Corruption, fraud, and organized crime in the emerging Baltic economies

Twyman-Ghoshal, Anamika ORCID: 0000-0003-4076-6687 (2005) Corruption, fraud, and organized crime in the emerging Baltic economies. In: Ethical Implications of Post-communist transitional economics and politics in Europe. IURA, pp. 343-366. ISBN 8080780455

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Fraud, often also referred to as financial crimes, describes several dishonest activities based on deception that may include theft of some type, bribery, corruption or false accounting, all with the result of a financial loss. Fraud has become an ailment of the transition economies. The focus here will be on some of the new European Union (EU) member states. Specifically the Baltic Sea Region countries, namely Poland, Estonia, Latvia and Lithuania. The reason for focusing this study on these countries is that they have all undergone tremendous change in their economies, including legal and social culture. In order to qualify for the May 1st, 2004 round of accession these changes have been placed on a fast track. The changes are not complete; there still remain many obstacles that need to be overcome in order to obtain the full benefits of membership. In order to understand what it is that these new member states have to accomplish I shall first discuss the development of the European Union in terms of security, discussing in particular the areas of banking, organized crime, money laundering, corruption and fraud. It is interesting to see how this aspect of Community law has developed with time. The question whether the EU has dealt with the matter adequately prior to the most recent round of accession is interesting in order to evaluate the burden that is placed on the fledgling economies. The focus is then shifted on the countries itself, looking at their recent history. In the banking sector one can see that all the countries were confronted with banking crises. Organized crime and also policing has remained a priority for the countries, perhaps due to the concern from the West of the threat of Russian organized crime. Money laundering, a topic that goes hand in hand with banking, fraud and organized crime has been dealt with in light of recommendations not only of the European Commission but also of the Financial Action Task Force (FATF) and Council of Europe’s special committee for Europe (PC-R-EV). Corruption and fraud influences much of day-to-day life. This has been a key concern for the countries and is dealt with specifically in this study. The question here is also whether these countries have fulfilled their obligation of implementing the acquis (on the protection of the Community’s financial interests and the fight against fraud). In light of the tumultuous road since independence it is possible to comprehend the immensity of the task that is ahead of these countries and how the countries have coped to date. The conclusion of this chapter is looking to identify whether the EU has taken on a too big a burden too early in its own process of development? Whether the new member states threaten the security of the EU as a whole? Have the new member states been able to adequately change their legislation and implement new laws? Perhaps most importantly, has it been possible for these countries to change their popular culture of bribery, which hangs in the air like a relic of the communist past? Have they been able to overcome their vulnerability to organized crime and seal the loopholes that breed fraud?

Item Type: Book Section
Uncontrolled Keywords: Economic ethics; Economic culture; Corruption; Economic transition; EU membership; Eastern Europe; EU countries
Subjects: H Social Sciences > HV Social pathology. Social and public welfare. Criminology. > HV6001 Criminology
J Political Science > JN Political institutions (Europe)
J Political Science > JZ International relations
Divisions: Schools and Research Institutes > School of Business, Computing and Social Sciences
Research Priority Areas: Society and Learning
Depositing User: Anamika Twyman Ghoshal
Date Deposited: 17 Nov 2022 16:08
Last Modified: 31 Aug 2023 08:25

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