Bulgaria, the most corrupt country in the European Union

Transparency International has declared Bulgaria the most corrupt country in the European Union, the Financieel Dagblad wrote. The agreement of the people of Bulgaria is shown by the ongoing protests in the Balkan state against corruption. The Prime Minister of Bulgaria, Boyko Borissov, has been under fire for some time for alleged fraudulent use of EU money. With this dubious title in hand and the ongoing unrest in the country, something must change.

As a member of the European Union Bulgaria, one of the poorer countries of the Union, receives a subsidy every year from for example the Structural and Investment Funds, to reduce the economic inequality with the other members of the European Union. Bulgaria receives more than two billion euros annually from this fund. This money should be used to improve infrastructure, agriculture, and education among other things. However, the protesters and the CPI accuse Bulgaria of corruption, accusations primarily based on fraud involving EU funding. But how does Bulgaria commit fraud with EU funding?

Exaggerated budgets and vacation homes 

One of the best-known examples of fraudulent use are the hotels built in Bulgaria with European funding, which should promote tourism in agricultural areas. These hotels were only not used by vacationers, but they were also used as vacation homes by government officials. Exaggerated construction budgets for the construction of infrastructure, which are so ramshackle that they in turn lead to major maintenance contracts, are another good example. European funding is systematically used to enrich those in the most prominent government circles who have influence in the local prosecution service, so that they can go to work with impunity. It is therefore logical that this is raising some eyebrows in Brussels. How is this possible? Although the EU funding ends up in the pockets of the political elite, the subsidies for the inhabitants are essential. In doing so, the European Union unintentionally promotes corruption.

The grades of Transparency International

The continuous diversion of money and the lack of laws to effectively combat corruption earns Bulgaria the title of “the most corrupt country in the European Union,” according to Transparency International. Transparency International is an organization that annually publishes a so-called Corruption Perceptions Index, or the CPI. The Corruption Perceptions Index scores and ranks countries or states based on how corrupt a country's public sector is perceived to be by experts and business leaders. The Netherlands has been around eighth on this list for years, while Denmark shares its first place with New Zealand. For comparison; Bulgaria ranks 74th on the CPI list, between Suriname and Jamaica. A "grade" is given by Transparency International on a scale from zero to one hundred. Europe scores best as a continent with an average of 66. The scores distributed by Transparency International are based on thirteen questionnaires, combined with assessments which they have performed by experts and business leaders.

The CPI list in the CDD On Demand solution

The CPI list is a leading indicator when it comes to corruption and is therefore also included in the CDD On Demand solution. In addition to the CPI list, the CDD On Demand solution also looks at the FATF list of risk countries and the high-risk country list drawn up by the European Union. If a client is a tax resident of a country that scores poorly on one of the lists or has established his company in one of those countries, it is important to conduct a enhanced client research under the Wwft. The stricter Wwft client due diligence can be carried out quickly and easily with the help of CDD On Demand. You go through an extensive compliance check that checks your client on eleven different points, including geographical risks. By performing this extensive compliance check, you reduce the risk that you - unknowingly - do business with malicious individuals or companies. At the end of the customer due diligence process you will receive a certified report which you can keep in your records in case of an audit by authorities.

Discover how much time and money you can save with CDD On Demand's extensive and fast Wwft client research by requesting a free demo account. You will receive ten free credits with which you can conduct the client screenings yourself to experience how CDD On Demand can enrich your organization.