1 anti-corruption conference stockholm, september 2009
TRANSCRIPT
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Anti-Corruption Conference Stockholm, September 2009
A Bribes B = A Global Web of Corruption
Company LawyersCorporate Service
ProvidersBankers Real Estate Agents
European Country
Paid bribes to designated accounts
HQ of Swiss subsidiary
USAHQ of Swiss subsidiary,
corresponding bank
United Kingdom
Solicitor instructed by Swiss lawyer
Designed corporate structure
Corresponding bank & payment for estate
Facilitated purchase of estates for company U
Isle of ManManaged company U
owned by Trust V owned Foundation W
Administered company U and trust
V accounts
SwitzerlandOpened & managed
Swiss accountsAdministered
accounts for lawyer
LiechtensteinEstablished
foundation W owned by Z
Administered accounts for
foundation W
British Virgin Islands
Incorporated company Y for Z
Administered company Y accounts
PanamaIncorporated
company X for ZAdministered
company X accounts
Private Sector : Corporate Responsibility
Private Sector Corporate Code of
Conduct and policiesMonitoring and
reporting on application of Code
Transparency in gift giving, political contributions and lobbying
Whistleblower protection
Due diligence and training of contractors
External verification
Public SectorProhibitions under
Art. 12 of UNCACEffective oversight
and audit standardsTransparency in
corporate ownershipRestrict employment
of public officials Incentives?
standards for public contracting
Sanctions? Corporate (criminal) liability
Financial Sector : Enforcing Agreed Standards
Financial and designated service providers are supposed to: Determine beneficial ownership
(34, 33) Undertake appropriate due
diligence (24,12) Verify corresponding banks’
control framework (7) Manage risks politically exposed
persons (6)
Weakest areas in FATF 3rd round related to anti-corruption risks
FATF fourth round from 2011 opportunity to target corruption
Data from Johnson (2008) in JMLC 11,1
NC C
Law Enforcement: Targeting Foreign Corruption
CasesInvestigation
sArgentina 1 0Australia 1 SomeBrazil 0 SomeDenmark 17 0France 19 16Germany 43 88Italy 2 3Japan 1 0Korea 5 1Netherlands 7 3Norway 4 0Spain 2 0Sweden 1 15Switzerland 16 36United Kingdom
0 20
United States 103 69Foreign Bribery Cases & Investigations,
Selected OECD in 2008, TI 2009
Prioritize of foreign corruption cases, dedicate resources to investigation & prosecutions of cases where have jurisdiction
Ensure independence of prosecutors … end interference on grounds of security and national interest
Facilitate exchange of intelligence through global networks, such as Interpol
Facilitate, support and participate in investigations and prosecutions with and on behalf of low capacity countries
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Development Agencies : Active Engagement
Ensuring transparency in procurement (eg. through web-based tracking ) even if that means selective use of government systems
Put in place an effective sanctions regime for those that don’t follow the rules - whoever they are
Bring anti money-laundering and law enforcement into the mainstream of development: not just prevention
Lead at home : financing law enforcement, inter-agency coordination and consistency in international engagement (EU, FATF, UNCAC, Interpol, Eurojust)
JAN SUNDQVIST 2003 PG 1.15(a)(ii)
SMAFORETAGARTJANST SRB AB
2003 PG 1.15(a)(ii)
DACTUS AB 2001 CG 1.25(a)(i) & (ii)
DATABAS & NATVERKSIDEER
2001 CG 1.25(a)(i)
MR. CLAES FJELLNER 2001 CG 1.25(a)(i)
NORDIC TRUST STIFTELSEN I STOCKHOLM AB
2001 CG 1.25(a)(i)
PRODUCTIONSEKONOMI I STOCKHOLM AB
2001 CG 1.25(a)(i)
SADIN INTERNATIONAL OPERATIONS LTD.
2001 CG 1.25(a)(i)
SWAAN CONSULTING AB 2001 CG 1.25(a)(i) & (ii)
SWEDCON KB 2001 CG 1.25(a)(i)
SWEDISH URBAN PLANNER & MANAGEMENT
2001 CG 1.25(a)(
Swedish Firms Permanently Debarred by the World Bank Group
Civil Society : A Key Ally
Civil society leadership Raise awareness Identify priorities for reform Mobilize political support for
anti-corruption efforts Monitor public and private
sector performance Can say what has to be said …
Public sector facilitator Financing technical analysis
DfID and TI-UK Opportunities for voice in
national and international arenas
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http://www.worldbank.org/StAR
Fight against Corruption for Fight against Corruption for Global Development: Global Development:
Using the UN Convention against Corruption Using the UN Convention against Corruption as a tool for changeas a tool for change
Stockholm, Sweden, 10 September 2009
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Structure of the ConventionStructure of the Convention
Prevention
InternationalCooperation
AssetRecovery
Criminalization
Technical Assistance
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UNCAC and its review mechanism in the makingUNCAC and its review mechanism in the making The Conference of the States Parties shall acquire the necessary knowledge ofmeasures taken by States Parties in implementing this Convention through informationprovided by them and through such supplemental review mechanisms as may beestablished by the Conference (Art.63, 5)
First Conference (Jordan, Dec. 2006) – Political Decision (Res. 1/1)It is necessary to establish a mechanism to assist in the review of implementation of theConvention. Such mechanism should:• Be transparent, efficient, non-intrusive, inclusive and impartial• Not produce any form of ranking• Provide opportunities to share good practices• Complement existing international and regional review mechanisms in order that the• Conference may cooperate with them and avoid duplication of efforts
Second Conference (Indonesia, Jan-Feb 2008 - Res. 2/1) The effective and efficient review of the implementation of the Convention in accordancewith article 63 is of paramount importance and urgent
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Established by CoSP1 to advice the Conference on mechanisms or bodies for reviewing implementation of UNCAC
CoSP2 tasked the Working Group with formulation of TORs
Formal meetings of the Working Group: 08 (Sept./Dec.); 09 (May/Sept.)
TORs’ consolidated: from 60 pages in September 2008 to 13 to-date
Latest meeting (extended from 3 to 7 days): second reading of TORs completed
Additional information requested:• Country report blue print• Guidance for government experts participating in review teams• Preliminary cost estimates
The working Group on Review of ImplementationThe working Group on Review of Implementation
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I. DefinitionII. Guiding PrinciplesIII. Relationship with the Conference of the States PartiesIV. The Review Process
A. GoalsB. Conduct of the Review
C. Outcome of the Review Process D. Follow-up Procedures
V. Implementation Review GroupVI. Secretariat VII. Funding
Provisional headings and status of negotiations of TORsProvisional headings and status of negotiations of TORs
Second readingcompleted
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2007 UNCAC 2007 UNCAC self-assessmentself-assessment tool tool
Horizontal reviewcovering all
chapters
Prevention (art. 5, 6, 9) Criminalization(art. 15, 16, 17, 23, 25)
Asset Recovery(art. 52, 53, 54, 55, 57)
International Cooperation (art. 44, 46)
New survey software launched on 15 June 07 Strong emphasis on technical assistance needs and donors’ coordination
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UNCAC, UNTOC self-assessment tool in the makingUNCAC, UNTOC self-assessment tool in the making
To be presented to
CoSP3
Budget: $0.6M by
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Overview of compliance and technical assistance needs in a clickOverview of compliance and technical assistance needs in a click
Select UNCAC article/provision:Article 5, paragraph1
Select year of assessment 2008/2009
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Working Group on Technical AssistanceWorking Group on Technical AssistanceEstablished by CoSP 1 to advise and assist the Conference in implementation of its mandate on technical assistance
First Working Group meeting: October 2007
Second Working Group meeting (December 2008) recommended:•Legal advice and legislative drafting assistance for implementing UNCAC•Strengthening domestic capacity to apply legislation•Coordinate assistance needs and delivery at the country level: development of matrix mapping technical assistance activities•Pool of anti-corruption experts
Latest meeting of the Working Group: September 2009
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Latest meeting of Working Group:Latest meeting of Working Group: recommendations recommendationsUNODC to Further develop: (a) matrices of national TA needs – building on findings of checklist (b) anti-corruption experts database – including CV template
Gather and disseminate:(a) country-level experiences in identifying and meeting TA needs (b) experiences in conducting UNCAC compliance and gap analyses – involving donor community(c) information on existing TA coordination networks and efforts Increase knowledge of UNCAC among country-based assistance providers and recipients – to mainstream UNCAC into developmental agenda
Conference of the States Parties to: Accord higher priority to TA needs to prevent corruption and promote international cooperation
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For further information:For further information:
United Nations Office on Drugs and CrimeUnited Nations Office on Drugs and CrimeVienna International CentreVienna International Centre
PO Box 500, A-1400 Vienna, AustriaPO Box 500, A-1400 Vienna, Austria
Tel: +43-1-26060-4534Tel: +43-1-26060-4534Fax: +43-1-26060-7 74534Fax: +43-1-26060-7 74534
http://www.unodc.org/unodc/en/crime_http://www.unodc.org/unodc/en/crime_convention_corruption.htmlconvention_corruption.html
[email protected]@unodc.org
THANK YOU FOR YOUR ATTENTION
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What use can companies make of the UN Convention in order to avoid
corruption in business transactions?
Jens Berthelsen
Global Advice Network
Stockholm 10/9-2009
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Global Advice Network
A Nordic consulting group first of all known for the Business-Anti-Corruption.com portal, which is a Public Private Partnership involving the foreign ministries and development agencies in Sweden, Norway, Denmark, Germany, U.K., Holland and Austria and Global Advice Network with the purpose of informing about corruption issues related to business
First of all 53 (60) country profiles, with users from 140 countries and 15-20.000 unique users on a monthly basis
Advisor to the private sector, governments, international organizations and NGO’s.
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The business case in opposing corruption - Incentives
The individual company: Compliance Reduction of risks New markets Better relations to existing customers New customers Reputation management Control over transaction costs
Business as a collective Level playfield Reforming the environment
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UNCAC, OECD Convention……
A typical Scandinavian exports about 80-90% of its production due to the small home market,
Export and investments in emerging economies plays an increasing role
Meaning that we- Scandinavian and other small economies with big exports and foreign investments benefits enormously from international regimes like UNCAC
More than 80% of the world trade is covered by international treaties, meaning that bribery & corruption has become a compliance issue in international business
But in general the knowledge about UNCAC is rather limited in international business
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Reasons for the limited knowledge of UNCAC
The business sector was not involved in the making of UNCAC, in contrast to the OECD Convention
All the major business organizations in the OECD countries was involved and became committed to the OECD convention
Very few information campaigns at country level. (This arrangement is the first government arrangement in Scandinavia),
Limited “business ownership” at local level- Business is not seen as a partner by governments in many
countries (in spite of art. 12 in UNCAC)
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The business call for UNCAC
The business letter to The Secretary General
Initiative taken by the friends of the 10’ principle which is individual companies, Global Compact, PACI, ICC and TI with the purpose of furthering support from individual global leading companies.
A call for an effective implementation review mechanism with sufficient funding, country visits with peer reviewers from other countries, inputs from business and other stakeholders and public available reports
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Does UNCAC create level playfield?
Still some uncertainties with regard to monitoring which is crucial with regard to prevent free riding
Still some “black holes” in national implementation: China has still not made bribery abroad a criminal offence FCPA - US legislation does still have the exceptions on
facilitation payments Germany has still not yet established corporate liability in
relation to corruption in a satisfactory way!
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Compliance without global standards and national enforcements is difficult
To many exceptions
Uncertainty with regard to local law
Contradicting national legislation The Danish data registration law did not until this summer
permit whistler blower systems as prescribed in US legislation, meaning that listed US companies either broke Danish or US legislation
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Facilitation payments- a serious challenge
OECD Conventions does not cover facilitation payments
UNCAC cover facilitation payments
Let us look at an example from Egypt!
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“The life of a container” in Sweden
Getting a container into Sweden, includes in general only one authority, the Swedish Customs Service.
The company might qualify for becoming an AEO - An Authorised Economic Operator
Only involving a single document (Single Administrative Document)
Meaning that the container can be out of the harbour area within a few hours after is has been landed in Göteborg!
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The life of a container in Nigeria
Takes in general 40 days to get the container out of the port area “clean”
It involves at least 10 different authorities who doesn’t cooperate
That the customs service has the right to confiscate the container if is isn’t declared within 30 days
With some professionalism you might reduce the time to 20 days
The goal of the Nigerian Customs Service is 48 hours
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Key messages
UNODC, national governments and business must consistently promote local ownership
Information campaigns Stakeholder consultations Secure access to information
UNODC and governments must create level playfield by Effective monitoring of national implementation Support capacity building
Governments must address reforms of public institutions with the purpose of reducing corruption and extortion
How to use UNCAC in the How to use UNCAC in the fight against corruption in fight against corruption in
developing countries?developing countries?
Rómulo AcurioRómulo AcurioMission of Peru in ViennaMission of Peru in Vienna
Three issues:Three issues:
A. Some lessons learned in developing A. Some lessons learned in developing countries. countries.
A Peruvian experience.A Peruvian experience.
B. Can UNCAC serve as a policy framework?B. Can UNCAC serve as a policy framework?
C. Can UNCAC function as a platform for C. Can UNCAC function as a platform for technical assistance?technical assistance?
A. Some lessons learned.A. Some lessons learned.A Peruvian experience.A Peruvian experience.
A situational approachA situational approach
1. 1. Processes Processes
- Self-regulating models- Self-regulating models
- Social demand models- Social demand models
1. Processes of social demand 1. Processes of social demand ((continuationcontinuation))- Broader scope (access to information regimes)- Broader scope (access to information regimes)
- Intermediate scope (State-reform policies)- Intermediate scope (State-reform policies)
- Narrower scope (sectorial programs)- Narrower scope (sectorial programs)
2. Leadership2. Leadership
B. Can UNCAC serve as a B. Can UNCAC serve as a policy framework?policy framework?
1. It stimulates a comprehensive assessment; 1. It stimulates a comprehensive assessment;
2. It contains a strategic potential; and 2. It contains a strategic potential; and
3. It suggests a multi-stakeholder approach.3. It suggests a multi-stakeholder approach.
At each level, it calls for balanced policies.At each level, it calls for balanced policies.
1. UNCAC for comprehensive 1. UNCAC for comprehensive assessmentassessment
- Balance in broad normative gap - Balance in broad normative gap analysis.analysis.
- Balance between prevention, control - Balance between prevention, control and and sanction institutions.sanction institutions.
2. UNCAC’s strategic potential2. UNCAC’s strategic potential
- Balance between short-term - Balance between short-term sanctionatory sanctionatory and long-term and long-term governance results.governance results.
-Balance between normative and policy Balance between normative and policy gap gap analysis. analysis.
- Balance between generic and sectorial - Balance between generic and sectorial programs.programs.
3. UNCAC for multi-stakeholder 3. UNCAC for multi-stakeholder approachapproach
- Balance between self-regulating and - Balance between self-regulating and social social demand models of demand models of prevention. prevention.
REQUIREMENTS: REQUIREMENTS:
An incentive mechanism for UNCAC An incentive mechanism for UNCAC andand effective international effective international
cooperationcooperation
C. Can UNCAC function as a C. Can UNCAC function as a platform for technical platform for technical
assistance?assistance?
1. National capacities for self-1. National capacities for self-assessmentassessment
- UNDOC Omnibus Survey- UNDOC Omnibus Survey
- Vulnerability studies- Vulnerability studies
2. Capacities for strategic action2. Capacities for strategic action
- Performance indicators- Performance indicators- Policy orientation- Policy orientation
3. Capacities for multi-stakeholder 3. Capacities for multi-stakeholder consultationsconsultations
- Awareness-raising- Awareness-raising
- Sustained processes- Sustained processes
Conclusions:Conclusions:
1. Lessons indicate the need for more emphasis 1. Lessons indicate the need for more emphasis in social demand models of regulation.in social demand models of regulation.
2. UNCAC can serve as a policy framework, 2. UNCAC can serve as a policy framework, especially if it acquires an incentive mechanism especially if it acquires an incentive mechanism for the review of implementation and it promotes for the review of implementation and it promotes effective international cooperation.effective international cooperation.
3. UNCAC can function as a platform for technical 3. UNCAC can function as a platform for technical
assistance, in particular if it articulates national assistance, in particular if it articulates national capacity –building for self-assessment, strategic capacity –building for self-assessment, strategic action and consultation.action and consultation.