Darijo Lazić, Senior Program Manager and Anti-corruption education expert, Transparency International, Bosnia and Herzegovina

1. IMPACT OF EU ENLARGEMENT ON NEIGHBORING
COUNTRIES (BENEFITS, OPPORTUNITIES AND
CHALLENGES)

2. Enterprises in Balkan countries are having problems with administration
and red tape in all countries. Corruption is continuously ranked among
the major challenges.
Despite the positive efforts of establishing regulatory and institutional
base for fighting corruption, including specialised anti-corruption
agencies, which are being introduced in the majority of the countries in
the region, significant problems persists, especially with regard to the
practical implementation of the existing legal framework and
institutional enforcement.

3. Though it is hard to generalise in the context of the different national
historical and institutional environments in the South-East European
countries, several underlying issues seem to draw a distinct picture of
the major corruption problems in the region.
Political pressure continues to influence the institutional environment,
which is especially problematic with regard to the work of judicial
system and the national anti-corruption agencies.
However, regional cooperation in the Western Balkans is central to the
EU Enlargement strategy. Next to the importance of governmental
dialogue and collaboration in the SEE region, CSO cooperation is
essential.

4. EU ACCESSION PERSPECTIVE
There is an increased understanding within the EU about the
importance of anti-corruption efforts, and there are a number of
provisions in the existing EU instruments that deal with the issue. Anti-
corruption considerations are part of the political criteria for accession,
part of the SAA, reflected in regular Progress Reports, and are included
in the list of recommendations of the European Partnership, among
others.
From the other side, countries must be able to demonstrate that they
can absorb and manage EU funds successfully, and there are a number
of internal and external audit mechanisms that assure that this is taking
place.

5. WHERE WE ARE – TI CPI?
The Corruption Perceptions Index (CPI) ranks countries and territories
based on how corrupt their public sector is perceived to be. A country
or territory’s score indicates the perceived level of public sector
corruption on a scale of 0 - 100, where 0 means that a country is
perceived as highly corrupt and 100 means it is perceived as very clean.
A country's rank indicates its position relative to the other countries and
territories included in the index. This year's index includes 176 countries
and territories.

7. Country: Rank: Score:
Slovenia 37 61
Turkey 54 49
Croatia 62 46
Macedonia 69 43
BiH 72 42
Bulgaria 75 41
Serbia 80 39

8. Business climate is very much influenced by politics, and there is no
transparency in procedures related to doing business, especially with
the public sector. Transparency of political party funding is another
major challenge in many SEE countries, which aids the presence of
strong external economic influence, where private interests are being
allowed to affect the course of governance.
Lack of transparency in managing and distributing State finances, mainly
with regard to public procurement contracts, is also a significant
argument for corruption allegations. Conflicts of interest and integrity
concerns give further ground for the overall lack of public trust. These
core issues render the existence of legal and institutional framework
against corruption inefficient.
The business environment is affected !!!

9. EXAMPLES
Spatial planning, energy, and other corruption challenges in
Montenegro
In discussions of corruption in the management of natural resources,
focus is often placed on extractive industries, as spatial/urban planning
are not adequately recognized. In Montenegro, this is one of the key
areas of concern and an issue to which CSO has been giving particular
attention, among other reasons, because of the impact on a number of
development strategies, and the energy strategy. In addition to
monitoring the implementation of the national anti-corruption strategy,
the privatization process, and other key anti-corruption regimes (such
as conflict of interest), CSO has been using freedom of information
provisions as the foundations of its watchdog work.

10. Regional challenges: the energy sector in Serbia
With privatization processes largely completed throughout the region, the
energy sector is the next crucial corruption challenge in SEE and one with a
fundamentally regional character. There is an insufficient energy supply in the
region, and while efficiency and diversification are seen as the only feasible
long-term strategies, the efforts to date have not considered all the options
adequately due to, among others, certain vested interests in the regional
energy market.
Corruption threats in the energy sector throughout the market rest in four key
areas: politicization, key players, privatization, and investments. Energy
providers are still largely state-owned enterprises characterized by
inefficiencies and politicization. These enterprises are considered the most
attractive posts for political appointments, a management system which does
not reward efficiency and performance. The investment and privatization
prospects for the state owned energy enterprises are not promising—these
processes have been, and continue to be, intransparent and politicized. A lack
of clear strategies in the area further opens the space for, at a minimum,
inefficient and unstrategic developments.

11. Opportunities and limitation of EU accession in the fight against corruption: the
Bulgarian experience
Despite high expectations, the EU accession process failed to deliver a decisive victory over
organized crime and corruption in Bulgaria, as witnessed by the EU sanctions undertaken in
the summer of 2008. The accession process emphasizes formal compliance rather than
implementation, and furthermore, necessitates undertaking a vast range of obligations that
institutions in states in transition lack the capacity to implement effectively in a relatively
short time frame. It is a mistake to view the EU accession process as a “magic wand” that
will solve all of a country’s problems, but it does contribute to building an institutional
framework for the fight against corruption. In Bulgaria in particular, part of the difficulty lies
in the fact that corruption was discussed without sufficient focus on key issues and sectors,
but without sufficient emphasis on implementation, and without sufficient accent on anti-
corruption measures as such. Today, there exists a renewed understanding of the challenges,
particularly the importance of political corruption.
The experience of Bulgaria, Romania, and other new member states inaugurates a new
understanding for the challenges inherent in fighting corruption within the EU accession
process and is likely to contribute to more specific and meaningful benchmarks for new
candidates, as it has become clear that corruption plaguing a member state becomes a
problem of the EU, and becomes about defending the institutions and interests of the EU.
Moving forward, the anti-corruption efforts of accession countries need to demonstrate a
more profound understanding of the challenges ahead, including the elaboration of more
long-term strategies that will be sustainable and focused on outcomes.

12. PUBLIC PROCUREMENT
At the and of last year Transparency International Bosnia and
Herzegovina (TI BiH) has issued a report on Monitoring of the
Implementation of the Law on Public Procurement, within the activities
of monitoring the implementation of Anti-Corruption Reforms in Bosnia
and Herzegovina.
The Monitoring findings have indicated the lack of transparency in public
procurement because open participation in the overall procurement fell
from about 91% in 2008, to 37% in 2011. This is primarily due to
amendments to the Law on Public Procurement in 2009 which has
raised the limit for direct agreements and led to a reduction of the
number of public procurement conducted in open bidding procedures.

13. PUBLIC PROCUREMENT
In addition to caring for the incorporation of the basic principles of EU-Treaty
(transparency, equal treatment, free competition and non-discrimination), a
significant space in the questionnaire on public procurement, which contains 26
questions, dedicated to the issue of prevention and fight against corruption.
From the standpoint of the current problematic practice in BiH, among the
most important issues are:
- The rules for the prevention of sharing tender to avoid complicated
procedures;
- The rules for defining the technical specifications. and a clear distinction
between the criteria qualification and award of contracts;
- Conditions for exemption due to corruption / conflicts of interest and related
problems, and breach of contract concluded on this basis, as well as how data
are existing rules in the past implemented, and how competent government
clerk to connect as detected conflicts of interest;

14. However, the biggest benefit will be the increased transparency of
doing business in the neighbouring country.
Croatia continues adopting and implementing EU legislation and is now
completing its alignment with the acquis, awaiting to become the 28th
Member State of the European Union on 1 July 2013. After a notable
and steady progress during the last years, an adequate legal and
institutional framework is firmly place and a track record of
implementation continues to be developed. Law enforcement bodies
are largely proactive, especially on higher-level cases, area which
remains an essential problem in other SEE countries. Croatia has also
improved its track record of strengthened prevention measures by
means of a number of legal instruments.

15. The job of Croatia, however, is far from over. Local-level corruption
needs attention, particularly in the area of public procurement. Efforts
are needed to ensure a sustained track record of efficient, effective and
unbiased investigation, prosecution and court rulings of corruption
cases. Lack of political integrity and strong accountability mechanisms
lead to State capture and the presence of vast private economic
interests, affecting policy-making and influencing the judicial process.
Conflict of interest legislation is not fully implemented. Issues related to
civil society capture and biased media also constitute a problem, which
leads to effective lack of public discussion on policies of strategic
importance.

16. BOSNIA AND HERZEGOVINA
The focus will be on the changes that will happen inside Bosnia and
Herzegovina because of those influences from outside, like:
- better customer protection,
- better environment protection and
- better regulations adjusted to the EU directives.

17. Thank you !!!
Darijo Lazic
darijolazic@blic.net
Mob. +387 65 94 19 69
www.transparency.org