Czech Republic Corruption
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Czech Republic perceived as being the third most corrupt country in the EU | Radio Prague International
There are three possible explanations for elite corruption in the Czech Republic.
Czech Republic Perceived As The Third Most Corrupt EU Country
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The current ministers in the Czech Republic.have shown little compunction at exploiting every opportunity for personal gain.
As it has become more entrenched and powerful, this Russian# m a f i a - i n t e l l i g e n c e network has exerted a corrupting influence
on Czech institutions.
"The response of most Czechs to continued corruption has been a retreat into passivity and continued acceptance of corruption as a norm.."
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Czech Republic Corruption Index Below On The www.inltv.co.uk webpage
Children for Sale: Croatia’s Corrupted Institutions Have Blessed Illegal Adoptions
"... Remember : All they do is to steal money from people that they control in the Czech Republic.
They can not do nothing to people they can't control i.e. outside the Czech Republic. ".... Irish Eddie Paul McGuinness
Irish Eddie Paul McGuinness
Josef Doucha, a former police investigator, was Slouf’s top choice for president of the police force. In 1996, as a UOOZ investigator, Doucha was criticized for cultivating contacts that “exceeded the framework of police work” with the Russian and Ukrainian mafias..."
Most importantly, it was later revealed that Vaclav Jakubik, the official who announced the conclusion of the investigation, is connected, through a chain of business partners and companies, to one of the most powerful and dangerous bosses of the Russian mafia, Sergei Mikhailov..."
Czech Republic perceived as being the third most corrupt country in the EU | Radio Prague International
Other newcomers to the EU have made progress in fighting corruption so what is the Czech Republic doing wrong - or rather -what has it failed to do? We called Michal Sticka of the Czech branch of Transparency International to find out.
"One of the most efficient tools to combat corruption in the political sphere would be an effective conflict-of-interests law. Political parties should be more transparent in financing their activities. When we look at bureaucracy, it should be said that the Czech Republic is still lacking a good civil service law that would govern the civil service sector and if we look at the judiciary, the main problem remains in insolvencies - we need to reform insolvency proceedings."
Now, we've said that this study is based on perception - perception of corruption in different countries - can you tell me how exactly it was conducted and how accurate it is, given the fact that it is based on perception alone?
"It should be said that there is no accurate tool with which to measure the level of corruption objectively. If you look at police or judicial statistics you will only get a notion of how the police and judiciary of a given country are able to prosecute crimes such as bribery. Therefore we need indirect tools and the CPI /Corruption Perception Index/ is one of the indirect tools which helps to measure the degree of corruption in a given country. It is based on data from various surveys conducted by renowned international organizations."
Where do these organizations get their own data from? Are people in the street asked if they think there is corruption in the Czech Republic or if they themselves have attempted to bribe anyone?
"The CPI is draws on data from organizations who survey academics, entrepreneurs and risk analysts, among others. Therefore there should be some elimination of the so called street bias. The street usually follows big scandals, it is usually very sensitive to media coverage of certain political scandals and the above mentioned target groups should be less prone to following the public outcry so to speak."
o what extent do you think reports such as this could damage the Czech Republic in the eyes of potential investors, for instance?
"The CPI score for the Czech Republic hasn't changed much since the beginning of this century so investors may have got used to the level of corruption in this country -given the flow of investments to the Czech Republic - on the other hand recent studies have shown that an increase of one point in the CPI index brings about a 15 percent rise in direct foreign investment to the country in question. So it is definitely better to make progress in curbing corruption - it really pays off."
SAIS Review vol. XXII no. 2 (Summer–Fall 2002)
Jeffrey Jordan recently received his M.A. in International Relations from Johns Hopkins University-SAIS. This essay earned him first prize in the annual SAIS Review student essay contest. An earlier version of this essay appeared in Radio Free Europe’s online journal, East European Perspectives (Prague), 20 February/6 March 2002, <www.rferl.org>.
Patronage and Corruption in the Czech Republic
by Jeffrey M. Jordan
Corruption was endemic to the communist system of the Soviet bloc prior to its collapse in 1989, and Czechoslovakia was no exception. In the
postcommunist Czech Republic, corruption remains a deeply rooted problem.
A corrupt elite political and business class has emerged to exploit opportunities for illicit profit that are inherent in the process of postcommunist transition. Corruption has inflicted damage upon the Czech economy, prolonged the process of transition, and imposed costs on Czech taxpayers. It has also damaged democracy and for some, delegitimized the political system. There are three potential explanations for the continuation of elite corruption in the Czech Republic.
Corruption was endemic to the communist system of the Soviet bloc prior to its collapse in 1989, and Czechoslovakia was no exception. This corruption generally arose from shortages inherent to the communist system, and usually took the form of bribery. Such behavior became generally accepted since, in a dysfunctional and illegitimate system, the rule of law was subordinate to the pursuit of personal well-being. This idea was encapsulated in the communist-era Czech axiom: “If you do not steal from the state, you rob your family.”
Corruption remains a deeply rooted malignancy in the postcommunist Czech Republic, and the problem has become increasingly serious, particularly in the past four years, under the current Social Democrat-led government. Transparency International, an anticorruption watchdog, underlined the seriousness of Czech corruption in its Corruption PerceptionsIndex1997,which ranked the Czechs twenty-seventhout of fifty-two countries.1In 2001, the Czech Republic dropped toforty-seventh out of ninety-one countries surveyed. More to the point, in 1997, the Czechs were tied with the Belgians; now they are tied with the Bulgarians. 2
cronies to exploit lingering market distortions for their own benefit.
This occurred on an enormous scale, enriching a few and leaving Czech taxpayers with the bill.
From the lowest level of functionaries to the highest level of official governance, a considerable part of the Czech bureaucracy is infected with corruption. At the top levels, the stakes are extremely high and opportunities abound for the entrepreneurial politician to benefit from the privatization of remaining state-controlled industries, the awarding of pubic contracts, or from simply turning a blind eye toward the misdeeds of other profiteers.
Sadly, those few who have remained above the fray, such as President Vaclav Havel, have been discounted as astute moralists, but ineffectual politicians.
Rather, “it exists on a national scale as a sophisticated enterprise that is parallel with public service.”3
There are three possible explanations for elite corruption in the Czech Republic.
Czech Republic risk report
Updated: Thursday, November 5, 2020
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Corruption can impede business in a number of sectors in the Czech Republic; corruption risks in the public procurement sector are perceived to be especially high, but many other sectors, including the public administration, carry moderate corruption risks. Patronage and nepotism are considered especially problematic in the country. The Criminal Code criminalizes attempted corruption, extortion, active and passive bribery, bribery of foreign officials and money laundering. The Czech Republic prohibits facilitation payments and any gift given with the intent to illegally influence decision-making may be considered a bribe. Criminal liability for legal entities covers domestic and foreign corporate entities registered in the Czech Republic. Nonetheless, the government does not implement the legal anti-corruption framework effectively. Although the majority of citizens do not encounter petty corruption in their daily lives, bribes or gifts are occasionally needed to speed up public administration processes.
Patronage and Corruption in the Czech Republic by Jerrfrey M. Jordan
cronies to exploit lingering market distortions for their own benefit.
This occurred on an enormous scale, enriching a few and leaving Czech taxpayers with the bill.
From the lowest level of functionaries to the highest level of official governance, a considerable part of the Czech bureaucracy is infected with corruption. At the top levels, the stakes are extremely high and opportunities abound for the entrepreneurial politician to benefit from the privatization of remaining state-controlled industries, the awarding of pubic contracts, or from simply turning a blind eye toward the misdeeds of other profiteers.
Sadly, those few who have remained above the fray, such as President Vaclav Havel, have been discounted as astute moralists, but ineffectual politicians.
Rather, “it exists on a national scale as a sophisticated enterprise that is parallel with public service.”3
There are three possible explanations for elite corruption in the Czech Republic.
Judicial system Moderate risk
There is a moderate risk of corruption when dealing with the judiciary. Bribes and irregular payments in return for favorable judicial decisions are common (GCR 2015-2016). Corruption within the judiciary is said to be "very sophisticated", making it hard to detect (FitW 2016). The judiciary is constitutionally independent and in practice, the court operates independently, but political influence in high profile cases has occasionally been a problem (NiT 2017; BTI 2016). There are concerns about career advancement of judges happening in a non-transparent manner (GRECO 2016). Approximately two out of five companies rate the independence of judges as fairly bad or very bad (JS 2017). Companies are broadly dissatisfied with the efficiency of the legal framework in relation to settling disputes and challenging regulations (GCR 2017-2018). Companies should be aware that decisions may vary from court to court (ICS 2017). A new Civil Code was introduced alongside the existing Penal Code without a procedural law explaining how the two laws should be applied, leading to problems in the application of the law (ICS 2017). Court proceedings move slowly and many judges lack familiarity with commercial and intellectual property cases (ICS 2017).
Enforcing a contract is significantly more costly and slightly more time-consuming in the Czech Republic compared to the OECD high-income average (DB 2018). The Czech Republic is a state party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and it is also a member of the International Centre for the Settlement of Investment Disputes (ICSID).
Police Moderate risk
There is a moderate risk of corruption when dealing with the Czech police. Businesses have sufficient trust in the reliability of the police services (GCR 2017-2018). Nevertheless, more than half of surveyed businesses pay for security (ES 2013). More than half of citizens perceive the police as corrupt (European Commission, Feb. 2014). Less than one in ten report to have paid a bribe to traffic officers (GCB 2016). Corruption among the security forces is a problem; in 2015, the police investigated 174 cases of corruption among its own forces (HRR 2016).
Public services High risk
The Czech public administration carries a moderate to high risk of corruption. Bribes and irregular payments when dealing with public services sometimes occur (GCR 2015-2016); one in ten companies report expecting to give gifts to "get things done" (ES 2013). More than two-thirds of companies perceive nepotism and patronage to be a problem (European Commission, Feb. 2014), with a significant majority believing that bribery and the use of connections are the easiest way to obtain a public service (European Commission, Feb. 2014). Almost two in every ten surveyed households perceive local public officials to be corrupt and less than one in ten report to have paid a bribe to obtain official documents (GCB 2016). Inefficient government bureaucracy is cited as the second most problematic factor for doing business in the Czech Republic (GCR 2017-2018). Businesses also cite inconsistent competition policies among the deterrents to investment (ICS 2017).
Starting a business in the Czech Republic takes almost twice as many steps compared to the OECD high-income average (DB 2018). Similarly, obtaining a construction permit also takes nearly twice as many steps and a significantly longer time compared to the average among OECD high-income countries (DB 2018).
Land administration Low risk
The land and construction sector poses a moderate to low corruption risk for businesses operating in the Czech Republic. Private property rights are generally well-defined and respected by the government (BTI 2016). Companies report moderate confidence in the government's ability to protect property rights (GCR 2017-2018). Only a small percentage of companies expect to give gifts in order to obtain a construction permit (ES 2013). Companies should note that the process of tracing the history of property and land acquisition can be complex and time-consuming (ICS 2017). Expropriation is only possible when done for public purposes and in a non-discriminatory manner in compliance with international law (ICS 2017). The new Civil Code has clarified the treatment of property rights and what constitutes 'public purposes' in expropriation cases (BTI 2016).
Registering a property takes slightly longer than the OECD high-income average (DB 2018).
Tax administration Moderate risk
The tax administration poses a moderate risk of corruption. Businesses report that irregular payments and bribes when making tax payments are uncommon (GCR 2015-2016); virtually no companies indicate they give gifts when making tax payments (ES 2013). As revealed by statistics from the Supreme Public Prosecutor, tax fraud is among the most occurring financial crimes (ICS 2017). A third of businesses indicate that they perceive tax fraud to be common (EU Barometer 2014). A number of initiatives have led to increased capabilities in the tax administration for detecting tax fraud, including the ability to detect foreign bribery cases (OECD 2017 Phase 4 Report).
Companies spend significantly more time on filing taxes each year than in other OECD high-income countries (DB 2018).
Customs administration Low risk
There is a moderate to low risk of corruption when dealing with the Czech customs administration. Businesses report that irregular payments and bribes are uncommon in customs procedures (GETR 2016). Fewer than one in ten businesses report expecting to give gifts when obtaining an import license (ES 2013). Businesses are satisfied with the efficiency and time-predictability of the clearance process (GETR 2016). Burdensome import procedures and tariffs are cited as among the most problematic factors for importing (GETR 2016).
The average time and cost required to deal with exports and imports are far below OECD high-income averages (DB 2018).
Public procurement Very high risk
There is a high risk of corruption in the Czech Republic's public procurement sector. Over two-thirds of businesses consider corruption to be widespread in national and local public procurement (European Commission 2014). The energy, rail, forestry and postal services are particularly susceptible to undue influence and conflicts of interest (EUACR 2014). Irregular payments and bribes in the process of awarding public contracts and licenses are perceived to be very common (GCR 2015-2016). Companies report high levels of favoritism in decisions of procurement officials and frequent diversion of public funds (GCR 2017-2018). Among the main corruption risks are customized criteria for certain bidders, closing a deal on a contract before the specifications for a call for tender have been identified, and abuse of emergency grounds to justify the use of non-competitive procedures (European Commission, Feb. 2014). In 2014, a fifth of contracts were granted without a call for tender and another fifth were awarded in tenders with only a single bidder (OECD 2016). According to a recent analysis carried out by the NGO zIndex, sponsors of political parties received contracts worth USD 19.5 billion, and companies owned by political donors acquired 40% to 60% more public contracts than companies owned by non-donors (zIndex 2015). Companies are generally able to compete on the same terms as state-owned enterprises (SOEs), but there are frequent accusations that large domestic firms (both private firms and SOEs) are able to use their political clout to gain unfair advantages (ICS 2017). Public Procurement is primarily regulated by Act. No. 134/2016. Tenders are required for acquiring services and supplies exceeding CZK 2 million and construction work exceeding CZK 6 million (ICS 2017).
In one corruption case, an aide to former Prime Minister Mirek Topolanek had been charged for demanding a multi-million dollar bribe from a foreign company in return for a government defense procurement contract (Reuters, Feb. 2016). After a lengthy trial, including a conviction which was overturned, but ultimately reinstated by the country's Supreme Court, the aide was handed a five-year jail sentence (Radio Praha, May. 2017).
Legislation
The