DOES CORRUPTION IN PUBLIC PROCUREMENT

ALSO EXIST IN THE WORLD S LEAST

CORRUPTIVE COUNTRY (DENMARK)?
Hanne Marie Motzfeldt and Carina Risvig Hamer*
* Hanne Marie Motzfeldt, PhD, Assistant Professor and Carina
Risvig Hamer, PhD, Associate Professor, Department of Law,
University of Southern Denmark. The authors are working in
the field of administrative law, EU law, EU public procurement
law and personal data protection law.

ABSTRACT. According to Transparency Internationals

Corruption Perceptions Index, Denmark ranked number 1
in 2014 and 2015. In other words Denmark is considered
to be the worlds least corruptive country. Despite that
fact, in June 2015 Denmark was seeing its largest
corruption scandal in the public sector so far. The case
concerns two IT companies and the allegedly bribery of
public employers in order to be awarded public
contracts. This paper will explore the circumstances of
the case. in order to better understand why Denmark is
considered to be a country with very little corruption
the paper will explore what is considered as corruption
(bribery) in Denmark. It will be seen that the link
between bribery and acceptable gifts can be difficult to
draw. The paper will furthermore analyse the noncriminal
sanctions
for
undertakings
involved in
corruption in relation to whether such undertakings can
participate in future public procurement procedures.
Thus, in light of the 2014 EU Public Procurement
Directive the new rules regarding exclusion of
undertakings and the possibility of self-cleaning will be
explored in the paper. The paper concludes that even
though the procurement rules seeks to prevent that

contracting authorities enters into contracts with

undertakings who have committed corruption, the
possibility for undertakings to correct prior mistakes is
with the new EU procurement rules a real possibility
leading to the fact that the rules of exclusion of
undertakings perhaps does not have the preventive
effect originally intended.
INTRODUCTION
According to Transparency Internationals Corruption
Perceptions Index, Denmark ranked number 1 in 2014
and 2015.1 In other words Denmark is considered to be
the worlds least corruptive country. Despite that fact, in
June 2015 Denmark was seeing its largest corruption
scandal in the public sector so far. The case concerns
two IT companies and the allegedly bribery of public
employers in order to be awarded public contracts
(referred to in the following as the Atea case). The case
shows that even in the worlds least corruptive country
does corruption exists.
This paper will explore the circumstances of the
Atea case including what is considered as corruption
(bribery) in Denmark. The paper will furthermore
analyse the non-criminal sanctions undertakings risk
when being involved incorruption in relation to whether
such undertakings can participate
in
future public
procurement. In light of the 2014 EU Public Procurement
Directive2 the new rules regarding exclusion of
undertakings and the possibility of self- cleaning will be
explored in the paper.
Section 2 will introduce the concept of corruption and
how it is seen in Denmark. Section 3 will elaborate on the
EU public procurement rules regarding exclusion of
undertakings based on corruption and how these have

been implemented in Denmark. Section 4 will look at

the new possibility in the EU procurement regime
regarding self-cleaning for undertakings that have
committed a crime, and finally section 5 states the
conclusions.
WHAT IS CORRUPTION?
When talking about corruption in different countries
the
concept
of
corruption
varies.
Transparency
International for example defines corruption as the
abuse of entrusted power for private gain.3 Many
conventions such as the OECD and the UN do not
define corruption at all, but merely states examples as
to what can be considered offences. The EU Public
Procurement Directive has its own definition as to what
corruption is (see below Section 3), but even Member
States within the EU have different approaches to what
is considered to be corruption. In some countries
corruption will also cover breaches of competition rules
and in other Member States corruption has a more
limited terminology. Common for all jurisdictions is that
corruption distorts the democratic systems and should be
prevented. Open, transparent public
procurement
systems can help reduce corruption, but as well be
seen in this paper even in the worlds least corruptive
country, Denmark does corruption to some extent
exists.
Corruption (Bribery) in Denmark
Like the EU Public Procurement Directive Denmark
defines corruption as bribery4 (see below section 3 for
the EU Public Procurement rules). This means for
example that a breach of competition rules is not
considered as a part of the definition of corruption in
Denmark.5

Denmark has not seen many cases on corruption

(bribery). 6 To our knowledge, no undertakings have
yet been convicted for corruption in the context of
public contracts. The Atea case, which is still pending a
judgment, is probably the largest case of bribery seen in
Denmark. The case concerns charges of employees in
the IT Company Atea, who is accused of having paid
bribes to two public servants respectively Region
Zealand and the National Police. According to the
charges the public servants were given access to an
account with 1. Million DKK (approximately 150.000 euro)
as well as they, along with three protagonists from Atea,
went on a trip to Dubai at a value of 80.000 DKK
(approximately 10.000 euro). In addition, the case deals
with
an
annual
sponsorship
of
100.000
DKK
(approximately 15.000 euro) to a trotting track in
Nykbing, which Atea should have given at the request
of one of Region Zealand's IT staff.7
Taking a closer look at what is considered as bribery
in Denmark, the general Danish provisions on bribery of
public sector employees are to be found in Sections 122
and 144 of the Criminal Code. The prohibition against
bribing public officials is given in Section 122 of the
Criminal Code, which reads as follows:
Any person who unduly provides, promises or
offers a gift or other favour to someone in Danish,
foreign or international
public
service
or
engaged in such assignment in order to induce
such person to perform, or to omit performing, an
act in the service shall be punished by fine or
imprisonment for up to three years.8
Concerning public officials receipt of bribes, section 144
of the Criminal Code states: Any person who receives,

requests or accepts a promise of an undue gift or other

favour for him-/herself in the exercise of a Danish, foreign
or international public service or assignment, shall be
punished by fine or imprisonment for up to six (6)
years.
In Denmark, as far as government agencies,
municipalities
and
other
bodies
regulated
by
administrative law are concerned, the provisions on
bribery in the Criminal Code does not stand alone in
countering the endangerment of exerting influence on
public procurement and other decisions by the means
of
related to gifts and benefits in Denmark.
Complementary administrative law regulates the issue of
illicit gifts and favours to public employees.
A violation of case law-based administrative
principles is not defined as bribery in a Danish context
and thus not regarded as corruption. Nevertheless, the
principles of administrative law are important in order to
understand the Danish regulation due to the interaction
between these principles and the provisions in the
Criminal Code as cited above. In 1985 the High Court
stated the following about the interaction:
Similar considerations are to be decisive in
criminal law as in administrative law, but with the
significant level of certainty that is required to
declare any criminal responsibility, the margin of
what is acceptable under Section 144 of the
Criminal Code is wider than the case may be
under the principles of administrative law. 9
The cited above c i t a t i o n suggests the existence of
a grey area between punishable and criminalised
demand for, acceptance or receipt of bribes and the
mere acceptance of gifts or favours which are illegal

according to the principles of administrative law. This

grey area implies that acceptance of a gift or a favour
may be a violation of the principles of Danish
administrative law, without being able to apply the
provisions of the Criminal Code. Conversely, if
acceptance of a gift or a favour is considered legal
under the rules of administrative law, neither Section
122 on providing, promising or offering bribes nor
Section 144 on accepting bribes can apply. The gift or
favour is not undue and the providing, promising or
offering is not unduly, see the above cited wording of
Sections 122 and 144 of the Criminal Code.
In other words, assessment as to whether the Danish
provisions on bribery in the Criminal Code applies to a
certain set of circumstances, requires a preliminarily
clarification of whether the acceptance of a gift or a
favour is in accordance with the principles of
administrative law. Is this case neither the public
employee nor the giver can be convicted of bribery. Only
if acceptance of the gift or favour is a violation of the
principles of administrative law, can it be assessed
whether the Criminal Codes provisions on bribes are
violated.
The
Danish
principles
of
administrative
law
regulating public employees demand for or acceptance
of gifts and other favours have mainly been developed
though opinions of the Parliamentary Ombudsman.10 In
2007 and updated in 2010 this case law was
codified into guidelines published by the Agency for
Modernisation under the Department of Finance.11
In general terms, as a public employee, it is
prohibited to accept gifts, favours or any kind of
benefits linked to your designated position and duties.

Any asset or service is covered by this prohibition and

there is no lower limit as far as economic value is
concerned. 12 This applies not only to gifts and favours
connected to exercise of public authority, but to all
public activities. Thus, the prohibition applies to all kinds
of gifts and favours linked to a public procurement. As
Section 144 of the Penal Code on receiving bribes
but in contrast to undertakings promising, giving or
offering bribes as laid down in Section 122 of the Code
also acceptance of illicit gifts and favours taking
place after the end of procurement can be a violation of
the principles of administrative law.
However, there are a number of exceptions from the
general rule. These exceptions are developed on the
grounds of culture or custom all with the reservation
that the gift or favour must be regarded as modest and
normal in the specific context. Is the gift or favour
excessive or more luxuries than expected in a similar
context, the exceptions will not apply.
Countering the risk of offending the giver, it is
accordance with the principles of administrative law in
Denmark for a public employee to receive modest gifts
or favours in connection with special occasions, e.g.
birthdays, anniversaries or retirements. To a very limited
extent this goes for national celebrations as well.
Smaller gifts given by courtesy are allowed as well, e.g.
from visiting delegations. Additionally, Danish public
employees are granted the opportunity to receive
smaller gifts and favours when emotional aspects can
justify these. The reasoning is to give some room for
gratitude. Therefore this exception goes with the
understanding of some form of a personal relationship
between the giver and the receiver. In order to prevent
abuse it is also required that e.g. a caretaker

relationship has to be ended at the time of acceptance

of the gift or favour. Gifts and favours in connection
with procurement can hardly be classified as justified
by emotional reasons. In other words this exception is
not aimed at business relationships. More relevant in
the context of this paper is the exception allowing
public employees to attend dinners and events relating
to ongoing partnerships and contractual relationships.
Within reasonable limits such participation is accepted
provided it is an integrated part of the employee's
duties, e.g. within the employees area of representation.
A final exception can also be of some relevance for
public employees responsible for procurement. Within
the principles of administrative law staff can receive
samples etc., provided that the samples are similar to
what the contracting authority is expected to acquire.
These are considered as part of the undertakings tender
and will not belong to the staff but to the contracting
authority and should only have a limited value.
As long as a public employees acceptance of a gift
or a favour is fully covered by one or several of the
exceptions described above, the requirement of Danish
administrative law are met. In such case neither the
public employee nor undertakings taking part in a public
procurement can be convicted of bribery according to
Sections 122 of 144 of the Criminal Code. However, if
the allegations of a trip to Dubai in the pending case of
Atea are true, there can be no doubt that the public
employees participation exceeded the above mentioned
limit regardless of any specific circumstances. Thus,
none of the exceptions apply and the behavior of the
employees doesnt seem to comply with the principles
of administrative law.13
As it is cited above, the Danish

Criminal

Code

criminalizes receiving, requesting or accepting undue

gifts or other favours as well as providing, promising or
offering bribery of any public-sector employee, not
regarding whether his or her employment is based
on contract or election. 14 Both provisions of the
Criminal Code cover all kinds of received and promised
gifts and favours.15 The provisions are interpreted to
include gifts
or
favours
to closer relatives and
organisations or associations which are particularly
close to the employee in question, if courts consider the
benefits likely to induce non- objective considerations.
Thus, the alleged requested sponsorship in the Ateacase may fall within the provisions as well as the trip
to Dubai.
As far as accepting bribery is concerned, Section
144 of the Criminal Code requires a link between the
gift or favour and the designated position and duties of
the public employee. However, Section 144 of the
Danish Criminal Code doesnt require an actual
influence on the decision-making in the contracting
authority.16 Thus, receipt of a gift or favour, which
takes place after a public procurement, may be
considered as an act of accepting bribery according to
Section 144 of the Danish Criminal Code.
On the other hand Section 122 of the Danish
Criminal Code only imposes a penalty on providing,
promising or offering gifts and other favours with an
intention to influence the public employee into a certain
conduct or decision even though it is not a requirement
that the desired conduct or decision is illegal or
contrary to the public officials duties. Subsequent the
interpretation is that gifts or favours provided in
gratitude or as a courtesy after procurement are not in

general included in Section 122 and the provider will

not be liable to punishment even though the public
employees acceptance can be included in Section 144.
However, for ongoing business relationship this is likely
to be modified due to the fact that the process cannot
be regarded as ended.17 Assuming the information in
Ateas and the involved public bodies press releases
are correct, it doesnt seem unlikely that Denmark will
see the first conviction of bribing in the context of
public procurement in the near future.
THE EU PUBLIC PROCUREMENT DIRECTIVE
The

EU

Public

has been
implemented in Denmark since January 1, 2016.18 This
makes Denmark one of the first EU Member States to
adopt the new procurement rules. However, in relation to
exclusion of undertakings from public procurement
procedures due to corruption this was also a possibility
under the 2004 Procurement Directive.19
Corruption
Ground
in
Directive

Procurement

Directive

as
a
Mandatory
Exclusion
the
EU
Public Procurement

Article 57(1) of the Public Procurement Directive

contains mandatory exclusion grounds in the sense that
if an undertaking has been convicted for one of the
violations listed in the Article, contracting authorities
are required to exclude them from participating in
public procurement procedures for a given period. Few
exceptions exist.
Mandatory exclusions grounds at EU level were first
introduced in the 2004 Directive. The reason for
introducing mandatory grounds were, according to
Trepte, a response to the growing concern over the

effects of organized crime and terrorism, on public

procurement both as a means of subverting the normal
competitive process and as a mechanism for laundering
money.20 Thus, public contracts should not be awarded
to undertakings guilty of corruption or fraud against the
EUs financial interests, terrorism, money laundering or
terrorist financing. Non-payment of taxes or social
security contributions should also lead to mandatory
exclusion at EU level.
Regarding the possibility to exclude an economic
operator based on corruption this is found
as a
mandatory exclusion ground in Article 57(1)(b). Thus,
contracting authorities shall exclude an economic
operator from participation in a procurement procedure
where they have established that the tenderer has been
the subject of a conviction by final judgment as a reason
of
(b) corruption, as defined in Article 3 of the
Convention on the fight against corruption
involving officials of the European Communities or
officials of Member States of the European
Union( 21 ) and Article 2(1) of Council Framework
Decision 2003/568/JHA (22) as well as corruption
as defined in the national law of the contracting
authority or the economic operator.
A
similar
provision
was
found
in
Directive
2004/18/EC Article 45(1) litra b. However, compared to
the 2004/18/EC Directive the new provision also
includes, besides the relevant EU legal acts, convictions
for corruption offences under national law. This ensures
that economic operators are excluded in other Member
States as a consequence of a conviction for corruption
under the national criminal law of the economic

operators Member State.

Also corruption within the meaning of Council
Framework Decision 2003/568/JHA of 22 July 2003 on
combating corruption in the private sector is covered.
Article 2 of the framework decision lists regarding active
and passive corruption the following conduct:
(a) promising, offering or giving, directly or
through an intermediary, to a person who in any
capacity directs or works for a private-sector
entity an undue advantage of any kind, for that
person or for a third party, in order that that
person should perform or refrain from performing
any act, in breach of that person's duties;
(b) directly or through an intermediary, requesting
or receiving an undue advantage of any kind, or
accepting the promise of such an advantage, for
oneself or for a third party, while in any capacity
directing or working for a private-sector entity, in
order to perform or refrain from performing any
act, in breach of one's duties.
Such offences may lead to exclusion from procurement
procedures.
Fighting corruption and fraud within the European
institutions is a top priority for the EU and besides EU
rules on the matter OECD has also adopted conventions
in this area. 23 According to Sope Williams EU policy
against corruption can be said to have three
objectives. First, the policy is aimed at protecting
Community finances, Secondly, and similar to the main
rationale for EU action against organised crime, EU
measures against corruption are also intended to secure
for EU citizens an area of freedom, security and
justice devoid of activity such as corruption and

thirdly, EU anti-corruption measures are intended to

facilitate the liberalisation of the internal market.24
The Convention on the fight against corruption
involving officials of the European Communities or
officials of Member States of the European Union is
designed to fight corruption involving European officials
or national officials of Member States of the European
Union. Each Member State must take the necessary
measures to ensure that conduct constituting an act of
passive corruption or active corruption by officials is a
punishable criminal offence. Member States must ensure
that conduct constituting an act of passive or active
corruption, as well as participating in and instigating
these acts, is punishable by criminal penalties.
According to Article 3 of the convention corruption is
defined as
For the purposes of this Convention, the deliberate
action of whosoever promises or gives, directly or
through an intermediary, an advantage of any
kind whatsoever to an official for himself or for a
third party for him to act or refrain from acting in
accordance with his duty or in the exercise of his
functions in breach of his official duties shall
constitute active corruption.
When talking about corruption at EU level this
covers more elements than what is considered as bribery
according to the Danish criminal act (see the discussion
above). Covered is also bribery in the private sector.
However, it is not only violations of the provisions of the
Danish Criminal Code on bribery, which should lead to
exclusion. If an undertaking from another EU Member
State is convicted of bribery under the national rules on
corruption in that Member State, it will also result in the

exclusion of Denmark.
Exclusion Period
When
an
undertaking
has
committed
an
infringement, which implies that the contracting entity
shall exclude the undertaking from the procurement
procedure, the question of how long such an undertaking
must be excluded arises. The maximum period for
excluding an undertaking is according to the EU
Procurement Directive Article 57(7) for mandatory
exclusion grounds 5 years. In Denmark the maximum
exclusion is, however, only 4 years.25
In order to be excluded from participating in public
procurement based on corruption (bribery) it is a
requirement that the economic operator has been the
subject of a conviction by final judgment. This means
that if proceedings are pending against a tenderer the
contracting authority may not exclude the tenderer
before a final judgment is present. This will also be
the case if the tenderer can appeal the case. In such a
situation the contracting authority may not exclude the
tenderer before the time limit for appeal has passed.26
It is not clear from the Public Procurement Directive
whether the final conviction must be judgments within
EU or whether judgments can also occur outside EU.27
In some cases where a final conviction is not
present, it will be possible for the contracting authority
to exclude an economic operator as a consequence of
grave professional misconduct, which is considered a
discretionary exclusion ground in Article 57 of the
Procurement Directive. It will be the contracting
authoritys responsibility to bear the burden of proof of
such an assessment.28 This means that if a contracting

authority for example wants to exclude the abovementioned undertaking Atea from participating in public
procurement procedures before the judgment it is the
contracting authoritys responsibility that exclusion
could in fact take place. A risks that can seem heavy to
bear in light of the potential consequences of for
example damages is it turns out the contracting
authority could not bear the burden of proof later on.
Exclusion grounds can relate to the undertaking as
well as to persons in the undertaking. If the exclusion
ground relates to a specific natural person, that person
cannot
circumvent
the
mandatory
grounds
for
exclusion by creating a new legal person with the same
leading persons.
SELF- CLEANING
A few limited exceptions to the exclusion of
undertakings who have committed corruption exists in
the Public Procurement Directive. The exemptions are
limited because corruption is a serious violation and
the fact that there exist exceptions at all is to ensure
that there is the greatest possible competition for public
contracts, which will be ensured by as many
undertakings as possible to participate in public
procurement procedures. One of these exceptions is
found in the Public Procurement Directive Article 57(6)
and relates to self-cleaning.
According to this provision any economic operator
that is in one of the situations referred to in Article
57(1) mandatory exclusion grounds and Article 57(4)
discretionary exclusion grounds may provide evidence
to the effect that measures taken by the economic
operator are sufficient to demonstrate its reliability
despite the existence of a relevant ground for exclusion.

If such evidence is considered as sufficient, the economic

operator concerned shall not be excluded from the
procurement procedure. Thus, candidates or tenderers
who are about to be excluded on the basis of one of the
grounds for exclusion have the right to submit to the
contracting authority evidence demonstrating that they
have taken appropriate measures to remedy the
consequences of past misconduct and to effectively
prevent future occurrences. This is called self-cleaning.
The provision on self-cleaning is a new invention in the
2014 Public Procurement Directive and is inspired by
legislation and case-law from various Member States, in
particular Germany and Austria. It was already
indicated in the Defence Directive, that the Commission
should examine the possibility for such a provision.
Article 73 of the Defence Directive states that the
Commission shall investigate the feasibility of
harmonising the conditions for the reinstatement of
candidates or
tenderers
with
prior
convictions
excluding
them
from
participation
in
public
procurements, and shall, if appropriate, bring forward a
legislative proposal to that effect. The topic of selfcleaning was also mentioned in the Commissions
Green Paper, where it was stated An important issue
on which the current EU public procurement Directives
remain silent is what are referred to as the "selfcleaning" measures, measures taken by the interested
economic operator to remedy a negative situation
affecting his/her eligibility. Their effectiveness depends
on their acceptance by Member States.29
Even though self-cleaning
of the Public Procurement
principle of proportionality,
movement, self-cleaning can

has not prior been a part

Directives, based on the
and the rules on free
be said to have been a

possibility prior to the 2014 Directive as well.30 Thus,

self-cleaning was not excluded by the 2004 Directive,
which can also be seen from the Green Paper where it
is stated that Article 45 allows Member States to take
into account self-cleaning measures as far as such
measures show that the concerns about professional
honesty, solvency and reliability of the candidate or
tenderer have been eliminated. However, there are no
uniform rules on "self- cleaning", even though measures
taken by the economic operator to remedy the situation
of exclusion are taken into account anyway by the
contracting authorities in some Member States.31
The aim of self-cleaning is a proportionality test that
tenderers should not be excluded for a ground that first
of all does not any longer exist and which the tenderer
has done everything in its power to remedy in order to
avoid such offences should occur in the future. Thus,
according to the Green Paper (add p.# for this quote):
The issue of "self-cleaning measures" stems from
the need to strike a balance between the
implementation of the grounds for exclusion and
respect for
proportionality and equality of
treatment. The consideration of self-cleaning
measures may help contracting authorities in
carrying out an objective and fuller assessment
of the individual situation of the candidate or
tenderer in order to decide its exclusion from a
procurement procedure. 32 Such considerations
can also be seen from Recital 102 which states
that Allowance should, however, be made for the
possibility that economic operators can adopt
compliance measures aimed at remedying the
consequences of any criminal
offences
or

misconduct
and
at
effectively
preventing
further occurrences of the misbehaviour.
In order for the economic operator to be allowed to
participate in the procurement procedure despite the
fact that it has been involved in corruption, the
economic operator shall prove;
1) That it has paid or undertaken to pay
compensation in respect of any damage caused
by the criminal offence or misconduct
2) Clarified the facts and circumstances in a
comprehensive manner by actively collaborating
with the investigating authorities and
3) taken concrete technical, organisational and
personnel measures that are appropriate to prevent
further criminal offences or misconduct

Where such measures offer sufficient guarantees, the

economic operator in question should no longer be
excluded on those grounds alone. Economic operators
should have the possibility to request that compliance
measures taken with a view to possible admission to the
procurement procedure be examined.33
It is for the contracting authority to decide if the
economic operator has demonstrated sufficiently. The
measures taken by the economic operators shall be
evaluated taking into account the gravity and particular
circumstances of the criminal offence or misconduct.
Where the measures are considered to be insufficient,
the economic operator shall receive a statement of the
reasons for that decision. The fact that the tenderers
may require a statement of the reasons for the decision
that ist measures taken are insufficient seems to indicate
that the tenderer to begin with have asked the

contracting authority to evaluate the measures taken.

It will not be the contracting authoritys responsibility
to ask tenderers whether they have taken any measures.
The contracting authoritys decision to exclude the
tenderer constitute a decicion within the Remedies
Directive,34 and can therefore be the subject of
review.35
Article 57(6) also states that an economic operator
which has been excluded by final judgment from
participating in procurement or concession award
procedures shall not be entitled to make use of the
possibility provided for under this paragraph during the
period of exclusion resulting from that judgment in the
Member States where the judgment is effective. This is a
result of, that in some Member States, economic
operators can when convicted be excluded from
procurement procedures as a result of this judgment. If
an economic operator could self-clean it would
circumvent such a judgment, which should therefore not
be possible.
As the wording of Article 57(6) states it is for the
economic operator to provide evidence to the effect
that measures taken by the economic operator are
sufficient to demonstrate its reliability despite the
existence of a relevant ground for exclusion. It is for the
contracting authority to decide if such evidence is
considered as sufficient, the economic operator
concerned shall not be excluded from the procurement
procedure. However, as can be seen from Recital 101
it should be left to Member States to determine the
exact procedural and substantive conditions applicable
in such cases. They should, in particular, be free to
decide whether to allow the individual contracting
authorities to carry out the relevant assessments or to

entrust other authorities on a central or decentralised

level with that task. Thus, Member States can provide
national legislation regarding self-cleaning, which sets
the rules as to who should to carry out the relevant
assessments and to what extent measures can be said
to be sufficient. In Denmark it is for the individual
contracting authority to carry out the assessment.
Compensation
The economic operator must show that it has paid or
undertaken to pay compensation in respect of any
damage caused by the criminal offence or misconduct.
Thus, if the economic operator has paid its taxes,
compensations or paid damages the economic operator
in question should no longer be excluded. It is not a
requirement that the undertaking actively finds the
companies or individuals who have suffered a loss, and
offer compensation. The courts, arbitration or appeal
bodies will make imposition of compensation. An
undertaking
may
also
undertake
to
provide
compensation or damages, which for example could be
a form of settlement to avoid a lawsuit.
Collaborations
The economic operator must have clarified the facts
and circumstances in a comprehensive manner by
actively collaborating with the investigating authorities.
Thus, if the economic operator has participated in the
investigations by helping the authorities solve a given
violation, the economic operator in question should no
longer be excluded. A question, which arises in this
regard, is the risk of potentially self-incriminating. Thus,
the undertaking should not be required to reveal
elements that will result in criminal prosecution. The
information the undertaking provides should however,

be sufficient to ensure the undertakings

the future. An argument that there will
incriminations in these cases is that it is
participate in public tenders, and if the
wants to participate, one must comply.

credibility in
not be selfvoluntary to
undertaking

Personnel Measures
The economic operator must have taken meassures
relating to concrete technical, organisational and
personnel measures that are appropriate to prevent
further criminal offences or misconduct. This is perhaps
the most important requirement as this will show that
the economic operator does not intend to commit
futher criminal offences.
Those measures might consist in particular of
personnel and organisational measures such as the
severance of all links with persons or organisations
involved
in
the
misbehaviour,
appropriate
staff
reorganisation measures, the implementation of reporting
and control systems, the creation of an internal audit
structure to monitor compliance and the adoption of
36
internal
liability
and
compensation
rules.
Staffreorganisation could for instance be
the
dismissal of all officers, directors and employees
involved in the misconduct, redeployment and/or
disciplinary
measures
regarding
persons
having
participated to a lesser degree or simply tolerated the
misconduct.37
Appropriate compliance measures to prevent future
misconduct could also be establishing binding company
guidelines, staff training and information, separation of
administrative and operative department, installation of a
compliance
officer,
double-checking
of
important
decisions.38

The principle of proportionality must also be

observed in these cases. Thus, depending on an
employee's
involvement
in
the
infringement
arrangement may include immediate dismissal to
dismissal with notice, or could simply be to move one
employee to another department. It does not mean
necessarily that all employees involved, must be
dismissed. Relevant employment law must of course also
be observed.
CONCLUSIONS
Corruption distorts democratic systems, it places
mistrust in public bodies and should be prevented. Open,
transparent public procurement systems can help reduce
corruption, but it is difficult to imagine that corruption will
never take place, and as has been elaborated on above in
this paper also in the worlds least corruptive country,
Denmark does corruption to some extent exists.
The consequences which undertakings that have
committed corruption risks (besides criminal sanctions) in
relation to their possibility to participate in procurement
procedures can be serious. Thus, undertakings risk being
excluded for a long period from public contracts, which
should be seen as a preventive measure to avoid
corruption. Nevertheless, the new possibility of selfcleaning shows that it is important to ensure sufficient
competition for public contracts and that undertakings
can make up for previous mistakes in the past, including
corruption. It is well known, that corruption can be
difficult to spot,39 and it is possible that undertakings
does not yet see the possible exclusion from public
procurement as a real treat and that with the
possibility of self-cleaning, exclusion from
public
procurement procedures are not to be seen as a real

threat, but more as a paper tiger.

NOTES
1.

The Corruption perception index is an index

measuring the perceived levels of Public Sector
Corruption in 175 countries and territories and it
ranks countries based on how corrupt their public
sector is perceived to be. It is available at
http://www.transparency.org/cpi2015#results-table
[Retrieved March 2016]

2 Directive of the European Parliament and of the

Council on
Public Procurement and Repealing
Directive 2004/18/EC with reference to [2014] OJ
L94/65.
3

See
e.g.
http://www.transparency.org/what-iscorruption/#define [Retrieved March 2016]

4 About corruption and the definition see also Undg

korruption (How to avoid Corruption) a guideline
from the Danish Ministery of Justice 2015. Available
at
http://jm.schultzboghandel.dk/upload/microsites/jm/eb
ooks/andre_publ/19 1906%20dk%20undgaa
%20korruption%202015.pdf [Retrieved March 2016]
5

Breaches of competition rules are seen on a regular

basis in Denmark.

6 See e.g. case U.2007.1680 , where a man had

violated the speed limit by more than 30%, and
offered to this effect a police assistant a minor
amount of money (approx. 100 euro) to delete the
speed offense. Both the district court and the high
court found that a violation of the Danish Penal Code
122 had taken place and fixed the penalty to

imprisonment for 20 days. In another case

U.2009.2049, a staff engineer in a municipality,
whose job was to obtain quotes on maintenance
tasks, had received a total of 100.000 DKK (approx.
15.000 euro) from a smaller company that made a
bid for smaller jobs in the municipality. According to
the engineer the amount was for preparation of
documentation materials. The company performed
work for approximately 270,000 DKK and 509,000
DKK for the municipality. The director of the
company was sentenced to imprisonment for four
months and the engineer of the municipality was
sentenced to imprisonment for 6 months.
7 See further on the case in a Danish Magazine:
DJF Bladet, (2015). Korruption i
verdens
mindst
korrupteland.
Available
at
www.djoefbladet.dk/blad/2015/16/korruption-i-verdensmindst-korrupte- land.aspx [Retrieved March 2016]
8 The general conditions for the imposition of criminal
liability on companies are presented in Chapter 5 of
the
Danish
Criminal
Code.
Among
other
requirements criminal liability of a legal person
assumes a specific legal basis for this. For bribing
public-sector officials this legal basis is Section 306
of the criminal Code.
9 Judgment in U.1985.270 .
10 E.g. FOB 2015.4, Available at
www.retsinformation.dk/Forms/R0710.aspx?
id=168672&exp=1#FOB2 [Retrieved March 2016]
11

Code of Conduct in the

June 2007. Available at

Public

Sector,

http://hr.modst.dk/~/media/Publications/2007/God
%20adfaerd%20i%20det%20offentlige%20-%20Juni
%202007/God%20adfaerd%20juni%202007- pdf.ashx
and Acceptance of gifts, invitations and other
benefits, May 2010. Available at
http://hr.modst.dk/Arbejdspladsen/Personalepolitik/God
%20adfard%20i%20d et%20offentlige.aspx
[Retrieved March 2016]
12 Code of Conduct in the Public Sector p. 25.
13

According to Region Zeeland and the press a

disciplinary penalty has already been imposed on
the employees since Region Zeeland and the
police immediately announced a summary dismissal.
Available
at
http://www.regionsjaelland.dk/dagsordener/Dagsorden
er2015/Documents/2
180/2797738.PDF
[Retrieved March 2016] and
http://www.computerworld.dk/art/234982/topchef-ipolitiet-bortvist-efter- bedrageri-sag-i-region-sjaelland
[Retrieved March 2016]

14 The latter is for example members of City councils or

councils of the official state church. Generally, the
provision does not apply to employees of public
owned Companies, se Langsted, L. B., (2009).
Bribery across Borders and the like from a Danish
Perspective. Scandinavian Studies in Law, p. 252.
15 The High Court in U 1994.773 convicted a local
Danish politician of receiving commercials free of
charge from a radio station.
16 However, whether the bribe acted contrary to his
duties in connection with the bribe or had actual
influence on decisions or behaviour has a bearing on

sentencing.
17

U.1983.990 H concerned the director of a

construction company bribing both an elected
member of the City Council, a senior official and 3
junior members of the staff. The director was found
guilty in violation of Section 122 of the Criminal
Code and the employees of violation of the Section
144 of the Criminal Code. The gifts and favours was
received during several years, mainly at special
occasions like birthdays, receptions ect.

18 By Act nr. 1564 of December 15, 2015.

19 For a comparative analysis of the possibility of
excluding undertakings from participating in public
procurement procedures in some EU Member
States, see Graells, A. S. Exclusion of Economic
Operators from Public Procurement Procedures. A
Comparative
View
on
Selected
Jurisdictions.,
Available at ssrn.com/abstract=2739363. [Retrieved
March 2016]
20 Trepte, P. (2007).Public Procurement in the EU A
Practioners Guide. 2nd Edition, Oxford University
Press, p. 338. See also Sope, W. Coordinating public
procurement to support EU objectives a first
step? The case of exclusions for serious criminal
offences, Chapter 12 in Arrowsmith, S. & Kunzlik, P.
(2009). Social and Environmental Policies in EC
Procurement
Law
New
Directives
and
New
Directions.Cambridge University Press. Recital 43 of
the 2004 Procurement Directive stated The award of
public contracts to economic operators who have
participated in a criminal organisation or who have
been found guilty of corruption or of fraud to the

detriment of the financial interests of the European

Communities or of money laundering should be
avoided.
21 OJ C 195, 25.6.1997, p. 1.
22 Council Framework Decision 2003/568/JHA of 22 July
2003 on combating corruption in the private sector
(OJ L 192, 31.7.2003, p. 54).
23 See OECD Convention on Combating Bribery of
Foreign Public Officials in International Business
Transactions, which can be found at
http://www.oecd.org/daf/antibribery/oecdantibriberyconvention.htm [Retrieved
March 2016]
24

Sope, W. Coordinating public procurement to

support EU objectives a first step? The case of
exclusions for serious criminal offences, chapter 12 in
Arrowsmith, S. and Kunzlik, P. (2009). Social and
Environmental Policies in EC Procurement Law New
Directives and New Directions. Cambridge University
Press.

25 See the Danish Procurement Act 138.

26 See also Poulsen, S. T. EU-Udbudsretten, 2nd.
Edition, DJF Publishing, p. 429 and Priess who
states Therefore deferred prosecution agreements,
dismissals
on
other
considerations,
summary
penalties, or penalty orders will not trigger
mandatory exclusions. Having regard to the clear
wording, one must still conclude that only res judicata
judgements sensu strictu give rise to a mandatory
exclusion.
27 See Priess, who elaborates that this was also the

situation before the 2014 Directive and that Member

States have different practised on the matter. Priess,
HJ. (2014). The rules on exclusion and self-cleaning
under the 2014 Public Procurement Directive. Public
Procurement Law Review,, nr. 3, pp. 112-123.
28 According to the Directive Recital 101 Bearing in
mind that the contracting authority will be
responsible for the consequences of its possible
erroneous decision, contracting authorities should
also remain free to consider that there has been
grave professional misconduct, where, before a final
and binding decision on the presence of mandatory
exclusion grounds has been rendered, they can
demonstrate by any appropriate means that the
economic operator has violated its obligations,
including obligations relating to the payment of
taxes or social security contributions, unless otherwise
provided by national law.
29 Commissions Green Paper, p. 53.
30

Steinicke, M.l Qualification and Shortlisting.

Shapter 5 in Trybus, M Caranta, R, % Edelstam, G.
(2013). EU Public Contract Law. Bruylant, Priess, HJ.
The rules on exclusion and self-cleaning under the 2014
Public Procurement Directive, PPLR 2014, 3, 112-123.
31 Green Paper, p. 53.
32 Green Paper, p. 53.
33 Recital 102.
34 The Remedies Directive Article 2(1)(b) lists various
types of decisions, which must be open for review such
as the removal of discriminatory technical, economic or
financial specifications in the invitation to tender, the

contract documents or in any other document relating

to the contract
award procedure,. The list is not
exhaustive.
35 See also Priess.
36 Recital 102.
37 Cluster 3: Reducing documentation requirements,
Council document nr. 9185/12, p. 9.
38 Cluster 3: Reducing documentation requirements,
Council document nr. 9185/12, p. 9.
39 To spot corruption see also the OECD Principles for
Integrity
in
Public
Procurement.
Available
at
http://www.oecd.org/gov/ethics/48994520.pdf [Retrieved
March 2016]