ARTICLE
7 November 2024

The EU Identifies Six High-Risk Sectors In New Anti-Corruption Report

MK
Michael Kyprianou Law Firm

Contributor

The firm, based in Cyprus, has an international presence. Its services include Dispute Resolution, Property, Shipping, Immigration, Commercial and Corporate Law. It is highly ranked by leading legal directories, including Legal500 and Chambers and regularly receives accolades from the Cyprus Government and international bodies, in recognition of its excellent service and commitment to the values of integrity, efficiency and professionalism.
On 4 November 2024, the European Commission released a report highlighting six high-risk sectors for corruption across EU Member States.
European Union Criminal Law

On 4 November 2024, the European Commission released a report highlighting six high-risk sectors for corruption across EU Member States. The report identifies healthcare, finance, public procurement, defence and security, construction and infrastructure, and sports as sectors most vulnerable to corruption. These areas influence critical aspects of daily life across the EU, from access to healthcare to public safety and financial stability.

The study found that these six sectors share factors that make them particularly prone to corruption. These sectors typically handle substantial public funds, involve extensive cross-border interactions, and affect a broad range of EU citizens and consumers. Corruption in these areas not only drains resources but also undermines the quality of essential services, erodes public trust, and exacerbates inequality.

The six EU-wide sectors emerged as high-risk areas of corruption where the Commission will be prioritising actions are:

  • Healthcare was identified as particularly vulnerable due to its vast funding and crucial role in public welfare. Corruption here often involves misallocation of resources, inflated prices for medical supplies, and bribery for access to services. Annual losses in healthcare due to corruption in Europe are estimated to be up to €56 billion, affecting patient outcomes and public health systems.
  • The financial sector experiences widespread issues such as money laundering, tax evasion, and bribery. These crimes have severe cross-border implications and involve extensive networks, impacting economic stability across the EU. The sector's global scope and rapid technological changes present ongoing challenges for regulators.
  • Public procurement, which involves around €2 trillion in annual spending, is identified as a high-risk area due to the sheer volume of transactions and the complexity of oversight. Corruption in procurement manifests as bid-rigging, bribery, and collusion, which inflate costs and undermine the integrity of public projects
  • With high confidentiality and substantial budgets, the defence sector is susceptible to corrupt practices such as kickbacks and illegal arms trading. Defence spending in the EU is at a record high, emphasising the need for heightened oversight to prevent financial and security risks.
  • Construction and Infrastructure sector, which handles extensive public projects, faces frequent corruption risks through collusion, bid-rigging, and embezzlement. One-fifth of construction costs are lost to corruption, affecting the quality and safety of critical infrastructure projects such as roads, schools, and hospitals.
  • Corruption in sports, especially related to match-fixing and illegal betting, is often linked to organised crime and has a wide-reaching impact on communities. Sports corruption affects public trust and has cross-border implications, particularly in football, where manipulation is prevalent at multiple levels.

The findings from this study are set to inform the first EU Anti-Corruption Strategy, marking a coordinated effort to address these risks. The Commission's planned follow-up study aims to investigate specific anti-corruption measures tailored to these high-risk sectors. The strategy will focus on enhancing transparency, closing regulatory gaps, and strengthening cross-border cooperation to better detect and mitigate corruption.

As highlighted in the report, corruption in these sectors threatens the fundamental principles of fairness, trust, and integrity upon which the EU is built. With the right measures, the EU's Anti-Corruption Strategy aims to secure public resources, protect essential services, and foster a more resilient Europe.

MK Compliance Limited can assist your organisation in staying compliant with the latest EU anti-corruption standards and best practices. Our tailored consulting services include risk assessments, due diligence, and advisory support to help you navigate high-risk sectors identified by the EU. By leveraging our expertise, you can strengthen your organisation's resilience against corruption risks and ensure continued compliance with evolving regulatory expectations.

European Commission: Directorate-General for Migration and Home Affairs, Persson, A., Worth, M. and Jeney, P., High-risk areas of corruption in the EU – A mapping and in-depth analysis, Publications Office of the European Union, 2024, https://data.europa.eu/doi/10.2837/5907939

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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