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Algirdas Šemeta

Former employer: 
European Commission
Former function: 
Commissioner for taxation and customs union, audit and anti-fraud
New function: 
Ukrainian Business Ombudsman
New employer: 
Ukraine's Anti-Corruption Initiative
Nationality: 
Lithuania
Policy area: 
Date of Revolving Door: 
December, 2014
Institutional reaction: 

The Commission's ad hoc ethical committee was asked to consider this role, especially because of the links to Šemeta's previous Commission portfolio. It found that “The business community is one of the "Parties" [to the Anti-Corruption Initiative] and could expect to gain specific benefits from Mr Semata's [sic] former insider position” but in the end the committee approved the role saying that “the position of "Ukraine Business Ombudsman" is essentially one of independent service in the public interest”. The three-man ad hoc ethical committee took four days to deliver its verdict, a verdict which the Commission accepted in its meeting on 25 November 2014.

All released Commission documents relating to this case can be found here.

Other info: 

Algirdas Šemeta was European commissioner for taxation and customs union, audit and anti-fraud 2010-14. Now he has Commission approval to become the Ukrainian Business Ombudsman. This role forms part of Ukraine's anti-corruption initiative which is based on a memorandum of understanding between the “Parties” ie. the Ukrainian government, several international organisations including the European Bank for Reconstruction and Development (EBRD) and Ukrainian business associations including the American Chamber of Commerce in Ukraine, the European Business Association, the Federation of Ukrainian Employers, the Ukrainian Chamber of Commerce and Industry and the Ukrainian League of Industrialists and Entrepreneurs. These parties are, in essence, Semeta's new employers.

The mandate of the ombudsman is to

“(a) receive, examine and facilitate the resolution of complaints by business of unfair treatment including corruption; and (b) ascertain the systemic causes of the unfair treatment of business and corruption, and share its findings with the public and the appropriate public authorities."

In CEO's view, if the task of the "Ukraine Business Ombudsman" is limited to fighting corruption, then the risk of conflicts of interest seems limited, but the definition of “unfair treatment of business” seems open-ended and statements by Ukrainian business lobbies appear to indicate that they expect Šemeta to act on a wider range of issues.

On his appointment, Šemeta said:

"I am deeply convinced that by accepting this very challenging job, I will positively and practically contribute to the improvement of business climate, combating corruption and promotion of best international practices in Ukraine."

The Commission's rules

The current code of conduct for commissioners says that when they leave office they must abide by an 18 month notification period, during which time they must seek Commission authorisation for any new professional activities. The code further stipulates that the Commission should seek the view of its ad hoc ethical committee if the new professional activity is related to the commissioner's former portfolio. All commissioners are banned for 18 months from lobbying “members of the Commission and their staff for his/her business, client, or employer on matters for which they have been responsible”. The lobby ban is waived when former commissioners take up public office. In CEO's view, there are several loopholes and problems with these rules. The notification and lobby ban periods are far too short; lobbying is not defined; and the targets and content of proscribed lobbying are too narrowly-drawn.

As an ex-commissioner, Šemeta is entitled to a very generous transitional allowance after Šemeta leaves the Commission of between 40 and 65 per cent of final basic salary for the three years after he has left office. In addition, the transitional allowance scheme provides for commissioners to earn up to a further €9000 (approximately) a month from other sources without their pay-out being affected. In CEO’s view, the transitional allowance, the purpose of which was to enable ex-commissioners to not have to seek out immediate new employment, and thus avoid the risk of possible conflicts of interests, clearly needs to be reformed.

Before publishing this profile, CEO contacted Šemeta via twitter and facebook for a response to our concerns; he did not reply.

Update 28 October 2015: You can read our new report The revolving doors spin again, Barroso II commissioners join the corporate sector on our website. The report includes this case and many others, analyses all the revolving door moves of the Barroso II Commission and includes a spreadsheet which collates all known information about the 100 plus new roles of the former commissioners.

Comment from CEO: 

“While the Commission's ad hoc ethical committee has decided that the position of Ukraine Business Ombudsman is “essentially one of independent service in the public interest”, it is perhaps surprising that no further conditions were applied to this role, considering its links with business interests. For example, in CEO's view, the Commisison should have clarified that Šemeta should not lobby (directly or indirectly) any part of the Commission, on behalf of any of the “Parties” involved in his new role, on any issue.”

 

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