By Eleni Metanoia,
In our digital era, it is essential that governments and public institutions across the world achieve digital transformation, by using new technologies and data to create innovative and efficient public policies. One of the technologies that offers a wide array of opportunities is blockchain, which promises more transparent and accountable processes, and a way to tackle corruption.
The OECD, in one of its forums, defines blockchain technology as “a distributed presentation of data (or ledger), which can record, store, and allow access to the digital transaction without a central authority. Each new record in blockchain is connected to the previous record by cryptographic methods, and that is why blockchain records are unchallengeable”.
Some of the sectors that can benefit from the use of this technology are the following: banking and finance, currency, healthcare, property records, energy sector, supply chain management, smart contracts, climate change mitigation, voting, and other fields, by allowing to track and monitor transactions between individuals and institutions.
Because blockchain technology may give increased transparency through disintermediation, immutable accountability, power distribution, and peer-to-peer solutions, it can be used as an anti-corruption weapon by allowing fraud and misuse of public resources to be identified. Also, its non-reversibility feature allows the removal of intermediaries and reduces the possibility of third-party interventions to the accountability systems.
One successful example of the blockchain implementation by a government is the one made by Kathryn Haun, former federal prosecutor of the U.S. Department of Justice, during the investigation of the case “Silk Road”. In this case, the blockchain was used to reveal a fraud scheme committed by two public officers involved in the case.
The Greek incipient legislation towards blockchain technology
It is a fact that Greece’s public procurement sector suffers from widespread and high corruption practices. According to the Greece-OECD Project: Technical Support on Anti-Corruption of 2018, companies indicate that bribes and irregular payments are very common in the process of awarding public contracts. A survey made to evaluate the level of trust in the Greek government by the companies as part of the project revealed that most of them believe that “corruption is widespread in public procurement managed by national authorities (75%) or regional or local authorities (72%)”, which, according to a 2014 report by the European Commission, is “significantly higher than the EU average of 56%”.
Given its aforementioned characteristics, blockchain promises tamper-proof records that corrupt clerks or bureaucrats cannot modify. The distribution of a ledger and the consensus mechanisms also make it difficult for one entity to falsify entries. An article featured in the World Economic Forum states: “While the scalability of those solutions remains challenging, blockchain has emerged as the most promising disruptive technology in the fight against corruption”, and continues by pointing out that “it possesses important features that can help anchor integrity in bureaucracies by securing identity, tracking funds, registering assets, and procuring contracts”.
Thus, blockchain could provide an easily accessible, tamper-proof, and real-time window into ongoing procurement processes, by empowering Greek individuals to have access to public accounting data, know where government sectors allocate the resources, and how to give non-profit organizations a powerful tool to audit the correct use of the public expenditure.
Despite the fact that Greece has already adhered to the OECD Conventions on Combating Bribery of Foreign Public Officials in International Business Transactions, different United Nations Conventions against Corruption (UNCAC), and multiple recommendations made by the Council of Europe Civil and Criminal Law Conventions on Corruption, it is obvious that these efforts have not been enough, since the country’s corruption perception index remains virtually the same from 2008, when the country occupied the 57th place, to 2020, when it was located in the 59th spot of the same list.
In response to the Greek government’s inability of reducing corruption, the country has already started to implement, what the European Commission called a “comprehensive anticorruption strategic framework”, named the National Anti-Corruption Action Plan (NACAP), which aims to focus on high-risk sectors and activities such as administrative capacity in anti-corruption authorities and effectiveness of action against high-profile corruption.
However, eight years after the NACAP development began, it is clear that this strategy falls short of its goal in practice since it does not refer to any proposal for the application of blockchain. Furthermore, it acknowledges the absence of key elements for the correct monitoring of any law involving this technology. As stated in the working document Rule of Law: Report Country Chapter on the rule of law situation in Greece: “The challenges for the prosecution office concern, in particular, the lack of administrative and paralegal staff and as well as highly skilled investigators; a general lack of and delay in rolling out digital tools to detect sophisticated financial crimes; and absence of a system for case-management”.
In addition, in the words of Christos Paraskevopoulos, member of Karatzas & Partners law firm: “Greece has not adopted a specific regulatory regime applicable to market participants using blockchain technology or cryptocurrencies”. He continues by saying that: “There has been no enforcement action related to digital assets or blockchain utilization in general in Greece”.
Given the previous analysis, it is crucial that serious actions can be done by the Greek authorities, in order to legislate and implement blockchain technology as part of their common administrative policies. However, it appears that there is a lack of interest to take action in the matter.
References
- Greece-OECD project: Technical support on anti-corruption, oecd.org, Available here
- European Commission, 2021 Rule of Law Report Country Chapter on the rule of law situation in Greece, Brussels, 2021, ec.europa.eu, Available here
- Public procurement regarding a study on administrative capacity in the EU Greece Country Profile, https://ec.europa.eu, Available here
- OECD; Greece-OECD Project: Technical Support on Anti-Corruption, Assessment of AntiCorruption Reforms in Public Procurement, Health, and Tax & Customs, oecd.org, Available here
