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1 Anti-Corruption Conference Stockholm, September 2009.

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1 1 Anti-Corruption Conference Stockholm, September 2009

2 A Bribes B = A Global Web of Corruption CompanyLawyers Corporate Service Providers BankersReal Estate Agents European Country Paid bribes to designated accounts HQ of Swiss subsidiary USA HQ 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 Man Managed company U owned by Trust V owned Foundation W Administered company U and trust V accounts Switzerland Opened & managed Swiss accounts Administered accounts for lawyer Liechtenstein Established foundation W owned by Z Administered accounts for foundation W British Virgin Islands Incorporated company Y for Z Administered company Y accounts Panama Incorporated company X for Z Administered company X accounts

3 Private Sector : Corporate Responsibility Private Sector Corporate Code of Conduct and policies Monitoring 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 Sector Prohibitions under Art. 12 of UNCAC Effective oversight and audit standards Transparency in corporate ownership Restrict employment of public officials Incentives? standards for public contracting Sanctions? Corporate (criminal) liability

4 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 3 rd round related to anti-corruption risks FATF fourth round from 2011 opportunity to target corruption Data from Johnson (2008) in JMLC 11,1 NCC

5 Law Enforcement: Targeting Foreign Corruption CasesInvestigations Argentina10 Australia1Some Brazil0Some Denmark170 France1916 Germany4388 Italy23 Japan10 Korea51 Netherlands73 Norway40 Spain20 Sweden115 Switzerland1636 United Kingdom020 United States10369 Foreign 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

6 6 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 SUNDQVIST2003PG 1.15(a)(ii) SMAFORETAGARTJANST SRB AB 2003PG 1.15(a)(ii) DACTUS AB2001CG 1.25(a)(i) & (ii) DATABAS & NATVERKSIDEER2001CG 1.25(a)(i) MR. CLAES FJELLNER2001CG 1.25(a)(i) NORDIC TRUST STIFTELSEN I STOCKHOLM AB 2001CG 1.25(a)(i) PRODUCTIONSEKONOMI I STOCKHOLM AB 2001CG 1.25(a)(i) SADIN INTERNATIONAL OPERATIONS LTD. 2001CG 1.25(a)(i) SWAAN CONSULTING AB2001CG 1.25(a)(i) & (ii) SWEDCON KB2001CG 1.25(a)(i) SWEDISH URBAN PLANNER & MANAGEMENT 2001CG 1.25(a)( Swedish Firms Permanently Debarred by the World Bank Group

7 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

8 8

9 Fight against Corruption for Global Development: Using the UN Convention against Corruption as a tool for change Stockholm, Sweden, 10 September 2009

10 10 Structure of the Convention Prevention International Cooperation Asset Recovery Criminalization Technical Assistance

11 11 UNCAC and its review mechanism in the making  The Conference of the States Parties shall acquire the necessary knowledge of measures taken by States Parties in implementing this Convention through information provided by them and through such supplemental review mechanisms as may be established 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 the Convention. 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 accordance with article 63 is of paramount importance and urgent

12 12  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 Implementation

13 13 I. Definition II. Guiding Principles III. Relationship with the Conference of the States Parties IV. The Review Process A. Goals B. Conduct of the Review C. Outcome of the Review Process D. Follow-up Procedures V. Implementation Review Group VI. Secretariat VII. Funding Provisional headings and status of negotiations of TORs Second reading completed

14 14 2007 UNCAC self-assessment tool Horizontal review covering 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

15 15 UNCAC, UNTOC self-assessment tool in the making To be presented to CoSP3 Budget: $0.6M by

16 16 Overview of compliance and technical assistance needs in a click Select UNCAC article/provision:  Article 5, paragraph1 Select year of assessment  2008/2009

17 17 Working Group on Technical Assistance  Established 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

18 18 Latest meeting of Working Group: recommendations UNODC 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

19 19 For further information: United Nations Office on Drugs and Crime Vienna International Centre PO Box 500, A-1400 Vienna, Austria Tel: +43-1-26060-4534 Fax: +43-1-26060-7 74534 THANK YOU FOR YOUR ATTENTION

20 Providing Corporate Integrity 20 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

21 Providing Corporate Integrity 21 Global Advice Network  A Nordic consulting group first of all known for the 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.

22 Providing Corporate Integrity 22 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

23 Providing Corporate Integrity 23 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

24 Providing Corporate Integrity 24 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)

25 Providing Corporate Integrity 25 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

26 Providing Corporate Integrity 26 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!

27 Providing Corporate Integrity 27 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

28 Providing Corporate Integrity 28 Facilitation payments- a serious challenge  OECD Conventions does not cover facilitation payments  UNCAC cover facilitation payments  Let us look at an example from Egypt!

29 Providing Corporate Integrity 29

30 Providing Corporate Integrity 30

31 Providing Corporate Integrity 31

32 Providing Corporate Integrity 32

33 Providing Corporate Integrity 33 “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!

34 Providing Corporate Integrity 34 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

35 Providing Corporate Integrity 35 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

36 How to use UNCAC in the fight against corruption in developing countries? Rómulo Acurio Mission of Peru in Vienna

37 Three issues: A. Some lessons learned in developing countries. A Peruvian experience. B. Can UNCAC serve as a policy framework? C. Can UNCAC function as a platform for technical assistance?

38 A. Some lessons learned. A Peruvian experience. A situational approach 1. Processes - Self-regulating models - Social demand models

39 1. Processes of social demand (continuation) - Broader scope (access to information regimes) - Intermediate scope (State-reform policies) - Narrower scope (sectorial programs) 2. Leadership

40 B. Can UNCAC serve as a policy framework? 1. It stimulates a comprehensive assessment; 2. It contains a strategic potential; and 3. It suggests a multi-stakeholder approach. At each level, it calls for balanced policies.

41 1. UNCAC for comprehensive assessment - Balance in broad normative gap analysis. - Balance between prevention, control and sanction institutions.

42 2. UNCAC’s strategic potential - Balance between short-term sanctionatory and long-term governance results. - Balance between normative and policy gap analysis. - Balance between generic and sectorial programs.

43 3. UNCAC for multi-stakeholder approach - Balance between self-regulating and social demand models of prevention. REQUIREMENTS: An incentive mechanism for UNCAC and effective international cooperation

44 C. Can UNCAC function as a platform for technical assistance? 1. National capacities for self- assessment - UNDOC Omnibus Survey - Vulnerability studies

45 2. Capacities for strategic action - Performance indicators - Policy orientation 3. Capacities for multi-stakeholder consultations - Awareness-raising - Sustained processes

46 Conclusions: 1. Lessons indicate the need for more emphasis in social demand models of regulation. 2. UNCAC can serve as a policy framework, especially if it acquires an incentive mechanism for the review of implementation and it promotes effective international cooperation. 3. UNCAC can function as a platform for technical assistance, in particular if it articulates national capacity –building for self-assessment, strategic action and consultation.

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