EU threatens to block some Czech payments over conflict-of-interest spat

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The European Commission is ratcheting up its conflict-of-interest battle with the Czech Republic, threatening to withhold funds involving corporations held by belief funds.

The transfer comes after long-standing considerations that Czech Prime Minister Andrej Babiš might have inappropriately benefited from such arrangements led Brussels to challenge suggestions for systemic modifications in how the country handles European funding.

In 2017, Babiš positioned his large Agrofert agriculture and chemical conglomerate in two trust funds. However in a 2019 audit, made public earlier this year, the European Commission found the prime minister still had “direct” and “indirect” affect over these trust funds. In consequence, it stated, “all grants” awarded to Agrofert since February 2017 violated a conflict-of-interest regulation.

And whereas the Czech authorities finally didn't request any EU money in connection to the actions talked about in the audit, the difficulty has sparked a broader push for respecting conflict-of-interest rules.

Now, the Commission has sent Prague a letter advising native authorities operating EU-funded regional improvement and social packages to not seek reimbursement for funds to any belief fund-controlled corporations usually. The Commission stated it gained’t make funds in these instances.

The letter, sent last week, urged Prague to adopt the suggestions from the audit, which advised that the Czech Republic “enhance the management and control techniques in place” to “be sure that no further grants are awarded” in breach of conflict-of-interest guidelines.

The Commission, a spokesperson confirmed Monday, expects “the Czech authorities to implement all of the recommendations that have been put ahead in the audit report.”

If not, the results might be monetary.

The Commission “will interrupt any future cost claims in respect of such corporations pending the implementation of system enhancements to deal with this danger,” the spokesperson stated.

Babiš, who has long rejected any allegation of wrongdoing, didn't respond to a request for comment.

In June, the European Parliament referred to as in a resolution for “making certain that the enterprise entities underneath Prime Minister Babiš’s management stop to receive any funding from EU funds.”

“Additional disbursement of funds, either from the EU or Czech national price range, to the businesses finally managed by Prime Minister Babiš or members of the Czech Authorities have to be halted till the instances of conflict of interest are absolutely resolved,” MEPs stated.

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