controlling corruption problems, approaches and best practices hans-joerg albrecht

Controlling CorruptionProblems, Approaches and Best

Practices

Hans-Joerg Albrecht

Corruption Tehran 2014

Content

Introduction: The phenomenon of corruption

International anti-corruption policies

Best Practices

Summary

The Phenomenon of Corruption


The phenomenon of corruption

Forms of corruption– administrative/bureaucratic corruption

– „… an advantage, to act or refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties ...“

– political corruption– CoE Recommendation (2003) on common rules against corruption in

the funding of political parties and electoral campaigns– commercial corruption

– promising, offering or giving directly or through an intermediary to a person who in any capacity directs or works for a private sector entity, an undue advantage of any kind, for that person or for a third party in order that that person should perform or refrain from performing any act in breach of that person's duties

Forms of corruption interact with– Petty or grand corruption– Structural (systemic/endemic) and situational corruption– Local and transborder/international corruption


Corruption as a Social and Legal Problem

Corruption is viewed as a major social problem

– a threat to the social fabric

– a particular threat for developing countries

– an obstacle to good governance

– an instrument of organized crime groups

Corruption is Part of Global „Bads“: Transnational crime, organized crime, money laundering


Transparency International Survey 2010

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Fran

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Ital

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Gre

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Pola

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Iran

The TIS is a composite index, drawing on corruption-related data in expert surveys carried out by a variety of reputable institutions. It reflects the views of business people and analysts from around the world, including experts who are resident in the countries evaluated.


Consequences (threats) of Corruption

Economic consequences

– Increasing (transaction) costs

– Parallel economies

– Dislocation of public and private funds

– Reciprocity and vulnerability

Social/political consequences

– Distrust (vertical and horizontal)

– Uncontrolled political, administrative and economic power– Weakening the state and governance


Correlates (causes) of corruption

Corruption refers to rent seeking decisions

Vast administrative and political discretion and little control Subsystems of mutual trust (old boys networks) Extent of the state`s involvement in the private sector/economy Freedom of the press and transparency Independence of public prosecution and the judiciary Civil service professionalism and civil service pay Quality of democratic structures and the dependency of political

elites and political parties from the public A culture of generalized negotiation Reluctant/weak political and law enforcement response to corruption

International Anti-Corruption Policies


An international consensus on repressive anti-corruption policies

Corruption (administrative and commercial) is recognized as a high priority national and international political issue

– Political corruption does not fall under international corruption conventions

Substantive criminal law should cover public sector and commercial corruption as well as transborder/international corruption

Corporate liability Forfeiture and mutual judicial assistance in forfeiture cases, including

the return of illicitly acquired assets Reporting of corruption cases to be encouraged in order to

compensate for the lack of victims interested in criminal complaints (witness and whistleblower protection, anonymity)

Collection of criminal evidence to be facilitated through proactive investigation and special investigative measures


Consensus on the need for prevention

Repressive criminal law based approaches to corruption control should be backed up by comprehensive systems of (primary) prevention

Monitoring to be strengthened through external and internal audits

Adopting and implementing local, regional and national anti-corruption policies

Self control to be strengthened through codes of ethics and other internal compliance enhancing mechanisms (ombudsmen)


International instruments against corruption

OECD – Convention on Combating Bribery of Foreign Public Officials in

International Business Transactions 1997 European Union

– Convention on the fight against corruption involving officials of the European Communities or officials of the member states of the European Union of 1997

– Joint Action on Corruption in the private sector 1998– Council Framework Decision 2003/568/JHA of 22 July 2003 on

combating corruption in the private sector Council of Europe

– Civil and Criminal Conventions Against Corruption (1999)– Resolution (97) 24 on the twenty guiding principles for the fight

against corruption United Nations

– Convention against Corruption 2003

A Four Pillar Approach

Prevention

Criminalization

International Cooperation (Mutual Legal Aid)

Asset Recovery



Implementation of international instruments

Activation of peer pressure and support– GRECO (Groupe d´ états contre la corruption)

– OECD Working Group on Bribery in International Business Transactions

Implementation of legal instruments must be backed up through financial and other assistance to developing countries and peer evaluation of national implementation of anti-corruption policies and laws

1st Pillar Prevention

Anti-Corruption Policy Development

UNCAC and other international and regional anti corruption instruments request development of

– Anti-corruption policies

– Adjusted to the national legal etc. framework

– Rule of law, transparency, accountability, protection of public resources

– Effective practices

– Monitoring and evaluation

– International collaboration on best practices


Organizational/Corporate Culture

Establishing a culture of professional/business ethics averse to bribery/corruption

Involvement of senior management

Code of conduct/ethic rules– In particular with respect to gifts, hospitality, entertainement


Risk Control Process

Identification of risks (coming with specific administrative or commercial activities, professional roles)

Risk assessment

Follow up and monitoring


Measures to Control Risks

Compliance and internal audits

Due diligence and third party risks

Public procurement, tenders etc.– Transparency, public, clear rules, appeal possibilities

Clear procedures to establish public budgets

Public access to information


Anti-Corruption Commissions

UNCAC Art. 6

– Each country shall establish Anti-Corruption bodies

– To implement anti-corruption policies

– Independent

– Adequate resources


Whistleblowing

What is whistleblowing?– Insider disclosure of evidence

– Of illegal conduct (or other serious risks)

Best practices– Clear rules to be established

– Internally and/or externally? Outside disclosure should be limited to ineffective internal practice

– Confidentiality

– Protection against retaliation (immunity)– ECHR No 28274/08, Judgment 21. July 2011 (Heinisch v. Germany)

– Internal follow up procedure


2nd PillarCriminalization

Criminalization: Corruption

Relevant for Mutual Legal Aid– Dual criminality

Harmonization, approximation, mutual recognition

Standards of defining corruption/bribery Elements

– offering, promising, giving (no agreement/acceptance needed: endangerment)

– Requesting, soliciting, accepting

– Undue advantage

– Acting or refraining to act

– National or foreign official (including international bodies)


Criminalization: Trading in Influence

Elements (like corruption offence)

Anyone who asserts/confirms that he/she is able

– To exert improper influence on national/foreign public official


Other Criminal Offences

Embezzlement

Abuse of authority

Money laundering (corruption, influence trade as predicate offences)

Obstruction of justice


Criminal Sanctions

Effective, proportionate, dissuasive sanctions

– Significant differences between countries (and practices)

Removal from office, interdiction of professional activities

Forfeiture of illicit assets

Non criminal, not conviction based forfeiture (in rem)


Other Issues

Statutes of limitation

Immunity from prosecution

Crown-witnesses

Liability of legal entities


3rd PillarInternational Cooperation

Main Pillars of International Cooperation

Extradition

Mutual legal assistance


Conditions of Cooperation

Dual criminality

Treaty– (UNCAC serves as a statutory basis where a bilateral

treaty does not exist)

Ordre public


Obligations Under UNCAC

Corruption

– To be made an extraditable offence

– Not to be declared a political offence

In case nationals are not extradited

– Prosecution shall take place in the country where the suspect resides


Mutual Legal Assistance

In case of non-coercive measures and lack of dual criminality

– MLA shall always be granted (UNCAC)

Coercive measures– Dual criminality principle can be waived

Bank secrecy shall be no ground to refuse mutual legal assistance


4th PillarAsset Recovery

Asset Recovery and Return

Confiscation, forfeiture rules have to be in place– Including freezing assets

Implementation of a confiscation order in a foreign country

Assisting a foreign country to freeze and confiscate assets

Which law applies in case of MLA?


Return of Assets and Asset Sharing

UNCAC provides for full return of assets aquired through corruption

Other instruments provide for asset sharing between requesting and requested country (TOCC)

Expenses for freezing and confiscating may be deducted from the assets


5th PillarImplementation


Implementation of international instruments

Activation of peer pressure and support– GRECO (Groupe d´ états contre la corruption)

– OECD Working Group on Bribery in International Business Transactions

Implementation of legal instruments must be backed up through financial and other assistance to developing countries and peer evaluation of national implementation of anti-corruption policies and laws

Peer review of implementation of legislation against corruption and compliance with the Council of Europe`s Convention against Corruption

Conclusions

Anti Corruption Resources

UNOCD Instruments, tools, model codes http://www.unodc.org/unodc/en/corruption/publications.ht

ml http://www.track.unodc.org/Pages/home.aspx

UNODC (database covering 175 legal systems) www.track.unodc.org/LegalLibrary/Pages/home.aspx?chapter=5

Stolen Asset Recovery (STAR) Initiative (Worldbank, UNODC) http://star.worldbank.org/corruption-cases/arwcases


http://www.unodc.org/unodc/en/corruption/publications.html

http://www.unodc.org/unodc/en/corruption/publications.html

http://www.track.unodc.org/LegalLibrary/Pages/home.aspx?chapter=5

http://www.track.unodc.org/LegalLibrary/Pages/home.aspx?chapter=5

http://star.worldbank.org/corruption-cases/arwcases


Conclusions

Corruption is associated with a range of problems

An internationally formed system of corruption control has emerged which requires specialized legal knowledge

The system is based on five pillars– Prevention, criminalization, international cooperation, asset recovery and

effective implementation

The pillars are interrelated and reinforce each other

Most important will it be to develop an system of mutual recognition

controlling corruption problems, approaches and best practices hans-joerg albrecht

Documents

corruption corruption

governancecorruption

corruptionrelated data

political discretion

funding of political

dependency of political

international consensus

transnational crime