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International Legal Standards on Corruption

Robert Leventhal, Director, Anticorruption Programs and Governance Initiatives
Remarks to the American Society of International Law
Washington, DC
April 10, 2008

There is now a series of regionally and substantively focused treaties on corruption, culminating most recently in the first global treaty - the United Nations Convention Against Corruption (UNCAC).

As recently as 13 years ago, none of these conventions existed. Now there is a wide body of defined and shared standards and measures. These conventions not only establish standards – they also express the highest-level recognition of the problem of corruption and a political commitment to cooperate to address it.

The path to the UNCAC was forged by the 1996 Inter-American Convention against Corruption; the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; the Council of Europe 1998 Criminal Law and 1999 Civil Law Conventions1; and the 2003 African Union Convention2.

There are also EU instruments3 and important instruments on related issues such as transnational organized crime and trafficking in persons4, money laundering, etc., as well as “soft” initiatives in Eurasia5, South Eastern Europe6, Middle East/North Africa7, and Asia8, characterized by shared nontreaty commitments and coordinated capacity building.

We could likely spend all of our time on any one of the conventions. In brief, the Inter-American Convention was the first multilateral instrument on corruption, and covers a range of optional preventive measures9, mandatory but limited criminal provisions10, and mutual legal assistance. At its inception, it lacked a follow-up mechanism, which was finally established in 2000 and is in its second round of peer reviews11. The U.S. is one of the 33 parties and preparations are underway for next review of the U.S., in June 2008. Cites to implementing legislation and reports on country action are available on the OAS website.

The OECD Anti-bribery Convention is a substantively focused instrument targeting those who pay bribes to public officials to win or maintain business abroad, in effect internationalizing the Foreign Corrupt Practices Act12. The U.S. deposited its instruments of ratification in December 1998, and the convention came into effect in February 199913. The 37 parties, which include all 30 OECD countries and 7 non-member countries (Argentina, Brazil, Chile, Bulgaria, Estonia, Slovenia and South Africa), collectively account for 76% of world Gross Domestic National Income and 84% of world trade.

Apart from requiring criminalization of transnational bribery14, the convention requires parties to take “books and records” measures, such as prohibiting the establishment of off-the-books accounts and off-the-books or inadequately identified transactions. It requires that sanctions be “effective, proportionate and dissuasive” and that countries establish liability for legal persons. Implementing legislation is publicly available on the OECD website.

The convention has a particularly robust peer review follow-up process including expert site visits, with publicly available reports. Phase I reviews looked at legislation; Phase II is looking at implementation, including institutions, awareness, and application in practice. While the review process is structured and effective, implementation, in legislation and enforcement, could be more effective, including in the areas of:

  • Providing enforcement agencies with adequate resources and training;
  • Providing for nationality jurisdiction;
  • Ensuring penalties are effective, proportionate, and dissuasive; and
  • Ensuring clear coverage for bribery through an intermediary.

Most recent developments include the issuance of a publicly available Consultation Paper, seeking input on what steps might need to be taken to strengthen implementation – broken down by criminalization issues and detection/prevention. Also, discussion is underway on making the implementation review process permanent, upon the completion of the Phase I and Phase II reviews for all parties. Finally, the number of parties will likely increase with the invitation to Russia and Israel to join the OECD, which will require them to accede to the convention.

The Council of Europe Conventions are substantively broad but primarily subscribed to by Council of Europe member states in Western and Eastern Europe. The Criminal Law Convention entered into force in 2002 and has 39 parties. It covers a broad range of active and passive bribery of domestic and foreign officials, and of international bodies. It also covers bribery within the private sector itself, account offences, money laundering, liability of legal persons, and trading in influence15. The U.S. has signed but not ratified.

The Civil Law Convention came into force in November 2003 and has 42 parties16. Novelties include provision for civil law remedies for persons injured by corruption, international cooperation in civil cases, voiding of contracts that effectuate corruption, sufficiency of statutes of limitations, and whistleblower protection.

The Group of States Against Corruption, or GRECO, is not a convention but the body that monitors compliance with the Criminal and Civil Law Conventions and other CoE standards through a process of mutual evaluation similar to the OECD process17. Country reports and recommendations are publicly available on the GRECO website upon authorization by the country. A country automatically joins GRECO when it ratifies a CoE Convention. But a country may also choose to participate only in GRECO, but not accede to the CoE Conventions – this is the case for the U.S. GRECO has 46 member States, and it continues to grow: in 2007, three new States joined GRECO: Italy, Monaco and the Russian Federation18.

The African Union Convention entered into force in August 2006 and has 24 parties. It is an inclusive mix of largely mandatory preventive and criminal law measures, including domestic and foreign bribery, trading in influence and illicit enrichment. It has mandatory provisions with respect to declaration of assets by designated public officials, and restrictions on immunity.

The most recent and most comprehensive international instrument on corruption is the UN Convention against Corruption. It was opened for signature in December 2003 and entered into force in December 2005. There are 111 States Parties, including the U.S., which ratified in October 2006.

UNCAC has comprehensive chapters on Preventive Measures, Criminalization and Law Enforcement, International Cooperation, and Technical Assistance and Information Exchange. A walk through the convention is a walk through a complete range of anticorruption tools – from special investigative measures (Art. 50) to bribery of foreign public officials (Art. 16), from procurement reform and transparency in the management of public finances (Art. 9) to money laundering (Art. 23). As broad as the convention is, it also reflects political balances: there is a mixture of mandatory and optional provisions and, particularly in the prevention chapter, the convention does not require exactly harmonized approaches to implementation. For example, while States Parties must endeavor “to establish measures and systems requiring public officials to make declarations to appropriate authorities,” the particular way to get there is left to the party.

The convention establishes the first ever comprehensive framework for recovery of illicit assets sent or taken abroad by corrupt officials – from tracing to freezing to seizing to repatriation. Many countries saw the problem of corrupt officials acquiring assets illicitly -- and hiding those assets in foreign safe havens -- as the key problem that a convention at the global level should address.

The convention establishes a Conference of States Parties (COSP) to take political decisions to further implementation. The COSP first met in Amman, Jordan in December 2006, and met again in late January in Bali, Indonesia. The COSP will meet again in late 2009 in Qatar, with a principal theme being prevention.

Three working groups formed at the first COSP reported back in Bali and will continue to work up to Qatar. They focus on recommendations relating to technical assistance, asset recovery, and the issue of review of implementation.

With respect to review of implementation, when the convention was first negotiated there was insufficient political consensus to define and establish an implementation review process such as other conventions have. It remains a controversial issue, but the 2nd COSP in Bali gave the Review of Implementation Working Group a mandate to design terms of reference for consideration in Qatar. It meets in September, 2008. In the meanwhile, countries are experimenting with a voluntary self-assessment checklist and a Pilot Review Project19. An analysis of the 60-plus checklist responses is publicly available20 – there is still a lot of work to be done on implementation and a wide range of technical assistance needs.

With respect to asset recovery, interest remains high but the political process up to and in Bali did not chart a clear path on coordinated work to support implementation. The Asset Recovery Working Group will continue to meet to review recommendations for cooperation among States Parties on these issues. In the meanwhile, there are a growing number of initiatives and expert bodies providing technical assistance to countries to build capacity to undertake these complex, time-consuming, and painstaking cases. In fall 2007, for example, the World Bank and the UN Office on Drugs and Crime launched the Stolen Assets Recovery Initiative, or StAR – and the U.S. will deploy asset recovery advisors in three pilot countries later this year.

The asset recovery provisions reflect an increased interest in the use of anti-kleptocracy tools. These include tools that have a place in U.S. practice but have now been endorsed in the Group of 8, APEC, and Summit of the Americas contexts, such as denial of safe haven for corrupt high-level public officials and those who corrupt them. The U.S., through Presidential Proclamation 7750, issued in January 2004 (relying on Sec. 212(f) of the INA21), can revoke or deny visas on that basis – where it has serious adverse impact on a range of U.S. interests - without requiring a criminal conviction22. We also have targeted exposing and disrupting corrupt officials’ financial networks in countries such as Belarus, Burma and Syria, in some cases as part of a concerted international effort. These are powerful tools that are becoming more and more internationalized.

We are now at a moment where we have shared standards establishing powerful tools to combat corruption. The kleptocrats are on notice. We have a range of substantively and regionally focused instruments, being implemented by countries and monitored on a peer review basis and by civil society. And we have a new global instrument, the UNCAC. While it still lacks a formal review process, it has 111 parties, from north and south, who have ratified at a record pace.

Some of the principal challenges that may lie ahead bear examining, by way of conclusion.

First, while we have started down the road, much work needs to be done to establish an effective review mechanism for the UNCAC. The number of parties and the comprehensiveness of the treaty raise particular challenges.

Second, policymakers in mid- and longer terms must deal with issues relating to the proliferation of conventions. Multiple conventions may lead to expert fatigue in some countries – for example, the U.S. participates in and is subject to review processes in the OECD, the Inter-American Convention, the Council of Europe GRECO, and even the UNCAC Pilot Review Project. Likewise, what is the best interrelationship between a new global convention and existing regional and subject matter standards, from the point of view of most effectively addressing corruption? On that note, there are more African parties to the UNCAC than there are to the AU Convention.

Third, as always, the issue of implementation. Multilateral initiatives will succeed only if governments take concrete steps to implement their commitments and if they, their citizens, and the private sector work together to build the capacity to prevent and deter corruption. Diplomatic efforts achieve the most when they facilitate the efforts of locally-driven reform.

1 Supplemented by 2003 Criminal Law Convention Protocol (bribery of domestic and foreign arbitrators and jurors) and Twenty Guiding Principles, and Committee of Ministers Rec(2003)4 (corruption in the funding of political parties and campaigns).

2 Dates based on adoption or opening for signature, not entry into force.

3 European Union Convention on the protection of the communities' financial interests and the fight against corruption, First and Second Protocol; European Union Convention on the fight against corruption involving officials of the European Communities or officials of Member States.

4 UN Transnational Organized Crime Convention and the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children.

5 OECD Istanbul Action Plan.

6 Stability Pact Anticorruption Initiative, now SEE Regional Anticorruption Initiative.

7 UNDP/OECD Good Governance for Development initiative.

8 Asia-Pacific Economic Coordination Anti-Corruption and Transparency Task Force and Asian Development Bank/OECD Anti-Corruption Initiative.

9 E.g., codes of conduct, conflict of interest, declarations of assets, government hiring and procurement, and whistleblower protection.

10 E.g., active or passive bribery of domestic public officials; transnational bribery; illicit enrichment.

11First round of review (preventive mechanisms, access to info, civil society, mechanisms for reporting, central authorities) concluded in March 2006; second Round started in December 2006, covering criminal provisions, whistleblower protections, and government procurement and hiring.

12 Cite.

13 The other OECD anti-bribery instruments include the following: the Commentaries on the OECD Anti-Bribery Convention, the 1997 Revised Recommendation of the Council on Combating Bribery in International Business Transactions, and 1996 Recommendation of the Council on the Tax Deductibility of Bribes to Foreign Public Officials.

14Article 1 - The Offence of Bribery of Foreign Public Officials:

1. Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business. Note: Facilitating payments are permitted under the Convention.

15 “…the promising, giving or offering, directly or indirectly, of any undue advantage to anyone who asserts or confirms that he or she is able to exert an improper influence over the decision-making of any person referred to in Articles 2, 4 to 6 and 9 to 11 in consideration thereof, whether the undue advantage is for himself or herself or for anyone else…”

16 The U.S. is not a signatory.

17 The First and Second Rounds have covered specialized bodies, immunities, conflicts and other public administration issues, and other issues. The Third Round covers criminalization and transparency of party financing.

18 Liechtenstein and San Marino are the only CoE Member States which have not joined GRECO.

19 Argentina, Austria, Finland, France, Greece, Indonesia, Jordan, the Netherlands, Norway, Peru, Poland, Romania, Sweden, Tanzania, UK and the U.S.

20 See http://www.unodc.org/unodc/en/treaties/CAC/CAC-COSP-session2.html.

21 “Whenever the President finds that the entry of any aliens or of any class of aliens into the United States would be detrimental to the interests of the United States, he may by proclamation, and for such period as he shall deem necessary, suspend the entry of all aliens or any class of aliens as immigrants or nonimmigrants, or impose on the entry of aliens any restrictions he may deem to be appropriate.”

22 Sec. 4. For purposes of this proclamation, "serious adverse effects on the national interests of the United States" means serious adverse effects on the international economic activity of U.S. businesses, U.S. foreign assistance goals, the security of the United States against transnational crime and terrorism, or the stability of democratic institutions and nations. “

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