advantage: a person requests or receives, directly or through an intermediary, an undue advantage of any kind, or accepts the promise of such an advantage, for him or herself or for a third party, while in any capacity directing or working for a private sector entity, in order to perform or refrain from performing any act in breach of one’s duties.
  • The above applies to business activities within profit and non-profit entities. At the time of adoption, EU countries were able to limit the scope to conduct which involves or could involve a distortion of competition in relation to the purchase of goods or commercial services. This limitation is not valid anymore. Limitations were valid for 5 years from 22 July 2005.
  • EU countries had to declare to the Council how they were going to act at the time of the adoption of this decision. Before 22 July 2010, the Council had to review declarations made by EU countries in relation to limitations.

Liability of legal and natural persons

  • The aim of this decision is to make not only natural persons, such as employees, but also legal persons, such as undertakings, liable.
  • With regard to the liability of natural persons, EU countries must ensure that the acts referred to are liable to a maximum penalty of at least 1 to 3 years’ imprisonment. For example, if in an EU country, the conduct is criminalised by up to one year of imprisonment or in another, up to two years of imprisonment, both cases satisfy the criteria set by the framework decision. EU countries can also apply higher legal thresholds for the maximum term of imprisonment.
  • The right to engage in business activities may be temporarily suspended. Instigation to commit one of the acts set out above or aiding or abetting such conduct must also be criminalised as an offence.
  • Legal persons may be held liable for offences involving corruption if these are committed for their benefit by any natural person acting individually or who has a leading position within a legal person based on:
    • a power of representation of the legal person;
    • an authority to take decisions on behalf of the legal person;
    • an authority to exercise control within the legal person.
  • Penalties for legal persons may include criminal or non-criminal fines. Moreover, EU countries may consider exclusion from entitlement to public benefits or aid, temporary or permanent disqualification from the practice of commercial activities, etc.

Jurisdiction

Each EU country has jurisdiction if the offence has been committed:

  • within its territory;
  • by one of its nationals;
  • for the benefit of a legal person that has its head office in the territory of that EU country.

The decision applies to Gibraltar.

This decision is affected by the judgment of the Court of Justice of the European Union in Case C-176/03 concerning the distribution of powers in criminal matters between the European Commission and the Council.

FROM WHEN DOES THE DECISION APPLY?

EU countries had to take the necessary measures to comply with the rules of the decision by 22 July 2005.

BACKGROUND

For more information, see:

KEY TERMS

Active corruption: giving bribes to a person to have them unlawfully accomplish an act within the exercise of their duties.
Passive corruption: taking bribes.
Legal persons: any entity having such status under the applicable national law, except for States or other public bodies acting in the exercise of State authority and for public international organisations.
Breach of duty: must be understood in accordance with national law. The concept of breach of duty in national law must cover as a minimum any disloyal behaviour constituting a breach of a statutory duty, or a breach of professional regulations.

MAIN DOCUMENT

Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector (OJ L 192, 31.7.2003, pp. 54-56)

RELATED DOCUMENTS

Report from the Commission to the European Parliament and the Council assessing the extent to which the Member States have taken the necessary measures in order to comply with Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector (COM(2019) 355 final, 26.7.2019)

last update 18.02.2020

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