OVERVIEW OF POLITICAL CORRUPTION IN SERBIA

Extent of corruption

Corruption is a serious problem in Serbia, affecting the everyday lives of its citizens and hampering economic development. Corruption is ranked as the most important problem identified by businesses in making a decision for starting economic activities. Serbia tops the Balkan states for illegal financial flows with an estimated US$5 billion disappearing every year through illicit flows, including the proceeds of crime, corruption and tax evasion.

The fight against corruption is an important precondition for accession the European Union,of which Serbia is a candidate country. The Serbian government has declared a “no tolerance” policy towards corruption but commentators from civil society have pointed out that anti-corruption measures have not always been implemented through the established institutional channels and have been dependent on the political will of the government, pointing to the need for a more systemic approach in the fight against corruption .

Political corruption in Serbia

In the last few years, Serbia has made a number of positive steps in establishing legal and institutional framework for the fight against corruption. The legislation adopted in recent years brings greater control in the area of public procurement, conflict of interest, financing of political parties and increased capacity among the agencies responsible for investigating and prosecuting corruption. The Anti-Corruption Agency has initiated a public anti-corruption awareness campaign, integrity plans, increased training and education activities, and is applying corruption risk analysis to draft legislation.

Following a broad stakeholder consultation, the new Anti-Corruption Strategy for the period 2013-2018 was adopted in 2013 together with a related action plan. The strategy aims at both a structural approach to dealing with issues such as good governance, independent institutions, internal and external audit and control, and protection of whistle-blowers, together with a sectoral approach addressing corruption in the most sensitive sectors such as public procurement, the judiciary, police, spatial planning, education and health. However, a civil society coalition monitoring EU accession has pointed out that the strategy falls shorts of effectively addressing some significant corruption related problems (including the further definition of the status and powers of anticorruption institutions, political influence on state owned enterprises, cross checks on asset declarations) and it lacks ambition in its goals related to the prosecution of corruption cases .

Despite the positive developments, effective enforcement of the existing anti-corruption legislation and the functioning oversight mechanisms within the public sector are still missing.  Of the citizens surveyed in 2013, 70 per cent said corruption is a serious problem in the public sector, while political parties, public officials and civil servants top the list of institutions perceived to be the most corrupt in Serbian society . Political parties continue to exercise control over numerous public enterprises and exert significant influence over the media.

While elections are administered efficiently and are generally in line with international standards, vote buying practices are still present and abuse of state resources for election campaigns remains a persistent problem . Financing of election campaigns is perceived to be a common problem in the political sphere. There are widespread beliefs that parties are financed in order to receive benefits in return, and state funds are diverted to favour a party’s own electorate.

Although the legislation regulating the financing of political parties has been significantly strengthened and the Anti-Corruption Agency is in charge of controlling it, transparency of parties’ income sources remains a concern as parties are not believed to be reporting their finances accurately .

Despite existing laws and the Anti-Corruption Agency supervising implementation of conflicts of interests and asset declarations of public officials, the oversight is still not effective. The number of procedures related to control of asset declarations of public officials has increased and the agency has taken action in a number of cases to report procedure violations. However, the agency’s staff is not sufficient for a full review of all officials subject to the asset declaration requirements. Independent supervision and capacity for early detection of wrongdoing and conflicts of interest in public enterprises, privatisation procedures and public expenditure are underdeveloped .

Lobbying

Lobbying in Serbia is not legally regulated although the National Strategy for Fighting Corruption 2013-2015 indicates that adoption of a law on lobbying will be an important part of fighting corruption.

There is generally a negative public perception of lobbyists in Serbia. Lobbying is undertaken by prominent law firms, consulting firms and also some high-profile individuals who are quite often former public employees and politicians,  a practice that carries serious risks of creating conflicts of interest.

In 2009, the lobbyists’ association was established and it developed a draft law on lobbying. This draft has not been discussed by Parliament. According to the draft, all lobbyists would  acquire a special licence from the state in order to declare income and pay taxes. In return, they would  receive a special "free pass" to enter the premises of the parliament, government and other institutions, and high level civil servants in government would be obliged to listen to their proposals. The draft also envisaged the definition of a lobbyist and the introduction of a Register of Lobbyists. All lobbyists would have to report once a year. The report would have to include information about clients, the reasons for lobbying and the individuals with whom contacts were established. The Trade Ministry did consider that document as a basis for drafting the law on lobbying