Business Integrity Country Agenda – BICA Assessment Report Serbia

Transparency Serbia presented the Report on conditions for business with integrity in Serbia.[1]The assessment is based on the methodology that was developed by Transparency International (TI) and until 2020 was implemented in a dozen countries. The analysis is structured into 15 thematic areas, comprising a total of 51 indicators and 139 general questions.

Key findings

The research shows that the conditions for business entities to operate with integrity in Serbia are not fully provided.Such a situation is only partly due to the flawsand the fallacies contained in legislation(where the average score is 85 out of a possible 100 points), but rather a result ofinsufficient engagement of public authorities in implementation of regulations (average score 47 out of a possible 100).This is especially reflected in therelatively small number of investigated and detected cases of corruption and other wrongdoings that occur in the interaction between the public and private sectors or within the private sector. When it comes to measures for strengthening of integritythat companies apply independently and voluntarily, there is significant room for improvement in order to reach standards of good practice.Current contribution of the media and civil society to the business integrity is insufficient for the moment.

Taking all that into account, there is a huge space for improvementthrough the initiatives of the business sector and through the cooperation of this sector with state institutions and civil society. Previousanti-corruption plans, including a recently revised Action Plan for the Chapter 23 in Accession Negotiations between Serbia and the EU, have not paid sufficient attention to these issues.

In order to overcome these problems,Transparency Serbia has proposed 40 recommendations for the public, private and civil sector with the aim of creating conditions for increased integrity. Among them are recommendations related to the work of investigative bodies, protection of whistleblowers, financing of political activities and public officials campaigns, public procurement, lobbying, anti-corruption programs, media programs of public interest and the issue of conflict of interest in relation to media and private sector.

Transparency Serbia

Belgrade, December 16, 2020

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Findings by researchareas

Within the analyses of relevant legislation and institutions thatshould ensure the implementation and application of rules in practice,the following issues were considered: bribery of public officials, bribery in the private sector, money laundering, illicit arrangementsthat undermine economic competition,undue influenceon decision-making processes, public tendering,accounting and auditing rules, protection of whistleblowers and the work of certain bodies that affect the economy. Legal provisions in Serbia for most thematic areas provide a solid basis to foster and maintain business integrity. However, there are still legal loopholes in all areas and, as a result, harmful consequences that occur in practice are significant.

There are even more problems in the enforcement of existing rules. The main problem in this regard is the small number of law violation cases that have been investigated by the relevant authorities.One reason is the insufficient capacity of some institutions in charge.Another factor is the exposureof law enforcement agencies to political influence, resulting with unequal treatment of businesses in similar situations.In addition, when state control bodies carry out controls, they use much of their capacity to verify and formally comply with regulations, while substantial offenses remain largely unchecked.

Within the conditions for business integrity related to the business sector, we assessed the existence and quality of anti-corruption policies in companies, implementation of rules on internal control and audit, transparency of operations and cooperation with other actors in the fight against corruption.

Measures to strengthen integrity in the business sector are only partly based on legal rules, and much more are dependent on initiatives of business entities themselves. As a result, there are significant differences in the scope of implemented measures, depending on the size of the company, share of international capital, professionalism of the management and the industry in question.

There are still no sufficient external incentives for the private sector in Serbia to promote integrity in its activities. There is the odium again corruption throughout the private sector, but it is still not articulated into an action in the common interest.In part, such a situation is the consequence of a high influence of the public sector on the national economy and the dependence of businesses on their connections with those in power, in particular when it comes to small enterprises at the local level.

Despite the fact that anti-corruption is one of the frequent topics in Serbian civil society and media, business integrity texts and initiatives are rare exceptions. There is a huge potential to improve that situation through collective actions. Most media outlets cannot function independently of the government and commercial advertisers, which prevents themfrom fulfilling their role completely in the fight against corruption in both public and private sector, it was concluded in the research results.


Recommendations for public sector

Recommendations for the business sector

Recommendations for civil society


[1]This project is funded through financial means received from the European Bank for Reconstruction and Development (EBRD). Findings and recommendations are the sole responsibility of Transparency Serbia and can in no way be taken to reflect the views of the EBRD.