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					THE MINISTRY OF INTERIOR OF THE CZECH REPUBLIC

          SECURITY POLICY DEPARTMENT




REPORT ON CORRUPTION IN THE CZECH REPUBLIC IN 2002
    AND ON MEETING THE SCHEDULE OF MEASURES
     ADOPTED BY THE GOVERNMENT PROGRAMME
          FOR FIGHT AGAINST CORRUPTION




                     PRAGUE

                       2003
2
                            THE GOVERNMENT OF THE CZECH REPUBLIC




                                      GOVERNMENT DECREE

                                       No. 473 of 19th May 2003

    on Report on Corruption in the Czech Republic in 2002 and on Meeting the Schedule of
       Measures Adopted by the Government Programme for Fight against Corruption




The Government

       I. a p p r o v e s the Report on Corruption in the Czech Republic in 2002 and on Meeting the
Schedule of Measures Adopted by the Government Programme for Fight against Corruption

        II. c h a r g e s

        1.       members of the Government and Heads of the other central government
                 administration bodies and the Director of the Security Intelligence Service to fulfil the
                 Updated Government Programme for Fight against Corruption attached hereto as an
                 appendix to this Decision;

        2.       the 1st Deputy Prime Minister and the Minister of Interior shall
                 a)       co-ordinate the preparation of anti-corruption measures in the Czech Republic;
                 b)       submit to the Government by 30th April 2004 the Report on Corruption in the
                          Czech Republic in 2003

        III.     recommends to the Governor of the Czech National Bank, President of the Supreme
                 Audit Office, Chairman of the Office for Protection of Economic Competition,
                 President of the Office for Personal Data Protection and to Presidents of the Regional
                 Authorities to participate in the implementation of this Decree.

To be implemented by:

members of the Government
and Heads of central government administration bodies
Director of the Security Intelligence Service


Copy to:

President of the Office for Personal Data Protection
Presidents of the Regional Authorities


                                                        Prime Minister
                                                    PhDr. Vladimír Špidla



                                                    3
Appendix to Government Decree No. 473 of 19th May 2003 regarding the Report on Corruption in
the Czech Republic in 2002 and on Meeting the Schedule of Measures Adopted by the Government
Programme for Fight against Corruption

Updated Government Programme for Fight against Corruption

A.     Legal Framework

1.     During the preparation of the Tax Administration Offices Act, Customs Administration Act
       and the Tax Code or other laws and regulation

       a)      to ensure that the tax administration offices are granted the authority to check whether
               the statements included in property returns of persons under obligation of the law to
               submit such returns are true, and a general authority to request from taxpayers proof of
               the origin of income;

       b)      to allow specialised Police bodies dealing with serious economic crime, corruption
               and organised crime access to information in tax proceedings without the restriction
               that has been imposed until now in Section 24 of Act No. 337/1992 Coll. on
               Administration of Taxes and Charges

       Responsible body: the Minister of Finance
       Review date: 31st December 2003

2.     To consider, as part of the re-codification of Private Law, the following suggestions:
       a)     ensure the right to initiate an action against corrupt and illicit competition practices
              also to legal persons which defend the interests of competitors and consumers
       b)     allowing the prosecution of corrupt and illicit competition practices with effects
              abroad.
       Responsible body: the Deputy Prime Minister and Minister of Justice
       Review date: 31st December 2003

3.     To analyse the possibilities of establishing a register of at least some administrative
       punishments (e.g., those imposed for the violation of administrative laws regarding order in
       the state administration and self-administration, public tenders, disciplinary punishments for
       breach of duties in the exercise of state administration), and to propose to the Government
       possible legislative or organisational solutions.
       Responsible body: the 1st Deputy Prime Minister and Minister of Interior in co-operation with
       other Members of the Government
       Review date: 31st December 2003

4.     To consider, as part of the re-codification of substantive Criminal Law (or of the preparation
       of partial amendments to the Criminal Code)
       a)       defining the failure to report and to thwart crimes of a corrupt nature as a punishable
                offence;
       b)       modification of the definition of conditions concerning effective repentance with
                respect to bribery;
       c)       defining (if possible) unfair competitive bribery as a separate criminal offence and
                limiting at the same time the existing conditions of prosecution of the criminal offence
                of unfair competition
       Responsible body: the Deputy Prime Minister and Minister of Justice
       Review date: 31st December 2003




                                                   4
5.   To submit a draft amendment to Act No. 238/1992 Coll. on Certain Measures Relating to the
     Protection of Public Interest, or a legal factual intention of a new act on the protection of
     public interest in a manner
     a)      expanding personal jurisdiction of such an act;
     b)      ensuring that a designated state institution is granted the authority to check whether
             the property returns of persons under obligation to submit such returns when the
             assumption and exercise of an office are true;
     c)      determining new forms of sanctions for breach of this regulation, other than the
             publication of information about such a breach (e.g., a fine in the case of members of
             the Government, removal from office by a Supreme Court verdict in the case of
             certain state administration employees, etc.)
     Responsible body:        the Deputy Prime Minister and Chairman of the Legislative Council
                              of the Government in co-operation with the 1st Deputy Prime Minister
                              and Minister of Interior
     Review date: 31st December 2003

6.   To indicate in the existing regulations and when drafting new regulations any legislative
     sources of corrupt practices (too vague public laws and regulations, excessive concentration of
     decision-making powers in the hands of a single person without the possibility of independent
     (external) control, ineffective regulation, construction of processes that are not adequate, as to
     their material and timing aspect, to the matter that is being resolved, absence of sanctions for
     exceeding one's powers, absence of controlling mechanisms), and to ensure their removal.
     Responsible body: all members of the Government
     Review date: 31st December 2003

7.   To make use of conclusions and suggestions resulting from the assessment of controlling
     activities in public procurement specified in Chapter 3 of the Report on Corruption in the
     Czech Republic in 2002 during the preparation of new legislation relating to public
     procurement or of any related laws.
     Responsible body: the Minister for Regional Development
     Review date: 31st December 2003

8.   To complete and submit to the Government an analytical paper regarding the possible use of
     integrity tests in the Czech Republic in relation to the possibility of using available
     instruments of criminal law in the documentation of crimes of a corrupt nature.
     Responsible body: the 1st Deputy Prime Minister and Minister of Interior in co-operation with
     the Deputy Prime Minister and Minister of Justice, the Deputy Prime Minister and Minister of
     Foreign Affairs and the Minister of Informatics
     Completion date: 31st August 2003




                                                 5
B.   Organisational measures

1.   To indicate within the scope of powers of individual ministries the sources and forms of
     corrupt practices; to analyse them, prepare and continuously update the anti-corruption
     programmes of ministries, containing specific organisational and technical measures to
     combat corruption within the competencies of individual state administrative bodies. To create
     conditions for informing citizens about their rights when dealing with public authorities.
     Responsible bodies: Heads of all central government administration bodies.
     Completion date: continuously with the review date on 31st December of each year

2.   To draw up, based on applicable laws, agreements between the Police of the Czech Republic
     and controlling (especially financial) institutions in order to improve the quality of co-
     operation, including communication, and ensuring the exchange of information essential for
     their activities.
     Responsible bodies: the 1st Deputy Prime Minister and Minister of Interior in co-operation
     with the Minister of Finance, the Governor of the Czech National Bank and other Heads of
     central administrative authorities
     Completion date: continuously with the review date on 31st December of each year

3.   To inform the Government on the prepared systemic measures for preventing corruption in
     commercial justice, in particular with respect to bankruptcy and composition and register
     courts
     Responsible body: the Deputy Prime Minister and Minister of Justice
     Completion date: 31st August 2003

4.   To submit to the Government a specific proposal of systemic measures for preventing
     corruption in the activities of cadastral offices.
     Responsible body: the President of the Czech Office for Surveying, Mapping and Cadastre
     Completion date: 31st August 2003

5.   To support the activities of parliamentary investigative commissions focusing on the
     investigation of particularly serious cases of corrupt conduct
     Responsible bodies: all members of the Government
     Completion date: continuously with the review date on 31st December of each year

6.   To inform the Government within 60 days of the publication of each report of the Supreme
     Audit Office in the Supreme Audit Office Bulletin on adopted remedial measures, and to
     assess such measures within 6 months of their adoption.
     Responsible bodies: all Heads of central government administration bodies, Director of the
     Security Intelligence Service
     Completion date: continuously with the review date on 31st December of each year

7.   To submit to the Government an analysis of the possibilities for using cashless payments in
     the levying of on-the-spot fines, which would establish an appropriate record-keeping method
     and a proper procedure of issue, collection and acceptance of financial amounts of fines issued
     as punishment imposed in administrative proceedings.
     Responsible bodies: the 1st Deputy Prime Minister and Minister of Interior in co-operation
     with the Minister of Finance
     Completion date: 30th November 2003

8.   To prepare operational and technical conditions for public procurement by means of electronic
     media.
     Responsible body: the Minister of Informatics in co-operation with the Minister for Regional
     Development
     Completion date: 30th September 2004

                                               6
9.    To support activities of non-governmental organisations involved in combating corruption
      (e.g., Transparency International). To agree with these organisations on the method, form and
      scope of co-operation.
      Responsible body: the Deputy Prime Minister for Science and Research, Human Rights and
      Human Resources
      Completion date: continuously with the review date on 31st December of each year

10.   To support all forms of scientific research concerning corruption. To periodically perform
      surveys in order to compare the data resulting from consecutive surveys. To publish the results
      of those surveys. To support (for instance, in the form of grants) independent journalistic and
      documentary activities revealing corrupt practices.
      Responsible bodies: the 1st Deputy Prime Minister and Minister of Interior in co-operation
      with the Deputy Prime Minister and Minister of Justice, the Minister of Culture, the Minister
      of Education, Youth and Sports and other members of the Government
      Completion date: continuously with the review date on 31st December of each year

11.   To systematically monitor, within its competencies, any manifestations of corruption in public
      administration, to transfer specific information to bodies active in criminal prosecution and to
      provide general information about forms of corruption and its grounds existing within the
      system to the Government
      Responsible body: Director of the Security Intelligence Service
      Completion date: continuously with the review date on 31st December of each year

12.   To ensure appropriate training for competent bodies in the use of operative instruments for
      detecting and investigating corruption; to organise joint investigative training for Police units
      involved in combating corruption
      Responsible bodies: the 1st Deputy Prime Minister and Minister of Interior in co-operation
      with the Deputy Prime Minister and Minister of Justice
      Completion date: continuously with the review date on 31st December of each year

13.   To inform the 1st Deputy Prime Minister and Minister of Interior about the implementation of
      tasks with the review date of 31st December and of other adopted measures in accordance with
      the chart specified in Annex No. 1 of Government Decree No. 144/2001.
      Responsible bodies: all members of the Government and Heads of other central government
      administration bodies, Director of the Security Intelligence Service
      Completion date: 31st January 2004


C.    International co-operation

1.    To monitor the results of activities carried out by international and supra-national
      organisations (GMC within the Council of Europe, UCLAF within the European Commission,
      Interpol, UN, Transparency International, the International Monetary Fund, the World Bank,
      Organisation for Economic Co-Operation and Development) in combating corruption and to
      inform other ministries about them. To facilitate the exchange of information about those
      activities among concerned domestic organisations. To participate actively in events relating
      to combating corruption which are organised by those and by other organisations.
      Responsible body: the Deputy Prime Minister and Minister of Foreign Affairs in co-operation
      with the Minister of Finance, the 1st Deputy Prime Minister and Minister of Interior and the
      Deputy Prime Minister and Minister of Justice
      Completion date: continuously with the review date on 31st December of each year




                                                 7
8
   THE MINISTRY OF INTERIOR OF THE CZECH REPUBLIC

                     SECURITY POLICY DEPARTMENT




 REPORT ON CORRUPTION IN THE CZECH REPUBLIC IN 2002
AND ON MEETING THE SCHEDULE OF MEASURES ADOPTED BY
   THE GOVERNMENT PROGRAMME FOR FIGHT AGAINST
                    CORRUPTION




Donť hesitate to visit the Internet sites of the Ministry of Interior of the Czech Republic
                   at: http://www.mvcr.cz (and follow the symbol „ “)
 Any suggestions or comments regarding the issue of corruption in the Czech Republic
               can be mailed to the following address: korupce@mvcr.cz



                                             9
TABLE OF CONTENTS


1 Introduction ……………………………………………………………………………………………… 11
2 Definition of corruption and overview of the development of offences related to corruption; Criminal
     offences of public officials in 2002 ..……….………………………………………………………. 12
     2.1 Definition of corruption
     2.2 Corruption and its legal recourse in the Penal Law
     2.3 Development of the individual offences related to corruption
     2.4 Criminal offences of the Police officers
     2.5 Conclusion
3 Overview of anti-corruption measures implemented in 2002; Update of the Government
     Programme for Fight against Corruption adopted by the Government Decree No. 125
           th
     of 17 February 1999 .............................................................................................................. 25
     3.1 Legislative measures
             3.1.1 Penal Law
             3.1.2 Law of Criminal Procedure
            3.1.3 Position of tax administrations as independent state bodies for financial inspection,
                    declaration of assets
             3.1.4 Re-codification of Private Law
             3.1.5 Legal immunity of members of the Parliament of the Czech Republic
             3.1.6 Conflict of interests
             3.1.7 Reform of administrative punishment and administrative proceedings
             3.1.8 Jurisdiction of the Public Prosecutor’s Office
             3.1.9 Commissioning of public orders
     3.2 Organisational sphere
             3.2.1 Conduct of public employees
             3.2.2 Preventive activity and public relations sphere
             3.2.3 Agreements between the Police of the Czech Republic and inspection (especially
                   financial) institutions in order to improve the quality of their mutual cooperation,
                   including their communication, and to ensure exchange of information necessary
                   for their activities
             3.2.4 Detected cases of corruption in jurisdictions of individual ministries
             3.2.5 Support of scientific research on corruption
      3.3 Educational sphere and influence of the media
      3.4 International co-operation
             3.4.1 International legal instruments on corruption – state of their ratification
             3.4.2 Activities of the Czech Republic within international organisations
4 Other measures taken in order to eliminate offences related to corruption .………………......... 56
     4.1 Activities of the Ministry of Finance
     4.2 Activities of the Ministry of Defence
                                                                                                                      th
5 Evaluation of fulfilment of tasks arising from the Government Decree No. 391 of 17 April 2002,
     on the Report on Corruption in the Czech Republic in 2001 .…………………………………... 59
    a) Tasks assigned to the Minister of Interior
    b) Tasks assigned to the Minister of Finance
    c) Task assigned to all members of the Government and the Director of the Security Intelligence
         Service)
6 Activities of the non-governmental organisation Transparency International Czech Republic .. 67
7 Public opinion polls ………………………………………………………………………………........ 69
8 Conclusion …….……………………………………………………………………………………...... 70




                                                                   10
                                   1       INTRODUCTION


         The anticorruption policy has been one of the priorities of the Government of the
Czech Republic since 1998. In its Decree No. 125, of 17th February 1999, the Government
acknowledged the Government Programme for Fight against Corruption and assigned to the
members of the Government and directors of the central administration bodies certain tasks
whose fulfilment should prevent corrupt behaviour in the society from spreading further.
         The Government is regularly informed about the fulfilment of the tasks arising from
the Government Programme for Fight against Corruption. The Report on Corruption in the
Czech Republic in 2001 and on Meeting the Schedule of Measures Adopted by the
Government Programme for Fight against Corruption was approved by Government Decree
No. 391 on 17th April 2002. The Report on Corruption in the Czech Republic in 2002,
which follows up the previous reports on corruption, is now being submitted. The report
informs about the fulfilment of the Government Programme for Fight against Corruption and
tasks arising from the Report on Corruption in the Czech Republic in 2001, and about other
quantitative, as well as qualitative development of the fight against corruption in the Czech
Republic. The Report puts great emphasis on the evaluation of the situation in bribery and
criminal activities of public officials during the relevant period. The Report uses data from
statistics of the Ministry of Interior and Ministry of Justice, which are attached as an addition
to the data from public opinion censuses.

        Many tasks specified in the programme have been fulfilled, such as changes in the
Penal Code and the Code of Criminal Procedure, stronger focus on the specialisation of
bodies involved in the fight against corruption, and a change of the system of financing
political parties. Since 1997 the process of accession to the European Union has been one of
significant factors influencing the anticorruption policy in the Czech Republic. Regular
evaluation reports of the European Commission describe corruption as one of the main
problems of institutions in the Czech Republic and require continuous improvements in the
state’s anticorruption policy. These factors strengthen the will to continue in creation of
further anticorruption measures and support the reform of authorities active in investigation of
corruption within criminal proceedings, which is an area where the European Union has
provided significant direct help.

        Anticorruption policy is also applied by some other international organisations, which
include especially the Council of Europe, an organisation very closely associated with the
European Union. The Council of Europe created a set of general anticorruption so-called
“governing principles”, active and functional framework for monitoring of their fulfilment –
the Group of States against Corruption (GRECO), and two anticorruption conventions –
Criminal Law Convention on Corruption and Civil Law Convention on Corruption. The
Czech Republic has been a member of GRECO since the 8th February 2002; the country takes
part in evaluation of anticorruption measures introduced in member states and ensures smooth
course of evaluation of the Czech Republic. The significant anticorruption activities within
the process of accession to the EU also include the joint programme of the Council of Europe
and the European Union - OCTOPUS, which provides help to all candidate countries in
taking measures for fight against organised crime and corruption.




                                               11
          2 D E F I N I T I O N O F C O R R U P T I O N A N D O V E RV I E W O F T H E D E V E L O P M E N T O F
    O F F E N C E S R E L AT E D T O C O R R U P T I O N ; C R I M I N A L O F F E N C E S O F P U B L I C O F F I C I A L S
                                                          IN 2002




2.1         Definition of corruption1

        Corruption (from the Latin “corrumpere” = spoil, corrupt, bribe, graft) is an
expression that does not have a uniform definition; however, in the broader (Anglo-Saxon)
concept the most frequently used definition is the definition made by Joseph Nye: „behavior
which deviates from the normal duties of a public role because of private-regarding (family,
close clique), pecuniary or status gain; or violates rules against the exercise of certain types
of private-regarding influence.“2 Corruption includes bribery (a reward for different
interpretation or a change of decision by an official person), nepotism (favouring persons on
the basis of their family or friendly relationships, rather than on the basis of their merits)3
and fraud as illegal acquisition of public funds for private purposes. Sometimes the “formal
duties” of the society in the definition of corruption are replaced by norms and the constituent
elements include “damage to the society”. In a narrower (European) concept corruption means
behaviour that results in a certain exchange between an official and a person who is offering
certain advantage to this official; this advantage is not necessarily of a financial character. In
this conception corruption includes also active and passive bribery and nepotism.
        Corruption could be divided into “market” corruption, i.e. selling power illegally, and
“parochial” corruption, with prevailing traditional connections (family relationships,
clientelism4, acquaintances, etc.). Also moral condemnation of corruption develops together

1
   For more details see „Velký sociologický slovník” (Large Sociologic Dictionary), Charles University,
Karolinum Publishing, Prague 1996.
2
  Nye, J., S., Corruption and Political Development: A Cost-Benefit Analysis. American Political Science
Review, vol. 61, 2 / 1967, p. 417-427.
3
   Nepotism (from the Italian “nepos” = grandson, nephew) is a method of enforcing, strengthening and
extending influence of an important person on structures in the society through promoting one’s own relatives or
favourites into lucrative and influential positions and roles. The principle of nepotism may be applied within a
state, location, company, or any other institution. It is one of the mechanisms that change originally democratic
and open institutions into oligarchic institutions. These days this phenomenon is common especially in
developing countries. However, it appears that no country is completely immune to nepotism. In certain partial
social structures, such as the “mafia” type structures, nepotism is one of the basic methods of exercising power
and influence and building the organisation. The continuous conflict between the principles of nepotism and the
principles of performance is usually solved in a number of ways, mainly by marriage or adoption. These methods
allow the clan to integrate competent people from the outside into the clan and bind them with family solidarity.
However, the principle of nepotism is clearly incompatible with democracy.
4
  Clientelism (from the Latin “cliens” = obedient) is a social institution based on the relationships between
dependent clients and their patron. The most significant characteristic of the client relationship is the
acknowledged inequality of the involved parties. This type of a relationship is also reciprocal; each one of the
parties has certain duties towards the other, although their importance is usually unmatched. The relationship is
strictly personal, usually with very strong emotional motivation, and influenced by the idea of loyalty, which
makes it very different from the market-type impersonal relationships. The relationship does not have any
contractual basis and is often only partially legal, which distinguishes it from relationships regulated by public
law, although its importance for the structure of public life is usually significant. The paradoxical combination of
mutual loyalty and uncompromising inequality does not prevent either of the parties to maintain this relationship
voluntarily. The fact that this undemocratic institution is widely spread in traditional, as well as modern societies
proves its significant strength. Clientelism as a social phenomenon was analysed in various stages of antiquity,
during feudalism in and outside Europe, in the times of absolute monarchies, in the British political system of the
18th century, currently especially in Mediterranean countries, Latin America, Southeast Asia and Japan.
This very specific form of social exchange is carried out in a totally non-market manner; its character does not
allow the involved parties to calculate their profit and expenses, its strictly personal character excludes the

                                                              12
with processes that form civic society. This is conditioned on the general acceptance of free
will of an individual and the recognition of binding rules for conduct of the official.
        Corruption is explained by many reasons. In general, literature mentions 5 categories
of causes:
1. Social change, especially transition from a traditional society to modern;
2. Deficits in the development of the society, which result in differences in incomes, political
   power as a condition for acquiring wealth, changes in moral norms, weakness of the state
   and lack of sense of national society;
3. Monopolist position of the state, which results in the creation of “state classes”;
4. Economic factors that create discrepancy between supply and demand;
5. Socio-psychological reasons caused by individual or group characteristics.
        While corruption is seen as pathologic behaviour in the politics developed countries, it
is a wide spread phenomenon in third world countries and former socialistic countries.
Corruption often causes scandals, or even more significant crises in the society or take-overs.

        For the purposes of this document corruption can be described as abuse of authority
connected with a breach of the principle of fairness in decision-making, motivated by a desire
to profit. Corruption is a sign of an error in a decision-making (controlling) process. A corrupt
relationship includes a decision-maker, his power to deviate from the determined rules,
exchange of this deviated decision for a certain advantage, and the wrongfulness (illegality,
amorality) of this exchange. Institutions’ ability to fight and prevent corruption is also an
indicator of the quality of the particular institutions and the institutional system as a whole.

      Corruption can jeopardize the existence of democratic institutions and market
economies. It also jeopardizes the state’s internal, as well as external safety.

2.2      Corruption and its legal recourse in the Penal Law

        Although criminal legal norms of the Czech Republic do not define corruption as a
separate offence, the current legal regulation is able to support the fight against corruption.
This applies especially to offences stated in the third chapter of the special part of the Penal
Code, referred to as “offences against the order in public affairs”. Especially the third section
of this chapter – “bribery” includes those offences that have all elements of corruption. The
offences mentioned here are the following: Art. 160 – accepting a bribe, Art. 161 – bribery,
and Art. 162 – indirect bribery. The immunity from prosecution provided in Art. 163 of the
Penal Code as a special provision on effective repentance is supposed to motivate people who
were asked for a bribe and provided or promised to provide this bribe to report this criminal
activity immediately to the relevant authorities. Apart from bribery our legal system also
includes some other merits of a offence that define corrupt behaviour. As the main danger of

possibility to regulate prices of the services exchanged. The patron’s input is usually protection of the dependent
clients and the clients on the other hand increase the patron’s influence by their loyalty. Client relationships act
as substitute of the market in the distribution of services and assets, which as a rule are not accessible for
everybody. This applies especially to uneven distribution of power – political clientelism. The category of
“brokers” plays a very important role. These are persons who do not control directly the desired sources but have
strategic contacts to those people who control these sources.
In the modern form of clientelism a more instrumental and pragmatic element of the relationship becomes more
pronounced, which allows the clients to participate in privileges controlled by the patron without being involved
emotionally. In this situation clientelism survives in patronage and acquaintances as forms of non-market
distribution of assets and services.


                                                        13
corruption is without any doubt in public administration in general, i.e. including legislative
and judicial power, especially certain offences of public officials according to the second
section of the third chapter of the special part of the Penal Code – abuse of authority of a
public official (Art. 158) and obstruction of official’s tasks due to negligence (Art. 159) are
important in the fight against corruption. The following offences can also be included in the
offences with the indicators of corrupt behaviour: breaches of regulations on handling
controlled goods and technologies according to Art. 124a, breaches of person’s duties in
bankruptcy proceedings according to Art. 126, breaches of person’s duties in administration
of other people’s property according to Art. 255, misappropriation of information in business
contact according to Art. 128, machination in a tender or in a public auction according to Art.
128a to 128c of the Penal Code, and some other merits of a offence included in the second
chapter of the special part of the Penal Code.

2.3     Development of the individual offences related to corruption

        The following overview states offences recorded in the Police statistics, such as
bribery, abuse of authority of a public official, obstruction of official’s tasks due to negligence
(however, only some of these offences can be described as corruption), and some other
offences with elements of corruption. The overview also includes criminal activities of
employees in control and administration sectors recorded in the Police statistics (This
monitored statistical category allows better description of the criminal activities of “public
officials” defined in the Penal Code – with the exclusion of police officers who are monitored
and mentioned in this report separately)5. A list of persons convicted of selected offences
according to the judicial statistics is added to the Police statistics.

         The Police statistics in the relevant year is not directly comparable to the statistics of
the Ministry of Justice, which manages statistics of public prosecutors’ and courts. This is due
to the time difference (sometimes a number of years) between the closures of a particular
criminal case in the individual stages of the criminal proceedings. The Police statistics record
the individual cases at the beginning of the criminal proceedings, and the judicial statistics
record the same case at the end of the proceedings. Another reason is the fact that Police
statistics record even offences committed by an unknown offender as detected offences. Since
2002 the Police statistics have also been recoding the numbers of reported commencements of
criminal proceedings, thus providing more accurate data on the actual workload of the Police
compared to the data on detected offences.
         The ascertained offences are recorded in the criminal statistics according to reports of
operatively detected circumstances that suggest that a offence has been committed submitted
5
  Employees in the control and administration sectors are defined according to the code-list of the System for
Statistical Records of Crimes of the Police of the Czech Republic and include the following categories: 1)
employees of state (central) bodies and community organisations of representations abroad (with the exception
of employees in economic management and administration); 2) employees of courts, public notary’s office,
public prosecutor’s office, arbitration (with the exception of employees in economic management and
administration); 3) managing staff of economic organisations (directors, deputies, chairmen of cooperatives and
deputy chairmen); 4) economic staff (planning, statistics, accountancy, finance, costs, prices, inspection, banking
industry, insurance, economy); 5) specialised staff of organisations, control and information technology
(programmers, operators, specialised officials, staff working on machinery, etc.); 6) specialised staff in
commercial sectors of travel industry, accommodation, public catering and transport (suppliers, purchasers,
commodity expert, specialised warehousing staff, specialised staff in postal services, telecommunication and
transport); 7) administrative staff (specialised administrative staff, treasurers, secretaries, telephone operators
and other administrative staff); 8) employees in the public administration sector, including elective officials of
municipalities; 9) customs officers; 10) other control and administration staff.



                                                        14
by citizens or the Police of the Czech Republic. The Police statistics record as detected
offences those cases where criminal-law qualification has been established and a concrete
person reasonably suspected of committing the relevant offence is known, i.e. those cases
where the offender has been notified of the criminal charge, or the offender would have been
notified of the criminal charge, if the offender was criminally liable, or the person was
notified of a suspected offence6. Persons suspected of committing a offence are recorded in
the Police statistics as “prosecuted and investigated persons”7.

Number of ascertained and detected offences related to corruption in the Czech
Republic:
              Art. 158         Art. 159           Art. 160        Art. 161          Art. 162       Bribery total
    Year
               Abuse          Obstruction      Accepting bribes   Bribery       Indirect bribery
            of authority   of official’s tasks
             of a public   due to negligence
               official

           Ascert. Detected Ascert. Detected Ascert. Detected Ascert. Detected Ascert. Detected Ascert. Detected
    1993    189      144       5       4       52      52      127      123      7        7      186      182
    1994    321      299      21      20       54      53      138      138      2        2      194      193
    1995    370      355       7       7       77      77      200      197      3        3      280      277
    1996    334      325      23      23       51      50      185      185      6        6      242      241
    1997    356      354      16      16       40      39      107      105      8        8      155      152
    1998    365      346      16      15       49      50      138      137      4        4      191      191
    1999    403      384      19      16       55      55      109      109      3        3      167      167
    2000    367      350      18      18       38      37      133      131      3        3      174      171
    2001    390      381      18      18       28      28      171      171      4        4      203      203
    2002    376      269      33      31       48      38      116      109      7        6      171      153


        In 2002 the Police of the Czech Republic recorded the total of 171 cases related to
bribery (of which 48 offences of accepting a bribe, 116 bribe cases and 7 cases of indirect
bribery), 376 cases of abuse of authority of a public official and 33 cases of obstruction of
official’s tasks due to negligence. In comparison to 2001 the number of ascertained cases of
bribery slightly decreased (-32 offences), the number of cases of abuse of authority of a public
official also decreased slightly (-14 offences), and the number of cases of obstruction of
official’s tasks due to negligence increased (+15 offences).
        Offences with elements of corrupt behaviour can also include breaches of person’s
duties in bankruptcy proceedings according to Art. 126 – 387 cases recorded in 2002 (an
increase by 233 cases compared to 2001), breaches of person’s duties in administration of
other people’s property according to Art. 255 – 514 cases recorded (an increase by 344
compared to 2001), misappropriation of information in business contact according to Art. 128
- 103 cases ascertained (an increase by 48 cases compared to 2001).
The least frequent offences related to corruption are breaches of regulations on handling
controlled goods and technologies according to Art. 124a to 124c (1 case ascertained in
2002), and machination in a tender and public auction according to Art. 128a to 128c of the
Penal Code (12 cases ascertained).

6
  Numbers of crimes detected during the particular year stated in the “detected” item include those crimes that
were recorded in previous years. These are the so-called “additionally detected crimes’. Therefore, if in some
cases the number of detected crimes is higher than the number of ascertained crimes, it is not a mistake. In the
case of a combination of crimes the relevant offender is recorded in the Police statistics under the most serious
crime committed only.
7
 The data on prosecuted persons include those persons who have been notified of charges or suspected crime,
and persons whose prosecution is inadmissible or inexpedient.

                                                         15
Numbers of persons prosecuted and investigated for offences related to corruption:
                            Art. 158          Art. 159             Art. 160         Art. 161          Art. 162

                             Abuse           Obstruction           Accepting        Bribery           Indirect      Bribery total
        Year              of authority    of official’s tasks       a bribe                           bribery
                           of a public    due to negligence
                             official
        1993                   189                     4               46              85                 6              137
        1994                   325                    20               50              94                 1              145
        1995                   234                     6               34             135                 2              171
        1996                   232                    15               25             110                 5              140
        1997                   211                    11               18              68                 6               92
        1998                   250                     6               37             106                 3              146
        1999                   304                    20               32              80                 2              114
        2000                   262                    17               18              88                 2              108
        2001                   283                    18               15             142                 6              163
        2002                   277                    23               37              81                 6              124


       The total number of persons prosecuted or investigated for offences related to bribery
was 124 in 2002, which was a slight decrease compared to 2001 (-39 persons). The Police of
the Czech Republic prosecuted and investigated the total of 37 persons for accepting a bribe
(+22 persons compared to 2001), 81 persons for bribery (-61 persons compared to 2001), and
6 persons for indirect bribery. The number of persons prosecuted and investigated for abuse
of authority of a public official decreased slightly to 277 (-6 persons), the number of persons
prosecuted and investigated for obstruction of official’s tasks due to negligence increased to
23 (+5 persons).

Criminal sanction for corruption in the Czech Republic; overview of numbers of
charged and convicted persons:
               Art. 158                Art. 159                 Art. 160               Art. 161                  Art. 162

        Abuse of authority         Obstruction             Accepting a bribe           Bribery                Indirect bribery
        of a public official    of official’s tasks
                                due to negligence

Year    Charged    Convicted   Charged     Convicted       Charged     Convicted   Charged    Convicted   Charged     Convicted
 1993      70          18         0               0          27             6       108          47            2            0
 1994     205          86         13              2          55             18      140          68            3            3
 1995     198          78         11              0          60             23      177          88            1            1
 1996     247          79         3               0          65             24      169         111            11           2
 1997     220          69         9               3          29             34      122          98            0            1
 1998     236         100         4               4          41             20      140          88            4            1
 1999     253          85         6               9          68             19      119          88            4            3
 2000     232         100         6               3          48             49      106          68            4            1
 2001     262          99         8               1          51             28      149          83            1            3
 2002     332         104         12              6          45             26      120         108            3            3


       The data recorded in the judicial statistics show that in 2002 the total of 168 persons
was charged with bribery (Art. 160 to Art. 162 of the Penal Code) (-33 persons), and the total
of 137 persons was lawfully convicted (+23 persons). The courts convicted the total of 26
persons of accepting a bribe (–2 persons compared to 2001), 108 persons of bribery (+25
persons), and 3 persons were convicted of indirect bribery. The number of persons convicted
of abuse of authority of a public official increased to 104 (+5 persons), and the number of
persons convicted of obstruction of official’s tasks due to negligence also increased to 6 (+5
persons).


                                                                  16
Number of ascertained offences committed by employees in the control and
administrative sectors:8
           Year               1995         1996        1997          1998           1999        2000          2001            2002
Number of offences           1 081        1 093       1 993         4 615          5 081       3 092         2 634           1 691
Interim change                               12         900         2 622            466     - 1 989          - 458           - 943
In %                                        1.1         82.3        131.6            10.1      - 39.1        - 14.8          - 35.8


        The total of 1 691 offences committed by employees in the control and administration
sectors was ascertained in 2002, which means a decrease by 35.8 % compared to 2001.
        Employees in the control and administration sectors committed 39 detected offences
of abuse of authority of a public official (-52 cases), 9 offences of obstruction of official’s
tasks due to negligence (+3 cases), and 19 offences related to bribery (+12 cases).
        The cases of breaches of person’s duties in administration of other people’s property
according to Art. 255 account for a significant portion of offences committed by employees in
the control and administration sectors - 93 ascertained offences is 18 % of the total number of
these offences (514). In the total number of 103 cases of misappropriation of information in
business contact according to Art. 128 employees in the control and administration sector
accounted for 18 cases, which is a portion of 17 %, and in 387 cases of breaches of person’s
duties in bankruptcy proceedings according to Art. 126 employees in the control and
administration sectors accounted for 28 cases, which is a portion of 7 %.

Criminal activities of employees in the control and administration sectors related to
corruption:
Art.     Name/                                   Year               1995    1996    1997    1998   1999      2000     2001     2002
of the
Crim.
Law
Art. 118 Unauthorised trading                                         3       1         1      2        3      17       1             2
Art. 124 Breaches of rules on circulation of goods in relations       0       2         2      0        7       7       1             1
         with abroad
Art. 125 Misrepresentation of data on the state of financial          5       5         0      6        13     11      21        25
         management and assets
Art. 126 Breaches of person’s duties in bankruptcy                    0       0         0      1        6       9      22        28
         proceedings
Art. 127 Breaches of binding regulation on economic contacts          1       1         6    34       7       16        4         6
Art. 128 Misappropriation of information in business contact          2       3         8     7     160       25       19        18
Art. 147 Unpaid tax, and social and health insurance                  0       0         0    14     112      277      346       214
         contributions
Art. 148 Tax evasion                                                 14      12         4     23     61        49      93        87
Art. 158 Abuse of authority of a public official                     24      35        49     20     89        51      91        39
Art. 159 Obstruction of official’s tasks due to negligence            1       1         0     10      6         5       6         9
Art. 160 Bribery                                                     14      27         5      4     12         4       7        17
Art. 161 Bribery – providing bribes                                   3       0         0      3      2         4       0         1
Art. 162 Bribery – indirect bribes                                    0       0         0      0      0         1       0         1
Art. 171 Obstruction of an official decision                         16       9        23     31     22        33      29        29
Art. 209 Infringement of other people’s rights                        1       7        11      5     91       119      18        18
Art. 247 Theft                                                      108     107        83     85    146       103     105        79
Art. 248 Embezzlement                                               297     323       343    382    371       345     195       162
Art. 250 Fraud                                                      249     116       968   3418   3156      1219     583       235
Art. 255 Breaches of person’s duties in administration in other      14      79        31     64    132       183     392        93
         people’s properties




8
  The total numbers include also those criminal activities of employees in the control and administration sectors
that are not related to their discharge of office of a public official.

                                                               17
        Regarding the offenders who committed offences in the control and management
sectors in the Czech Republic in 2002, in 17 cases out of 39 cases of abuse of authority of a
public official the offenders were customs officers, and in 15 cases public employees. In
seven cases out of the total of nine cases of obstruction of official’s tasks due to negligence
the offenders were customs officers. In seven cases out of the total of 17 cases of bribery the
offenders were employees in the public administration sector.

Criminal activities of employees in the control and administration sectors according to
categories of the System for Statistical Records of Offences of the Police of the Czech
Republic:
Art. of Type of a offence, according to the offender’s        1995   1996   1997     1998   1999   2000   2001   2002
the      profession/         Year
Crim.
Code
Art. 158 Abuse of authority of a public official, of which:    24     35     49       20     89     51     91     39
         Employees of state bodies and community                4      4     25        5     28      7      4      1
         organisations (1)
         Employees of courts (2)                                       3         4     1      2      3      1      1
         Managing staff of economic organisations (3)           1                      2      2      0      0
         Economic staff (4)                                     5      5     1         2      2      6      4
         Administrative staff (7)                               0     12      1               4      1      2
         Employees in the public administration sector (8)      5      6     16        9     29     22     12     15
         Customs officers (9)                                                                        9     56     17
         Others                                                 9      5         2     1     22      3     12      5
Art. 159 Obstruction of official’s tasks due to negligence,     1      1         0    10      6      5      6      9
         of which:
         Employees of state bodies and community                                              1             1
         organisations (1)
         Economic staff (4)                                     1
         Administrative staff (7)                                      1                                           1
         Employees in the public administration sector (8)                                    4      3      4      1
         Customs officers (9)                                                                        1             7
         Others                                                                       10      1      1      1
Art. 160 Bribery, of which:                                    14     27         5     4     12      4      7     17
         Employees of state bodies and community                2      2         2            3      1             3
         organisations (1)
         Employees of courts (2)                                       1                             1
         Managing staff of economic organisations (3)           1      3               4      1             1      1
         Economic staff (4)                                     3      7                      2             4      2
         Administrative staff (7)                               1     12
         Employees in the public administration sector (8)      4      1                      2                    7
         Others                                                 3      1         3            4      2      2      4
Art. 161 Bribery – providing a bribe, of which:                 3      0         0     3      2      4      0      1
         Employees of courts (2)                                1                                    1
         Managing staff of economic organisations (3)                                                1
         Economic staff (4)                                     1                                    2
         Administrative staff (7)                                                             1
         Employees in the public administration sector (8)                             1
         Others                                                 1                      2      1                    1
Art. 162 Bribery – indirect bribe, of which:                    0      0         0     0      0      1      0      1
         Economic staff (4)                                                                          1



Activities and knowledge of specialised units of the Police of the Czech Republic

       A special unit – Service for Protection of Economic Interests was established within
the Police of the Czech Republic in 1991; this unit was transformed in 1994 into Police of the
Czech Republic – Service for Detention of Corruption and Serious Economic Criminality
with a sphere of action covering the whole Czech Republic, which later changed into Police
of the Czech Republic – Service for Detention of Corruption and Serious Economic

                                                         18
Criminality of the Service of Criminal Police and Investigation. This unit is responsible for
the detection of the most serious corruption cases. As some of the large corruption cases
combine with organised offence, another unit with the sphere of action covering the whole of
the Czech Republic – Police of the Czech Republic – Service for the Detention of Organised
Crime of the Service of Criminal Police and Investigation can deal with corruption cases.
Investigation of cases related to corruption was assigned to the Office for Financial Crimes
and State Protection of the Service of Criminal Police and Investigation.
        According to the amendment to the Code of Criminal Procedure the Police Presidium
of the Czech Republic has been undergoing an internal reorganisation since the 1st January
2002. The authority of these specialised units needs to be specified clearer and their
coordination with other bodies must also improve. The Police Presidium of the Czech
Republic compiled the “Analysis of Operation and Mutual Cooperation between the Office
for Economic Crime and State Protection and the Unit for the Detention of Corruption and
Serious Economic Crime of the Service of Criminal Police and Investigation”. On the basis of
this analysis both units were joined on the 15th March 2003 into “Unit for the Detention
of Corruption and Financial Crimes of the Service of Criminal Police and Investigation”
(Útvar pro odhalování korupce a finanční kriminality Služby kriminální policie a vyšetřování,
hereinafter “ÚOK”).
        Department for Proceeds of Serious Crimes was established within the authority of the
ÚOK in 2002. This was the first time a specialised unit of this type has been established in the
whole history of the Police of the Czech Republic. It can be expected that creating and using
effective methods for freezing proceeds from criminal activities could significantly change the
development of criminal activities in the Czech Republic9.
       A new specialised unit of the Police of the Czech Republic for protection of witnesses,
which was established after the act on protection of witnesses came into force, is fully
functional. This unit provides protection to witnesses especially in cases related to corruption
and economic and organised crime.


9
  The main task of the department is searching for illegally gained assets and the department operates as a
specialised service workplace for solving requirements submitted by specialised Police units. While doing so,
members of the department also cooperate methodically with other Police specialists and help to increase the
value frozen during the criminal proceedings. One of the conditions for establishing this specialised workplace
was acquiring concrete practical knowledge on legislation and organisational barriers that prevent proper search,
freezing and the consequent confiscation of proceeds from criminal activities. The current legal regulation
provides only partial solution. However, it is necessary to create new legal instruments and carry out certain
legislation changes in the future.
Methods of freezing assets that are assumed to be proceeds from criminal activities (the current lack of
instruments for freezing assets in the Code of Criminal Procedure and the consequent frequent escapes of these
assets).
Administration of assets from the moment of their freezing until the end of criminal proceedings – especially
who and how will administer these assets (problems with objects that require special storing conditions - cars,
airplanes, drugs, weapons, etc., or large object and object that are difficult to store).
Methods of freezing and administration of assets in the form of a capital participation (i.e. share in a
commercial company), business or right (who should carry out their administration, how the quality of this
administration will be evaluated, potential compensations for damage).
Instruments for withdrawal of the assets after the end of criminal proceedings.
Possibility to withdraw those assets that have been transferred to third persons by the suspected person for
the purposes of freezing assets before the decision is made, as well as execution of the final decision.
Cooperation between the involved state bodies (the Police of the Czech Republic, Public Prosecutor’s Office,
courts, revenue authorities), exchange of information between them (cancelling the duty to keep certain
information secret).



                                                       19
        Corruption within the Police is investigated directly by specialised public prosecutors.
Special workplaces for the supervision of maintaining lawfulness in preparatory proceedings
in criminal cases of serious economic crimes, including crimes with elements of corruption,
have been established within Higher Public Prosecutor’s Offices. Establishing specialised
units for corruption and economic rime at the Supreme Public Prosecutor’s Office in Brno
with branches at Higher Public Prosecutor’s Offices in Prague, Ostrava and Olomouc was a
significant positive step in the fight against corruption.
       In 2002 ÚOK recorded 107 cases in which criminal prosecution by the ÚOK Police
body or a other unit of the Service of Criminal Police and Investigation in cooperation
with ÚOK was instituted, or a petition for instituting criminal prosecution was filed. The
preliminary estimate of damage in these cases was CZK 9 096 106 523. The total of 225
offenders was notified of charges by the ÚOK Police body or a different unit of the Service of
Criminal Police and Investigation in cooperation with ÚOK.
       The following table is an overview of cases in which a petition for instituting criminal
prosecution (CP) was filed:

ÚOK IN 2002:
                                                    Number               Number                  Number                    Damage
                                                    of cases           of offenders              of crimes                (in CZK)
                                                                                                committed
Cases with a petition for instituting CP or           107                  299                      421                 9 096 106 523
instituted CP by the ÚOK or other units of
the Service of Criminal Police and
Investigation
Of which cases in which CP was instituted             92                   225                     319                  6 122 929 930

Number of operational employees directly involved in the unfinished cases – total                               167
(status as of 1st January 2003)

The following table provides an overview of cases where criminal prosecution was
instituted arranged according to the individual ÚOK branch offices:
ÚOK                                        Number           Number          Number        Number            Number          Damage
organisational unit                      of operative       of cases           of       of offenders       of crimes       (in CZK)
                                          employees         with ICP      prosecuted        with         (Art. of the
                                                                           offenders   instituted CP     Penal Code)
                                                                                          at ÚOK          committed
                                                                                                               by
                                                                                                          prosecuted
                                                                                                           offenders
Complicated Operative-Investigative            6               4             14             0                  15          5 407 865 890
Cases Section
Branch Prague                                  53              11             23            13                42             219 803 427
Branch České Budějovice                        14               7             14            11                14              31 106 248
Branch Plzeň                                   11               9              9             8                 9              10 912 539
Branch Ústí nad Labem                          12               8             11             8                14             235 325 351
Branch Hradec Králové                          14              12             66            26                87           1 291 364 987
Branch Ostrava                                 19              11             27            16                47             786 236 197
Branch Brno                                    19              16             27            27                33             139 733 776
Financial Intelligence Department              10               7             27             1                50           2 727 689 169
Department for Proceeds of Crime               9                7              7             7                 8             139 971 646
Total                                         167              92            225           117               319           6 122 929 930


        Out of the above-mentioned 299 offenders against whom criminal prosecution was
instituted or a petition for criminal prosecution was filed in 2002, 42 offenders are women and
142 offenders have university-level education.10

10
     According to the amendment to the Penal Law, which came into force on 1 st January 2002, the criminal

                                                               20
        According to the information available to the Police of the Czech Republic it can be
concluded that the number of cases with suspected corrupt behaviour has been increasing
since 1997. The cases with suspicion of corruption in 2002 related to all forms of bribery,
abuse of authority of a public official, misappropriation of information in business contact,
breaches of person’s duties in administration of other people’s property, etc. The continuing
trend of increasing use of corruption by organised criminal structures and increasing latency
of this criminal activity can be observed.
            The occurrence of corruption relates to environment that creates the right
condition for corruption – execution of state administration and local government,
concentration of capital for public subsidies and their distribution, restructuring of state
assets, etc. Corruption cannot be evaluated separately; it usually needs to be evaluated
in connection with other serious crimes. The solution for detection and prevention of
these types of crime is especially in t h o r o u g h c h a n g e s i n l e g i s l a t i o n t o
f a c i l i t a t e t h e u s e o f o p e r a t i v e p r o c e d u r e s a n d r e s o u r c e s . Government
Decree No. 391 of 17th April 2002 assigned the Minister of Interior the following task: to
analyse in cooperation with other members of the Government the possibility of using
the integrity tests in the conditions of the Czech Republic and to propose the method
and conditions for the use of the test to the Government by the 31st December 2002. As
fulfilment of the task the Minister of Interior submitted to the Government the material
“Analysis of the Possibility of Using Integrity Tests in the Conditions of the Czech
Republic, Proposal of Method and Conditions for its Use”. During the meeting on the
22nd January 2003 the Government established a workgroup that should continue to
examine the possibility of using the integrity tests in the conditions of the Czech
Republic, and recommended the use of this institute in criminal proceedings.
       Corruption in the state administration and local governments occurs most frequently in
administrative activities and in government and public contracts. According to the
implemented cases the Police of the Czech Republic managed in 2002 to detect only
corruption on lower levels, i.e. corrupt behaviour of individuals. Detection of organised
corruption requires complex and long-term elaboration. In this type of criminal activity the
corrupt criminal activity itself (bribery) cannot be fully documented and the criminal
prosecution is carried out on the basis of criminal activity that results from bribery (such as
abuse of authority of a public official) where finding the evidence is easier.
         On the basis of the available information it can be concluded that especially corruption
in t a x e s a n d d u e s is increasing. According to the information available to the Police of
the Czech Republic in these cases employees of revenue authorities focus on economically
strong entities and require payments of high amounts of finance under the threat of financial

prosecution according to Art. 160 of the Penal Law according to material competence was transferred to the
ÚOK. A relevant investigation department consisting of investigators from the former units who brought some
unfinished cases of corruption and economic crimes with them was established for this purpose. The number of
these cases, which are not included in the overview, is 15, with 47 offenders (these offenders were notified of
their charges prior to the amendment to the Penal Code). In 2002 petitions for bringing charges against 28 of
these offenders were filed and a public prosecutor brought charges against 6 of these offenders.
The criminal prosecution was instituted by the ÚOK in 69 cases in 2002 – these cases were investigated under 83
separate numbers of case files, with 117 charged offenders; petitions for bringing charges against 38 of these
offenders were filed and a public prosecutor brought charges against 10 of these offenders. Petitions for bringing
charges against 64 offenders in total were filed at the investigation department of ÚOK in 2002 (in cases older
and new, after 1st January 2002). Criminal proceedings were initiated and the total of 536 cases was assigned to
ÚOK in 2002; 175 of these cases were closed as of 31st December 2002, of which 42 were closed by filing a
petition for bringing charges.



                                                       21
recourses (fines and levy of unpaid taxes). Although this type of criminal activity is very
difficult to document, the Police of the Czech Republic implemented a number of cases of this
type. However, the acquired information often remains on the level of information base and is
used further in operatively investigating activities.
       Approvals of buildings for use are another area where corruption appears, as
information on corruption in certain construction administration suggests. The Police of the
Czech Republic continuously determine concrete cases with a potential risk of corruption and
takes measures to detect any potential corrupt behaviour.

        According to the information available to the Police of the Czech Republic greater
willingness of the citizens to be actively involved in the detection of crimes related to
corruption contributes to the prevention of corruption most significantly. Inspection bodies of
the state administration and local governments also show better attitude towards the fight
against corruption and greater willingness to cooperate. Another important measure is
attention paid to these cases in the media because it decreases the citizens’ tolerance of these
types of crimes.


2.4    Criminal offences of the Police officers

        Corrupt behaviour of Police officers of the Czech Republic is a very serious problem,
which is perceived very negatively by the public. Inspection authorities that deal with
citizens’ complaints have paid long-term attention to the issue of corrupt behaviour of the
Police officers of the Czech Republic. The Police compile annually summarising information
on numbers of complaints about behaviour of Police officers that have been dealt with by
inspection bodies of the Police of the Czech Republic. Inspection of the Minister of Interior
then publishes a report on the number of criminally prosecuted Police officers.
        According to the data of the Inspection of the Minister of Interior 453 crimes
committed by Police officers were recorded and detected in 2002 (by 212 crimes less that in
2001), charges against 444 Police officers were brought, which is by 24 less than in 2001.
From the territorial distribution point of view the highest number of detected crimes is in the
capital city of Prague (140), i.e. 31.5 % of the total number of charged Police officers, the
Northern Moravian (73), i.e. 16.4 %, and Northern Bohemian (54), i.e. 12.2 % regions follow.
Officers of Police for maintaining order (48.4 %) and traffic Police (20.5 %) accounted for the
largest part of the total number of offenders – Police officers. Police officers of the Service of
Criminal Police and Investigation account for 13.1 %, Alien and Border Police account for
4.7 %, and investigation departments 3.4 %. Criminal activities included especially
processing documentation of a fictitious car accident, keeping finance collected for imposed
on-the-spot fines. Almost 39 % of the criminal offences of Police officers are cases of abuse
of authority of a public official (176 cases), bribery was ascertained and detected in four
cases, in 12 cases it was obstruction of a public official’s task due to negligence.
Insurance fraud was ascertained and detected in 47 cases and fraud according to Art. 250
of the Penal Code in 19 cases. Unauthorised handling of personal data was ascertained and
detected in four cases. Preparatory proceedings against 444 offenders – Police officers was
completed in 2002 in 287 cases, 215 of which resulted in filing petitions for bringing charges.
        An internal inspection was carried out throughout the year 2002 as a part of the
activities of the Police of the Czech Republic. Special attention was paid to areas with
possible occurrence of corrupt behaviour, such as on-the-spot fines, investigation of car
accidents (insurance frauds), and economic activities (public contracts). The relevant causes

                                               22
of the detected defects and responsibility of concrete persons are determined in all cases of
illegal conduct of officers of the Police of the Czech Republic. The measures taken are
consequently evaluated11.

Manipulation with money

        Manipulation with money, especially in proceedings on on-the-spot fines, is one of the
areas where fraud and embezzlement, but also theft of fine receipt slips or collected money
occurs despite inspections, taking measures, including repressive measures. Carelessness of
the injured parties and indifference of other Police officers play a significant role in the cases
of theft. Manipulation with money is regulated, apart from the generally binding regulation,
also by Binding Instructions of the Chief of Police of the Czech Republic No. 170/2000
and 24/2001. Records of fine receipts, their settlement and settlement of money paid for fines
issued in the proceedings on on-the-spot fines is regulated by Instruction D-95 published in
the Financial Bulletin of the Ministry of Finance, issue 10/1994.
        Practical experience shows the necessity to further specify the regulation of
manipulation with fine receipt slips, from the moment they are picked up from a revenue
authority until the moment when they are handed over to a particular Police officer, i.e. to
specify exactly the method of keeping records, handing out, taking over and accepting finance
for issued slips in the case of a penalty not only in proceedings on on-the-spot fines itself but
during the entire period of manipulation with the particular valuables or with cash, including
when imposing on-the-spot fines within administration proceedings.
        Introducing non-cash payments of fines would help to eliminate illegal practices in
manipulation with money when imposing fines in proceedings on on-the-spot fines. A Police
officer would only hand over a document stating the relevant sum of the imposed fine and a
different authority would collect the payment. Effectiveness of this system needs to be
ascertained. However, anticorruption effect of this measure is obvious because a Police
officer has to ask for a bribe directly or the other party has to expressly offer a bribe, i.e. the
bribe cannot be accepted “unawarenessly” as it happens, for example, in the cases of not
handing out the relevant number of slips.
       Therefore, the Updated Government Programme for Fight against Corruption imposes
on the first Deputy Prime Minister, Minister of Interior and the Minister of Finance the duty
to submit an analysis of the possibility of using non-cash payments in collection of fines in
proceedings on on-the-spot fines to the Government by the 30th November 2003; this analysis
should determine the method of due keeping records, handing out, taking over and accepting
finance for the issued slips as a penalty within administrative proceedings.


2.5     Conclusion

       The official statistic can only provide data on documented cases of corruption. Their
number depends on the intensity of inspection and operative activities of the relevant state
bodies. From the quantitative point of view the number of cases remains virtually unchanged;
from the qualitative point of view the situation (according to the data of ÚOK) is not


11
   An intra-departmental concept of procedure against illegal conduct of police officers was developed and
approved by the Minister of Interior during 1999. This concept focused especially on long-term preventive
measures influencing the Police officers, improvement of control and improvement of the existing inspection
system in the Police force. Tasks arising from this concept are evaluated continuously.

                                                    23
improving (interconnection of corruption and organised crime, intentions to gain political
influence through corruption, etc.).
        According to experience of the Police of the Czech Republic the necessity of
modification of the provisions of Art. 24, par. 5, letter d) of Act No. 337/1992 Coll., on
administration of taxes and dues, according the valued amendment, has repeatedly been
pointed out. If the secrecy was abolished, authorities active in criminal proceedings would
gain legitimate access to information acquired as a part of administration of taxes an dues,
which could then be used as evidence in criminal proceedings carried out due to suspicion of
corrupt behaviour and not tax offence (although the corrupt behaviour relates also to tax
offences). Government Decree No. 391 of 17th April 2002 assigned the Minister of Finance
the task to compile and submit to the Government by the 31st December 2002 a proposal of
legal regulation of the relevant rules that allow specialised Police bodies that focus on serious
economic crimes, corruption and organised crime the access to information acquired through
tax proceedings without the limitation determined in Art. 24 of Act No. 337/1992 Coll., on
administration of taxes and dues, according the valued amendment. The evaluation of the
fulfilment of this task is described in detail in Chapter No. 5.
        The issue of transfer of assets from the offender to relatives or other persons is another
problem that is partially solved through the re-codification of the Penal Code and partially in
the proposal of the so-called integrity test. These transfers are always carried out with a clear
purpose (in most cases the transfer is not carried out on the basis of any payment and the
persons that transferred the assets continue using them), although according to the current
legal regulation these assets cannot be frozen unless participation is proven.
         The provisions of Art. 163 of the Penal Code on effective repentance also need to be
modified as a part of the re-codification of the Penal Code; the expression “without delay”
needs to be omitted from the text of the provision. The possibilities of extinction of criminal
liability for bribery (Art. 161) and indirect bribery (Art. 162) need to be extended to ensure
that persons who offered a bribe can provide the police with information and help without
being worried about the potential criminal liability.
        Similarly, in the cases of criminal activities according to Art. 127 of the Penal Code –
breaches of binding regulations of business contact consisting in a serious breach of rules for
business contact determined by a generally binding legal regulation (Commercial Code), one
of the possible merits defined by the Commercial Code is bribery (Art. 49 of the Criminal
Code). Regulation that includes special provision on effective repentance, as defined in Art.
163 of the Criminal Code might prove helpful in detecting bribery in business contact, i.e. the
criminal liability for bribery would cease to apply if the offender promised or accepted a bribe
because he was asked for it and reported this fact voluntarily and without delay to a state
prosecutor or a Police body. For the above-specified reasons, an addition of a provision
similar to the provision of Art. 163 of the Penal Code, chapter two, section two would be
suitable.
       Fulfilment of tasks arising from the Government Programme for the Fight against
Corruption in the Czech Republic, which was approved by the Government Decree No. 125
of 17th February 1999, has a significant importance for the fight against corruption. The
evaluation of the results is included hereinafter.




                                               24
       3   O V E RV I E W O F A N T I - C O R R U P T I O N M E A S U R E S I N 2 0 0 2 ; U P D AT E O F T H E
     GOVERNMENT PROGRAMME FOR THE FIGHT AGAINST CORRUPTION ADOPTED BY
                 T H E G O V E R N M E N T D E C R E E N O . 1 2 5 O F 1 7 T H F E B R U A RY


3.1        LEGISLATIVE MEASURES

3.1.1 Penal Law

        Accepting the Amendment to Penal Code No. 96/1999 Coll., which completed
definitions of certain merits of a crime, defined the term “bribe” and extended the term
“public official” to ensure that it also includes a foreign public official (in accordance with the
Organisation for Economic Cooperation and Development Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions, Paris 17th December 1997)
was a significant step in the sphere of Penal Law. The amendment specified and increased the
extent of criminal sanction for bribery and allowed a clearer application of anti-bribery
provisions to private sector (by extending the definition of a public official specified in the
law to discharge of office related to powers in settling matters of public interest and if the
crime was committed in relation to these powers).
        The Amendment to Penal Code No. 134/2002 Coll., which came into force on the 1st
July 2002, provided further material legal regulations that integrate obligations arising from
the EU law and international conventions, as well as current changes of the special part of the
Penal Code. The Penal Code was extended by merits of the crime of legalisation of proceeds
from criminal activities (Art. 252a), which describe behaviour of an offender that serves the
purpose of disguising the origin or making it difficult or impossible to find out the origin of
an object or other assets gained through criminal activity, with the objective to pretend that
the object or assets were gained in accordance with the law. 12 The amendment also includes a
stricter recourse of an offender who abuses his professional position or post to commit this
type of a crime.
        The Government Programme for Fight against Corruption assigns the Minister of
Justice the task to consider the following issues during re-codification of the Penal Code (or
during preparation of partial amendments on the Penal Code):
a) Determination of culpability for not reporting and not obstructing crimes related to
corruption;
b) Modification of the specified conditions for effective repentance in cases of bribery;
c) Possibility of introducing special merits of bribery in unfair competition with limitation of
the currently existing conditions of culpability in merits of unfair competition;
        According to the information of the Minister of Justice this task will be fulfilled on the
basis of analysis and evaluation of findings from the practice, after the amendment to the
Penal Code has been introduced and implemented. Consequently, a decision on further
potential modifications to the special part of the Penal Code will be made; these modifications
may be included in changes during the re-codification of the Penal Code.


12
   This change relates to obligations arising from the European Convention on Laundering, Search, Seizure and
Confiscation of the Proceeds from Crime, which binds the member states to include in their legal systems the
merits of money laundering; these merits should describe behaviour where the offender is attempting to legalise
proceeds from criminal activities, i.e. to create the impression that the proceeds from the criminal activity is a
legally made income. Joint measure taken by the Council on the basis of chapter K3 of the Convention on
Laundering, Search, Seizure and Confiscation of the Proceeds from Crime includes a similar requirement of
introducing special merits of this crime.




                                                        25
3.1.2 Law of Criminal Procedure

        Amendment to the Code of Criminal Procedure, Act No. 265/2001 Coll., came into
effect on the 1st January 2002. This amendment significantly reforms the Code of Criminal
Procedure of the Czech Republic. The most important newly introduced changes include
eliminating the duplicity in gathering evidence in preparatory proceedings, stronger position
of a public prosecutor, and emphasis on court trial. The preparatory proceedings are no longer
divided into the stage of proceedings before a Police body and the stage of proceedings before
an investigator.
        The Amendment to the Code of Criminal Procedure is a significant step towards more
effective detection and recourse of corrupt behaviour and other criminal activities connected
with corruption. The conditions of more effective detection and recourse of corruption are
especially the following:
a) Creating a new concept of criminal proceedings that ensures more effective cooperation of
all authorities active in criminal proceedings and shorter average duration of the criminal
proceedings;
b) New regulation of procedures for the Police regarding the use of operatively investigating
means and operative techniques before the commencement of criminal prosecution that
ensures that the results can be used as evidence;
c) Transferring actions within criminal prosecution related to suspected criminal activities of
Police officers exclusively to public prosecutors.
        The Amendment to the Code of Criminal Procedure determines strengthened rights of
public prosecutors to carry out individual actions or the entire investigation. The Code of
Criminal Procedure states that the preparatory proceedings on all crimes committed by Police
officers must be carried out directly by a public prosecutor in order to maintain the objectivity
of the proceedings. Making decisions on suspending or postponing criminal prosecution or
transferring the matter to an administrative authority as an administrative offence within
preparatory proceedings is also transferred to the exclusive authority of a public prosecutor.
        ÚOK sees especially positively the inclusion of operatively investigating instruments
in the Amendment of the Code of Criminal Procedure and therefore the possibility to use their
results as evidence (especially during monitoring people and objects). The shortened
proceedings are also a good step – actions are not repeated after the criminal prosecution has
been instituted because actions taken prior to instituting the criminal prosecution (expert
opinions, specialised statements) remain valid even after the criminal prosecution has been
instituted. Evidence can be adduced directly before the court. However, the existing short-
term practical experience shows that certain public prosecutors require repeated questioning
of witnesses in implementation of cases according to Art. 16 of the Code of Criminal
Procedure (they do not consider an official record according to Art. 158, par. 5 of the Code of
Criminal Procedure sufficient). This procedure thus partially casts doubts on the purpose of
the Amendment of the Code of Criminal Procedure (acceleration of criminal proceedings).


3.1.3 Position of tax administrators as independent state bodies for financial
      inspection; Declaration of assets

      The tasks arising from the Government Programme for Fight against Corruption
included the following tasks for the Minister of Finance to be carried out as a part of the
preparation of the material design for the Act on Tax Administration Offices, and the Act on
Administration of Taxes and Dues, or as a part of the preparation of the material design of
other regulations:


                                               26
a) To ensure that in the future tax administrators will be “independent” state bodies for
collection of unpaid taxes and dues and for financial inspection;
b) To ensure that the tax administration offices are authorised to verify the accuracy of
statements provided in declarations of assets submitted by those persons that have legal
obligation to submit these declarations to the tax administration offices, and that they are
authorised to require from tax payers in general proofs of origin of their incomes;
c) To consider introducing special legal regulation of labour-law position of employees of
regional revenue authorities and the Central Financial and Tax Directorate.

Re letter a):
The Ministry of Finance re-evaluated its design and decided to integrate it in two separate acts
– on tax administration, with the proposed efficiency from 1st January 2005, and on Customs
Administration, with the proposed efficiency from 1st May 2004. The modernisation of tax
and customs administration with regards to the entry of the Czech Republic into the European
Union will be carried out through these acts.
The task has not been fulfilled, work continues.

Re letter b):
The proposal of Act on Assets Declaration and Accrual of Assets, and on Changes to Act
No. 140/1961 Coll., Penal Code, according the valued amendment (Act on Assets
Declaration) has been refused twice during the previous period. On the basis of the
Government’s statement of policy a similar task – Act on Assets Declaration – is included in
the legislation tasks of the Government for 2003, with the expected effectiveness of this act
from 1st January 2004.
The task has not been fulfilled, work continues.

Re letter c):
Act on service of state employees in administration offices, on remuneration for these
employees and other employees in administration offices (Service Act) No. 218/2002 Coll.,
will create a special public-law system for those employees who carry out state administration
at ministries and administration offices. This regulation will apply to employees of the Central
Financial and Tax Directorate, as well as to employees of regional revenue authorities.
This tasks will be solved further in relation to creating the Act on Tax Administration – see
item a).
The task has been partially fulfilled.


3.1.4 Re-codification of Private Law

      The Government Programme for Fight against Corruption instructed the Minister of
Justice to consider the following issues as a part of the re-codification of the Private Law:
a) Introducing active legitimacy to complaints about behaviour that constitutes unfair
competition also for those legal persons that protect the interests of competitors and
consumers;
b) Allowing recourse of corrupt behaviour in unfair competition with effects abroad.
        Legal regulation of the recourse of corrupt behaviour in unfair competition is included
continuously in re-codification of the Commercial Code (the part that has so far been prepared
is published at http://www.juristic.cz).




                                              27
        The relevant amendment to the Act on Protection of Consumers (adding par. 2 into
Art. 25 of Act No. 634/1992, Coll.) and the Civil Procedure Code came into force on 1 st
January 2003.
        According to the provisions of Art. 25 of Act No. 634/1992 Coll., according the
valued amendment, the Association of Czech Consumer Organisations and other legal persons
established for the protection of consumers can file petitions for instituting proceedings before
court on refraining from unlawful conduct in protection of consumers’ rights and these
entities can also be parties to these proceedings. The associations are authorised to submit
suggestions to state administration bodies in relation to the fulfilment of their tasks in
accordance with the third part of this Act. The relevant state administration bodies must
inform the associations about processing these suggestions without unnecessary delay, but at
the latest within five months after receiving these suggestions.

The task is being fulfilled.

3.1.5 Legal immunity of the members of the Parliament of the Czech Republic

       Members of the Parliament of the Czech Republic are protected by immunity from
prosecution for not only actions related to the performance of their mandate but also for
common offences and crimes against the law. If the Police want to prosecute a member of the
Parliament or a senator, they need to request from the Parliament or the Senate that the
relevant MP or senator is deprived of his/her immunity.
       The Government Programme for Fight against Corruption assign to the Deputy Prime
Minister the task to compile for legislation or support passing the amendments to
Constitution, Constitutional Law No. 1/1993 Coll., and related regulations, which would
modify the legal regulation of immunity of members of the Parliament of the Czech Republic
to ensure that the immunity relates only to conduct in relation to the performance of the
mandate, or to ensure at least that refusal of the Parliament does not mean that criminal
prosecution of the relevant member of Parliament or senator is ruled out forever.
       The above-mentioned principle was integrated into the proposal of the Constitutional
Law that modifies Constitutional Law No. 1/1993 Coll., Constitution of the Czech Republic,
compiled and submitted by a group of members of Parliament. The Government expressed its
approval of this proposal in Government Decree No. 993, of 29th September 1999, but the
Chamber of Deputies of the Parliament of the Czech Republic refused this proposal.
The Council of Europe also expressed the requirement to modify the legal immunity of
members of the Parliament of the Czech Republic in the Report on Evaluation of
Anticorruption Measures in the Czech Republic, which was compiled as a part of activities
of the Group of States against Corruption – GRECO and approved on the 13th plenary
meeting on 24th – 28th March 2003. The report recommends that the system of immunity of
members of Parliament of the Czech Republic is reconsidered to ensure that concrete and
objective criteria are applied when depriving members of the Parliament of their immunity,
and that the current system, which excludes criminal prosecution even after the end of the
term of office of the particular member of the Parliament of the Czech Republic, is
reconsidered (see chapter 3.4.2). Therefore, the Deputy Prime Minister and the Minister
of Justice should compile a proposal for amendment to the Constitution, Constitutional
Law No. 1/1993 Coll., and relating regulations, according to the above-mentioned
recommendation.

The task has not bee fulfilled.



                                               28
3.1.6 Conflict of interests

        Conflict of interests is regulated by Act No. 238/1992 Coll., on some measures
relating to the protection of public interests and incompatibility of certain office-holding,
according the valued amendment. The Act only applies to the top public officials, such as
members of the Parliament, senators, members of the Government and chief officers of
central administration bodies. The Act does not expressly state that these officials must not
carry out any enterprise, or does not require them to submit declaration of assets. The Act
only specifies the duty to submit a statement and does not specify any sanctions in the case of
not submitting a statement or submitting a statement with incomplete information. The last
amendment – Act No. 15/2002 Coll., with the effective date from the 1st September 2002,
which was supposed to prevent the members of Parliament from gaining income as members
of statutory bodies of companies with majority share owned by the state, does not mean any
significant step forward; the fact that top public officials can carry out entrepreneurial
activities remains unchanged.
       According to the practical experience of the Police of the Czech Republic the Act is
completely ineffective due to the impossibility to force the relevant public officials to specify
exactly or at least to provide information on their income.

      The Government Programme for Fight against Corruption instructed the Minister of
Justice to amend Act No. 238/1992 Coll. to ensure that a) the operation of the Act is
extended; b) a certain state institution is authorised to verify the accuracy of assets
declarations submitted by those persons who are obliged to submit these declarations before
and during the term of their office; and c) some further sanctions for breaching this rule, apart
from publishing information about the breach, are specified (such as a fine for the members of
the Government, removal from office by a resolution of the Superior Court for certain public
employees, etc.).
       The modifications specified in the Government programme for Fight against
Corruption have not been implemented and the Ministry of Justice has not even
prepared them. According to the opinion of the Minister of Justice, this task is not within his
authority – his participation needs to be limited to legal regulation relating to courts and
public prosecutor’s office. In accordance with this comment the management of this task
was transferred to the Deputy Prime Minister and the Chairman of the Legislation
Council of the Government.

The task is being fulfilled partially.


3.1.7 Reform of administrative punishment and administrative proceedings

      With regards to the currently carried out reform of administrative punishment and
administrative proceedings the Government Programme for Fight against Corruption
instructed the Minister of Interior to carry out the following tasks:
a) To place emphasis on maximum transparency of administrative proceedings and for the
cases of decision-making according to free consideration, to introduce an obligatory
description of official procedures that occurred during this decision-making;
b) To consider the possibility of priority (faster) processing of matters within the individual
types of administrative procedures on the basis of higher fees determined by the law;
c) Where possible and expedient, to state the period within which the proceedings must be
carried out;


                                               29
d) To prepare legislation conditions for creating a register of at least some administrative
punishments (including those that have been imposed for breaches of regulations of
Administrative Law in relation to law and order in state administration and self-government,
in relation to public contracts, for disciplinary offences that resulted in breaches of duties in
performance of public administration).

        The above-mentioned principles have been included in two proposals for legal
regulations – the proposal for act on liability for petty offences and on proceedings on
these offences (Act on Petty Offences) and the proposal of the Administrative Procedure
Code. The proposal of the Administrative Procedure Code has been approved by the
Government of the Czech Republic and is currently being discussed by the Chamber of
Deputies of the Parliament of the Czech Republic. The proposal of act on petty offence will
be submitted to the Government by the end of June 2003 (in relation to the reform of the
Penal Law). Both acts – Administrative Procedure Code, as well as Act on Petty Offences –
should come into effect by 1st January 2005.

Re letter a):
In the case of the proposal for Administrative Procedure Code the transparency of
administrative proceedings can be enhanced by exact regulation of rules for procedures used
by administrative authorities and thorough documentation of the course of proceedings, which
will also allow more effective operation of administrative justice. The newly introduced
institute of resolution can be used as an example. A resolution is an administrative act that an
administrative authority uses to decide in cases specified in the law on procedural matters
(this applies to almost all procedural tasks, such as determining a period for performance of
an act, reverse to the previous status, or decision-making in issues of participation). The
participants are informed about a resolution by a personal delivery in writing, or by verbal
information; the oral information has the effect of a resolution providing a participant at the
same time waives his right to receive a written copy of the resolution. The resolution is only
recorded in the files in writing, if the law determines so. With the exception of those cases
that are only recorded in the files and against which a person can protest, a procedural
complaint about this administrative act can be lodged at an appellate administrative authority.
Another important fact is the right to view the files, which applies to participants and their
representatives, providing the participants are present also to their specialised advisors and to
other persons in certain cases specified by the law; and the possibility for participants to
express their opinion on materials used before the administrative act is issued. The duty of an
administrative authority to inform is also important – an administrative authority is obliged to
continuously publish information on when and where a submission in person can be made at
the relevant administrative authority, and information on contact details necessary for making
a submission through technical means, and other information required by the law. An those
administrative authority is also obliged to inform relevant persons upon their request on
administrative regulations that apply to the sphere of their action and those administrative
regulations that apply to the spheres of action of their superior and subordinate administrative
authorities; and on the method of submitting requests. Otherwise, an administrative authority
provides information in accordance with general regulations. The efforts to ensure maximum
transparency of administrative proceedings are also apparent in the institute of preliminary
information, which can be used if a special law refers to it explicitly. According to the
relevant provision of the proposal every person can request that the relevant administrative
authority that is supposed to issue an administrative act or a conditional administrative act
provides them with preliminary information in writing stating whether the particular intention
can be carried out only if an administrative act or a conditional administrative act is issued,


                                               30
and according to what criteria the request for issuing an administrative act or a conditional
administrative act will be evaluated.
In terms of decision-making according to free consideration, the obligatory particulars of
an administrative act within the pronouncement part include an overview of legal regulations
used to make the decision. The grounds will then include the reasons for issuing an
administrative act, materials on the basis of which the administrative act was issued,
considerations that the administrative authority took into account when evaluating and
interpreting legal regulations, and how the administrative authority dealt with proposals and
objections of participants and with their opinion on the materials used.

Re letter b):
The possibility of priority (faster) processing of matters in cases determined by the law and
on the basis of higher fees was included in the proposal of the Administrative Procedure
Code, as submitted to the Government by the Minister of Interior on the 30th June 2001.
However, this institute was later excluded from the proposal of the act on the basis of an
opinion of the Legislation Council of the Government.

Re letter c):
The Government proposal of the Administrative Procedure Code regulates periods for
issuing an administrative act. According to this provision, an administrative authority is
obliged to issue an administrative act without unnecessary delay.
The proposal of the Administrative Procedure Code also includes regulation of protection
against inactivity, which a participant can use after the end of the period for issuing an
administrative act to file a procedural complaint at the appellant administrative authority. The
appellant administrative authority can make the necessary measures against inactivity from its
official authority.

Re letter d):
Creating a register of certain administrative punishments was intended to be a part of the
material design of the Act on Administrative Punishment. However, during internal
discussions at the Ministry of Interior in cooperation with other central administrative
authorities the prevailing opinion was that creating a central register of administrative
punishments would be too expensive and it would also significantly increase the workload of
central bodies of the state administration. At the same time, many experts questioned the
usefulness of such register.
If the central register of administrative punishments was to be established, the sphere of
action of the relevant ministry would also need to be determined either by an amendment to
Act No. 2/1969 Coll., on establishing ministries and other central bodies of the state
administration of the Czech Republic, according the valued amendment, or by passing a
separate act on register of administrative punishments.

The task is being fulfilled.

3.1.8 Jurisdiction of the Public Prosecutor’s Office

        The Minister of Justice was instructed within the Government Programme for Fight
against Corruption to carry out an analysis of position of the Public Prosecutor’s Office in the
network of state authorities, taking into consideration the possibility of extending its
jurisdiction also to supervision over lawfulness of civil judicial and administrative
proceedings. The Minister of Justice was also instructed to consider extension of the


                                              31
possibility to enter into civil judicial proceedings (typically, for example, in the cases of
actions for determining the validity of contracts arising from public contracts), into
proceedings within administrative justice, and into proceedings before Constitutional Court.
The Minister of Justice is also to ensure that specialised public prosecutors of regional public
prosecutor’s offices have supervision over investigation of the most serious forms of
organised crime, economic criminal activities and corruption, or that (also these) public
prosecutors can carry out the investigation themselves. The Minister of Justice should also
propose a method of investigating criminal activities of Police officers by public prosecutors.

        The provisions of Art. 66 of Act No. 150/2002 Coll., Administrative Punishment
Procedure Act, regulate special right of action for the protection of public interests. Action
can be filed by the Supreme Public Prosecutor, providing he finds the relevant public interest
significant. This Act came into effect on 1st January 2003.

        The amendment to Act on Public Prosecutor’s Office, No. 14/2002 Coll., with
efficiency from 1st March 2002 determines more accurate rules for appointment and removal
of officials of public prosecutor’s offices, makes relationships between the individual levels
of public prosecutor’s offices and between public prosecutors simpler and more transparent,
and emphasises the coordinating role of the Supreme Public Prosecutor’s Office, which
ensures that the whole system is more functional and can act more effectively than it has been
in the past. The authority of the Public Prosecutor’s Office to act in other than criminal
proceedings under the conditions and in a manner specified by the law is determined in the
general framework of the jurisdiction of the Public Prosecutor’s Office.

The task is being fulfilled.

3.1.9 Commissioning of public orders

        Legal regulation of matters related to public contracts is carried out by Act
No. 199/1994 Coll., on commissioning public contracts, according the valued amendment.
However, this Act even with a number of amendments did not remove certain ambiguities in
interpretation of terms, which results in legal uncertainty and therefore to excessive number of
requests – petitions for instituting revisionary proceedings. This obviously makes the entire
commissioning process lengthy and costly.
        Act No. 278/2002 Coll., which amends Act No. 199/1994 Coll., on Commissioning
Public Contracts, according the valued amendment, came into force on the 29 th May 2002.
This amendment will increase the transparency of economic environment during
commissioning public contracts because the possibility of concluding a contract on the basis
of a written invitation sent to one party interested in a public contract if “the Government of
the Czech Republic decides so” in accordance with Art. 50, par. 1, letter a) of the Act on
Commissioning Public Contracts, has been cancelled. Commissioners can continue to act in
accordance with Art. 50, par. 1, letter a) of the Act on Commissioning Public Contracts, and
commission a public contract on the basis of an invitation sent to one interested party only,
providing they prove objectively in the documentation on commissioning a public contract
that the conditions determined by the above-mentioned provision have been met.
      The Ministry for Regional Development prepared a proposal of a new Act on
Commissioning Public Contracts, on supervision over commissioning public contracts and on
changes of certain acts, which was submitted to the Government for reading in February
2003.


                                              32
        Further anticorruption mechanisms that will make offering and accepting bribes more
difficult have been included in the proposal of the Act. The Act should ensure that public
contracts are commissioned professionally; especially that commissioners and interested
parties are duly qualified. It should also introduce a system of certain supervision in the form
of an information system, which should also help to enhance the transparency of the process
of commissioning public contracts. The information system should include all of the
important details relating to commissioning public contracts (commissioner, applicant,
qualification, offer prices, conditions…). This information could be used to find out, for
example, whether the applicants are sufficiently qualified (according to comparison to lists),
whether the commissioner adhered to the lawful procedure, etc. Currently, the commissioners
are obliged to compile the so-called record sheets about the procedure of commissioning
contracts and send these sheets to the Office for Protection of Economic Competition. Since
mid 1999 the data from the record sheets have been saved in electronic database, in
accordance with Art. 52, par. 1, letter d) of the Act on Commissioning Public Contracts; this
database is then used to acquire information on commissioners, public contracts, and the
public finance spent. Commissioners carry out the commissioning of public contracts as legal
persons and use, in most cases, their own employees; larger public contracts are usually
commissioned through “appointed persons”, who carry out commissioning activities with the
exception of the authority to make decisions.
        Persons that commission public contracts often lack professionalism; their knowledge
of commissioning procedure is limited only to general knowledge of the Act on
Commissioning Public Contracts. Most educational courses organised in the commissioning
sector are focused on the legal regulation of the commissioning procedures only. The
education is provided through private agencies with varying professional qualification of
lecturers. In many cases the poor quality of education is also caused by certain ambiguous
provisions of the existing Act No. 199/1994 Coll., on commissioning public contracts,
according the valued amendment, which different lecturers interpret differently. The current
methods of education do not use educational programs compiled by international
organisations (such as the SIGMA - the Organisation for Economic Cooperation and
Development programme for increasing qualification in Central and Eastern European
countries). The low professional qualification of commissioners is one of the causes of
creation of a corrupt environment.
        As the new proposal of the Act does not include the institute of professional
qualification for commissioning activities, it is expected that a voluntary educational
programme will be carried out together with the application of the Act. The Ministry for
Regional Development is preparing this programme in cooperation with a German partner as
a solution of a twinning project under the programme PHARE 2000.
        The effectiveness of the act on public contracts is decreased by the fact that its current
version does not require institutions to determine clearly and in advance selection criteria and
thus allows the officials that select the winner to use their own discretion to a great extent.
Furthermore, the Act does not expressly prevent institutions from setting the selection criteria
in such manner that automatically excludes all applicants with the exception of the only
winner.
        Another problem in regulation of public contracts is the absence of any limitation of
subsequent increases in prices and changes in performance of the contract – these matters are
entirely subject to agreement between a supplier and investor.
        No formal system for keeping records of those companies that carry out public
contracts poorly has been established.




                                               33
        The supervision of public expenses is carried out by the Supreme Audit Office
(jurisdiction in accordance with Act No. 166/1993 Coll., on the Supreme Audit Office), which
is responsible for monitoring all main accounts of the state budget. The closest attention is
paid to individual audits. The Office selects concrete spheres of public administration for
these audits and analyses the lawfulness and effectiveness of public expenses in them. The
Supreme Audit Office is authorised to inspect those private entities that received subsidies
from the state budget (their management of these funds) in the supervision of the adherence to
the state budget.
        According to Act No. 320/2001 Coll., on financial inspection in public administration,
the Ministry of Finance and the individual administrators of heads can carry out inspections of
management of public financial means allocated to physical or legal persons as a part of
public financial support. The inspection bodies can impose penalties in accordance with
Articles 17 and 20 of the Act No. 320/2001 Coll., within these inspection activities.
        The evaluation of activities of the Supreme Audit Office during 2002 shows that the
inspected entities breached the relevant provisions of the Act on Commissioning Public
Contracts by commissioning public contracts without a tender; they concluded contracts on
the basis of invitations sent to one interested party only without meeting the conditions of this
procedure determined by the law.13
        The inspected persons also evaded the relevant provisions of the Act or applied them
differently, allowing discriminative selection of business partners. Consequently, they created
conditions favourable for potential creation of a corrupt environment and at the same time
restricted economic competition, for example, by:
            Excluding certain applicants from the evaluation of bids without a sufficient
             reason;
            Not carrying out the evaluation of bids according to the criteria stated in the
             conditions of a tender;
            Dividing supplies of a similar character into a number of partial fulfilments
             without a sufficient reason;
            Concluding contracts with suppliers who did not prove that they have met the
             qualification requirements, or by not requiring the proof of the suppliers’
             qualification;
            Not including all data and information necessary for compiling a bid in the tender
             documentation.

      However, in 2002 the Supreme Audit Office did not file any complaints relating to these
matters because the detected circumstances did not provide a sufficient reason for suspicion
of constituting merits of a crime in any of the cases.
      The jurisdiction of the Office for Protection of Economic Competition is regulated by
Act No. 273/1996 Coll., on jurisdiction of the Office for Protection of Economic Competition,
according the valued amendment by Act No. 187/1999 Coll., and new Act No. 143/2001
Coll., on Protection of Economic Competition, which regulates the protection of economic
competition on the market of goods and services against its elimination, restriction, other
breaches and threats to the competition arising from agreements between competitors, abuse
of dominating role of competitors or integration of competitors.
        The Office for Protection of Economic Competition carries out supervision of if and

13
  In 2002 the Supreme Audit Office commenced the total of 37 inspections. The Supreme Audit Office received
one incentive to inspection from the committee for science, education, culture, youth and sports of the Chamber
of Deputies of the Parliament of the Czech Republic (inspection of state budget funds intended for the
implementation of the State Informatics Policy in Education).

                                                      34
how competitors (physical and legal persons, their associations, associations of these
associations, and other forms of associating) fulfil their obligations arising from the Act on
protection of Economic Competition or from decisions made by the Office in accordance with
this Act. The Office for Protection of Economic Competition also publishes proposals for
granting individual exceptions from the ban of agreements, to allow association of
competitors and publishes the legitimate decisions issued by the Office. During the
performance of inspection the Office can institute proceedings on the basis of its own
incentive.

       The Annual Report of the Office for Protection of Economic Competition for 2001
includes an analysis of defects that occur when commissioning public contracts:

The most common mistakes of commissioners when commissioning public contracts:

   Determining unclear conditions in the public contract specification, or conditions that
    allow various interpretation in many cases and it is therefore not clear how the applicants
    should compile their bids to meet the specified conditions or to meet the evaluating
    criteria as close as possible;
   Addressing less entities when specifying a public contract than the number specified in
    the Act;
   Not requiring all conditions specified in the law (for example determination of payment
    conditions, often requiring from the applicants to state them in their bids, i.e. payment
    conditions are stated as one of the selection criteria);
   Not paying due attention to the criteria for evaluation of bids (often general criteria – such
    as the overall advantageousness of a bid – that do not state what exactly the commissioner
    intends to evaluate according to a criterion determined in this manner – evaluation
    according to a vaguely specified criterion is not transparent);
   Not including in the specification a requirement that states the manner of demonstrating
    the fulfilment of in a bid;
   Including discrimination elements in the conditions of tender specification; for example,
    when special conditions for the performance of the contract are used to favour certain
    applicants;
   Determining “very strict conditions” beyond the framework of the Act and finding our
    during the evaluation of bids that bids that do not meet these extremely strict conditions
    are acceptable (or even advantageous);
   Dividing a contract purposefully, to ensure that the commissioner does not have to use a
    procedurally more complicated method of commissioning a public contract.

   The most common mistakes made by commissioners when evaluating and selecting the
most suitable bid:

        During the evaluation of bids errors in adherence to basic principles valid for
commissioning public contracts, such as transparency of the commissioner’s procedures, no
discrimination of any of the applicants for a public contract, and the possibility of revision of
the commissioner’s decision on the choice of the most suitable bid, occur. Evaluation of bids
is carried out according to the amount of the offer price or according to the so-called
economic advantageousness of bids in accordance with the criteria stated in the conditions of
the specification of a public contract (Art. 6 of the Act.). If a commissioner opts for the
evaluation according to economic advantageousness of bids, the selection of suitable criteria
according to the object of the public contract fulfilment, which will genuinely lead to the


                                               35
selection of the most advantageous bid, is a very important step in the commissioning
procedure. The commissioners continue to select unsuitable criteria, such as “meeting the
qualification requirements”, “keeping to the effective date of the fulfilment”, etc. Completely
vague criteria, such as “the overall advantageousness of the bid”, “complexity of the bid”,
“advantageousness of the contract for work”, etc., do not enable the applicants to find out
what is more suitable for the commissioner and what the commissioner prefers.
        In many cases the evaluation of bids according to a number of criteria is impossible to
supervise because the report on the evaluation of bids does not include a brief description of
the evaluating method. The description should be especially thorough if using criteria that
cannot be measured objectively. The most common defects in the process of evaluating bids
also include:
 Breaching the principle of equality of all applicants; for example, a contract on the subject
    of the fulfilment is concluded with an applicant that should have been excluded from any
    further participation in the public contract because he did not prove meeting the
    qualification requirements, or did not meet the conditions for commissioning the public
    contract;
 The decision on the selection of the most suitable bid (or on exclusion of an applicant),
    which according to the Act must be made by the commissioner, is made by a person
    appointed to carry out the commissioning;
 Incorrect evaluation of meeting the qualification requirements on the part of the
    applicants, or meeting the conditions for commissioning;
 Absence of or insufficient reasoning of the commissioner’s considerations during making
    a decision what is and what is not an exceptionally low offer price;
 Lack of differentiating between the individual criteria for evaluation of bids according to
    their importance;
 Bids are evaluated according to different criteria than the criteria stated in the conditions
    for commissioning a public contract, or the commissioner divides the main criterion into
    partial criteria whose contents (object of evaluation) does not match the main criterion;
 Members of committees for evaluation of bids evaluate bids individually and then
    determine average evaluation (sometimes even by a vote), which may result in a faulty
    selection of the most suitable bid;
 Verbal reasoning of the selection of the most suitable bid is missing from the report on
    evaluation of bids;
 The documents required by the Act to prove the applicant’s qualification are not required
    before the contract with the selected applicant is concluded;
 The decisions of the commissioner on the selection of the most suitable bid, or the
    subsequent decisions on objections are not sent to the applicants registered mail with
    recorded delivery, which prevents the commissioners from knowing objectively whether
    the period for submitting objections, or the period for filing a proposal for revision of the
    commissioner’s decision on objectives have lapsed;
 Advice on the possibility to file a proposal for instituting proceedings before a supervisory
    body is missing from decisions on objectives;
 Not all documents acquired in connection with the selection of the most suitable bid,
    including the submitted bids, are filed, which objectively prevents the inspection of the
    accuracy of the commissioner’s procedure from being carried out.

       From the point of view of Police of the Czech Republic (ÚOK) the most significant
defect of the new proposal of the Act on Commissioning Public Contracts is the fact that it
does not establish any clear rules for a tender that would prevent the possibility to create a
corrupt environment. The main problem, i.e. the regulation of public contracts, remains


                                               36
unsolved; no limitation of subsequent increases in the price and changes during the
performance of the contract exists and these matters are therefore solely subject to
agreements between suppliers and investors (commissioners). The proposal of the Act
determined the increase by up to 50 % of the original price, which is totally
unacceptable. Furthermore, the proposals regarding inspection mechanisms and penalties are
inadequate to the prices of contracts. Excessively great manipulation space is allowed for
statutory exceptions that enable public institution to organise tenders with a limited circle of
participants, etc.
        ÚOK believes that it s necessary to consider in the existing Act on Public Contracts
certain provisions in the sphere that influences commissioning public contracts also in the
Penal Code. The Penal Code directly regulates only commissioning a public contract through
a tender. In the cases of other methods of commissioning public contracts (invitation to more
applicants, invitation to submit a bid to one applicant, and direct commissioning of a public
contract for the price usual at the time and in the location) the Penal Code does not include
any merits of a crime that could be applied to behaviour constituting “machination” in the
selection of an applicant; this behaviour is therefore judged especially according to Articles
127, 160, 161, and 255 of the Penal Code. The situations where a tender should have been
organised or an invitation to more applicants should have been sent to commission a public
contract but it did not happen are a significant problem. None of the merits stated in the Penal
Code describes this situation directly; criminal liability according to Art. 127, or Art. 255 of
the Penal Code can possibly be used. To eliminate these deficiencies ÚOK has proposed a
modification of provisions of Articles 128a and 128b.

         When preparing new legal regulation of commissioning public contracts or related
regulations the Minister for Regional Development should take the conclusions arising from
the evaluation of inspections of public contracts into consideration. Recommendations of
ÚOK and Supreme Audit Office should be integrated in the proposal of the Act on
Commissioning Public Contracts, which is currently under preparation.




                                              37
3.2    Organisational sphere

3.2.1 Conduct of public employees

        The issue of corruption is closely connected to the issue of ethics because ethical
conduct basically always has an anticorruption character. Ethics is an issue more urgent
in public administration than anywhere else. From the ethical point of view public
administration has certain specifics: it does not generate direct profit but it could bring
bribes, it provides relatively stable position and salary, the results of employees’ work
are difficult to measure, and it is strongly influenced by political factors.
        The Organisation for Economic Co-Operation and Development organisation is
dealing with the current tasks of ethics management on international level. The committee for
public proceedings of Organisation for Economic Co-Operation and Development published
in 1998 recommendation “Principles of Management of Ethics” and in 2000 a report on this
issue.
        The issue of conduct of public employees in the Czech Republic is being discussed in
relation to the current process of decentralisation of the state administration, which will
necessarily bring also changes of the social status of an employee in public administration and
therefore changes of the social influence and power, which is a source of possible corruption
and corrupt behaviour. However, conduct of public employees must be regulated on a
political level, for example, by introducing legislation and institutional measures that would
enforce ethical conduct and introduce penalties for illegal behaviour. Public supervision
should be enabled by transparent and democratic procedures, legislation and access to public
information. Transparency should be enforced through measures such as systems of providing
information, and by recognising the importance of active and independent media. Conduct of
employees of public administration in contact with the private sector should be governed by
clear rules that would determine the ethical requirements, for example, in the case of
interaction between the public and private sector the requirement to pay more attention to
values of the public administration and require acceptance of these values also from external
partners. Managing staff should demonstrate and support ethical conduct. It is necessary to
have reliable procedures and sources for monitoring, reporting, and investigating of breaches
of rules for public administration, together with adequate administrative or disciplinary
penalties that would discourage from abusing the authority. The Ministry of Interior in
cooperation with other administrative bodies has prepared and will continuously prepare the
necessary instruments.

Code of Conduct of Public Employees

       The Government Decree No. 270, of 21st March 2001 approved the “Code of
Conduct of Public Employees”. The Decree instructs the members of the Government,
heads of central government administration bodies and heads of district offices to
publish the Code for the use of their offices and to make their employees familiar with
this Code. In accordance with this Decree the Ministry of Interior published this Code
as informative material for the general public.
       The purpose of the Code is to support the desirable standards of conduct of public
employees and to inform the general public on the behaviour they are entitled to expect from
public emloyees. The Code is recommendation for employees of administrative authorities
and employees of municipalities.
       General Directorate of Customs has compiled the Code of a Customs Officer and the
employees are being acquainted with this Code.


                                              38
Code of Conduct of a Police Officer
        Specialised units of the Ministry of Interior compiled a proposal for Code of Conduct
of a Police Officer on the basis of the “Council of Europe Recommendation on to the
European Code of Ethical Principles of Police Work”.
        The Code defines desirable standards of conduct of the members of the Police of the
Czech Republic and provides the general public with an overview of behaviour they are
entitled to expect from the members of the Police of the Czech Republic. The Code is
recommendation for conduct of members of the Police of the Czech Republic in their
everyday Police practice.
        The basic principles of the proposal of the Code of Conduct of a Police Officer are
integrated in the drafted proposal of the Act on service officer’s of state service, which has
been approved by the Government and is currently discussed in the Chamber of Deputies
(House Print, issue 256).


3.2.2 Preventive activity and the public relations sphere

       All ministries are trying to make the process of providing state funds transparent
and significantly reducing the possibility of influencing the provision of state funds
during decision-making. All ministries established inspection workplaces authorised to
process complaints, reports, incentives and petitions submitted by citizens over the
phone or the Internet. Most ministries publish annual reports on activities of these
inspection bodies. Offices for public relations have also been established.

      The “Anticorruption Commission” operates within the Ministry of Interior. Members
of this commission are representatives of the Inspection of the Minister of Interior, Police
Presidium of the Czech Republic, Police of the Czech Republic (ÚOK), and the Department
for Internal Audit and Supervision of the Ministry of Interior. The subject of activities of the
Commission is, apart from corrupt behaviour of employees of the Ministry of Interior, also
detection of potential corrupt sources in the ministry, on the basis of which thorough follow-
up inspections and researches are proposed and carried out. The special telephone line of the
Office of the Minister of Interior and the e-mail address (stiznosti@mvcr.cz) established for
citizen’s complaints, incentives and reports on corrupt behaviour of employees in the Ministry
of Interior should also serve this purpose. Evaluation of submissions made during 2002 shows
that to submission relating to corrupt behaviour of employees of the Ministry of Interior or
members of the Police of the Czech Republic was made.
      A section called “Fight against Corruption” is published on the Internet pages of the
Ministry of Interior. The Government Programme for Fight against Corruption, reports on
Corruption in the Czech Republic, Code of Conduct, anticorruption conventions, information
on anticorruption activities abroad, and other information can be found here.
Information on the issue of corruption is published through press releases of the so-called
“Information Service of the Ministry of Interior”.
      The anticorruption campaign of the Ministry of Interior, which started in 2001,
continued also in 2002:
 The total of 500 leaflets with a joke with an anticorruption theme by famous artist
   Vladimír Renčín and information on the “anticorruption line” (phone number 974 832 222
   and e-mail stiznosti@mvcr.cz) were placed in the Prague Public Transport.


                                              39
   Competitions in national and regional radio broadcasting continued. The Ministry of
    Interior informed the public in this entertaining manner about what corruption is and what
    recourse is in the case of corrupt behaviour, etc. The winners received t-shirts and caps
    with the “anticorruption logo” and “Anti-Corruption Hotline”.
   A calendar for 2003 with jokes with an anticorruption theme by Vladimír Renčín and
    information on the “Anti-Corruption Hotline” (3 000 pieces) was printed and distributed
    to district headquarters of the Police of the Czech Republic.

        A number of operationally technical measures to prevent corruption were taken within
the Ministry of Finance – tax administration:
 Circulation of files between the assessment staff;
 Negotiations and inspections are carried out always by at least two employees of the tax
    administration, these pairs are not constant, employees rotate;
 Commissions consisting of at least three persons decide on relief in tax proceedings
    within the power of revenue authorities and all processed cases are recorded in writing;
 Using the programs “Reliability of Tax Statements for VAT” and “Selection of Entities
    for Inspection” as technical support for evaluation of taxable persons;
 Continuous random inspection of entire tax files;
 Checking system of two or more levels in the selection of an entity for an inspection or for
    instituting collection proceedings;
 Repeated internal audit of the possible conflict of service and private interests;
 Finance can only be accepted at the cash counter. The proposals for legal regulation (the
    proposal of the Tax Regulations, which assumes manipulation with cash up to CZK 5 000
    and the proposal of the Act on Limitation of Cash Payments) deal with this issue.
 Increased control of the computer network, especially for the cases of potential
    unauthorised access;
 Allocation of access rights in such manner that ensures that no employee of the tax
    administrator can make unlimited changes to the system.

        Within the Inspection of the Minister of Defence and in relation to publishing the
internal anticorruption programme the contact page of the electronic mail of the
Inspection of the Minister of Defence was established on the server http://www.army.cz,
where citizens can report cases of corruption or their suspicion of corruption in the
Ministry of Defence. An officer of the Inspection of the Minister of Defence –
coordinator of implementation of the internal anticorruption programme was appointed
to administer these pages.
        Test operation of a web page of the Inspection of the Minister of Defence where
relevant documents, such as the internal anticorruption program, and the results of selected
inspection findings, are gradually published is being carried out on the intranet of the Ministry
of Defence.
        During the previous year individual trade competitions in the sphere of handling
redundant assets were published in the media in a greater extent. Test operation of a system of
electronic auctions, which should increase the effectiveness of establishing contractual
relationships, was commenced on 1st December 2002.
        Although the Military Police is authorised according to Art. 21a of Act No. 124/1992
Coll., on Military Police, according the valued amendment, to use traps and security means
when fulfilling their tasks according to Art. 3, letter f) of the above-mentioned Act (Protection
of Military Material and other State Assets Managed by the Ministry of Defence), they are not
authorised to use these means in relation to proceedings on crimes in the same way as, for
example, the members of the Police of the Czech Republic.


                                               40
        The indication of sources and forms of corrupt behaviour in other ministries is
carried out within inspection inquiries, especially during regular inspections of management
of state budget finance and state assets in the apparatus of the ministry, in organisations
established by the ministries, and in entrepreneurial and other entities. Inspections are carried
out in accordance with plans of inspection activities and relate to, among others, selection
procedures according to Act No. 199/1994 Coll., on Commissioning Public Contracts and
Providing Investment and Non-Investment Subsidies from the State Budget, where the
occurrence of corruption is especially likely. Performance of further inspections is based on
reports submitted by citizens. Inspections are also carried out on the basis of direct orders of
ministers.
        Personal computers installed in halls that provide the general public with transparent
access to all required information according to Act No. 106/1999 Coll., on free access to
information, appear to be a good solution.


3.2.3 Agreements between the Police of the Czech Republic and inspection (especially
      financial) institutions in order to improve their mutual cooperation, including their
      communication and ensuring exchange of information necessary for their activities

       The relevant measures within the sphere of action ÚOK, and mainly in the money
laundering sector, are implemented on the basis of the Implementing Protocol between the
Financial Analytical Unit of the Ministry of Finance of the Czech Republic and the Police of
the Czech Republic - Service for the Detention of Organised Crime of the Service of Criminal
Police and Investigation (currently ÚOK) of 20th March 1997, which was concluded in the
sense of Art. 4 of the Agreement concluded in relation to the necessity to implement
further measures against legalisation of proceeds from crimes.

       At the end of 2001 the Ministry of Interior and the Ministry of Finance concluded an
Agreement on joint procedure, mutual assistance and cooperation in actions against
criminal activities that threaten the state’s fiscal interests. The Agreement authorised the
Director of the Central Financial and Tax Directorate and the Police President to conclude
implementing protocols to the Agreement, which should specify the concrete methods of
cooperation in fulfilment of the subject of the Agreement in detail. At the same time the
relevant bodies of tax administration and the Police of the Czech Republic were appointed
with the fulfilment of the Agreement.

       In relation to the fulfilment of tasks assigned to ÚOK and arising from the “Updated
Strategy for Combating Organised Crime” cooperation between the Czech Securities
Commission, Czech National Bank Banking Supervision, Czech Banking Association, and
the Police of the Czech Republic was established at the end of 1998. However, this
cooperation still does not have the character of an official agreement in writing.

        On the 7th January 2002 the Agreement on cooperation in fulfilment of tasks in
criminal proceedings in cases where a public prosecutor carries out criminal
proceedings against members of the Police of the Czech Republic, between the Superior
Public Prosecutor’s Office, Police Presidium of the Czech Republic and the Inspection of the
Minister of Interior was published in the collection of orders of the Inspection of the Minister
of Interior. The purpose of this agreement is to avoid disputes on exercising authority and
competence when carrying out tasks within criminal proceedings and when carrying out


                                               41
activities necessary for the fulfilment of tasks in criminal proceedings in cases where a public
prosecutor is carrying out criminal proceedings against members of the Police of the Czech
Republic.

       The Financial Analytical Unit of the Ministry of Finance cooperates with bodies that
supervise financial institutions on the basis of concluded agreements, as well as according to
the law (for example, cooperation with the Czech Securities Commission and Prague
Securities Centre according to Act No. 61/1996 Coll., according the valued amendment). The
cooperation, especially with authorities active in criminal proceedings, is evaluated regularly
and the necessary measures of an operative character are taken.

        The Agreement on cooperation and mutual relationships between the Military
Police and the Police of the Czech Republic, which is fully implemented in the practice, in
the fight against corruption, is very important in relation to the Ministry of Defence and the
Ministry of Finance.


3.2.4 Detected cases of corruption in jurisdictions of the individual ministries

        The Ministry of Interior – the Press and Public Relations Department informs the
general public regularly about cases processed by the “Anticorruption Commission” on the
basis of journalists’ questions. The Police of the Czech Republic compile annual summarising
information on the number of complaints about behaviour of Police officers dealt with by
inspection bodies of the Police of the Czech Republic. The Inspection of the Minister of
Interior publishes a report on criminal activities of Police officers.

       In 2002 the general inspection department of the Ministry of Justice recorded 7
submissions that included suspicion of corrupt behaviour of employees in the justice sector.
All submissions were transferred to local branch offices of ÚOK of the Police of the Czech
Republic. However, the Police of the Czech Republic have not confirmed the preliminary
information on the possible corruption.

        In 2002 the General Inspection of the Ministry of Foreign Affairs in one case lodged
a complaint against a former head of a representation of the Czech Republic in Yemen for
justified suspicion of committing a fraud according to the provisions of Art. 250, paragraphs 1
and 2 of the Penal Code and distortion of data on the state of financial management and assets
according to provisions of Art. 125, par. 1 of the Penal Code. The investigator of the District
Office of Investigation, Prague 4 subsequently notified the above-mentioned persons of
charges brought against him for the above-mentioned crimes. Authorities active in criminal
proceedings have closed the case lawfully by a verdict on sentence.
        In 2002 incentives for investigation were submitted to ÚOK on the basis of results of
inspections carried out by the General Inspection of the Ministry of Foreign Affairs in two
cases. However, the investigation of these incentives has not been completed.

       Within the authority of the Ministry of Finance in c u s t o m s a d m i n i s t r a t i o n
(according to the records of the Ministry of Finance – General Directorate of Customs) 106
cases of suspicion of illegal conduct of employees in relation to the discharge of their office
were submitted to the authorities active in criminal proceedings on the basis of internal
inspections. In 2002 the authorities active in criminal proceedings notified the total of 47
employees of the charges. These were mainly cases of abuse of authority of a public official,


                                                42
accepting a bribe, evasion of taxes, dues and other similar payment, and a theft. The number
of charges slightly decreased in comparison to the previous period. Less serious cases of
insufficient performance of duties were dealt with according to Art. 33 of Act No. 186/1992
Coll., on service relationship, and disciplinary punishments were imposed (reprehension in 93
cases, written reprimand in 90 cases and salary cuts in 116 cases). Seven employees were
temporarily exempted from the service and subsequent to inspection findings 19 employees
were dismissed.
I n t a x a d m i n i s t r a t i o n (according to the records of the Central Financial and Tax
Directorate) 8 cases of suspicion of illegal conduct of employees were reported on the basis of
internal inspection. One case is still being investigated by authorities active in criminal
proceedings, another two cases are currently tried before the court, in four cases the offenders
were sentenced and the suspicion of a criminal activity was not proven in one case.

        In 2002 within the Ministry of Defence the Military Police investigated the total of 50
reports of behaviour with elements of corruption. However, corruption was not proven.
Fourteen of the above-mentioned cases (mainly of a property character) were transferred for
further investigation to materially and locally relevant units of the Service of Criminal Police
and Investigation of the Police of the Czech Republic. In most of these cases the
documentation has not been completed due to the complexity of the probation.
        The Inspection of the Minister of Interior received a number of reports on unusual
course of tenders for resale of immovable assets unnecessary for the state. These cases mainly
related to repeated cancellations of the individual rounds of tenders, which in some of the
cases resulted in a sale for prices that were mere fractions of the prices originally determined
by an expert. These cases were transferred to ÚOK of the Police of the Czech Republic.
        In 2002 a case of attempted corruption occurred at the army unit in Náměšť nad
Oslavou. An applicant for a job offered a bribe at the Personnel Department in order to
acquire a job as a professional soldier. The Military Police was called to the case immediately
and the offender admitted that he had offered a bribe. The case was handed over for further
investigation to the Service of Criminal Police and Investigation of the Police of the Czech
Republic.
        In 2002 within the Ministry of Labour and Social Affairs a case of accepting bribes
by a medical assessor of the District Branch of the Social Security Administration in Brno -
City was closed by delivering a judgement.
        Submission informing about the possible acceptance of bribes in determination of due
amounts by employees of the District Branch of the Social Security Administration in Prague
- East was found unjustified. A case of two foreign citizens at the Local Branch of the Social
Security Administration Prague 1, who tried to force CZK 500 onto two employees for
issuing a certificate of zero indebtedness of their firm, was closed by warning them about the
unacceptability of their behaviour; the required certificate was issued without any problems.
        The Labour Office in Domažlice gave notice according to the provisions of Art. 46,
par. 1, letter f) of the Labour Code for serious breach of work discipline to one of their
employees – an employee of the inspection-legal department. This employee required that the
inspected person contracts the firm operated by the particular employee (against his duties of
an employee of a state administration body) to carry out his accountancy as a return service
for not stating the deficiencies detected by the inspection in the inspection record.
        The materials of other ministries show that no case of corrupt or similar behaviour was
detected within their authorities in 2002.

       Internal audit departments of central government administrative bodies provide the
authorities active in criminal proceedings upon their request with information on the


                                              43
particular cases, including information on the carried out inspection inquiries, providing this
information is available to them. These departments are prepared to cooperate with
parliamentary investigating commissions in the relevant spheres, if invited into the
cooperation by the above-mentioned bodies.
        Regular inspections focused on those areas that may be exposed to corruption (public
contracts, inspections of implementation of measures recommended during thorough
inspections of financial management in directly controlled organisations) are carried out in all
departments. If a personal responsibility for the detected negative actions is established, these
cases are solved by personnel measures. Number of departments amended their internal
regulations relating to inspection. Certain ministries also have a special advisory body that
should help to intensify the inspection mechanisms in order to improve the detection of
negative occurrences and determination of personal responsibility.


3.2.5 Support of scientific research on corruption

        In May 1999 the agency UNIVERSITAS (researcher: doc. Dr. J. Buriánek, CSc.)
carried out the “Security Risks 1999” research within a grant of the Ministry of Interior of the
Czech Republic. This sociologic research was a base for subsequent series of researches that
combine wide cross-sectional study with operative diagnosis of the current security issues. A
series of researches called “Continual Research of Victimising and the Citizens’ Sense of
Security” was carried out during 2000-2002.
        The Institute for Criminology and Social Prevention, which is a research facility
within the structure of the Ministry of Justice, includes tasks related to various aspects of
corruption in its activities. These are especially researches on organised crime (already third
stage of a research on organised crime is being carried out during 1999-2003) and economic
crime. Expert estimates of occurrence of corruption and types of corrupt behaviour are carried
out within this research; these estimates have been regularly monitored since 1992 and the
results have been published in specialised publications.


3.3    Educational sphere and influence of the media

        As a part of projects of joint education of Police officers and specialists in
investigation and detection of corruption the issue of corruption is included in the
lifelong education programme of the Police Academy of the Czech Republic, which is
organised in the academic year 2002-2003 as a three-day course.
        A seminar “On Issues of Corruption and Bribery” with international participation was
organised at the Police Academy of the Czech Republic in September 2002.
        Within the Ministry of Finance – customs administration the issue of combating
corruption was integrated in all types of professional training. In the introductory preparation
a new employee is acquainted with the Code of Conduct of Public Employees, basic and
specialised courses deal with the issues relating to the Code of Conduct of a Customs Officer
(deontology) within a subject called “Conduct and Behaviour of a Customs Officer”.
        A decision of General Directorate of Customs instructs the managing staff to train the
so-called integrity of employees in customs administration in relation to the Code of Conduct,
behaviour, conduct, and combating corruption in the form of a special topic within
instructional methodical preparation. The issue of integrity of employees of customs
administration was also included in all seminars organised for directors of customs
authorities.


                                               44
        The Ministry of Finance organised a number of lectures relating to the issue of
corruption. These seminars were organised in the legal sphere (for example seminars on
management of state assets, relating to Act No. 106/1999 Coll., and methodology for
subsidies), as well as in tax, supervision, and inspection spheres (for example seminars on
consumption tax from alcohol, tax records, courses on evaluation for tax purposes, internal
audit, tax inspection, price inspection of financial headquarters, legislation and performance
of the state supervision, and fight against legalisation of proceeds from criminal activities).

        Within the Ministry of Defence the emphasis in increasing special and ethical
qualification of employees at acquisition workplaces is placed on strict adherence of the
relevant norms of Act No. 199/1994 Coll., on commissioning public contracts, according the
valued amendment, the provisions of Order of the Minister of Defence No. 36/2001 Bulletin –
Directive on Commissioning Public Contracts Within the Authority of the Ministry of
Defence, and other documents. These activities are carried out annually and are also focused
on precise application of Order of the Minister of Defence No. 6/2002 of the Bulletin of the
Ministry of Defence regarding the issue of providing donations to units of the Army of the
Czech Republic.
        During 2002 the selected members of the Military Police continued in their specialised
educational course focused on economic and financial crimes, which is organised under the
management of the Ministry of Interior at the Police Academy of the Czech Republic in
Prague.
        Employees of the National Armaments Authority took part in a basic course on
commissioning public contracts and were informed about the criminal-legal consequences of
breaches of legal regulations, the duty to inform and procedure in the case of suspicion of
corrupt behaviour.




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3.4     International co-operation

3.4.1   International legal instruments on corruption – state of their ratification

Organisation for Economic Cooperation and Development Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions

        The Convention was signed in Paris, on 17th December 1997, published in Notification
of the Ministry of Foreign Affairs No. 25/2000 Collection of International Conventions, and
came into effect for the Czech Republic on 21st March 2000. To implement the Convention
and fulfil obligations arising from this Convention the Minister of Justice compiled an
amendment to Penal Code No. 96/1999 Coll., which includes a definition of a bribe and
extends the recourse according to Articles 160 to 163 of the Penal Code to those persons who
are foreign public officials in the sense of the Convention. Amendment No. 492/2000 Coll.
modified Act on Income Tax No. 586/1992 Coll., and consequently the provisions of Art. 25,
par. 1, letters zf) expressly excludes tax deductibility of fulfilments provided to a foreign
public official in relation with the discharge of his office.
        The requirement of Art. 8 of the Convention relating to audit services was
fulfilled by passing Act No. 254/2000 Coll., on Auditors. The Act determines auditors’
duty to inform a statutory and supervisory body of the unit of accountancy or the
individual Regional Assembly in the case of detecting facts that might constitute the
merits of a crime, including bribery. Due to the preparation and passing the amendment
to Act on Auditors No. 219/2000 Coll., effective from 1st July 2002, further partial
reduction of handling state assets that require approval was made. The principles of the
Organisation for Economic Cooperation and Development Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions up to the
general business conditions and applications for insurance of a loan, or application for a
loan in the Export Guarantee and Insurance Cooperation and Czech Export Bank were
implemented within the workgroup for export loans and export guarantees of the
Organisation for Economic Cooperation and Development Trade Committee.
        The fulfilment of the requirements according to this article is also ensured in the
amendment to Act on Accountancy No. 353/2001 Coll., especially in the provisions on the
meaning of keeping books as a set of accounting records in written or technical (electronic,
optic, etc.) form, including transfer and conclusiveness of the data. The amendment came into
effect on the 1st January 2002.
        A workgroup on combating bribery in international business transactions
(members are representatives of the Ministry of Justice and the Ministry of Finance) was
appointed within the Organisation for Economic Cooperation and Development (OECD) on
the basis of the provisions of Art. 12 of the Convention to check the implementation of the
provisions of the Convention. Also countries that are not OECD members are parties to the
Convention (Argentina, Brazil, Chile, Bulgaria, Slovenia), discussions on accepting more
non-member countries are currently in progress in OECD.
        The workgroup performed an examination of the so-called Stage I, i.e. examination of
how the individual signatories integrated the provisions of the Convention into their national
legal systems. Examinations of the Stage II, which focus on implementation and enforcement
of legislation, were commenced at the end of 2002. At the same time other issues included in
the recommendation of the OECD Council on combating bribery of foreign public officials in
international business transactions from 1997 are being discussed. The discussions focus on
the following issues:



                                             46
    -   Bribery in relation to foreign political parties;
    -   Advantages promised or provided to a person on the basis of an expectation that this
        person will become a foreign public official;
    -   Bribery of foreign public officials as predicative crime for money laundering, role of
        foreign branches and offshore centres in bribery.

        The Czech Republic takes active part in the examinations (under the management of
the Ministry of Justice in cooperation with the Ministry of Finance). In 2000 Czech Republic
underwent the examination of the Stage I. The conclusions of the examination were positive,
although it included recommendation to pay attention to the issue of criminal liability of legal
persons, fine improvements of legislation relating to audit and explicit exclusion of bribes
from items deductible from the tax base. The Czech Republic reacted to the last mentioned
recommendation by the relevant amendment to the Act on Income Tax. In 2001 experts of the
Ministry of Justice and the Ministry of Finance carried out examinations of the Stage II for
Finland (it was the first country ever examined in the Stage II) and additional examinations
for Slovakia.
        As examinations of the Stage II for al signatories of the Convention should be
completed in 2007, discussions on the method of their financing are currently being carried
out in OECD. As the Czech Republic sees the fight against corruption as one of the priority
activities of OECD, it supports finding a solution that will allow the fulfilment of this
objective.

Legal Instruments of the Council of Europe
Criminal Law Convention on Corruption

          The Convention was adopted on 27th January 1999 in Strasburg and came into effect
on the 1st July 2002 also for the Czech Republic. The Czech Republic ratified the Convention
on the 8th September 2000. The Convention was published in Notification of the Ministry of
Foreign Affairs on the Criminal Law Convention on Corruption No. 70/2002, Collection of
International Conventions. The convention criminalizes a number of types of corrupt
behaviour of domestic or international character.
          The Convention means a s i g n i f i c a n t c h a n g e i n t h e p r o c e d u r e s o f t h e
P o l i c e o f t h e C z e c h R e p u b l i c in documentation of corrupt behaviour. Offences
related to corrupt behaviour cannot be (due to the low sentence for these offences) included in
the category of “especially serious crimes” in the sense of Art. 41, par. 2, and Art. 62 of the
Penal Code and certain procedures necessary for documentation, such as wire-tapping,
recording telecommunication, and especially operatively investigating means, could not be
used due to this classification before the Convention came into effect.

Civil Law Convention on Corruption

        The Convention was adopted on 4th November 1999 in Strasbourg. It was signed on
behalf of the Czech Republic on 7th November 2000. Its implementation in the Czech
Republic will be carried out in relations to the reform of the private law. The last adjustment
that required modification of Art. 106, par. 1 of the Civil Code, extending the subjective
prescription period for compensation for damage caused by corrupt behaviour, was made by
the amendment to Civil Code No. 136/2002 Coll. (effective from the 1st January 2003). The
amendment completes the provisions of Art. 106 in the following manner: “If the damage was
caused by breach of a legal obligation resulting from providing, offering, or promising a bribe
by other than the injured party, or resulting from a direct or indirect request of a bribe from

                                                   47
the injured party (hereinafter only referred to as “corrupt behaviour”), the right for
compensation for damage originated in this manner will lapse in three years from the day the
injured party learnt about the damage and about the persons responsible for the damage, but at
the latest ten years from the day the corrupt behaviour occurred.” The Ministry of Justice
submitted the Convention to the Chamber of Deputies (the Chamber of Deputies approved the
Convention on the 4th March 2003).

3.4.2 Activities of the Czech Republic within international organisations

Council of Europe

        The Ministry of Foreign Affairs is the coordinator for the Czech Republic in relation
to expert committees of the Council of Europe; the individual ministries are managers of the
tasks arising from the work of the individual committees.

        Groupe multidisciplinaire sur la Corruption (GMC, Multidisciplinary
Group on Corruption), was established on the basis of a proposal of the 19th conference of
European Ministers of Justice in Malta in 1994 and started working in 1995. Representatives
of the Ministry of Interior and the Ministry of Justice are delegates of the Czech Republic.
Within the Council of Europe the work on the following matters was completed within the
activities of GMC:
 Proposal of Additional Protocol to the Council of Europe Criminal Law Convention on
    Corruption, which should extend the application of the Convention also to cases bribery
    of jurors and arbitrators;
 Proposal of Recommendation of the Committee of Ministers on mutual rules against
    corruption in financing political parties and election campaigns;
        The prepared documents were submitted to the Committee of Ministers of the Council
of Europe for further discussion.

GRECO – Group of States against Corruption

        The Czech Republic became a regular member of GRECO (Group of States against
Corruption) on the 8th February 2002. GRECO is a work group operating within the Council
of Europe; so far 34 states became members of this group (including the USA). The
Convention on establishing GRECO was accepted by the Committee of Ministers on the 5th
May 1998 and the group itself started its activities in May 1999, when a sufficient number of
states joined the Convention on establishing GRECO.
        The purpose of the existence of GRECO is creating a mechanism that monitors
through mutual evaluation the implementation of obligation arising from anticorruption
conventions of the Council of Europe; the group currently focuses especially on the adherence
to the “Twenty Guiding Principles for the Fight against Corruption” (a strategic document of
the Council of Europe accepted in 1997 with the purpose to identify the most important
spheres for the fight against corruption and determine a long-term conception). Since the
beginning of 2003 (in relation with the so-called second stage of the member states
examination) certain provisions of the Criminal-law Convention on Corruption have also been
included in the monitoring.
        The mutual evaluation of the GRECO member states ensures exchange of key
information on anticorruption efforts in the individual countries, which helps to make the
international cooperation in law enforcement more effective. In accordance with the Statute of
GRECO the main objective is improvement in the capacity of the member states by the


                                             48
mutual exchange of ”anticorruption know-how” in creation and enforcement of legislative and
organisational measures in the fight against corruption.
        The activities of the Czech Republic within GRECO include especially the
participation in examinations of anticorruption measures introduced in the individual member
states, ensuring a smooth course of examination of the Czech Republic and participation in
making decisions on further focus of the Council of Europe in areas connected to the fight
against corruption. The Czech Republic is represented in GRECO by two permanent
representatives; one from the Ministry of Justice and one from the Ministry of Interior. An
employee of the Police of the Czech Republic (ÚOK) and a judge of the Higher Court in
Prague also participated in activities of GRECO in 2002 (as experts participating directly in
examinations of other member states).
        Examination of the Czech Republic was carried out during 1 st – 4th October 2002,
when GRECO experts met with representatives of a number of governmental and non-
governmental entities and institutions. The mission went smoothly, experts were
satisfied with its course. The Council of Europe compiled a report on examination of
anticorruption measures in the Czech Republic and this report was approved in the 13 th
plenary meeting between 24th and 28th March 2003.

Overview of recommendations for the Czech Republic:

1. To combat not only corruption itself but also to increase the public awareness of corruption
    threats, which could shake the economic, social and political foundations of the society of the
    Czech Republic; to place strong emphasis on objective research on corruption in the country;
2. To provide proper education on the use of operative means in detection and investigation of
    corruption for the relevant authorities, including creation of methodical guidelines; to ensure that
    operative means are used in detection of corruption duly and effectively;
3. To duly revise and apply the Government Programme for Fight against Corruption in such manner
    to ensure that:
   a) The authority responsible for the implementation and coordination of the programme is clearly
   identified;
   b) Concrete, specific steps whose implementation can be duly checked are determined; and
   c) The awareness of the programme for fight against corruption is increased as much as possible
        in relation to public institutions (especially those the implementation of the programme related
        to), as well as in relation to the general public.
4. To facilitate reporting suspicion of corruption from the citizens to the greatest possible extent and
    to establish suitable and effective programs for protection of witnesses and victims in the cases of
    detection of corruption;
5. To interconnect and rationalise the functions of the operative and investigation parts of the Police
    as much as possible and to complete the merger of the operative and investigation parts of the
    Police in detection and investigation of corruption as soon as possible;
6. To provide training in investigation to those parts of the Police that deal with the fight against
    corruption as soon as possible;
7. To provide sufficient human and material resources for activities of the Unit for the Detention of
    Corruption and Financial Crimes of the Service of Criminal Police and Investigation;
8. To strengthen the role of the Public Defender of Rights (Ombudsman) in the prevention and
    combat of corruption and to increase the awareness of this role of the Public Defender of Rights
    (Ombudsman) among the general public;
9. To reconsider the system of immunity of the members of the Parliament of the Czech Republic in
    the sense of application of concrete and objective criteria for depriving the members of the
    Parliament of their immunities; to reconsider the current system, which excludes prosecution of a
    member of the Parliament of the Czech Republic even after the end of the term of his office.




                                                  49
Stability Pact

         Stability Pact helps to improve legal and organisational framework of the fight against
corruption in the countries in South-Eastern Europe. Legal systems of the states in the
relevant region are evaluated and mechanisms for combating corruption are proposed within
this initiative. The Council of Europe, Organisation for Economic Co-Operation and
Development, and the World Bank are the main organisers of this initiative. Representatives
of the Ministry of Justice and the Ministry of Foreign Affairs participate in the work of this
initiative.

OCTOPUS II

        OCTOPUS II is the second joint programme of the European Commission and the
Council of Europe for the fight against organised crime and corruption in the countries in the
transition stage. Sixteen states, including the Czech Republic, are included in the programme
(the Czech Republic participated also in the implementation of the OCTOPUS I program).
The purpose of the programme is to strengthen capacities, policies, and cooperation (national
and international) for the combat of organised crime and corruption in Europe. The
programme should help the candidate countries to implement the EU acquis and to accept the
relevant instrument of the Council of Europe. The programme includes nine topics:
criminalizing corruption and organised crime and support of sanctions in the Penal Law;
criminal liability of legal persons; strengthening investigation means; strengthening
cooperation between units and creating specialised units; protection of witnesses and victims;
economic and financial crime; prevention of juvenile crime and delinquency; strengthening
international cooperation; international sharing of sensitive information. The activities of the
programme include series of seminars and study trips focused on the particular topics. Experts
of the Ministry of Interior and the Police of the Czech Republic, representatives of the
Ministry of Justice, judges, public prosecutors, and experts from the Ministry of Finance
(Financial Analytical Unit, General Directorate of Customs) take part in these seminars and
study trips.

European Office for Fight against Fraud - OLAF (Office de la Lutte Anti-Fraude)

         The Office was established in April 1999 when it also took over tasks previously
carried out by UCLAF (Unité de Coordination de la lutte Anti-Fraude). The main task of
OLAF is the protection of financial interests of the EU. It includes especially detection of
“irregularities” and financial frauds in handling with the EU budget funds. The Office consists
of a number of units focused especially on agriculture, information technology, gathering
information, evaluating legislation, coordination and legal expert examinations. The units
operate of course in relation to the possible financial frauds in the EU bodies. Activities of
OLAF target internal EU institutions (Commission, Council, Parliament) and their
representations in EU member states, with the exception of European Bank for
Reconstruction and Development and European Central Bank. In terms of individual cases or
suspicions, the Council instructed OLAF to investigate thoroughly all reported cases. From
the legislation point of view OLAF is based on the Convention on the Protection of the
Community's Financial Interests and two protocols of this Convention that regulate
legal procedure in relation to the implementation of the Convention, determine the relevant
definition in corruption, allow exchange of information and focus on the issue of legal
liability of physical and legal persons and money laundering. Practical activities of OLAF and
its concrete results are based on the fact that OLAF is obliged to investigate suspicions of


                                              50
“irregularities” or frauds as such, while it is the duty of all EU bodies to inform OLAF in the
cases of these suspicions immediately. In general, the investigation of OLAF is of an
administrative character because OLAF does not replace authorities active in criminal
proceedings. During the last approximately 5 years approximately 50 serious cases have been
dealt with; however, only some of them were solved successfully and were dealt with by
courts (were transferred to national authorities). This is due to the problematic detection of
financial frauds, lack of experience of individual judges in the member states with cases
relating to international financial crimes. Number of these cases relate to direct payments of
EC, which account for approximately 20 % of the budget. In terms of inspection of finance
allocated through the PHARE, SAPARD and ISPA programs, the rules are included in the
relevant financial memoranda and OLAF is only submitted in the case of suspicious
transactions. Activities of OLAF are documented in the report of the Commission on the
Protection of the Community's Financial Interests and in the OLAF Report.

        On the 22nd October 2001 the Convention on cooperation between the European
Office for Fight against Fraud and the Supreme Public Prosecutor’s Office of the Czech
Republic on fight against frauds and other illegal actions that damage the financial
interests of the Community during the period prior to the entry of the Czech Republic into
the European Union was signed and came into effect on the 1st January 2002. Consequent to
the Convention negotiations between the Supreme Public Prosecutor’s Office, OLAF, and
other institutions were carried out in Brno during 28th and 29th January 2002; a representative
of the Ministry of Finance also took part in these negotiations.
        The results of these negotiations included the proposal for Agreements on
Cooperation between the Supreme Public Prosecutor’s Office and Other Concerned
Institutions. The following agreements were concluded: agreements on cooperation between
the Supreme Public Prosecutor’s Office and the Ministry of Finance - General Directorate of
Customs (25th April 2002), between the Supreme Public Prosecutor’s Office and the Ministry
of Transport and Communication (25th April 2002), between the Supreme Public Prosecutor’s
Office and the Ministry of Environment, between the Supreme Public Prosecutor’s Office and
the Ministry for Local Development, between the Supreme Public Prosecutor’s Office and the
Ministry of Agriculture, and between the Supreme Public Prosecutor’s Office and the
Supreme Audit Office (23rd May 2002). In November 2002 an OLAF mission visited all
central bodies that signed the Agreement on Cooperation.

         To strengthen the cooperation between the Czech Republic and the EU in the fight
against economic crime the Ministry of Justice approved a Decree that extends the
jurisdictions of the specialised units of the Higher Prosecutor’s Offices in Prague
and Olomouc, and the Supreme Public Prosecutor’s Office in Brno in such manner to ensure
that they also provide protection of the financial interests of the EC. The Decree came into
effect on the 8th June 2001 and was published under No. 183/2001 Coll. (Decree of the
Ministry of Justice, which amends Decree of the Ministry of Justice No. 23/1994 Coll., on the
Rules of Procedure of the Public Prosecutor’s Office, on establishing branches of certain
Public Prosecutor’s Offices and on details of acts carried out by lawyers - aspirants, according
the valued amendment). Creating these specialised units and the above-mentioned extension
of their jurisdictions is seen within the EU very positively as effective enforcement of
institutional framework for the fight against corruption in the Czech Republic.




                                              51
United Nations

        The United Nations Office on Drugs and Crime (UN ODC)14 with its seat in Vienna is
the key body within the UN system that focuses on the issue of corruption. This body does not
solve cases of corruption inside UN (this is within the authority of the Office for Internal
Supervision) but focuses on corruption in general. The so-called Global Programme against
Corruption is one of the five global programs of the technical assistance of the UN ODC. The
remaining four programs are:
    - Global Programme of Action (against the Illicit Production, Sale, Demand, Traffic and
        Distribution of Narcotic Drugs and Psychotropic Substances);
    - Global Programme against Trafficking in Human Beings;
    - Global Programme against Money Laundering;
    - Global Programme against Terrorism.
        The main objective of the Global Programme against Corruption is to create in all
involved countries such anticorruption mechanisms that will best help in the concrete
conditions to detect corrupt practices, including their value aspect. The United Nations
Convention against Transnational Organized Crime, which has recently been finalised,
together with three protocols to this Convention (the Protocol against the Illicit Manufacturing
of and Trafficking in Firearms, Their Parts and Components and Ammunition; the Protocol to
Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children; the
Protocol against the Smuggling of Migrants by Land, Sea and Air) are a step of a historic
importance. The UN Convention regulates in the provisions of Art. 8 the issue of
criminalizing corruption, and in the provisions of Art. 9 determines measures against
corruption. It also solves the issue of legal liability of legal persons, which is very closely
related to corruption, for example in business relationships. The UN Convention was signed
at the conference in Palermo during 12th –15th December 2000 and was open for signing in
New York until 12th December 2002. The Czech Republic signed the Convention already at
the conference in Palermo in December 2000 but has not ratified it to this day. The
responsible bodies of the preparation of the ratification of this Convention are the Ministry of
Interior and the Ministry of Justice.
        10th Conference on the Prevention of Crime and the Treatment of Offenders, which
was organised in Vienna in April 2000, initiated the preparation of a completely independent
international contractual document against corruption. This initiative was formalised in 2001
– the proposal underwent the necessary procedure within the Centre for International Crime
Prevention (CICP), the UN Economic and Social Council, and the General Assembly, which
allocated the finance for the work of the so-called Ad Hoc Committee for the Negotiation of
a Convention against Corruption.
        In order to create conditions for effective work of the Ad-hoc Committee a preparatory
meeting was organised in Buenos Aires at the beginning of December 2001. More than 30
“national” proposals for the wording of the individual articles and sometimes even complete
texts of the future contractual document on fight against corruption were gathered at this
meeting. The Czech Republic was formally represented at the meeting by an employee of the
representation in Buenos Aires. The number of contributions enabled the CICP secretariat to
collect a compilation of the proposal for the new contractual document, which was used as the
basis for meetings of the Ad-hoc Committee in Vienna. A group of government experts met in
summer 2001 in Vienna and prepared a mandate for composing agreement of the future
contractual document against corruption. This document will be historically the first universal
contractual regulation of the international fight against corruption. The relevant partial,
14
  UN ODC is the new name (since 1st January 2003) of the former United Nations Office for Drug Control and
Crime Prevention (UN ODCCP).

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already existing legal documents (within the EU, OECD, Council of Europe, etc.) were taken
into consideration in the preparation of the text. This new global instrument against corruption
should, among other things, define corrupt behaviour, determine its criminal character and
sanctions, including freezing, confiscating and returning finance gained in this illegal manner,
determine the legal liability of legal persons, determine rules for protection of witnesses and
victims of offences related to corruption, etc. The new regulation will also include the
creation of a mechanism of international cooperation focused on combat of legalisation of
proceeds from corruption, on gathering and analysing information, on technical cooperation,
and on monitoring of the fulfilment of the obligations by the contracting parties.
        Representatives of the Ministry of Interior and the Ministry of Justice participate
actively within the Ad-hoc Committee in negotiations in the Plenary, as well as within a
number of workgroups. First three sessions were hold through the year 2002, the last three
sessions took place through the year 2003. The conference where the Convention is going to
be signed will take place in Mérida, Mexico. The conference is planned in December 2003.

Role of Brettonwood institutions

        The main task of the International Monetary Fund (IMF) is monitoring of exchange
rates and supervision over the international payment system. IMF also provides short-term
loans for improving balance of payments. The purpose of the World Bank’s (WB) activities is
the support of development of economies of developing and transition countries especially
through long-term financing. Neither, the International Monetary Fund or the World Bank has
any special programme or body created for the fight against corruption. Fight against
corruption in public administration is seen as fight against interconnection of business and
political circles and is carried out as a part of the general efforts of these financial institutions
to maintain sustainable growth and macroeconomic and financial stability. The IMF started to
pay slightly more attention to this issue at the end of the 90’s; the International Monetary and
Financial Committee focuses on this issue (among others) within the IMF. The reason is the
economic and financial instability of the third world countries, which is to a great extent
caused by the above-mentioned interconnection between state administration and
entrepreneurial circles.
        In many strategies and recommendations of the IMF and WB anticorruption appears in
the form of “good governance”. These could be documented, for example, in initiatives of
IDA (International Development Association – initiative of WB focused on aid for the least
developed countries) and HIPC (Heavily Indebted Poor Countries, joint initiative of IMF and
WB focussed on discharge from debts of the poorest countries), where the criterion “good
governance” exists as one of the conditions for allocation of a loan, or for decrease of a debt.
The Czech Republic participates in both initiatives. The Ministry of Finance and Czech
National Bank are in charge of both of these organisations.

International police cooperation

        The National Police Service of INTERPOL plays a significant role in international
cooperation in fight against serious economic crimes, financial crimes, and corruption.
Interpol is an intergovernmental organisation whose main task is the fight against organised
crime. Its activities are gradually extending with the development of “new crime fields” in the
conditions of advancing globalisation. The activities of this organisation currently include
also fight against illegal migration, illicit sale of narcotic drugs, economic and financial crime
(Euro counterfeiting and money laundering), computer crime, trafficking in women, etc.



                                                 53
Interpol does not focus on corruption in general and does not have any specialised units for
this purpose.
        The Agreement on Cooperation between the Czech Republic and the European Police
Office EUROPOL of 5th March 2002, according the valued amendment by exchange of
personal notes (Haag, 13th February 2002, Prague, 5th March 2002) came into effect on the
16th August 2002 (modification of the Agreement allowed extension of cooperation also on a
new mandate of Europol, i.e. corruption).
        Immediately after the accession to the European Union the Czech Republic will
also join the Convention based on article K.3 of the Treaty on the European Union, on
the establishment of the European Police Office (Europol Convention) and will thus
become a regular member of this organisation.
        The Czech Republic cooperates in combating corruption with other states also on the
basis of a number of bilateral international agreements that regulate police cooperation in
fight against serious forms of criminal activities.

International seminars and projects PHARE

        An international police course “Police Ethics and Corruption” was organised in
October 2002 under the auspices of the Belgian Chamber of Representatives. This course was
organised in cooperation with the International Centre of Sociological, Penal and Penitentiary
Research and Studies (INTERCENTRE). Employees of the managing ministries, i.e. the
Ministry of Justice and the Ministry of Interior, took part in the course.
       In 1999, in relation to the solution of the fight against serious economic criminal
activities the implementation of measures arising from the fulfilment of the “Accession
Partnership of the Czech Republic to the EU” and “National Programme for the Adoption of
Acquis for the Membership in the EU”, which focused on the “coordination of activities of
the individual bodies that have the fight against economic crimes, including money
laundering, as their task”, was commenced.
       Consequent to the fulfilment of these tasks the project PHARE 2001 - Fight against
Corruption and Serious Economic Criminal Activities was approved in 2001.
       The implementation of this project commenced in May 2002, when a pre-accession
advisor from SRN - Mr. Ralf Rosanowski started working at ÚOK. The completion of this
project is planned for June 2004, the courses will continue until 2005. The project consists of
8 training components in total, carried out mainly by experts from the Federal Republic of
Germany, Baden-Württemberg:

     1.   Economic crimes
     2.   Money laundering
     3.   Secret operations
     4.   Criminal intelligence analysis
     5.   European institutions for law enforcement
     6.   Corruption
     7.   Justice – judges, public prosecutors
     8.   Confiscation of proceeds from criminal activities

      All components have a similar structure – preparation of experts in the Czech Republic,
seminar in the Czech Republic, study trip abroad (Federal Republic of Germany, the
Netherlands, Belgium), final seminar in the Czech Republic, evaluation.
      ÚOK is the manager of the project implementation; a steering committee consisting of
representatives of all participating units participates in the management of the project. Nine


                                              54
employees of the unit who will be responsible for the cooperation and the fulfilment of these
parts of the project were appointed for the above-mentioned 8 modules by the order of the
Director of ÚOK.
       A number of experts from Federal Republic of Germany were received in 2002 as a part
of preparation, to map the need of the Police of the Czech Republic within the individual
modules and to determine details of further course of action. To this day the total of 7
specialised seminars in the Czech Republic with the participation of 21 experts from Federal
Republic of Germany were organised. 143 participants from the Police of the Czech Republic,
General Directorate of Customs, Financial Analytical Unit of the Ministry of Finance and the
Supreme Public Prosecutor’s Office took part in these seminars. Two study trips to the
Federal Republic of Germany were organised for 26 participants, especially from the Police
of the Czech Republic.
       Specialists of ÚOK also made a number of other contacts with foreign partners during
seminars and conferences organised by entities within or outside their department. Also a
number of “border meetings” on operative cooperation on regional level took place (Poland,
Slovakia, Austria, Federal Republic of Germany). Direct cooperation between ÚOK and the
Financial Police Office of the Criminal and Financial Police Administration of the Slovak
Police Presidium, which is carried out on the basis of the relevant bilateral agreement and
implementing regulations, continued also in 2002.
       Despite the non-existence of contractual documents intensive cooperation between the
Czech Republic and Ukraine is being carried out. This cooperation is expressed through
operative and legal assistance, especially in relation to breaches of international agreements
on trading with military material. The cooperation is of a highly professional character, the
information provided is direct, clear, fast and relevant, and it has contributed in a major way
to instituting criminal prosecution.
       The attitude of other partners (USA, Canada, United Kingdom, Federal Republic of
Germany, Austria) to the issue of cooperation is clear – in operative cooperation they prefer
direct contacts of specialised workplaces, which is conditional on the necessary language
skills and personal acquaintance of the employees in the individual units or contact officers of
these units. However, official requirements within criminal proceedings must be made
through Interpol and legal assistance.
         Since September 2001 a pre-accession advisor from United Kingdom –
Superintendent John Mottram has been working at the Ministry of Interior within the
twinning project Fight against Organised Crime PHARE 2000. The twinning project is
divided into a number of modules, three of which relate to fight against corruption on the
strategic level (training for key representatives of state administration in United Kingdom), as
well as on the practical law enforcement level (training for higher and middle police
management). Finally, the project also includes a seminar with the participation of British
experts – Prevention and Detection of Corruption and Serious Economic Criminal Activities.
         In 2002 the General Directorate of Customs of the Czech Republic participated in the
project for ensuring integrity through benchmarking, which was implemented under the
auspices of the European Commission within the CUSTOMS 2000 programme and in which
also customs administrations from Federal Republic of Germany and the Netherlands took
part. The participation in the project brought knowledge of the situation in the participating
countries and also provided incentives for further development of different systems for
corruption prevention and ensuring integrity. It also allowed the evaluation of the extent of
this problem in the individual participating countries and provided material for preparation of
recommendation of measures and instruments for fight against corruption to be implemented.
A report on this joint project was submitted to the Global Forum II on Fighting Corruption
and Safeguarding Integrity.


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 4       O T H E R M E A S U R E S TA K E N I N O R D E R T O E L I M I N AT E O F F E N C E S R E L AT E D T O
                                               CORRUPTION




4.1     Activities of the Ministry of Finance

         The inspection of the c a p i t a l m a r k e t is carried out by the Czech Securities
Commission, which is an independent administration body. This means that no other
institution interferes in the decision-making authority of this body. This is connected with
certain concentration of decision-making authority but decision-making in two levels
distributes this authority between more employees of the Commission. This issue is regulated
by the Act on Administrative Proceedings (Administrative Procedure Code) and the internal
regulations of the Czech Securities Commission. The newly prepared acts on enterprise on
capital market, collective investment, and bonds should, apart from harmonisation with the
EC regulations, allow greater transparency of operations on the capital market and thus
increase the effectiveness of supervisory activities.
         In accordance with the relevant provisions of Act No. 21/1992 Coll., on banks,
activities of b a n k s , including their branches operating abroad, are subject to banking
supervision carried out by the Czech National Bank. A bank is obliged to require that a client
proves his identity in every transaction of the value exceeding CZK 100 000, and when
renting safety deposit boxes. A bank can refuse to provide the services with maintaining the
client’s anonymity. A bank is obliged to ensure identification of a depositor when
administering his bank account and in other forms of acceptance of his payments, and to keep
records of the depositor’s identification data. All deposit relations documented by passbooks
n the bearer were cancelled on the 31st December 2002.
         Also in c o o p e r a t i v e b a n k i n g Act No. 87/1995 Coll., on Savings and Loan Co-
operatives, according the valued amendment, expressly bans accepting anonymous deposits.
The Office for Supervising Savings and Loan Co-operatives has been established for
inspection of activities and financial management of cooperative savings societies and the
Security Fund of Savings and Loan Co-operatives. This Office is established as an
independent institution and operates as an administrative body within the extent determined
by the Act on Savings and Loan Co-operatives. Similarly to the case of the Czech Securities
Commission, it can be said that the legislative regulation cannot fully eliminate potential
corruption.
         Material design of the act on l i m i t a t i o n o f c a s h p a y m e n t s has been
approved by the Government within the Government Programme for Fight against
Corruption. The intention behind this act is the limitation of cash payments exceeding a
certain amount. The above-mentioned amount stated in the proposal was decreased compared
to the original intention from CZK 500 000 to CZK 100 000. Apart from a number of
practical advantages of more frequent use of non-cash payments the purpose of the proposal is
to limit the possibility of money laundering or tax evasions. This act applies to mutual
payments between physical and legal persons with permanent residence or a registered office
in the Czech Republic, and to payments made by these entities abroad. The sphere of action of
this act should also relate to branches of organisational units of foreign entities established in
the Czech Republic. The new proposal of the act was submitted to the Office of the
Government of the Czech Republic for discussion on 13th December 2002.
         Measures for fight against corruption in the i n s u r a n c e i n d u s t r y relates basically
only to the issues of insurance settlement because certain elements of corruption may appear
in relation with dates of their payments by insurance companies. The conditions for insurance

                                                      56
settlement are currently regulated by the provisions of Chapter XV of the Civil Code, where
in Art. 797 the maturity of insurance settlement is mentioned from the point of view of the
investigation necessary to establish the extent of the due fulfilment. This provision also
mentions reasonable advance payments of insurance settlement in those cases where the
investigation has not been completed within one month from the day the insurer was informed
about the insurance event. A proposal of the act on insurance contract, which specifies the
above-mentioned provisions on insurance settlement, was submitted to the Government at the
end of 2002.
        Similar provision is contained in Act No. 168/1999 Coll., on insurance of liability
from operation of a vehicle, in Art. 9. The amendment to this Act (in Art. 9) also states that
the insurer is obliged to investigate the insurance event without unnecessary delay and within
3 months either to complete the investigation of the insurance event and inform the injured
about the amount of insurance settlement, or to provide reasons why the claims of the injured
party have been refused in writing.
        The time limits for payments of the supplementary pension insurance benefits, transfer
of supplementary pension insurance funs and returning state contribution to supplementary
pension insurance determined by Act No. 42/1994 Coll., on supplementary pension
insurance with the state contribution, exclude corrupt behaviour on the part of pension funds.
        Improving the cooperation between supervisory financial institutions – Czech
National Bank, the Czech Securities Commission and the Ministry of Finance is the objective
of a trilateral agreement signed on the 1st June 1998. A new agreement on cooperation with
supervisory bodies on capital market, which should also contribute to more effective
coordination of planning and exchange of findings from supervisory activities, is currently
under preparation. These supervisory bodies do expect – in the case of suspicion of criminal
activity – to cooperate with the bodies of the Police of the Czech Republic.

4.2    Activities of the Ministry of Defence

        The approved r e f o r m o f a r m e d f o r c e s has a significant influence on fight
against corruption. The reform promotes stronger value-orientation of military and civil staff
based on the Code of Conduct of a Military Professional and promotes new way of thinking,
which is based on the principles of modern management and new findings in military area..
All of this should result in a change of the overall atmosphere inside the Ministry of Defence,
which will be hostile against all signs of corruption. This new internal structure will be
implemented through education and training, development of internal communication,
organisational changes, and enforcement of certain new internal norms for decision-making
processes, including those with the potential for occurrence of corruption. The reform
introduces a new system of medium-term planning with a long-term outlook, which will
interconnect material and financial planning and will objectively create conditions for
transparency of the internal processes with the possible occurrence of corruption. The reform
proposes an effective model of acquisitions in the Ministry of Defence and promotes a
simplified and transparent procedure in transfers of the unnecessary immovable assets of the
state to municipalities.
        Within the Ministry of Defence a significant change to the a c q u i s i t i o n s y s t e m ,
system of policy for subsidies, including the relevant internal regulation, was made. The
above-mentioned measures contributed to a significant increase in transparency of the
acquisition process though (among others) creating and using “electronic market” according
to Government Decree No. 683, of 26th June 2002, which creates conditions for the use of
effective inspection mechanisms free of the influence of a personal factor. The extent and
quality of inspections increased, among others, in relation to activities of state owned


                                                 57
companies established by the Ministry of Defence where representatives of the Ministry of
Defence are members of supervisory bodies.
        The Council for Prevention and Combat of Negative Phenomena (with the Minister of
Defence as the chairman and chief officers of the Ministry of Defence as the members) was
established at the Ministry of Defence as a part of the reform for the purpose of prevention
and recourse of serious negative phenomena, including corrupt behaviour. The Commission
for Prevention and Combat of Negative Phenomena serves the same purpose on operatively
tactical levels.
        Increased attention was paid to administrative proceedings carried out according to the
Military Service Act, in particular conscription proceedings. Inspections focused on corrupt
behaviour in this sphere were carried out during the administrative proceedings by
examination of level-one decisions, and within examination of complaints and incentive
submitted by citizens. Detection of corrupt behaviour was also a part of all regular
inspections. Organisational measures, which included preparation of members of inspection
commissions and other employees, and transparency of specialised activities and
administrative proceedings, were taken for this purpose.




                                              58
     5         E VA L U AT I O N O F F U L F I L M E N T O F TA S K S A R I S I N G F R O M T H E G O V E R N M E N T
         D E C R E E N O . 3 9 1 O F 1 7 T H A P R I L 2 0 0 2 , O N T H E R E P O RT O N C O R R U P T I O N I N T H E
                                               C ZE C H R E P U B L I C I N 2 0 0 1




5.1          Tasks assigned to the Minister of Interior

Task No. 3a)
To continue in the cooperation with other members of the Government in public
discussion on creating a minimum joint anticorruption programme for the Czech
Republic

        Projects that create “anticorruption coalitions” (i.e. coalitions that support the
anticorruption program) are a frequent subject of anticorruption recommendations of United
Nations, Organisation for Economic Cooperation and Development, and Council of Europe.
However, practical examples of implementation of these mechanisms are rare. The example
from the neighbouring Slovakia, where the local branch of Transparency International
implemented a similar project called Anticorruption Minimum15 during 2002, can be used as
good inspiration for the Czech Republic.

        The Minister of Interior addressed during 2001 and 2002 representatives of various
important institutions publicly active in the Czech Republic (political parties, trade unions,
professional chambers, non-governmental organisations, media, academic community) and
asked them to express their willingness to pronounce their support of the project (in the case
of political parties) and to provide concrete additional proposals for improving the quality of
the project.

Overview of entities involved in the project to a various extent:
   - Relevant political parties: Czech Social Democratic Party, Christian and Democratic
       Union / Czechoslovak People’s Party, Union of Freedom, Civic Democratic Party,
       Communist Party of Bohemia and Moravia;
   - Committee for Foreign Affairs, Protection and Security of the Senate of the
       Parliament of the Czech Republic;
   - Ministry of Justice (co-manager) and other entities within the structure of the
       ministry: Institute for Criminology and Social Prevention, Supreme Public
       Prosecutor’s Office, and theSupreme Court of the Czech Republic;
   - Other entities within the Ministry of Interior: Police Academy of the Czech Republic,
       Legislation, Coordination of Regulations and Compatibility with the EC Law
       Department, Inspection of the Minister of Interior, Department for Complaints and


15
   In the middle of 2002 a workshop in which representatives of relevant political, social, and economic
institutions in Slovakia (including representatives of the media and non-governmental organisations) was
organised in Bratislava. The results of this meeting included formulation of 29 brief theses and 15 propositions,
jointly referred to as Anticorruption Minimum. Representatives of most political parties in Slovakia signed the
text containing these theses and propositions. Transparency International Slovakia has carried out first evaluation
of fulfilment of the signed obligations. The evaluation focused on how the individual political parties in Slovakia
incorporated the theses of the Anticorruption Minimum in their election programs in autumn 2002. The main
positive conclusion relating to the Anticorruption Coalition programme in the Czech Republic that can be drawn
from the above-mentioned facts is that implementation of a similar programme is possible. In Slovakia, this
project created a situation where if a party decided not to join the document, it would damage this party’s image.



                                                             59
       Inspection of the Police Presidium, Unit for Detection of Corruption and Financial
       crimes;
       Other entities: Czech Chamber of Advocates, the Institute of State and Law of the
       Academy of Sciences of the Czech Republic, Journalists’ Syndicate, Chamber of
       Commerce of the Czech Republic, Supreme Audit Office, Czech-Moravian
       Confederation of Trade Unions, Transparency International Czech Republic, Open
       Society Fund o. p. s., GfK, Office of the Public Defender of Rights (Ombudsman),
       Czech Statistical Office, Centre for Economics and Politics, Liberal Institute, Czech
       Medical Chamber, Faculty of Law of Charles University, Czech Invest, Czech Trade.

       The issue of fight against corruption over the last years have been dealt with by a
number of institutionalised appearances (representatives of the Police of the Czech Republic
before the members of the Subcommittee for Fight against Corruption of the Committee for
Foreign Affairs, Protection and Security; thematic lectures and seminars organised by
representatives of state administration; participation of representatives of the Czech Republic
in a number of foreign or international conferences and meetings focused on fight against
corruption), as well as non-institutional activities with participation of the civic society in
general.
       One of conclusions that can be drawn from these activities is that the entities involved
would appreciate further intensification of the mutual communication and a deeper insight
into all aspects of this issue. The main benefits of the emerging project could be the
following:

   -   Exchange of specific experience related to fight against corruption between members
       of the individual state institutions, political parties and other entities;
   -   Creation of a complete idea of the framework for fight against corruption for the
       involved parties (through looking at the issue from other entities’ perspective);
   -   Possibility of informal creation of partial ad-hoc work coalitions dedicated to
       overcoming concrete obstacles in implementation of anticorruption measures according
       to the current interests of the entities involved;
   -   Exchange of information on the current development in creation of international legal
       instruments for fight against corruption within various international organisations;
   -   Representatives of political parties expressed their interest in the participation in
       related discussion, which is one of the expected outputs agreed preliminarily in the
       workshop;
   -   Possibility of establishing informal relationships between the participants present,
       which could help to make the mutual communication between the entities represented
       in the plenum faster and more effective.

        A concept of the project, which consists of series of thematically focused workshops,
was created on the basis of the response of the addressed entities and on the basis of the latest
experience with the existence of similar initiatives abroad. The information aspect of a
workshop will always play an important role in every meeting (exchange of information
and know-how between representatives of state administration, political sphere and other
entities), focusing, for example, on recognised international standards and well-tested practice
of fight against corruption in democratic countries.
        The first workshop (on the 24th April 2003) serves the purpose of a work pilot meeting
with the objectives to determine a more concrete time schedule for further work, focus of the
work and the contents of the potential outputs (information analytical materials or other
documents).


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Task No. 3b)
To analyse in cooperation with other members of the Government the possibility of
using the integrity test in the conditions of the Czech Republic and to propose the
method and conditions for its use to the Government by the 31st December 2002

        To fulfil this task The Ministry of Interior of the Czech Republic compiled a separate
document called “Analysis of the Possibility of Using Integrity Tests in the Conditions of the
Czech Republic, Proposal of Method and Conditions for its Use” and submitted it to the
Government of the Czech Republic on the 22nd January 2003 for discussion.
        The material is constructed as an analysis of the possible implementation of the
integrity tests in the conditions of the Czech Republic and at the same time contains a concept
proposal for its legal regulation and the subsequent practical implementation. The integrity
test should be another element in the system of anticorruption measures and should, in
connection with the already existing measures, significantly help to combat corruption in the
Czech Republic. The material also includes an analysis of the possible use of the existing
institutes of the legal system in fight against corruption (pretended transfer and other
operatively investigating means according to the Code of Criminal Procedure). One of the
important parts of the document is the proposal of narrower and wider form of the integrity
tests and the conditions for their use.
        Integrity test is a term generally known in international anticorruption
discussion. The Czech Republic would not be the first country to introduce the integrity
test. The integrity test is currently practically used in many countries, especially in
security services. Experience of these countries was used in compiling this document.
        The institute referred to as the integrity test in narrower form would allow making a
pretended offer of a bribe to a group of persons exactly specified by the law (the so-called test
of corruptibility). The wider version of the integrity test also includes inspection of
employees’ assets and can include other measures to test the employees’ willingness to adhere
to their legal obligations when performing their activities.
        Both forms of the integrity test relate to a specific circle of employees – members
of security community. The original intention of the workgroup was to create an
integrity test that would apply to almost all public employees. However, after a lengthy
discussion the group arrived at the conclusion that in the first stage the integrity test will
be designed for members of security service only. The reason for this is that although the
occurrence of corruption in public administration is alarming, its combat in members of
security service is the basic condition for gradual minimizing of corruption in the state
as a whole and introducing the integrity test for this category of persons will also allow
the evaluation of this measure and potentially its consequent introduction also for other
categories. Public prosecutors and judges are the next category of persons who should
be subject to the integrity test. Integrity testing should be carried out in all authorities
active in criminal proceedings to increase their overall resistance against corruption.
        A pretended offer of a bribe (test in a narrower form) should be used only under
conditions exactly specified by the law. The pretended offer should be used as an instrument
for combating corruption in the cases where corrupt behaviour is not sufficiently documented
and thus the means according to the Penal Law cannot be used. It should also be used as an
instrument for prevention in groups of people with significant opportunity for corruption due
to their positions. A concrete supervisor should be authorised to request the integrity test and
inspection bodies of the relevant units should be authorised to carry out the test itself together
with the documentation of the action. The use of the integrity test should be subject to a
previous approval of a relevant independent body. This condition should ensure that the


                                               61
integrity test couldn’t be abused. The consequences of the integrity test are the most
significant factor. If the employee’s corrupt behaviour is proven, the consequences should
always arise from the Labour Law, not Penal Law.
        The integrity test in the wider sense for the purposes of this document means also
providing explanation of the origin of assets and income. This measure should relate to the
same circle of entities as the pretended offers of bribes. This test should contain description,
upon a request of a relevant supervisor, of employee’s assets and incomes, including assets
and incomes of persons sharing a household with the particular employee. The purpose of this
type of inspection should be prevention and potentially also repression. Non-compliance with
the request would result in labour-legal recourse for the particular employee. Supervisors
should have the means for reverse check to find out whether the person provided truthful and
complete explanation. If the explanation were based on a suspicion of corrupt behaviour, the
supervisor would be obliged to inform the relevant authorities about this fact. Protection of
personal data is also dealt with in the document in relation to providing these details as a part
of the test.
        The integrity test in the proposed version relates to a limited circle of persons. After
the practical use of the test has been evaluated, the test could be applied to two more circles of
employees (firstly, public prosecutors and judges, secondly, officers of state administration
and municipalities).
        The Government discussed the document “Analysis of the Possibility of Using
Integrity Tests in the Conditions of the Czech Republic, Proposal of Method and Conditions
for its Use”, appointed a workgroup that will investigate further the possibility of using the
integrity tests in the conditions of the Czech Republic and recommended this institute in
criminal proceedings.
        The 1st Deputy Prime Minister and the Minister of Interior, in cooperation with the
Deputy Prime Minister, Minister of Justice, Minister of Foreign Affairs, and the Minister of
Informatics, should complete an analytical document on the possibility of using the integrity
tests in the conditions of the Czech Republic in relation to the possibility of using the
instruments available according to the Penal Law when documenting criminal activities of a
corrupt character and submit it to the Government by the 31st August 2003.

5.2    Tasks assigned to the Minister of Finance

Task No. 4a)
To compile legal regulation of the relevant rules that would allow specialised Police
bodies dedicated to serious economic crimes, corruption, and organised crime the access
to information acquired in tax proceedings without the limitation stated in Art. 24 of Act
No. 337/1992 Coll., on administration of taxes and dues , according the valued
amendment, and to submit it to the Government by the 31st December 2002

        The Ministry of Finance compiled the proposal of the act on tax procedure regulations,
which should come into effect on 1st January 2004 and replace the existing Act No. 337/1992
Coll., on Administration of Taxes and Dues, according the valued amendment. The text of the
relevant provision that, if accepted, will allow specialised units of the Police of the Czech
Republic an exception from the tax confidentiality determined by the law to the full extent of
tax proceedings was integrated into the newly prepared tax procedure regulations. The
proposal of the Act was submitted to the Government of the Czech Republic on the 30th April
2003. Legal regulation of the relevant provision integrated in the proposal of the act on tax
procedure regulations – a part of Art. 9 of the proposal of the tax act under preparation, status
as of 18th February 2003:


                                               62
(3) The duty to maintain confidentiality does not apply:
a) To a court, in relation to information on the income tax base from entrepreneurial
   activities and other self-employment, from capital assets, rent and other income of a
   physical entity for the purposes of an affiliation order;
b) To the Supreme Audit Office, if this Office is carrying out an inspection within its
   authority and in accordance with the approved plan of inspections;
c) To specialised parts of Police force specified by the Minister of Interior
   1. for detection of legalisation of proceeds from criminal activities;
   2. for fight against terrorist activities and detection of their sources of finance;
   3. for fight with serious economic crime, corruption, and organised crime,
   in relation to details necessary for proceedings on crimes committed in areas stated under
   items 1 to 3, providing it is in accordance with the public interests;
d) If it is necessary in criminal proceedings to clearly detect circumstances that suggest that
   the following crimes were committed: non-payment or evasion of tax, due, or a similar
   compulsory payment, credit fraud, unauthorised use of subvention of subsidy, failure to
   fulfil the duty to declare in tax proceedings, distortion of data on the state of economic
   management and assets, crimes that arise from not reporting or not preventing other
   crimes, crimes committed by public officials, crimes against exercising authority of a
   state body or a public official, and bribery. In relation to these crimes a public prosecutor,
   and after the charges have been brought, the court, can request data acquired in relation to
   administration of tax that are a subject of the duty to maintain confidentiality; A tax
   administrator fulfils the duty to report specified by the law to the same extent.7)
e) In tax administrator’s fulfilment of his duty to report according to letter c) in relation to
   crimes related to counterfeiting and modifying duty stamps, counterfeiting and modifying
   stamps for marking goods for tax purposes, breach of regulations on stamps for marking
   goods for tax purposes, reporting counterfeited and modified money, counterfeiting and
   modifying a public record, unauthorised manufacture and possession of a state seal and
   an official stamp, and obstructing execution of an official decision, providing they
   occurred directly in relation to committing tax-related crimes stated under letter c), to the
   extent necessary for their complete detection; This condition of direct relation to tax-
   related crimes does not apply when fulfilling the duty to report counterfeited and
   modified money and obstructing execution of an official decision.


Task No. 4b)
To appoint 25 employees of local revenue authorities into permanent joint teams of the
Ministry of Interior and the Ministry of Finance for documentation and withdrawal of
proceeds from criminal activities, enforcing compensation for damage incurred by
criminal activities, identification and collection of unpaid tax, by the 31 st December
2002.

        In accordance with the specification of the task the determined number of employees
of the tax administration was appointed to work in the permanent workgroups. The employees
selected meet the requirement of extensive qualification in tax issues.
        At the same time the establishment of a separate department, which will operate as a
methodical and coordination workplace under the direct control of the Section Director, is
being prepared at the Central Financial and Tax Directorate.

7)
       Art. 8, par. 1, second sentence of the Code of Criminal Procedure.


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5.3    Task assigned to all members of the Government and the Director of Security
       Intelligence Agency

Task No. 2
To compile anticorruption programs of the individual ministries and to appoint
responsible coordinators of their implementation by the 31st December 2002
        All ministries compiled their internal anticorruption programs and appointed relevant
responsible coordinators of their implementation. Managements of the relevant ministries
approved the internal anticorruption programs. The programs are specified according to the
units in the spheres of authority of the individual ministries and contain time-schedules of
tasks, in some ministries (the Ministry of Interior and the Ministry of Defence) already
finalised by stating concrete dates for their fulfilment. The programs were compiled mostly as
general and require further, more detailed specification of concrete procedures by the
individual managing units. Chief officers according to their post and authority determined by
the internal organisational rules are responsible for the fulfilment of the measures taken
within the programme in their relevant ministries. A section for internal audit evaluates the
effectiveness of the internal inspection system and the introduced measures in most of the
ministries.
        The internal anticorruption programme of the Ministry of Finance determines high-
risk areas, positions and activities in the ministry, i.e. those areas of activities where
corruption occurs or may occur. Consequently to the determined “corruption risks” the
programme defines basic system measures in the following areas: administrative regulation,
transparency and automation of administrative decision-making procedures, strategic
separation, rotation and transfer of employees, duties and responsibilities of the management,
inspection, ethics and organisational culture (Code of Ethical Behaviour), recruitment and
selection of new employees, professional development, public relation, awareness and public
supervision. The anticorruption programme of the Ministry of Finance is arranged in three
areas: basic area of integrity of the Anticorruption Programme of the Ministry of Finance,
Action Plan of Integrity of General Directorate of Customs and Internal Anticorruption
Programme of the Central Financial and Tax Directorate.
       The internal anticorruption programme of the Ministry of Foreign Affairs defines the
major factors in fight against the possible corruption at the Ministry of Foreign Affairs,
determines the problems that occur in the individual factors, and proposes solutions in the
following areas: rotation and transfer of employees, duties and responsibilities of the
management of the Ministry of Foreign Affairs, inspection, organisational culture,
recruitment of new employees, code of ethical behaviour, professional development, adequate
remuneration, selection proceedings and investment activities.
        The internal anticorruption programme of the Ministry of Education, Youth and
Sports determines crisis or high-risk areas (activities) in the decision-making process and
measures for decreasing these risks. The following high-risk areas-activities were determined:
department of the budget manager, sending to business trips abroad, granting scholarships to
foreign citizens and to citizens of the Czech Republic abroad, inspection and revision –
public-law inspection, legislation and legal matters – representing the ministry, personnel
proceedings – recruitment of employees, ensuring the operation of the ministry,
administration of assets, their use, maintenance, renewal and records, department of the chief
accountant, economic department – allocation of funds from the state budget, including and
excluding schools, pre-school and educational facilities in the network, fulfilment of joint
tasks, selection proceedings for positions of directors of schools and educational facilities

                                             64
managed by the Ministry of Education, Youth and Sports, remuneration for directors of pre-
school facilities, schools and educational facilities managed by the ministry, financing the
state information policy in education, providing subsidies to public and private schools,
providing special subsidies for science and research, making decisions on granting
accreditations, allocating subsidies to civic associations dedicated to youth and sport,
concluding contracts (deliveries of goods and services, contracts for services, leasing and
renting, etc.), commissioning public contracts – tenders, concluding contracts for work and
contracts for services, management of the funds in “FKSP” (Fund for Cultural and Social
Needs).
       The internal anticorruption programme of the Ministry of Justice focuses on
departments with possible occurrence of corruption, such as department for complaints and
pardons, department for organisation and supervision, department for compensation,
economic management department, personnel section and general inspection, and describes
potential risks and therefore options for prevention of corrupt behaviour of employees in
Public Prosecutor’s Offices, courts, and prisons.
        The internal anticorruption programme of the Ministry of Defence focuses on those
areas that are exposed to the greatest danger of corruption: dealing with public contracts,
management of state assets, making decisions on rights, legally protected interests or duties of
citizens in administrative proceedings, making decisions in matters related to service
relationships of professional soldiers, proceedings on crimes and investigation of offences
committed by soldiers, and performance, evaluation and settlement of inspections. The time-
schedule for measures includes detailed definitions of tasks in external and internal
legislation, organisation, education, and international cooperation, and concrete dates for their
fulfilment. This is the most detailed anticorruption program.
       The internal anticorruption programme of the Ministry of Interior is divided into two
separate sections – units of the Ministry of Interior and the Police of the Czech Republic. The
programme includes measures in personnel, organisational and economic area and states
concrete dates for their fulfilment.
       The internal anticorruption programme of the Ministry of Culture analyses possible
occurrence of corrupt behaviour in all aspects of activities of the Ministry of Culture and
defines anticorruption mechanisms for decreasing the risk of corrupt behaviour.
       The internal anticorruption programme of the Ministry of Health is specified
according to the individual sections of the ministry – section of the Minister, section of the
Director of the Office of the Ministry, section of the Deputy for healthcare, section of the
Deputy for legislation, international relationships and medicament policy, section of
economic deputy, and section of the Chief Hygiene Officer of the Czech Republic.
       The internal anticorruption programme of the Ministry for Regional Development
focuses on the individual sections in the ministry with conditions for occurrence of corrupt
behaviour, i.e. European integration and travel industry sections, economic policy and
financial management sections, regional policy and development programs sections, town and
country planning and construction regulations section, housing policy sections, personnel
department, and department of economic services.
       The internal anticorruption programme of the Ministry of Agriculture is compiled as
material for the Ministry of Agriculture and other significant organisations within the ministry
– Land Fund of the Czech Republic, State Agricultural Intervention Fund and State
Veterinary Administration .



                                               65
       The internal anticorruption programme of the Ministry of Environment is based on
compiling a questionnaire for units and subordinate organisations focused on analysis of risks
of corrupt behaviour. The situation will be evaluated and the concrete measures will be
proposed on the basis of analysis of the processed questionnaires.
       The internal anticorruption programme of the Ministry of Transport focuses on the
individual sections where risks of occurrence of corrupt behaviour exist and defines measures.
The high-risk sections include the Office of the Minister, crisis management department,
department of financial inspection and audit, department of land communications, department
of public and combined transport, department for approval of vehicles and regulations,
department for civilian aviation, department of information systems and communication,
department of railway and railway transport, department of shipping and waterways, transport
policy department, department for international relations and environment, department of road
transport, separate department for safety of road traffic, department for drivers register,
financial and economic department, and internal administration department.
       The internal anticorruption programme of the Ministry of Labour and Social Affairs
is based on tasks determined by the Government Decree No. 125, of 17th February 1999, on
Government Programme for Fight against Corruption. The programme specifies this tasks for
organisations within the authority of the Ministry of Labour and Social Affairs: The Czech
Social Security Administration, Institute for Research of Labour and Social Affairs, social
care institutions managed by the Ministry of Labour and Social Affairs, labour authorities,
Czech Office for Occupational Safety, Institute for Research of Occupational Safety, Institute
for Education in Occupational Safety, and Institute of Technical Inspection Prague.
       The Ministry of Industry and Trade compiled evaluation of fulfilment of the
Government Programme for Fight against Corruption and described the Government
Programme as the strategy for fight against corruption. A management and inspection system,
which also includes anticorruption mechanisms for minimizing potential corrupt behaviour, is
being created according to the standpoint of this ministry.
        The internal anticorruption programme of the Security Intelligence Agency is based
on the internal inspection system, which includes a number of mutually relatively independent
institutes: functional managing inspection, inspection of commissioning public contracts,
internal security department, inspection department, and department for internal audit. One of
the conditions for effectiveness of these institutes is their interconnection in relation to
information and coordinated approach.
       Members of the Government and chief officers of central administrative authorities
should continuously indicate and analyse sources and forms of corrupt behaviour within their
relevant ministries, compile and continuously update internal anticorruption programs of
individual ministries, containing concrete anticorruption organisational and technical
measures for combating corruption.
        The 1st Deputy Prime Minister and the Minister of Interior (now as the coordinator of
anticorruption policy clearly defined by the proposed Government Decree) will create a
workgroup at the Ministry of Interior for monitoring the implementation of the programs,
indication of areas that require closer attention and proposals of updated government
anticorruption policy. Apart from representatives of the institutions involved experts outside
the executive sphere will also participate in activities of this group, or activities of ad-hoc
workgroups for solution of individual cross-sectional issues.
      Public access to the internal anticorruption programs is also an important factor.
Information on all compiled programs should appear in the media.

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     6        A C T I V I T I E S O F T H E N O N - G O V E R N M E N TA L O R G A N I S AT I O N T R A N S PA R E N C Y
                                       I N T E R N AT I O N A L C Z E C H R E P U B L I C


        Corruption Perception Index (CPI) of the organisation Transparency International
         16
(TI) is widely considered to be one of the most significant indicators of occurrence of
corruption in a particular country. It is an estimated corruption rate in the public sector, as
perceived by entrepreneurs, analysts and general public17. The Czech Republic was included
in this research for the first time in 1996 and took the 25th position with the index of 5.37 (10
is the best, 0 is the worst). One year later the Czech Republic was on the 27 th position with the
index of 5.2 (52 countries were evaluated). In 1998 the index for the Czech Republic on the
37th position was 4.8 (out of 89 countries), 39th position in 1999 with the index of 4.6 (out
of 99 countries), and 42nd position in 2000 with the index of 4.3 (out of 90 countries). In 2001
the Czech Republic took the 47th position with the index of 3.9 and in 2002 with the index of
3.7 the Czech Republic was as far as the 52nd position, together with Latvia, Morocco,
Slovakia and Sri Lanka (out of 102 evaluated countries). Therefore, the evaluation of the
16
  Transparency International (TI) is an international non-governmental organisation dedicated to fight against
corruption and bribery, established in 1993 in Berlin. Activities of the organisation are financed from
independent, not state funds. Transparency International Czech Republic (TIC) was established as a civic
association in June 1998 and became the 65th national branch of this organisation.

Selected projects in 2002:
“Transparent Region” – project in the Czech public administration, which, after its territorial reform, needs to
be simplified and made more transparent. This applies especially to setting transparent decision-making and
inspection mechanisms inside the individual offices, clarifying authorities and duties of officers and elected
representatives, their continuous education, overall elimination of redundant regulation, determining clear
procedures for commissioning public contracts, setting effective mechanisms for prevention of conflicts of
interests, and gradual introduction of “e-government” elements. All of the above-mentioned changes should
make activities inside the public administration more transparent and thus significantly reduce opportunities for
corruption.
TIC started a project focused on these topics in Regional Authorities (RA). Although RA are in most cases
appellate institutions, improvement in their transparency could influence positively also lower levels of the
public administration, i.e. towns and municipalities. The important fact for TIC is that in this stage TIC has a real
change to influence the structure of RA, which is currently being formed, and to highlight ethical aspects in
thinking and decision-making of regional councillors and employees. The pilot phase of the project will be
carried out in the Olomouc, Hradec Králové and Plzeň regions.
“Anticorruption Strategies” of the individual regions, which will be approved by the councils and consequently
implemented in the RA, will be the output of the project. Finally, the project should also positively influence the
public perception of RA.

“Records in Commercial Registers” – the purpose of this project is to accelerate proceedings at Commercial
Registers by providing authoritative information on legal requirements for individual records to submitters. This
information will be accessible on special web pages.

17
   Corruption here means abuse of a public post for private benefit. Researches do not show the intensity of
corruption in the country but focus on the perception of this phenomenon. This fact often causes doubts and
brings up a controversial question whether it is sensible to consider “virtual” reality. However, the general image
of the country, which is often also very difficult to express exactly, is often of a key importance for investors. 17
individual researches carried out by 10 different independent organisations are used to determine the CPI. The
top quality of these organisations is, according to Transparency International, a guarantee of thorough
performance of the researches and top-quality methodologies. Detailed reports on the methodologies used in
researches are available on web pages of TI. The methodologies are evaluated by the steering committee of TI
consisting of international experts in corruption, econometrics and statistics. Some of the researches focus on a
representative sample of the public, others focus on entrepreneurial elite, a part of the researches is based on
analyses of foreign experts – every country is therefore evaluated by people inside and outside the country.
Researches no older than three years are used, the three-year period decreases rapid reaction to current political
scandals.

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Czech Republic continuously deteriorates. The highest positions (i.e. countries with the
lowest rate of perceived corruption) are traditionally taken by Finland, Denmark, and New
Zealand. In 2002 Slovenia (6.0) and Estonia (5.6) had the best evaluation out of the countries
accessing the EU.
        The objective of the Transparency for the Police of the Czech Republic project of
Transparency International Czech Republic (TIC) is to contribute to solution of the problem
of corruption inside the Police of the Czech Republic by creating a set of measures that should
help to minimize opportunities for corrupt behaviour for Police officers. The project started in
February 2001. First part of the project was carrying out an international research on
anticorruption strategies in Police forces. The total of 71 experts (from Police forces,
inspection bodies, universities and non-profit-making organisations) in 25 countries were
questioned. Five experts from the Czech Republic were also questioned. These experts
answered a questionnaire on anticorruption strategies used in the selected countries, on
possible factors that influence the choice of these strategies, and on effectiveness of the
specific measures used in fight against corruption inside police forces.

The following recommendations arise from the research for the Czech Republic:
       Stricter punishment for offences related to corruption;
       Introduction of a non-cash payment system;
       Creation of the institution of an agent – provocateur;
       Creation of an independent inspection institution;
       Promotion of the Code of Conduct;
       Providing rewards for capture of corrupt persons;
       Improvement of the general public’s opportunity to check the Police;
       Continuous tests of Police officers’ integrity;
       Disguising the actual identity of the inspection bodies;
       Extending authorities of the inspection bodies.

        Using the findings of studies carried out TIC started the process of creating the
"Concept for Fight against Corruption inside the Police of the Czech Republic" in December
2001. TIC cooperates in creation of the concept with representatives of all sectors of public
life (Ministry of Interior; Ministry of Justice; Police Presidium of the Czech Republic; Police
of the Czech Republic; Police Academy of the Czech Republic; Supreme Public Prosecutor’s
Office; judges; non-profit organisations – Czech Helsinki Committee, People in Need (Člověk
v tísni), Civil Legal Observers; Office of the President of the Czech Republic; Office of the
Public Defender of Rights (Ombudsman); Office of the Government’s Special Representative
for Human Rights).
        One of the measures the experts in the international research described as very positive
was introduction of regular training of integrity and ethics for Police officers and students of
police schools. TIC has already taken steps to introduce these measures also in the Czech
Republic and initiated the pilot “Course of Integrity and Ethics” for teachers of police
secondary schools.




                                              68
                               7       PUBLIC OPINION POLLS




        Sociologic researches, which provide information on the public opinion on the status
of corruption in the society and experience of the public with corrupt behaviour, significantly
correct information on criminal activities recorded in criminal statistics. These researches are
necessary material for objective evaluation of the actual crime rate. Criminal statistics provide
data on officially detected crimes in the society; they do not include the so-called latent crime.

        According to the research carried out by the Universitas agency in 2002 (grant project
of the Ministry of Interior of the Czech Republic called “Continual Research on Victimisation
and Citizens’ Sense of Security” during 2000-2002), in which the total of 1 229 respondents
were questioned, more than a third of people considers the situation in the Czech Republic
worse than elsewhere in the world (37 %). Half of the respondents sees the situation roughly
the same as in other countries, which on the other hand does not necessarily have to mean a
positive opinion. Only approximately one tenth of people believe that the situation in the
Czech Republic is better than in other countries. The data practically have not changed in
comparison to 2001. The general public believes that corruption occurs especially in the
world of high politics and that corruption does not consider us too much because you can
survive without it. The lack of services, which leads certain service providers to requesting
bribes, is seen as another cause of corruption. These opinions are influenced by little trust in
market mechanisms and the state’s ability to solve the problem. It seems that not even effects
of deterring are not strong enough. We can therefore talk about typical characteristics of a
climate favourable for corruption: the presence of a certain generalised feeling, a furtive
atmosphere where unclear attitudes prevail, and people are likely to be influenced by the
particular situation. The prevailing opinion is that corruption is a widespread and permanent
phenomenon, which, however, only applies to isolated cases. One third of the respondents
saw the situation as more serious. In terms of places where corruption occurs offices
obviously have the leading position. The position of the Police is average; the overall
evaluation of the Police is close to the middle of the range.




                                               69
                                     8      CONCLUSION




       Government Decree No. 125 of 17th February 1999 approved the Government
Programme for Fight against Corruption. Since then the Government has been regularly
informed about the fulfilment of this Programme and about the situation in corruption in the
Czech Republic. Tasks determined by the Government Programme for Fight against
Corruption are updated annually. The majority of the tasks arising from the Government
Programme for Fight against Corruption are fulfilled continuously. The submitted proposal of
the Updated Government Programme for Fight against Corruption contains new tasks and
includes also applicable tasks from previous government decrees. A complete set of measures
implemented as a part of the state’s anticorruption policy is thus created and can be further
updated.
        The new tasks arise from the need to pay special attention to certain priorities, such as
the issue of public contracts, commercial justice, or activities of cadastral offices.
        A clearly defined task to focus systematically on the issue of corruption has been
assigned to the Director of the Security Intelligence Agency. On the other hand, the tasks
related to the issue of conflict of interests and the extent of immunity of members of
Parliament and senators arise from the original Government Programme for Fight against
Corruption. This time, however, a new date for their fulfilment is determined and in the case
of the conflict of interests also a new manager is specified.
         In accordance with Government Decree No. 391 of 17th April 2002 the members of the
Government and the Director of the Security Intelligence Agency processed relevant internal
anticorruption programs. The 1st Deputy Prime Minister and the Minister of Interior (now as
the proposed coordinator for anticorruption policy clearly defined by the Government Decree)
will create a workgroup within the Ministry of Interior, which will monitor the
implementation of the individual programs, indicate areas that require special attention, and
propose updates of the Government anticorruption policy. Apart from representatives of the
institutions involved also experts outside the executive sphere will participate in activities of
this group, or in activities of ad-hoc workgroups for solution of the particular cross-sectional
issues.
        Attention must also be paid to the updated text of item B. 1 of the Updated
Government Programme for Fight against Corruption, which instructs also other central
administrative bodies than the ministries to create their internal anticorruption programs. The
Ministry of Interior will hand over to the institutions stated in item III of the Government
Decree, who have been recommended to participate in the fulfilment of the tasks arising from
the Updated Government Programme for Fight against Corruption (Supreme Audit Office,
Office for Protection of Economic Competition, Czech National Bank, Office for Personal
Data Protection, Regional Authorities), the available material (know – how) for compiling
their own anticorruption programs.
        Another problem is the issue of transfer of assets from the offender to the family
members or other persons. It is solved partially in the ro-codification of the Code of Criminal
Procedure and partially within the proposal of the so-called integrity test. These transfers of
assets are always carried out with a special purpose (in most cases the transfers are not made
for a payment and the transferors continue to physically use these assets even after the
transfer). However, according to the current legal regulation these assets cannot be frozen


                                               70
unless the participation is proven.

       In terms of the development of criminal activities related to corruption, the
detected cases of corruption can be traced according to the official statistics of the
Ministry of Interior and the Ministry of Justice. Their number depends on the intensity
of inspection activities of the relevant state bodies. The number of recorded crimes
remains almost unchanged.
       The Czech Republic is participating in the preparation of significant international
documents dedicated to fight against corruption (United Nations Ad Hoc Committee for the
Negotiation of a Convention against Corruption), ensures that legislative obligations arising
from the conventions the country is a party to are fulfilled (OECD Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions), participates in
activities of international groups dedicated to specialised cooperation of member countries in
improvement of intrastate anticorruption mechanisms (Group of States against Corruption,
GRECO). The Czech Republic also continues to cooperate in previously commenced
programs (OCTOPUS II – programme of the European Commission and the Council of
Europe for fight against organised crime and corruption in states in transition period,
programme PHARE on fight against corruption and serious economic crimes, etc.).




                                             71
    Report on Corruption in the Czech Republic in 2002
     and on Meeting the Schedule of Measures Adopted
by the Government Programme for Fight against Corruption

       Editors: Mgr. Lenka Rohanová; Bc. Jakub Švec

  Published by the Ministry of Interior of the Czech Republic
                 Nad štolou 3, 170 34 Praha 7

                          1st Edition

                         Prague 2003




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