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WCO Workshop: Trade Supply Chain Security / Facilitation and Integrity

05 November 2008

13th International Anti-Corruption Conference

Athens , Greece , 30 October to 2 November 2008

WCO Workshop: Trade Supply Chain Security / Facilitation and Integrity

Speech by Mr. Nikolaos Vernadakis

General Director of Customs and Excise in Greece

I would like to welcome all participants to Transparency International’s 13th International Anti-Corruption Conference which is being held in our country.

The mere fact that, in 15 years of action, this Non-Government Organization has organized 13 International Fora to reveal and confront corruption demonstrates the amplitude of this NGOs activism and calls attention to the already dangerous dimensions of corruption at the international level.

As a result of the activities developed by Transparency International, corruption has been identified as a global problem, highly placed in the international and national agendas, and strategies to combat the struggle against anti-corruption become actions.

The problem of corruption is as old as governance. This, of course, does not mean that it is acceptable or that any attempt to confront it would be a waste of time. In Greece, as shown by all relevant studies, corruption is the most serious symptom of public life. The problem is particularly alarming, due to the fact that all indications confirm the existence of an endemic, and in a way, tolerated corruption.

In order to approach the causes of corruption, we should take into consideration what Mr. James Wolfensohn said, “ Although corruption is a common problem for all countries, the solution that we must seek cannot be anything but different in each country”. This is due to the fact that each country has its own pathogeneses – its own origin and development.

Let’s look at some of them:

As a social phenomenon, the tolerance of corruption, as well as the participation of citizens in it, goes back to eras of absolute and authoritarian regimes. Of course, it would be naive to try to justify today’s corruption by referring to the influences of the Ottoman Empire and the great tradition of corruption inherited in all countries which used to be under its command.

But the object is not to look for the causes of endemic corruption in all sectors of the state function, by going back to eras where the concept of a state governed by the rule of law or the concept of democratic functions of the state had not yet been established.

Moreover, I believe that going back to the past of the Ottoman Empire today, after approximately 200 years of independence, is not excuse enough. Nor is it correct to assume that generations of citizens, who formed the Greek State, have not changed. National or social myths do not help to understand the problem, neither to confront it.

If we accept that corruption thrives in Greek society, then we must wonder if the maintenance of features of preferential treatment in the political system has undermined the establishment of democracy and of the principle of the rule of law.

Because it is certain that, in countries where the state is governed by the rule of law, where democracy has deep roots, and where the human resource mechanisms of public administration function correctly, incidents of corruption are particularly eliminated, even extinguished.

In the opposite case, where the rules under which the public administration functions are not fully and clearly established, it is easier for maladministration and corruption to flourish.

The expansion of the public sector and the existence of too many laws led to the growth of bureaucracy of gigantic dimensions, which contributed significantly to the increase in the corruption problem in our country. Other factors which resulted in the frequency and extent to which corruption incidents emerged is the alarming level of overlapping competencies, the frequent modifications of legislation and the inadequacy of control mechanisms.

Furthermore, the financial situation of our country has deteriorated through lack of transparency in the functions of the public sector in general. As a result, legal business activities meet obstacles and the effectiveness of the social state has been reduced, at the expense of our less privileged fellow citizens.

Corruption can extend from the elementary form of public servants’ bribery in order for them to issue a certificate or document sooner, to more complex and dangerous cases.

Corruption can be particularly harmful in many ways;

It distorts the markets and harms overall economic, social and political development, especially in developing countries.

According to certain studies, corruption costs the global economy billions of dollars each year. Corruption cases can be found in every country and in every social class. In developing countries, it can be both the cause and the result of poverty, as is well known to those who suffer corrupt authoritarian regimes which waste their countries’ resources. In developed countries, factors such as the lack of professional stability and of good faith in trade markets can lead to an increase in corruption incidents.

Corruption jeopardizes public administration, since the corrosion of its personnel in crucial sectors, such as health or education, does not allow the quality services to be offered to everyone.

Corruption, when tolerated by society, corrodes the social net itself, annuls the function of instituted administrative organs, even justice itself. In other words, it creates the conditions for the depreciation of both the political dimension of society and of the function of democracy.

In a society where corruption is generally tolerated, we can observe the following paradox; on the one hand, legislative authorities are trying to regulate, as severely as possible and in the most detailed way, all cases which are considered as corruption incidents and, on the other hand, citizens appear more and more apathetic to legal provisions, which are usually not implemented, or are annulled in practice. How often don’t we hear nowadays the phrase that “ we don’t need any more laws, we only need one law; that the laws are to be implemented”. This phrase indicates the deeply-rooted discontent of society towards the laws, although their implementation constitutes a sine qua non condition for the consolidation of the rule of law and of democracy.

Furthermore, corruption is an important obstacle to the efforts of the international community to protect the international supply chain against acts of terrorism.

Regarding corruption in the Greek public sector and especially in the fiscal services, we should stress that this phenomenon needs two partners. On the one hand, there is the “corrupted” official who holds a public position and uses it for private gain at the maximum possible level with profit gain depending on market circumstances and his or her ability to maximize personal profit. On the other hand, there is the “customer” who may decide that it is in his or her best interest to risk possible sanctions, which are known in advance, and pay the extra cost in order to receive a desired favour.

According to a report of the Ministry of Public Administration submitted to the European Union, corruption in the Greek public services has endemic features.

The human resources of the public sector, despite the measures and precautions taken, show signs of traditionally formed malfunctions, which affect the quality of the services.

One of the most serious factors is the inflexibility of the public sector, which derives from the bureaucratic, often complex and insufficient legal framework that regulates its function in general.

In the Ministry of Economy and Finance we are engaged in a big systematic effort, launched 4 years ago, to enhance transparency and effectively tackle anti-corruption activities.

The most important initiatives that we have taken thus far are the following:

- Computerization of services (especially the tax and customs authorities) for the cross examination of fiscal data.

- Motivation of citizens to report corruption incidents under the new tax reform legislation.

- Integration of EU directives in order to fight money laundering and corruption within the banking system and the stock market.

Despite the efforts which are still being carried out by simplifying procedures concerning transactions of public services with citizens and enterprises, there is still much to improve in order to assure transparency in all public acts.

Another important factor which influences the confrontation of the corruption problem, although often underestimated, is the system of social values of each society.

In order to influence society positively and tackle corruption, we should point out the extension and consequences of corruption and focus the attention of public opinion on them.

Thank you for your attention.