Codes of Conduct and Conflicts of Interest at

any governance level of the management of

EU Funds Budgetary Affairs

Policy Department D for Budgetary Affairs

Author: Blomeyer & Sanz Directorate General for Internal Policies of the Union

PE 572.715 - March 2017 EN

STUDY for the CONT committee

DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT D: BUDGETARY AFFAIRS

Codes of Conduct and Conflicts of Interest at any governance level of the management of EU Funds

STUDY

Abstract This study reviews the Member States’ experience with codes of conduct and conflicts of interest affecting the partnership arrangements under the European Structural and Investment Funds. The focus is on conflicts of interest affecting the Monitoring Committees under the European Regional Development and European Social Fund. The study reviews the rules and other approaches to deal with conflicts of interest, discusses best practices and ends with conclusions and recommendations advocating a complementary rule and value based approach supported by transparency and ethical leadership.

30/01/2016 PE 572.715 EN

This document was requested by the European Parliament's Committee on Budgetary Control. It designated Ms Martina Dlabajová (MEP) to follow the study. AUTHOR(S) Blomeyer & Sanz

Dr. Christoph Demmke (assisted by David Hanel), Roland Blomeyer, Dr. Thomas Henökel, Mike Beke, Timo Moilanen

RESPONSIBLE ADMINISTRATOR Ms Rita Calatozzolo Policy Department on Budgetary Affairs European Parliament B-1047 Brussels E-mail: poldep-budg@europarl.europa.eu LINGUISTIC VERSIONS Original: EN ABOUT THE EDITOR To contact the Policy Department or to subscribe to its newsletter please write to: poldep-budg@europarl.europa.eu Manuscript completed in January 2017. Brussels, © European Union, 2017. This document is available on the Internet at: http://www.europarl.europa.eu/studies

DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament.

Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy.

mailto:poldep-budg@europarl.europa.eu mailto:poldep-budg@europarl.europa.eu http://www.europarl.europa.eu/studies

Codes of Conduct and Conflicts of Interest at any governance level of the management of EU Funds ____________________________________________________________________________________________

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CONTENTS

CONTENTS 3

LIST OF ABBREVIATIONS 4

LIST OF TABLES 6

EXECUTIVE SUMMARY 7

1 INTRODUCTION 13

1.1 OBJECTIVES 13

1.2 METHODOLOGY AND IMPLEMENTATION SCHEDULE OF THE STUDY 15

1.3 STRUCTURE OF THE STUDY 17

2 FRAMEWORK OF CONFLICT OF INTEREST PREVENTION UNDER SHARED MANAGEMENT 18

2.1 THE EUROPEAN FRAMEWORK 19

2.2 MEMBER STATE RESPONSES 26

3 EFFECTIVENESS OF CONFLICT OF INTEREST PREVENTION 38

3.1 INTRODUCTORY COMMENTS 39

3.2 INTRODUCTION TO THE CONCEPT OF COI POLICY 40

3.3 THE MONITORING COMMITTEE EXPERIENCE WITH COI 43

3.4 EFFECTIVE TOOLS FOR PREVENTING COI 47

4 BEST PRACTICES 65

4.1 CASE STUDY NORWAY 67

4.2 GENERAL DISCUSSION OF BEST PRACTICE 71

5 CONCLUSIONS AND RECOMMENDATIONS 79

ANNEX 1: RESEARCH QUESTIONS 83

ANNEX 2: STAKEHOLDER CONSULTATIONS 86

ANNEX 3: LITERATURE 87

Policy Department D: Budgetary Affairs __________________________________________________________________________________________

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LIST OF ABBREVIATIONS

BG Bulgaria

CF Cohesion Fund

CoI Conflict of Interest

CPR Common provisions regulation1

CZ Czech Republic

DE Germany

DG Directorate General

DR Delegated Regulation

DG EMPL Directorate General Employment, Social Affairs and Inclusion

DG REGIO Directorate General for Regional and Urban Policy

EAFRD European Agricultural Fund for Rural Development

EAGF European Agricultural Guarantee Fund

EC European Commission

EE Estonia

EEA European Economic Area

EMFF European Maritime and Fisheries Fund

EP European Parliament

ERDF European Regional Development Fund

ES Spain

ESF European Social Fund

ESI Funds European Structural and Investment Funds

EU European Union

EUR EURO

FMO Financial Mechanism Office

1 Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006

Codes of Conduct and Conflicts of Interest at any governance level of the management of EU Funds ____________________________________________________________________________________________

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FR Financial Regulation2

MA Managing Authority (for the ERDF and/or ESF)

DG MARE Directorate General Maritime Affairs and Fisheries

MC Monitoring Committee (for the ERDF and/or ESF)

MS Member State

NL The Netherlands

NO Norway

NPM New Public Management

OECD Organisation for Economic Co-operation and Development

OLAF European Anti-Fraud Office

OP Operational Programme

PL Poland

RAP Rules of Application (of the Financial Regulation)3

SME Small and Medium-sized Enterprise

TFEU Treaty on the Functioning of the European Union

US United States

2 Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 3 Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union

Policy Department D: Budgetary Affairs __________________________________________________________________________________________

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LIST OF TABLES

Table 1: Case studies ............................................................................................................................................................ 16

Table 2: Study milestones .................................................................................................................................................. 16

Table 3: EC strategy and guidance documents .......................................................................................................... 25

Table 4: Codes of conduct / legislation on CoI, public administration .............................................................. 27

Table 5: OECD data on level of disclosure and public availability of private interests by the level of

public officials in the executive branch (0/low to 100/high) ....................................................................... 28

Table 6: Eurobarometer data on conflicts of interest and public procurement (% of respondents

considering conflicts of interest to be ‘widespread’ in the evaluation of bids in public

procurement) ................................................................................................................................................................ 29

Table 7: MC rules of procedure in Spain ....................................................................................................................... 36

Table 8: Examples of policy tools and instruments on the national level......................................................... 49

Table 9: Examples of European policy tools and instruments .............................................................................. 50

Codes of Conduct and Conflicts of Interest at any governance level of the management of EU Funds ____________________________________________________________________________________________

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EXECUTIVE SUMMARY

Introduction

The preparations for the 2014-2020 programming period have witnessed an increased concern over conflicts of interest (CoI) affecting the deployment of European Union (EU) funding under shared management. Promoting the introduction of CoI policies was considered an important element in strengthening the protection of the EU financial interests.

This study aims to understand how the Member State (MS) administrations involved in the shared management of EU funding, and more specifically the European Structural and Investment (ESI) Funds, ensure the integrity of relevant decision-making an