Legal Eye: EU expansion marches on

"Bulgaria and Romania will join the EU in 2007 unless the Council decides, upon recommendation from the Commission, to postpone accession of either country until 2008"

EU Commission monitoring report

The EU Commission, in its recently issued monitoring report on the state of preparedness for EU membership for Bulgaria and Romania, concluded that both countries "should be prepared for membership by January 1, 2007, provided that they address a number of outstanding issues." This language is nothing new for the Commission. Similar wording was used three years earlier by the Commission in describing Poland's preparation for accession. Only the details are different. What is interesting, though, is that the Commission's monitoring report appears to confirm that both countries are assured entry to the EU, the only question being if accession will occur as scheduled on January 1, 2007 or sometime in 2008. Here we will examine what still needs to be done to ensure that accession for both countries will not be postponed.

Bulgaria

"Bulgaria needs to demonstrate clear evidence of results in the fight against corruption, in particular high-level corruption, notably in terms of investigation and subsequent judicial proceedings."

Three of the six areas cited by the monitoring report requiring urgent action by Bulgaria pertain to fighting crime. The monitoring report says that "there have been few tangible results in combating organised crime" and that "indictments, prosecutions, trials and convictions remain rare in the fight against high-level corruption."

Three years earlier, Poland was put on notice to improve its anti-money laundering efforts, but the measures it had to implement were nothing close to the requirements to combat organised crime and corruption imposed upon Bulgaria.

Two of the three remaining areas identified in the monitoring report requiring immediate action involve agriculture, including the creation of an integrated administration and control system (IACS) and a comprehensive mechanism to fight the spread of communicable disease among farm animals. The final issue is the need to strengthen internal financial controls in order to use EU structural and cohesion funds. Poland was similarly tasked with its improving its internal financial controls.

Romania

The monitoring report cited Romania's progress in "fighting corruption by establishing sound structures and launching investigations into a considerable number of high-level corruption cases." Of the four areas identified by the EU Commission as requiring urgent action by Romania, three involve agriculture, including the accreditation of paying agencies to execute direct payments to farmers, and the creation of an integrated administration and control system (IACS) and establishment of a comprehensive mechanism to fight the spread of communicable disease among farm animals (similar to Bulgaria and Poland three years earlier). The fourth applies to the need to improve administration of the tax system by means of upgrading the government's IT system.

Safeguards

Additionally, the disbursement of EU funds could be suspended if Bulgaria and Romania do not take urgent action to improve their financial management and control systems, in particular in the agricultural sector. In the end Bulgaria and Romania could very well find themselves in the EU, but without many of the benefits due to the imposition of various safeguards by the Commission.

Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki & Partners