Christiana Stilianidou 14 • 12 • 2021

An unjustified exemption from the obligation to submit asset declarations

Christiana Stilianidou
An unjustified exemption from the obligation to submit asset declarations
14 • 12 • 2021

Article 69 of law 4871/2021 provides an exemption from the obligation to submit asset declarations to a specific category of persons: those participating in companies that undertake public contracts. The incomplete and insufficient justification provided for this exemption; the specific timing, as well as the consequences that such an exception may have for the detection and fight against corruption, raise serious concerns.

On 7-12-2021 at 21:55 amendment 1161/104/7-12-2021 was tabled. It was both overdue and irrelevant in content to the main topic of the bill to which it was submitted, and was ultimately voted in as article 69 of law 4871/2021, “reforms in the legislative framework of the National School of Judicial Officers and other urgent provisions.” With Article 4 of this amendment, two changes take place:

Paragraph 5 of Article 8 of law 3310/2005 is amended, “measures to ensure transparency and and prevent infringements during the procedure for signing public contracts,”  to provide an exemption from the obligation to submit asset declarations for shareholders of companies that undertake public contracts “where either themselves or their main shareholders fall under the exemptions from the obligation of registering shares as foreseen in paragraph 3”.

It is worth noting at this point that paragraph 3 of Article 8 of law 3310/2005, which provides for exemptions from the obligation of registering shares, was amended in March 2021 by Article 239 of law 4782/2021. Through this amendment the exemptions from the obligation to register shares have multiplied.

Paragraph 1 of Article 1 of law 3213/2003 is amended, also providing exemptions in this law from the obligation to submit asset declarations, following the changes that occurred in Article 8 of law 3310/2005.

According to the explanatory memorandum accompanying the above amendment (see pp. 8 and 15 ) the exemption from the submission of asset declarations in this case is justified as follows:

“Due to the (multi-shareholding) structure of these companies and the speed of stock exchange transactions, shareholders may not easily know that the company has entered into a public contract and that, consequently, they are obliged to submit asset declarations…moreover, the purpose of ensuring transparency and the fight against corruption can be achieved for these shareholders, through existing tax legislation… as well as through current legislation in general… ”

In any case, the introduction of this exception at a time when the submission of asset declarations for the year 2020 were pending, can only raise concerns. This is because during 2020 many questions were raised about the manner in which public procurement was being conducted due to the exceptional procedures which were followed (on the 2020 contracts see HSPPA (Hellenic Single Public Procurement Authority) report and articles in Kathimerini and Naftemporiki). Furthermore, according to the Head of Justice of opposition party SYRIZA, this exception has caused serious questions as it comes at a time when the Prime Minister’s own asset declarations are under scrutiny, and the Secretary General of Crime Policy is under the microscope for his management of state money in public procurement.

Finally, it is worth mentioning that in February 2021, opinion 12/2021  of the Legal Council of the State was issued, which interprets and explains to which persons the circumstances described in law 3213-2003 apply. Expressing explicitly that the proportional application of the exceptions can not take place in the context of asset declarations, it concludes that those who fit the profile obliging them to submit a declaration, and are not explicitly excluded by the law, must submit a declaration of assets.

The fact that the changes mentioned above (Article 239 of law 4782/2021 and Article 69 of law 4871/2021) took place after the issuance of this opinion and the questions submitted by those affected, raises concerns about whether the provisions of these laws have the general, objective and indefinite character that each law must have, or if on the contrary, they were issued to regulate specific cases.

For all the above reasons, the withdrawal of the obligation to submit asset declarations for certain individuals raises many concerns. The obligation of persons holding shares in companies that are involved in public procurement to submit asset declarations serves specific purposes of transparency and is a powerful weapon in the fight against corruption in the critical area of ​​public procurement. As stated in the explanatory memorandum of law 3310/2005, which initially created the obligations:

“The main purpose of the provisions is to prevent and to effectively deal with illegal and normally invisible interventions that may be exercised in the public procurement process…such interventions threaten the smooth functioning of the Rule of Law…in addition to distorting free competition, they also threaten the political system of the country, and they are dealt with with particular severity by the provisions of this draft law, with the provision of appropriate restrictions and the establishment of appropriate institutional guarantees.”

Where is the problem with the rule of law?

Public procurement is seen as an area particularly prone to corruption. Obliging certain categories of persons to submit asset declarations aims to provide more effective control of the management of public money, enhanced transparency and the strengthening of democracy.

Among these persons are the members of companies that undertake public contracts, according to the provisions of law 3213/2003. However, Article 69 of law 4871/2021 excludes a specific category of persons from the obligation to submit declarations on the basis of an insufficient and unconvincing justification.

At the same time, there are many concerns about the expediency of such a provision, especially at a time when the outsourcing of public works seems to have become the norm.

Christiana Stilianidou
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