Investigation of corruption and bribery represents an important part of the prosecuting and investigating authorities' activity in Greece. The use of international and domestic legal instruments against corruption, bribery and money laundering has significantly improved the efficiency of prosecution in such cases.
The latest legislative amendments have made a series of changes to the way that cases of corruption are prosecuted and investigated. There has also been an important legislative update with a view to unification and consolidation of various provisions in special legislation, and these changes have been included in the Greek Criminal Code (GCC). In addition, steps have been taken to encourage involved persons to disclose information in return for lenient treatment and protect material witnesses from possible liability or prosecution with respect to the facts they expose to the authorities (handling of privileged information, defamation liability, etc.).
II DOMESTIC BRIBERY: LEGAL FRAMEWORK
Bribery is prohibited under Greek law. Gifts, benefits, payments or favourable conduct linked with the duties of a public official are criminal offences.
A public official is a person who is assigned public duties either permanently or occasionally and may be working in any service within the public sector, which includes state services, state entities and municipalities.
In principle, public officials are not allowed to be involved in commercial activities. The Code of Conduct for public servants allows some types of activity outside the service following special permission as long as this activity does not interfere with or contradict the official's duties.
The basic elements of bribery as a criminal act are described in the GCC in Articles 235 (passive bribery) and 236 (active bribery). These provisions deal with bribery of (domestic and foreign) public officials. The punishable act of bribery is understood as the request or receipt directly or indirectly through third persons in favour of oneself or others of benefits of any nature, or accepting a promise of such benefits to act or omit to act in the future or for acts that have already been performed or omitted to be performed, with regard to public duties or contrary to these duties. The wording of the text is broad enough to cover most types of questionable transactions with public officials. It should be noted that the provisions on passive bribery are not applicable to acts within the scope of the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the OECD Anti-Bribery Convention), which provides only for acts of active bribery.
There is also a special provision in Article 237 of the GCC on bribing a judge. The punishable act is described as the request or receipt of gifts or benefits to conduct or decide a case in favour of or against someone.
The above provisions (Articles 235, 236, 237 of the GCC) are applicable to acts of bribery related to both domestic and foreign public officials.
Private commercial bribery is prohibited by Article 396 of the GCC. Private commercial bribery is the acceptance or receipt directly or indirectly of any benefit during the exercise of a commercial activity in breach of their duties or the giving or offering of benefits directly or indirectly to a person in the private sector for the purposes of acting or omitting to act in breach of their duties.
Special legislation on funding of political parties (Law 3023/2002, as is in force) provides for the requirements and restrictions in making payments, contributions or donations to political parties or candidates. Individuals who do not have Greek nationality are not allowed to make donations and contributions to Greek political parties (although this prohibition does not apply to foreign legal entities).
Penalties for acts of bribery depend on the circumstances of the offence and whether there was a breach of public duty. If the act (passive or active bribery) is characterised as a misdemeanour and falls within the duties of the public official, it is punishable with imprisonment (of at least one year and up to three years) and pecuniary sanctions. If the act is committed in the course of one's professional duties it is punishable with imprisonment for between three and five years and pecuniary sanctions. Pecuniary sanctions are calculated depending on the seriousness of the act and the financial status of the convicted person. If the act of passive bribery is committed by a person by profession or habitually and the benefit or gain is of high value (thus characterised as a felony), it is punishable with a sentence of incarceration of up to 10 years and pecuniary sanctions. If the act of passive bribery is committed by an official in breach of his or her duties (felony) and if the act of passive bribery is committed in breach of duty and habitually or the gain or benefit is of high value, the act is punishable with incarceration for up to 10 years and pecuniary sanctions.
As regards active bribery, if the act is a misdemeanour, it is punishable with imprisonment of one to three years and pecuniary sanctions or imprisonment ranging from three to five years and pecuniary sanctions if the act of active bribery is related to an official's act in breach of his or her duties.
Legal entities that have gained or benefited from acts of active and passive bribery are liable. Sanctions against them are fines, temporary or permanent suspension of activity, prohibition from exercising specific activities, temporary or permanent ban from public tenders, etc.
In general, gifts, travel expenses and gratuities may be considered suspicious; however, most private corporations dealing with the public sector have set quantitative and qualitative thresholds for these types of interaction.
III ENFORCEMENT: DOMESTIC BRIBERY
The Prosecutor's Office is the authority that initiates criminal proceedings in all cases. The role of anti-corruption and anti-bribery prosecutor – a special prosecutorial authority – has also been established. This prosecutor is based in the Court of Appeal of Athens and is responsible for coordinating all investigations dealing with bribery and corruption offences. The offences are investigated by a group of judges (as stipulated by Law 4022/2011) who are assigned exclusively to bribery and corruption cases, and who utilise all information that can be retrieved by the Financial and Economic Crime Unit (FECU), the Hellenic Financial Intelligence Unit (FIU), etc. In addition, there are special provisions and proceedings aimed at shortening the time needed to conclude investigations and refer such cases to trial. The current legal framework gives the Anti-Corruption Prosecutor, as well as the investigating judges of Law 4022/2011, extensive powers in terms of gathering evidence and seizing of property, and almost unlimited access to privileged information (tax records, bank records, stock market transactions, etc.).
IV FOREIGN BRIBERY: LEGAL FRAMEWORK
With Law 3560/2007, Greece ratified the Council of Europe Criminal Convention on Corruption and domestic legislation is also compliant with EU legislation on the protection of the EU's financial interests. In view of this, provisions for active and passive bribery are applicable to officers or other employees in any contractual status of public international or transnational organisation of which Greece is a member as well as every person empowered by such an organisation to act on its behalf, members of parliamentary assemblies of international or transnational organisations of which Greece is a member, all persons exercising judicial duties or arbitration duties for international courts whose jurisdiction is recognised by Greece and persons acting as an officer or in service of a foreign country, including judges, jurors and arbitrators; and members of the parliament and local governments' assemblies of foreign states.
The provisions on gifts, travel expenses, gratuities, etc. with regard to foreign officials are no different from those applicable to domestic public officials. There are no specific provisions on what can be considered acceptable. Each case is considered individually based on common experience, custom, other characteristics of the transaction (e.g., long-term cooperation), etc. Money laundering provisions may apply if payments are linked to questionable conduct (e.g., proceeds of a criminal act).
Facilitating payments are prohibited directly or indirectly. The wording of Articles 235 and 236 of the GCC on passive and active bribery respectively cover gifts or financial benefits given in a direct or indirect way in favour of the perpetrator or others. There is special reference to intermediaries to a bribe; thus, intermediaries and third parties may be held equally criminally liable for bribery or corruption. All payments and expenses must be duly justified and relevant documentation must be kept with the tax records of the company, otherwise the payments might be considered questionable (gifts, benefits, etc.). Furthermore, these types of payments may raise questions as to their validity with respect to tax regulations and tax criminal law (especially in relation to Article 66 of the Taxation Code on registration of a fictitious or false transaction in tax records).
Only natural persons may be held criminally liable under Greek law. Legal entities may not be held criminally liable. However, after ratification of the OECD Anti-Bribery Convention with Law 2656/1998 and other international instruments as well as all updating relevant legal framework in respect to money laundering, specific provisions on sanctions against legal entities that benefit from acts of bribery of foreign public officials are in force. These sanctions take the form of administrative fines. As legislation on matters of bribery and corruption continued to evolve (in 2007 and 2008 with the ratification of the main conventions against corruption) it has become standard to include corporate liability (legal entity) for acts of bribery, usually in the form of administrative sanctions. There are also provisions for debarment from public tenders, suspension of participation in subsidies programmes, etc. The main criterion for imposing these penalties is the gaining of benefits, gifts or privileges through the acts of the individuals that may be held liable for a criminal act and subject to traditional penal punishments (e.g., imprisonment), and it covers all acts, whether they are acts of the main perpetrators or intermediaries or instigators.
Greece is also a party to the Council of Europe Civil Law Convention on Corruption (Law 2957/2001). By virtue of the relevant provisions, an individual or a legal entity may exercise its rights in accordance with Greek civil law and seek compensation or request the annulment of an agreement that has been the result of an act of bribery and also ask for protection of civil servants from disciplinary punishments because they reported corrupt practices to higher officials.
Initiation of preliminary investigations in respect to corruption cases is done by the Anti-Corruption Prosecutor. After the preliminary inquiry, the case file is forwarded to a presiding judge of a first instance court for the conduct of a main investigation. In the first stages of preliminary inquiries, the Anti-Corruption Prosecutor may request the assistance of any enforcement agency such as the FECU, the Hellenic Capital Market Commission, the General Inspector of Public Administration, the Hellenic FIU (the authority investigating money laundering acts). The latter gathers information on suspicious transactions or sudden changes in the financial status of individuals and entities, etc. The FIU is not entitled to act as an investigating authority. It collects evidence or information on suspicious transactions or possible misconduct and forwards this information to the Prosecutor's Office for further actions. There is also a provision for a special office of experts that will assist the prosecutor in his or her work. The Anti-Corruption Prosecutor performs all necessary preliminary investigations (including questioning of witnesses or suspects, audits, gathering of information from financial records, cooperation with foreign authorities through mutual assistance proceedings).
The amended Article 263A of the GCC provides for leniency measures applicable to perpetrators of active and passive bribery, and bribery in the private sector. Depending on the type of contribution to the exposure of acts of corruption by the perpetrator or accessory to the acts, and depending on the quality of information given and the procedural stage at which this information is provided to the authorities (e.g., before or after criminal proceedings have opened), individuals disclosing vital information are eligible either to receive a lesser sentence (which could be as low as one to three years – which is not serviceable) or to be granted a suspension of criminal proceedings against them by virtue of a decision of the indicting chamber. Moreover, perpetrators of both active and passive bribery, as well as those participating in the laundering of the bribes, may benefit from leniency measures if they offer evidence of participation in these offences by acting or former ministers.
As regards legal entities, there is no general provision for leniency but such provision can be found in special laws (e.g., in relation to cartel offences). In any event, exposing corrupt practices may serve as mitigating circumstances in the course of the administrative procedure that imposes a fine on the company.
As of 1 July 2019 new plea-bargaining procedures are provided for in the Code of Criminal Procedure for many financial and economic crimes (including money laundering and serious tax offences). These new procedures aim to ensure faster and more effective prosecution in cases where the factual basis of a case is not contested. In such cases, sentencing is done by a judge, following an agreement between the prosecutor and the defendant. Violent crimes are explicitly excluded. Generally speaking, the new provisions apply to the following categories of cases:
- cases where the defendant has made full restitution to the victim; and
- cases where the defendant has made partial or no restitution to the victim.
The defendant is always represented by a lawyer. If the defendant and the prosecutor do not reach an agreement acceptable to both parties, all related material is removed from the case file and destroyed.
There is no legal basis for prosecuting foreign companies for bribery of foreign officials as there is no criminal liability of a legal entity (only liability in the form of administrative fines and penalties, civil sanctions, etc.). The Prosecutor's Office may decide to open proceedings against individuals working with foreign companies provided that there is some connection either with domestic public officials (e.g., a foreign company bribing Greek officials) or intermediaries, accessories, etc. that have acted in Greece, and their conduct facilitated bribes to foreign or domestic public officials.
The basic penalties for violation of foreign bribery law – with respect to individuals – are the same as bribery of domestic public officials and range from imprisonment for one to five years (for misdemeanours) to imprisonment for up to 10 years (for felonies).
Sanctions against legal entities that have gained or benefited from acts of corruption are fines, temporary or permanent suspension of activity, prohibition from exercising specific activities, temporary or permanent ban from public tenders, etc.
V ASSOCIATED OFFENCES: FINANCIAL Record-keeping AND MONEY LAUNDERING
Companies (and individuals if applicable) are required to register all transactions with their books following certain rules, which aim to make all transactions readily and duly traceable. The basic set of laws and regulations regarding proper registration of transactions are the Code of Registration of Tax Records, the Code of Taxation and the Law on Money Laundering (Law 4557/2018, which made amendments to anti-money laundering legislation to comply with EU Directive 2015/849). In addition, the Administration (i.e., the Ministry of Finance) and other regulating authorities such as the Bank of Greece periodically circulate sets of guidelines on compliance issues. As a general rule, corporations have the obligation to file financial statements with the Revenue Service annually and publish their balance sheets every year (and also to make quarterly results for listed companies public), after external auditing has taken place. Auditors, internal or external, have the obligation to certify that what is stated in the company's books is accurate to the best of their knowledge and properly registered. This is signified by the fact that the auditors co-sign the annual financial statements.
Major reforms have taken place in tax legislation, which have affected financial record-keeping. In addition, the competent tax authorities have undergone restructuring to enable speedy and efficient review of entities' and individuals' financial records.
There is no explicit provision for disclosing of violations of anti-bribery legislation. Specific provisions do exist in money laundering regulations (for certain categories of individuals and entities), compliance and internal audit control for exposing or reporting irregularities related to financial records' irregular registration or suspicious transactions. It is not always clear to individuals who are under legal obligation to monitor transparency standards and corporate ethics, to what extent, and under what circumstances they must come forward and report internal (corporate) irregularities or failure to comply with set rules and regulations to the authorities. The Ministry of Finance is circulating various guidelines with regard to record-keeping and money laundering detection, primarily to chartered accountants and auditors. These guidelines detail the obligations for these professionals to report acts of tax evasion and money laundering if they come across these practices while performing their duties. Corporate tax and financial records are proof that a transaction is properly registered and is not related to questionable conduct of any type. Improper registrations, differences between registration and payments, insufficient documentation or failure to indicate the reason the transaction was executed may initiate an investigation by the competent authorities. It is not unusual to find indications of improper payments (and payments related to acts of corruption) by performing a thorough search in tax registrations. During an audit all transactions are examined for their validity and are cross-referenced to bank account records and supporting documents. A financial audit by the authorities may lead to the collection of evidence from other jurisdictions, disclosure of unknown or unregistered assets, etc. Evidence from the financial records of a company may contribute to the opening of a case of corruption or even provide evidence on transactions related to such a case. Tax offences and violations are prosecuted separately from any criminal case of corruption.
Transactions related to bribes would be characterised as fictitious (i.e., registration and reason for payment do not correspond). Such a transaction would also be suspicious under money laundering laws and regulations. Sanctions for tax violation include annulment of the book registers (resulting in recalculation of the company's income as if the registered transactions did not exist), fines and imprisonment of individuals with managerial duties for up to 10 years (for amounts over €200,000). The state may freeze assets pending resolution of the taxation dispute to avoid future loss through being unable to collect the fines.
Bribes are transactions prohibited by law and as such they cannot be registered with the company's financial records.
As of 30 July 2018, Law 4557/2018 is the core anti-money laundering legislation. It includes provisions of the second European Parliament and European Council Directive against money laundering (Directive 2005/60/EC), the third European Parliament and European Council Directive against money laundering (Directive 2006/70/EC) and the European Parliament and European Council Directive (Directive 2015/849/EC on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing). All supporting regulations and administrative orders are compatible with Law 4557/2018, which is also the means to apply the provisions of all international instruments.
The main elements of anti-money laundering law are a definition of the acts of money laundering; a description of the predicate offences, the proceeds of which fall within the scope of money laundering regulations; the jurisdiction of law enforcement agencies to apply the law; a list of the natural persons and institutions covered by law; provisions for asset freezing, search, confiscation and seizures; administrative and criminal sanctions; and coordination of all money laundering-related functions of competent authorities.
Bribery (active and passive) of domestic and foreign public officials is a predicate offence according to the Greek legislation on money laundering. Bribery of foreign officials is a predicate offence in relation to the provisions of the OECD Anti-Bribery Convention, the Convention on the Fight against Corruption Involving Officials of the European Communities or Officials of Member States of the European Union, and the Convention on the Protection of the European Communities' Financial Interests.
Sanctions for acts of money laundering depend on the severity of the act, who has committed the act and under what circumstances, and, on some occasions, the type of predicate offence. Natural persons are faced with imprisonment and a fine. Legal entities face penalties such as a fine with temporary suspension of activities or debarment from public tenders. For predicate offences that are misdemeanours, the money laundering act is punishable with imprisonment of at least one year (maximum sentence five years) and a fine ranging from €10,000 to €500,000. For predicate offences that are felonies, imprisonment (of individuals) ranges from five to 10 years. A fine is also imposed ranging from €20,000 to €1 million. If the convicted person was an employee of an 'obliged entity', the range of the fine is between €30,000 and €1.5 million. If the convicted person is involved in acts of money laundering by way of profession or has committed acts of money laundering repeatedly or within an organised crime or terrorist group, the act is punishable with imprisonment of at least 10 years and up to 20 years, and a fine ranging from €50,000 to €2 million.
Money laundering legislation and procedures – especially information gathered by the Hellenic FIU – has proved to be a very useful tool in exposing cases of corruption and bribery of public officials. In practice, both acts (predicate offence and money laundering act) are prosecuted together unless the predicate offence may not be prosecuted because of the statute of limitations, in which case the money laundering act is prosecuted independently.
All covered institutions and individuals are required to report without delay suspicious transactions for amounts over €15,000 to the FIU. There is also a specific provision for increased due diligence on politically exposed persons, their associates and their kin for the purposes of verifying in the best possible way the sources of their money or assets.
VI ENFORCEMENT: FOREIGN BRIBERY AND ASSOCIATED OFFENCES
There are currently no high-profile cases of bribery of foreign officials under investigation. The legal provisions in Law 3560/2007 (as currently in force) give the prosecuting authorities (the Prosecutor's Office and the FECU) many powers to bring such cases, not only locally, but also internationally, with the use of mutual assistance procedures extending these powers to other jurisdictions.
VII INTERNATIONAL ORGANISATIONS AND AGREEMENTS
Greece has signed and ratified all major conventions on combating corruption both on an international and European level. With Laws 2656/1998, 3560/2007, 3666/2008 and 3875/2010, Greece has ratified the OECD Anti-Bribery Convention, the Criminal Law Convention on Corruption (by the Council of Europe), the UN Convention on Combating Corruption and the UN Convention against Transnational Organized Crime. In addition, Greece is a signatory to the Convention on the protection of the European Communities' financial interests (Law 2803/2000) and the Convention against Corruption (involving officials of the European Communities or officials of Member States of the European Union, Law 2802/2000). The provisions of these conventions are applied in combination with the basic legislation on bribery and corruption (as depicted in the GCC). With the exception of the OECD Anti-Bribery Convention (which deals with active bribery only), all other international instruments apply in cases of active and passive bribery alike. All provisions on bribery and corruption are usually combined with the application of anti-money laundering legislation, especially at the stage of detection, investigation and evidence gathering.
VIII LEGISLATIVE DEVELOPMENTS
There has been a systematic effort to speed up and facilitate investigation and trial of cases of corruption through changes to various aspects of both criminal and civil law. Some of these changes have proven not completely compatible with existing criminal and civil procedures; thus, several issues have arisen in practice. Legal amendments were made for the purposes of prosecuting and investigating corrupt acts following a different set of procedural rules, which on the one hand enable the authorities to prosecute and investigate corruption cases more efficiently, but on the other hand have given rise to criticism and scepticism about the impact of these provisions on defendants' procedural rights and long-established investigation practices in relation to privileged information, bank secrecy, etc. As of 1 July 2019 a new Criminal Code and a new Code of Criminal Procedure is in force. Both laws have consolidated various provisions in other legal texts and have set a unified framework for prosecuting corruption offences. A new legal framework has made adjustments to comply with the latest EU Regulation and international instruments and has also integrated various special procedures with the standard procedural rules.
IX OTHER LAWS AFFECTING THE RESPONSE TO CORRUPTION
Certain categories of officials or public figures (politicians, government officials, high-ranking public officers, etc.) have an obligation to file statements of personal wealth (Law 3213/2003). These annual statements aim at detecting sudden or unjustified changes in the financial status of these individuals, which may signal possible corrupt practices. Article 4 of Law 3213/2003 stipulates that an individual who takes advantage of his or her capacity or position to obtain undue profits or advantages is punishable with imprisonment and a pecuniary sentence (tariffs vary according to the seriousness of the act).
Acts that may be considered acts of corruption may also be punishable under specific legislation (funding of trade unions, crimes against the state, etc.). Where this is the case, these other offences may be prosecuted separately, regardless of possible prosecution on the basis of corruption legislation, or they may not be prosecuted at all (e.g., when the other crime is of less importance or is punishable only in the absence of a prosecution for a more serious crime).
Law 4412/2016 has integrated EU Directives 2014/24/EU and 2014/25/EU setting rules in relation to public tenders. Among the provisions of the Law is the exclusion of financial operators from participation in procurement procedures if there has been a conviction for acts of bribery.
A comprehensive compliance programme may be very effective in detecting and exposing corruption acts in all kinds of financial and economic activities. Although connected primarily to anti-money laundering legislation, the latest guidelines from supervising and regulating authorities make special reference to acts of bribery and suggest ways of adjusting compliance programmes to the requirements of anti-corruption legislation. Guidelines have been given to all financial institutions (through the Bank of Greece or the Hellenic Capital Market Commission) and certain categories of professionals such as lawyers and notaries (through their associations). The Ministry of Finance also circulates guidelines on compliance programmes on a regular basis.
While any compliance programme, no matter how sophisticated, may fail to detect a bribery scheme at the outset, it may, nonetheless, be the means for exposing such a scheme. Although not expressly stated in the relevant provisions, the existence of a comprehensive compliance programme may help a company or corporation reduce the risk of strict penalties, and may even provide a means to avoid administrative or regulatory fines.
XI OUTLOOK AND CONCLUSIONS
The office of the Anti-Corruption Prosecutor is actively pursuing cases of corruption involving public officials. The Prosecutor's Office has proceeded with targeted investigations into corrupt practices within the public sector (pharmaceuticals and hospital costs) and in the construction field (infrastructure projects realised through public tenders). The Prosecutor's Office has made extensive use of the instruments provided by law (i.e., the resources of the FECU, Financial Police and FIU) to detect money, assets and changes in the financial status of individuals under investigation, as well as the processing of large volumes of data seized during dawn raids. On some occasions, however, use of measures such as searches and confiscations may become disproportionate to the scope of the investigation. The latest amendments (through the new Code of Criminal Procedure) will help to streamline relevant procedures and minimise chances of imposing excessively restrictive measures over a long period of time.
1 Ilias G Anagnostopoulos is the managing partner and Jerina (Gerasimoula) Zapanti is an attorney-at-law at Anagnostopoulos.