The most corrupt industries in the EU

On November 04, 2024, the European Commission published the study "High-risk areas of corruption in EU Member States: a mapping and in-depth analysis"🔗 which identifies the areas most at risk of corruption and provides an in-depth analysis of the nature and underlying reasons for these risks.

First of all, it should be noted that the document does not provide a definition of corruption unanimously accepted at EU level, and adopt a comprehensive definition of corruption as "the abuse of entrusted power for private gain". However, the analysis extends even beyond this conceptualization and includes other closely related crimes, including fraud, money laundering, tax evasion and organized crime.

The document identifies 6 sectors as having the highest risk of corruption: 1️⃣healthcare, 2️⃣finance, 3️⃣public procurement, 4️⃣defense and security, 5️⃣construction and infrastructure & 6️⃣sports.

The evaluation criteria considered the impact on populations, communities, employees and consumers across the EU and the areas in question to provide basic, everyday consumer products and services on which the EU population depends.

The study finds that Organized Crime Groups (OCGs) play different roles in high-risk areas, with a predominant presence in the financial, construction and sports sectors. This is due to the horizontal diversity of these sectors, digital vulnerabilities, fragmented regulation and oversight, the political vulnerability of supervisory authorities, the profitability of risk, and the attraction of high and quick monetary rewards.

Ironically, the well-developed rule of law in the EU makes it a more favorable destination than the home countries of criminals, where banks and other financial companies are not as safe and reliable and are vulnerable to political uncertainty.

Serious corruption crimes in financial sector include money laundering, tax evasion, hidden assets, consumer fraud, terrorism financing and cybercrimes. Banks both condone and are victimised by money launderers and tax evaders. As the sector becomes more unwieldy, the opportunities to become a perpetrator and/or a victim continue to grow.

The role of government regulation, oversight and procedures differs from sector to sector, with greater significance in the finance, health, procurement, construction and infrastructure sectors. In these sectors, given the prominent role of elected and public officials, the risks and realities of bribery, favoritism, conflict of interest, influence trafficking and policy capture are particularly high.

So-called "legal corruption" can take the form of campaign contributions channeled through third parties, unethical or threat-based lobbying, and favors that circumvent the law. In addition to questionable and illegal tactics to obtain favorable decisions, companies also lobby to change laws, regulations and policies to facilitate oversight and legalize previously illegal activities.