Croatia Country Profile

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Public Anti-Corruption Initiatives

• Legislation: Croatia ratified the United Nations Convention against Corruption in 2005, the Council of Europe Criminal Law Convention in 2000 and the Civil Law Convention on Corruption in 2003. However, there is no unified definition of corruption in Croatian legislation. In the Criminal Code (1998, amended 2003-2008), corruption-related offences include active and passive bribery, money laundering, illegal mediation, trading in influence, abuse of office and authorities, unfair competition in foreign-trade business operations, bankruptcy abuse, concluding harmful contracts, unauthorised acquisition of official secrets, and disclosing official secrets. According to the European Commission's Croatia Progress Report 2009, amendments to the Criminal Code have introduced new rules on confiscation of assets which reverse the burden of proof for persons convicted for organised crime or corruption offences. The Prevention of Money Laundering and the Financing of Terrorism Act 2008 expands on the Criminal Code to more directly target private sector corruption. Confiscation of the proceeds of crime and corruption is provided for by the Criminal Code and the Criminal Procedure Code. In December 2008, the government adopted a new Criminal Procedure Code that introduced new concepts of criminal procedure, including improvement measures for procedural rules and more efficient court procedures. The Law Preventing Conflicts of Interest in Public Office 2003 requires officials to report certain financial interests for themselves and for close family members and is supported by the Civil Servants Act, which outlines the rights and duties and code of conduct regarding conflicts of interest for government employees and transparency in hiring procedures for public office. In order to improve the framework of preventing conflicts of interest, and thereby reduce corruption risks, Parliament adopted Amendments to the Law Preventing Conflicts of Interest in Public Office (in Croatian) in May 2008. Croatia also passed a Law on Responsibility of Legal Entities for Criminal Offences 2003 (amended in 2007). However, only a small fraction of the many cases filed against legal entities have led to convictions. Corruption-related offences accounted for only 0.6% of the total convictions in criminal offences in the period from 1998 to 2004 and conviction rates continue to be low. Important laws on administrative practices, such as laws on giving and receiving gifts and laws governing instances of conflict of interest for public officials, are being implemented, and an administrative code of conduct is being drafted. Access the Lexadin World Law Guide for a collection of legislation in Croatia.

• Government Strategies: The Croatian government's National Anti-Corruption Programme 2006-2008 (NACP) contained an action plan that laid out a number of concrete measures and complimentary proponents to fight corruption. In the area of politics and public administration, the measures pertained to regulating the financing of political parties, prevention of conflict of interest, more objective employment criteria, safeguards against the abuse of power and enabling access to information, for which Croatia laid down the legal framework with the passing of the Act on the Right of Access to Information in 2003. According to the Regional Anti-Corruption Initiative Anti-Corruption Policy Implementation 2008, citizens are using this law, and the government implements it. For instance, in 2008, state bodies received 2,731 requests for information, of which only 103 were turned down based on legal grounds. As a long term objective, thorough reforms of the health and judicial systems are considered an efficient way to remove corruption in those sectors. Control of the work of local government and direct elections for local self-government bodies have been combined with a general strengthening of the transparency work of local self-government and the decentralisation process, as key measures for the prevention of corruption at the local level. A novelty in relation to the 2002 NACP was an explicit listing of measures for combating corruption in the private sector. The measures encouraged free market competition and accelerated privatisation in order to prevent arbitrary influence by the state on economic subjects and market competition. The NACP also provided for a special range of oversight measures and increased transparency in public procurement procedures. Measures requiring cooperation with international anti-corruption institutions and a public awareness campaign on the adverse consequences of corruption made up special components of the NACP. After it was first passed in the summer of 2008, the Croatian government launched the Anti-Corruption Strategy and Action Plan (revised 2010) as a follow up to the NACP, according to Vlada Republike Hrvatske. The Action Plan contains 145 anti-corruption measures and one of the measures is the implementation of the Anti-Corruption Program for Majority State Owned Companies for the Period 2010-2012, which aims at combatting corruption at all levels, and thus boosting transparency. According to the Ministry of Justice Analysis of the Implementation and Effectiveness of the Measures from the Action Plan of the Anti-Corruption Strategy 2010 (in Croatian), the government has also implemented training seminars on the Code of Judicial Ethics for judges, in order to prevent corruption and strengthen public confidence in the judiciary. As part of the Anti-Corruption Strategy and Action Plan, a HRK 2.36 million anti-corruption campaign called Corruption, this is not me was launched by the government. In addition, the Ministry of Justice has set up a national anti-corruption website (English version not as developed as the Croatian) where citizens can find information on how to report corruption cases.

• Anti-Corruption Agencies: Croatia has centralised the fight against corruption within one organisation, the Office for the Suppression of Corruption and Organised Crime (USKOK, in Croatian), with a broad political mandate to investigate, prosecute and prevent corruption based on its establishing legislation (in Croatian). Police and state prosecutors conduct investigations in the first instance and forward cases to USKOK if they suspect that corruption has occurred. According to Amnesty International 2010, the government set up four special anti-corruption courts named 'USKOK courts' in four different counties, tasked exclusively with the prosecution of corruption and organised crime cases. According to the GRECO Evaluation Report on Croatia 2009, over 1,000 cases of corruption-related offences were reported to law enforcement authorities in 2007, leading to over 400 indictments and 170 convictions. Since its inception, the USKOK has suffered from a number of problems. For example, the USKOK lacked premises in the beginning of its existence, and found it hard to recruit public prosecutors because the financial remuneration for working in this potentially high-risk area was simply too small. Three corruption cases implicating the USKOK itself have also weakened the institution and called into question its ability and commitment to fight corruption. According to the European Commission's Croatia Progress Report 2009, the USKOK continues to be active and has been able to investigate and issue indictments in major corruption cases, such as in cases involving a former Minister of Defence and a High Commercial Court judge. Nonetheless, the report emphasises that the USKOK still lacks a culture of political accountability for the corruption being uncovered. According to the Regional Anti-Corruption Initiative Anti-Corruption Policy Implementation 2008, the jurisdiction of the USKOK has been widened. Moreover, as part of a new Anti-Corruption Strategy launched in 2009, USKOK judges have been introduced by the government. These judges will contribute to the speed of solving cases, according to a March 2009 article by Javno. At the end of September 2009, a new National Police Office for Suppression of Corruption and Organized Crime (PNUSKOK) was created by the Prime Minister. The office has been set up in line with the government's strategy for the fight against corruption and organised crime.

• National Council for Monitoring Anti-Corruption Strategy Implementation (National Council): The National Council was created as a special parliamentary committee headed by Prime Minister Jadranka Kosor with the purpose of coordinating the implementation of the Anti-Corruption Strategy and Action Plan. It is charged with evaluating corruption risks and proposing and designing preventative measures, as well as improving the efficiency of implementation measures and the strengthening of inter-agency cooperation in this regard. The National Council regularly analyses the corruption data provided to it by implementing bodies. The National Council's composition includes parliamentary deputies, civil society representatives dealing with corruption issues, as well as media representatives. The National Council reports to Parliament annually about its work - see the National Council's May 2008-May 2009 report. According to the European Commission's Croatia Progress Report 2009, the work of the National Council has become more proactive, and it has begun to regularly hold public debates and hearings on measures to prevent corruption.

• Committee for the Prevention of Conflicts of Interest (CPCI): The CPCI was established by Parliament in 2004. The CPCI acts on the basis of the Act on Prevention of Conflict of Interest in the Exercise of Public Office and other provisions. The main functions of the CPCI include assessment of whether a certain activity is in compliance with the principles of public office. This is usually done on a demand of an official or other person. Citizens can anonymously report their suspect on conflict of interest to the CPCI. According to the European Commission's Croatia Progress Report 2009, while the CPCI has issued guidelines for public officials, there has been little progress in preventing conflicts of interest. The CPCI was re-established after a period of interruption but has not established a strong preventive role for itself, as assessed by the the EC's report. Access the CPCI's 2008 report (in Croatian).

• Office of the Ombudsman: The Office of the Ombudsman mainly deals with complaints from the public about maladministration or abuse of power by government authorities and offices. The Ombudsman institution is secured in the constitution (Art. 92) and regulated by the Law on the Ombudsman 1992. The Ombudsman is appointed by the Parliament with a mandate to protect the constitutional and legal rights of citizens in proceedings before the state administration and bodies vested with public authority. In general, the Ombudsman does not take on cases that are subject to legal proceedings. Apart from individual cases, the Ombudsman may also initiate investigations into matters that pertain to constitutional and legal rights raised by the media. The Ombudsman institution is supposedly independent; however, according to the Transparency International Croatia National Integrity System 2007, there have been several attempts to influence the Ombudsman's decisions in cases of human rights violations - attempts that have reduced the credibility of the institution. Moreover, the Ombudsman's proposal that the office's resources should be increased has been ignored for several years now by the government. Annual reports by the Ombudsman have been published on the Ombudsman's website.

• Auditor General: The State Audit Office (SAO) is authorised through the State Audit Act to oversee how the budget is executed. Its basic task is to audit financial transactions within the public sector. In addition to this, the SAO conducts audits in connection with ownership transformation and privatisation processes in order to make sure that all legal requirements are upheld. In an effort to strengthen itself as an institution and its competencies, the SAO is cooperating with the National Audit Office of the United Kingdom. The aim of this EU-financed project is to bring the Croatian SAO in line with international standards.

• E-Governance: Information on starting a company in Croatia can be found on the Croatian e-governance website. This web portal is designed as a one-stop shop for companies to deal with government on topics such as taxes, pensions, business registration, etc. The portal became operational in 2005, and significantly reduces the time it takes to conduct standard business operations. As a further service, a free information hotline is maintained. Another e-governance initiative is the e-Croatia Programme, created in 2003 to constitute a group of e-projects implemented within state government bodies and coordinated by the Central State Administrative Office for e-Croatia. The e-Croatia programme includes useful information on among others e-tax, e-customs, e-judiciary, and e-health. Other useful operational resources for companies in Croatia are the Trade and Investment Promotion Agency and the Croatian Chamber of Economy, which has issued pamphlets and reports on starting a company in the country. The Trade and Investment Promotion Agency is active in advising the government on how to make Croatia's regulatory environment more transparent and competitive. The website of the Croatian Chamber of Economy provides a useful English-language guide, How to Start Up an Enterprise in Croatia, as well as sector-specific and general reports.

• Public Procurement: In preparation for Croatia's potential EU membership, the Public Procurement Office is working with a consortium of partners towards aligning Croatian legislation and procedures with the EU public procurement system. Public procurement in Croatia is administered by the Public Procurement Office (English version not as developed as the Croatian) and governed by the Public Procurement Act 2007 and the Act on Amendments to the Public Procurement Act 2008. The amended act is completely harmonised with EU public procurement directives and provides for greater transparency with the introduction of electronic auctions, definitions of special procurement procedures and framework agreements, as well as publication of all procurement procedures over USD 14,000. On the Public Procurement Office website, companies will find a list of procurement regulations, tender announcements, forms, contact information for its call centre and other services. Major procurements over USD 3,000 are published in the Official Gazette. Article 20 of the Act on the State Commission for Supervision of Public Procurement Procedure 2010 guarantee transparency of the appellate procedure. According to the European Commission's Croatia Progress Report 2009, although the necessary institutional set up has been established making the management of public procurement policy more coherent and in a coordinated approach, further legislative alignments are needed, and administrative capacity remains to be improved at all levels of the procurement system.

• Whistle-Blowing: The Witness Protection Act 2003 provides for whistleblower protection, although it is very vaguely formulated. In December 2009, the Croatian Parliament passed the new Labour Act, which contains a provision securing whistleblower protection against dismissal for individuals who have reported an instance of corruption in good faith. Also, the burden of proof is now on employers. According to the Civil Service Act 2005 (amended in 2007 and 2008), Article 4, Paragraph 2, the Labour Act also applies to civil servants, thus indirectly providing civil servants with whistleblower protection. The Ministry of Interior has set up an e-mail and telephone service for citizens to report corruption in the public service.

• General Comments on the Public Anti-Corruption Initiatives: In March 2006, the Croatian Parliament adopted the National Anti-Corruption Programme 2006-2008, realising that corruption was viewed by the EU as an obstacle to Croatian accession. A new Anti-Corruption Strategy has been launched by the government in February 2009. According to Javno, with new laws being passed, all legal preconditions for combating corruption have been secured. The exposure of corruption in the Croatia Privatization Fund and subsequent arrest of the perpetrators also gives an impression that the government is actively engaged in fighting corruption. However, the underlying population's pessimistic outlook concerning levels of corruption remains a major problem, since government anti-corruption initiatives are deemed inadequate by the population. According to the European Commission's Croatia Progress Report 2009, Croatia's legal framework for combating corruption has improved, and the USKOK continues to be active - for instance, it has issued indictments in some important cases. Nonetheless, as specified by the report, corruption continues to be prevalent in many areas, and tools to combat it are not being used with sufficient vigour, particularly, in regards to political corruption.