Anti-Corruption

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Anti-Corruption

Introduction

By Anne Peters

The 172 ratifications of the UN Convention against Corruption (UNCAC), which was adopted in 2003, shows that States around the world are – at least verbally – committed to the international fight against corruption… In the 1990s, the United States achieved adoption of a treaty to criminalize foreign bribery, namely the OECD Anti-Bribery Convention of 1997. The primary goal at the time was to eliminate the unfair competitive advantages of companies paying bribes in the new markets especially of Eastern Europe. Today, the international leading authority on corruption mentions the following goal of international anti-corruption policy:

  • firstly, to improve the functioning of the global markets;
  • secondly, to promote economic growth;
  • thirdly, to reduce poverty; and
  • fourthly, to safeguard the legitimacy of the State.

Anti-corruption has largely been merged with the good governance agenda and the development discourse, and good governance – as well as development – is nowadays often analysed through a human rights lens. See, e.g., Human Rights Council, “The role of good governance in the promotion and protection of human rights” of 27 March 2008, para. 4: “Decides to continue its consideration of the question of the role of good governance, including the issue of the fight against corruption in the promotion and protection of human rights, […]” (UN Doc. A/HRC/RES/7/11). See also UN Development Programme – Oslo Governance Centre, The Impact of Corruption on the Human Rights Based Approach to Development (2004).

The number of criminal convictions for domestic and foreign bribery is notoriously low worldwide; corruption continues to be associated with impunity.

International Instruments

International anti-corruption instruments that have been adopted and implemented since 1997 – at least ten international and regional treaties with various additional protocols as well as soft law (see below) ? have so far been only moderately successful. For instance, only about four of the currently 41 States parties to the OECD Anti-Bribery Convention are truly “active” in their implementation (Transparency International, Exporting Corruption: Progress Report 2014:
Assessing Enforcement of the OECD Convention on Combating Foreign Bribery. The four “active” countries are the United States, the United Kingdom, Germany, and Switzerland).

International instruments include:

  • Inter-American Convention against Corruption of 29 March 1996, in force since 3 June 1997;
  • ECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 17 December 1997, in force since 15 February 1999 (41 parties as of June
    2015).
  • Council of Europe: Criminal Law Convention on Corruption of 27 January 1999 (ETS No. 173);
  • Additional Protocol of 15 May 2003 (ETS No. 191), in force since 1 February 2005;
  • Civil Law Convention on Corruption of 4 November 1999 (ETS No. 174);
  • Group of States against Corruption (GRECO), since 1999 (49 member States as of July 2015)
  • Committee of Ministers: Recommendation No. R (2000)10 on Codes of Conduct for Public Officials of 11 May 2000;
  • Recommendation Rec. (2003) 4 on Common Rules against Corruption in the Funding of Political Parties and Electoral Campaigns of 8 April 2003;
  • United Nations Convention against Corruption of 31 October 2003 (UNCAC), in force
    since 14 December 2005, UNTS vol. 2349, p. 41 (UN Doc. A/58/422), 175 States parties (as of 1 April 2015).
  • EU: Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities’ financial interests (CFPI Convention) of 26 July 1995, No. C 316/49, 27/11/1995, in force since 17 October 2002;
  • EU: Convention drawn up on the basis of Article K.3 of the Treaty on European Union, relating to extradition between the Member States of the European Union No. C
    313/12, 23/10/1996, in force since 17 October 2002;
  • EU: Convention drawn up on the basis of Article K.3 (2) (c) of the Treaty on European
    Union on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union of 26 May 1997, No. C 195/2 25/06/1997, in force since 17 October 2002;
  • European Commission, Communication on Fighting Corruption of 6 June 2011 (COM (2011) 308 final).
  • Africa: African Union Convention on Preventing and Combating Corruption of 11 July 2003, in force since 4 August 2006; Southern African Development Community (SADC) Protocol
    against Corruption of 14 August 2001, in force since 6 July 2005.

Human Rights and Corruption

By Anne Peters

Empirically, it can be shown that countries with high rates of corruption (or high levels of corruption perception) are also the countries with a poor human rights record. For a statistical analysis, see Todd Landman/Carl Jan Willem Schudel, Corruption and Human Rights, Empirical Relationships and Policy Advice, Working Paper (International Council on Human Rights Policy: Geneva 2007), controlling for other explanatory variables (democratic level; prosperity, population size, and government spending ratio). There are of course numerous human rights violations that have nothing to do with corruption, such as discrimination against women. Conversely, there are forms of corruption that have few if any links to human rights, such as illegal funding of political parties.

For instance, the countries at the bottom of a list of 173 countries ranked by Transparency International, the Corruption Perception Index of 2014, are Sudan, North Korea, and Somalia. Is is safe to say that corruption and human rights violations thrive in the same environments and probably have the same root causes, such as poverty and weak institutions.

In public procurement, the economic sector most susceptible to corruption – the EU estimates that approximately 13% of all budget spending for public procurement is lost-, the unsuccessful competitors are the potential victims if they are not awarded the contract due to extraneous criteria, at least if they have a concrete expectancy to the contract and not merely abstract prospects. Clients and end users are of course also adversely affected by corruption in public procurement if they have to pay higher prices or if they receive a product that is not worth the money because funds have been diverted during the production process.

In the political process, voters are adversely affected by candidates’ financial dependence on major donors if the candidates are politically indebted to the donors after the election and if voters are unaware of those vested interests.

Corruption affects the recognized human rights as they have been codified by the UN human rights covenants. In practice, what is most often affected are social rights, especially by petty corruption. For example, corruption in the health sector affects the right of everyone to the highest attainable standard of health (Article 12 ICESCR); in the education sector, the right to education (Article 13 ICESCR) is at issue.

But also the classical liberal human rights may be undermined by corruption: If a prisoner has to give the guard something in return for a blanket or better food, then the prisoner’s basic right to humane conditions of detention (Article 10 ICCPR) is affected. If – as most observers tend to think – the current surge in human trafficking is made possible and facilitated primarily by corruption that induces police and border guards to look the other way, then this affects the human right to protection from slavery and servitude (Article 18 ICCPR). Obviously, corruption in the administration of justice endangers the basic rights to judicial protection, including the right to a fair trial without undue delay (Article 14 ICCPR). In the case of grand corruption and foreign bribery, however, the implications for human rights – such as the effect of nepotism on the right to equal access to public offices (Article 25(a) ICCPR) – are less clear.

Global Anti-Corruption Initiatives

In the Anti-Corruption Summit in London in May 2016, Heads of state from more than forty countries, multinational organizations, and civil society leaders joined together to voice that corruption drives political instability, erodes trust between citizens and government, cripples basic functions of state like security and justice, fuels violent extremism, and stifles economic prosperity and human rights. The major initiatives include:

Strengthening Law Enforcement Efforts and Working Across Borders to Hold Corrupt Actors Accountable:

  • Global Asset Recovery Forum (GFAR) – The United States and the United Kingdom will co-host the first meeting of the GFAR in 2017 in Washington, DC. This forum will create a robust mechanism to work collaboratively on major asset recovery cases where there is emergent need to return assets for the benefit of the people harmed by corruption.
  • International Anti-Corruption Coordination Center (IACCC) – The IACCC will coordinate cross-border investigative communication, increase data sharing between key financial hubs, and assist developing countries with corruption cases. The United States is also joined by several countries representing key financial centers in supporting the IACCC.

Strengthening Capacity to Prevent and Fight Corruption in Countries Across the Globe:

  • An “Integrity Initiative” to Boost Capacity – After doubling anti-corruption assistance in the past four years, the U.S. Department of State is committing an additional $70 million, pending congressional approval, for capacity-building efforts globally, including training for thousands of law enforcement and justice-sector officials all over the world; platforms that mitigate opportunities for graft; efforts to tackle the security and corruption nexus; and a consortium to support civil society and media organizations.
  • A Global Consortium of Civil Society and Investigative Journalists against Corruption – Building on several countries efforts to partner with and support non-governmental networks that work across borders to expose corruption globally, this new consortium will support the critical work of investigative journalists and civil society networks in driving public demand for political will and action by law enforcement.
  • Maximizing Impact of the Open Government Partnership (OGP) – Several countries will continue its active engagement in and support for OGP, a partnership between government and civil society across 70 countries to advance transparency and accountability through national commitments for reform.

Greater Financial Transparency at Home to Prevent Perpetrators of Fraud, Tax Evasion, Illicit Funding from Hiding in the Shadows:

  • New Beneficial Ownership Legislation – The United States’ new legislative proposal would require all companies formed in the United States to report information about their beneficial owners to the Department of Treasury, for the first time making such information readily available to law enforcement.
  • Combating Transnational Corruption – Draft legislation would enhance and strengthen our efforts to combat transnational corruption through enhancing law enforcement’s ability to prevent bad actors from concealing and laundering illegal proceeds of transnational corruption, and would allow U.S. prosecutors to more effectively pursue such cases.
  • Reciprocal Foreign Account Tax Compliance Act (FATCA) Legislation – The U.S. President Obama proposed providing full “reciprocity” under FATCA in the last three budgets he submitted Congress, which would strengthen the United States’ hand in pressing other countries to improve transparency and ensure we live up to our end of the bargain.
  • Customer Due Diligence (CDD) Rules – Treasury regulations will enhance transparency and protect the integrity of the financial system by requiring financial institutions to know and keep records on who actually owns the companies that use their services.
  • IRS Rule on Single-Owner LLCs – New proposed Treasury/IRS tax rules will close a loophole allowing foreigners to hide assets or financial activity behind anonymous entities established in the United States.
  • Geographic Targeting Order (GTO) Rules for High-End Real Estate – In January, Treasury issued GTOs that will temporarily require certain U.S. title insurance companies to identify the natural persons who are the true owners behind the companies used to pay “all cash” for high-end real estate in certain geographic areas. The proposed beneficial ownership legislation would also expand the scope of future GTOs to include bank wires in addition to those paid by cash or other monetary instruments, such as cashier’s checks.
  • International Tax Treaties – The Obama Administration is also calling upon the Senate to finally approve tax treaties that have been pending for several years and that would help crack down on offshore tax evasion.

Tackling the Corruption-(In)Security Nexus:

Stronger Security Assistance Oversight – Corruption threatens national security. When security institutions are undermined through corruption, they are unable to protect citizens, defeat terrorists, or defend national sovereignty. Several countries are working to address the security costs of corruption through integrating anti-corruption components into training for security forces; better assessing corruption risk throughout security cooperation with foreign security forces; and ensuring that our security assistance also addresses governance goals.

Further Reading

  • Julio Bacio Terracino, The International Legal Framework against Corruption: States’ Obligations to Prevent and Repress Corruption (Antwerp: Intersentia 2012)
  • Susan Rose-Ackerman, Introduction: The Role of International Actors in Fighting Corruption, in: Rose-Ackerman/Paul Carrington (eds.),
  • Anti-Corruption Policy: Can International Actors Play a Constructive Role? (Durham: Carolina Academic Press 2013),
  • Jan Wouters, Cedric Ryngaert, Ann Sofie Cloots, The International Legal Framework against Corruption: Achievements and Challenges, Melbourne Journal of International Law 14 (2013)
  • Zoe Pearson, An International Human Rights Approach to Corruption, in: Peter Larmour and Nick Wolanin (eds.),
  • Corruption and Anti-Corruption (Canberra 2001), 30-61.
  • International Council on Human Rights Policy and Transparency International (prepared by Magdalena Sepúlveda Carmona),
  • Corruption and Human Rights: Making the Connection (Geneva: International Council on Human Rights Policy 2009); Martine Boersma/Hans Nelen (eds.),
  • Corruption and Human Rights: Interdisciplinary Perspectives (Cambridge: Intersentia 2010);
  • Martine Boersma, Corruption: A Violation of Human Rights and a Crime Under International Law? (Cambridge: Intersentia 2012);
  • Kolale Olaniyan, Corruption and Human Rights Law in Africa (Oxford: Hart 2014)

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