Conflict of interest in European public law
| Published date | 07 October 2013 |
| Pages | 406-421 |
| Date | 07 October 2013 |
| DOI | https://doi.org/10.1108/JFC-06-2013-0042 |
| Author | Nikolay Nikolov |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Conflict of interest in European
public law
Nikolay Nikolov
Commission for Prevention and Ascertainment of Conflict of Interest,
Sofia, Bulgaria
Abstract
Purpose – The aim of this article is to formulate and represent some common characteristics
about conflict of interest as a global legal occurrence. All the conclusions made here are based upon
11 European countries legislations. As do similarities so do differences in every separate legislation
give us the reasoning that there is a common European model on conflict of interest. The aim of the
article is to provoke a discussion on this topic which is to help creating a new and better European
legislation in the field of conflict of interest.
Design/methodology/approach – The basic methods used for writing the article are comparison
and analysis on the judicial system concerning conflict of interest in the treated European countries.
Findings – Conflict of interest is extremely important governmental instrument in the fight against
corruption and spending funds or using public properties for private purposes. Besides some of the
analyzed countries, i.e. Germany, where such an act is treated as a crime according to the criminal
code, the conflict of interest is an administrative offence. Finding conflict of interest is a matter in the
field of administrative control, so when there is a conflict of interest, it follows that administrative
punishment should be enforced. There exists a conjunction between the substantive staff dealing with
conflict of interest in much of the mentioned countries. Two main types of finding were described – by
a specialized governmental body or by the appointment authority or by some other internal for the
departmental system body.
Originality/value – The article claims that conflict of interest aims for higher public trust towards
institutions and to consolidate democracy. As far as conflict of interest is often applied when the
concern is spending a considerable funds, including supranational, there comes the question for the
need of a new supranational legislation. A review was made on the conflict of interest in European
countries. Free movement of people, goods and capital in EU boundaries demands a broadening of the
existing legislative system.
Keywords Administrativeoffence, Conflict of interest, Corruption, EU, Compatibilities
Paper type Conceptual paper
Introduction
Conflict of interest in the public sector is a legal and social phenomenon which dates
back to the dawn of civilization. In most simple terms it can be defined as a form of
abuse of power. The emergence of states, institutions and laws has also created
opportunities for the abuse of state power by the people who exercise it. As human
nature is weak, this abuse of power happens fairly often these days. At different times
and under different political regimes there have been specific methods for preventing
the people in power from abusing it[1]. Conflict of interest regulations are only one of
these methods.
In legal terms, conflict of interest is perceived as a collision or a clash between the
private interests of a person performing a public function, or another person relate d to
the latter, and the public interests which the abovementioned person has to defend
by exercising this public power[2]. Conflict of interest is related to the performance
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Journal of Financial Crime
Vol. 20 No. 4, 2013
pp. 406-421
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/JFC-06-2013-0042
JFC
20,4
406
of a certain act. With some exceptions, most laws require that the entrusted person
exploit his/her professional capacity to act in favour of his/her private interests.
The regulations on conflict of interest in current national legislations lay the ground
for it to be defined as a new and avant-garde trend in the fight to curb the abuse of
power, and, in a broader sense, corruption. The essence of this legal mechanism boils
down to imposing, in advance, legal restrictions that public officials are obliged to
observe in performing their functions and duties. Compliance with these norms shall
guarantee avoidance of conflict. Conflict of interest is an administrative offence,
committed in breach of these restrictions. Establishing such an offence results in
administrative sanctions – fines and other pena lty payments.
Over the past ten years, conflict of interest regulations in different European
legislations have been improving. New laws have been passed. New national law
enforcement institutions have been established. EU-level legislation (regulations),
applicable and binding in all 27 member states, has begun to take shape. Studying and
analyzing all these laws and legislations and finding their common characteristics is of
acute scientific interest. The analysis and conclusions to be made in this paper are
based on the national laws on conflict of interest in the public sector of 11 European
countries of which only Russia is not a member of the European Union. The countries
in question are Germany, Great Britain, France, Russia, Spain, Portugal, Poland,
Bulgaria, Hungary, Ireland and Latvia.
The similarities found among the conflict of interest regulations in these national
legislations give rise to the claim that a European model of conflict of interest exists.
I. Conflict of interest as a global legal phenomenon
1. Confidence in democracy is the main objective of conflict of interest regulations.
Over the past 30 years, the confidence in politicians and political parties in state
institutions has been steadily deteriorating. This is a common feature of modern
democracy.It is ubiquitousand global. It is not just characteristic of individualinstitutions
or movements, but is a constant feature of most countries with democratic political
systems.The primary reason for thispublic scepticism is not theoverexposure of different
corruptionscandals in the media. In fact,ordinary people believe that politiciansabuse the
trust and power entrusted to them to solve their personal problems and those of their
friends and relatives.This mood, now dominant in most civilizedsocieties, questions the
legitimacy of institutions and the effective operation of democracy.
Trust is a key element for the success of any democratic system. It should extend to
state institutions, political leaders and parties. People should know that the system is
fair and seeks and finds solutions to most global and individual problems. The doctrine
of the mandate, characteristic of a democratic system of government, revives only
partially and temporarily the ratings of institutions and politicians.
Corruption is a recognized criminal offence in the legislations of all countries.
“Bribery” is a criminal act involving the provision of money or other assets to a public
official in order to induce action or inaction contrary to the proper conduct of his/her
duties. Such crimes are difficult to prove. Furthermore, bribery is only one of the many
possible ways to abuse power.
Conflict of interestregulations are new and modernlegal mechanisms for fighting the
abuse of power.These regulations are characterized by flexibilityand an emphasis on the
Conflict
of interest
407
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