Jáno s Nagy Commissioner Customs & Finance Guard Republic of Hungary

1. Fight against Corruption in Customs János Nagy Commissioner Customs & Finance Guard Republic of Hungary

2. Heritage of the third millenium is corruption : Corruption is like AIDS: • AIDS attacks the individual’s immune system • Corruption attacks the immune system of society • The known cases of corruption are only the tip of the iceberg • The material damages of corruption are nothing compared to the ethic damages.

3. Causes of coruption: • Intransparent decision making process • Lack of public scrutiny • Inefficient controls • Low risk of being detected • „Shortage” • Slow work procceses • Weak judiciary system • Selection problems • Subjective factors

4. International co-operation • World Customs Organization • Bilateral agreements and projects EU Octopus Project • UN Global Program • International Anti-corruption arrangements • Conferences, exchange of information and experience

5. Customs against corruption • Corruption jeopardises: • Public confidence towards customs • Collection of revenues • Increase of legal trade

6. Usual forms: • Gifts • Donations • Outside sponsors • Free entertainment, holidays • Favoritism

7. Usual forms in Customs: At border offices: • Extraordinary treatment • Exercice of no or inefficient controls • Fictious entry or exit controls fiktív

8. Usual forms in Customs: At inland offices : • Extraordinary clearence • Clearence without checks • Falsification of documents • Issue of false documents

9. Integrity in Customs - A Problem “There are few public agencies in which the classic pre-conditions for institutional corruption are so conveniently presented as in a Customs administration. The potent mixture of administrative monopoly coupled with the exercise of wide discretion, particularly in a work environment that may lack proper systems of control and accountability, can easily lead to corruption” James Shaver, WCO Secretary General (1998)

10. WCO EFFORTS • The Arusha Declaration (1993, 2003) • WCO Integrity Surveys (1998) (2000) • WCO Integrity Forum (1998) • WCO Integrity Working Group (1998) • WCO Integrity Action Plan (from 1999) • Integrity Workshops (from 1998) • Global Fora on Fighting Corruption

11. The Revised Arusha Declaration • Leadership and commitment from management Responsibility and accountability • Harmonized and simplified Customs laws, regulations, administrative guidelines and procedures International standards – Low rates – No exemptions • Transparency Certainty and predictability for clients Consistent and easily accessible laws and procedures Appeal system with independent adjudication • 4. Automation

12. The Arusha Declaration (continued) 5. Reform and modernization Inefficient practices lead to bribery 6. Audit and Investigation Internal and external audit, check programs Investigation and prosecution Positive – Repressive strategies, Reporting corruption 7. Code of Conduct 8. HR Management Salaries, Selective recruitment, Promotions Rotation & relocation, Training, Appraisal 9. Morale and Organizational Culture 10. Relationship with the private sector

13. WCO Integrity Forum (1998) • Recommendations from the Forum: • Work with the private sector and provide forum • Work with other international organizations • Provide leadership in Integrity Matters • Strong link to Reforms and Modernization • Update and implement the Arusha Declaration • Establish the WCO Integrity WG and Action Plan • Encourage regional activities

14. WCO Integrity Survey 1998 Areas researched: • Forces impacting on Customs Integrity and Conduct • Administrative Policy Elements to Ensure Integrity • Trade and Tariff Policy Measures • Guidance to Ensure the Implementation of Standards • Evaluation Mechanisms • Measures to Reduce Opportunities • How ethical values are Communicated • New Initiatives and Sharing of Best Practices

15. 0 10 20 30 40 50 60 70 80 90 100 Forces Impacting on Customs Integrity and Conduct Greater public and media scrutiny Transparency of governmentdecision-making processes (accountability) Increased expectations from the public for quality services Government performance reviews International trade liberalization Relationship between opportunities for fraud and the rise of criminal tendencies

16. Administrative Policy Elements Relied onto Ensure Integrity Instruction manuals to guide staff on how to apply procedures A disciplinary system and a will to ensure the application of procedures An effective system of internal control Modern and transparent Customs legislation Transparent and fair recruitment procedures Service conditions conducive to ethical behavior 0 10 20 30 40 50 60 70 80 90 100

17. The link to Customs reforms “ … the very steps you would take to reform government to reduce corruption are the same steps you would take to reform government to increase efficiency.” (Vice-President Al Gore, 1st Global Forum on Fighting Corruption, Washington, USA, 1999)

18. The WCO Integrity Action Plan • Promote ethical and professional behavior by Customs through carefully articulated integrity policies and programs • Mobilize expertise to explain and maintain the highest standards of integrity in WCO Members • Stimulate a safer environment for Customs (public sector and business)

19. The WCO Integrity Workshop Objectives: • Raise awareness of the need for reinforcing Customs Integrity • Disseminate information on developments, trends, experiences, and best practices • Assist the development of effective management skills, structures and practices focussed on Integrity • Devise a national/regional Customs Integrity Action Plan

20. The WCO Integrity Workshop Content • Intended for senior managers at both • policy and operational levels • What others do in the international arena • Sharing information on best practices • Diagnostic study / SWOT analyses • Developing strategies and policies: • Action planning exercise • Involvement from both other government • agencies and private sector

21. WCO Integrity Self Assessment Guide • Based on the provisions of the Arusha Declaration • Designed to assist Member administrations to analyse their current situation and identify solutions which fit their culture, needs, resources and operating environment • Non prescriptive • Flexible • Compatible with wider reform and modernisation strategies

22. WCO Model Code of Ethics and Conduct • Designed to provide a model for the development of national Codes of Conduct • Based on the unique Customs operating environment • Already agreed as the APEC Region model • Contains 11 key elements • Designed to complement rather than replace civil service codes

23. Lessonsfromthe 2000 survey Assistance need in the development of: • Integrity strategies/programs • Code of Conduct • Educational material/workshop focussed • on Integrity • Effective management practices • Exchange of information on best • practices and co-operation • internationally

24. The perpetretors: • Under age of 30 • Less than 5 years in service • Mainly front line officers • No more lonely wolves

25. Negative trends: • Increased number of chain actions • Increased values • Organized and international actions • Sofisticated methods

26. What has been done by the Hungarian Customs?Legal Instruments • Rules of: -- accepting gifts and donations -- use of private mobile phone -- possession of money • Code of Ethics • Control by the National Security Office(Sensitive positions) • Investigation by the Public Prosecutor • Information leaflets • Customs strategy against corruption and measure plan

27. What has been done by the Hungarian Customs?Technical and technological measures • Customs registration (VÁMREG 1.0) • Technological order • Specialised customs clearance points • Closed circuit video • Vehicle identification system

28. What has been done by Hungarian Customs?Organizational measures • Internal Affairs Division • Internal Audit Division • Risk Management Division • Public Procurement Division • Central Investigation Service (for major cases) • „Customs Commando” • Specialized Revisers • Mobile Control Units (for service cars)

29. What has been done by Hungarian Customs ?Human resource management • Selective recruitment • Psychological tests • Training on ethics • Professional training

30. Anti-Corruption Strategy of the Hungarian Government {Gov. Decree No. 1023/2001 (III.14.)} • Asset Declaration • Screening of preparatory work for new pieces of legislation • Review of rules on business confidentiality • Review of Customs and excise legislation • Transparency of decisions and processes (Glass pocket Law) • Anti-Corruption Bodies

31. Anti-Corruption Strategy of Hungarian Customs: • Transparency • In decision making • In Customs legislation (fewer exemptions) • Less descretionary power (risk management, automation) • Bar coded Customs declaration forms • Recruitment: competition, probationary period, integrity, criminal records • Fair salaries • Rotation of officers

32. Organized crime and corruption has international character, does not stop at national frontiers! Important: Joint thinking and action! It is not enough to be clean, but one needs look clean.

33. Contact and information Dr. Janos Nagy Commissioner, Customs & Finance Guard, Republic of Hungary • H-1095 Budapest, Mester u. 7. • tel: + 36 - 1 - 2180084 • fax: + 36 - 1 - 4569501 • e-mail: nagy.janos@vam.hu • Internet: http://www.vam.hu