Publication Duty Endangering The Validity Of Contracts

As a part of its anti-corruption agenda, the Slovak government introduced a contracts publication duty as from 1 January 2011. Various practical difficulties have emerged since then.

Publication duty

The contracts publication duty was made a part of Slovak law by amendment to the Civil Code and to the Freedom of Information Act. The amendment identified the obliged entities: the state bodies, municipalities, self-governing regions, and legal and natural persons empowered by law to decide on rights and obligations within the sphere of public administration; legal persons incorporated by legal acts or founded by a state body, self-governing region, or a municipality; and legal persons founded by any of the above (Obliged Entities).

The amendment stipulates the duty to publish all contracts concluded with Obliged Entity if they: contain information obtained for public funds; or relate to the use of Slovak public funds or EU funds, or to the disposing of publicly owned property or property belonging to entities incorporated under legal acts.

Such contracts become effective only if properly published. Contracts concluded by ministries, central state administration bodies, public institutions, or entities incorporated by them or under their control must be published in the Central Register of Contracts. Other Obliged Entities must publish their contracts on their websites or in the Commercial Bulletin.

Difficulties in practice

Although contributing to greater transparency, the amendment has raised many questions. In particular, due to the vague definition of Obliged Entities, it is not clear whether it applies only to entities under majority state control or to all entities with any state ownership interest, regardless how small. An independent survey showed inconsistent fulfilment of the publication duty, in particular by big businesses like the gas and electricity distributors that have been partially privatised.

Such entities, controlled by private shareholders but also having some state participation, simply refuse to publish their contracts. They argue that the contracts do not relate to public funds or public property, or they rely on the imprecise definition of Obliged Entities and claim they do not fall within its scope. Another argument used by such entities is that the contracts contain business secrets, meaning publication would endanger their business and benefit their competitors, who are privately owned and have no publication duty.

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