1 anti-corruption conference stockholm, september 2009

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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

1111

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

1515

UNCAC, UNTOC self-assessment tool in the makingUNCAC, UNTOC self-assessment tool in the making

To be presented to

CoSP3

Budget: $0.6M by

1616

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

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


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.


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


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


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)


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


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!


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


Facilitation payments- a serious challenge

OECD Conventions does not cover facilitation payments

UNCAC cover facilitation payments

Let us look at an example from Egypt!


“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!


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


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.

1 anti-corruption conference stockholm, september 2009

Documents

company x accounts

managed swiss accounts

corporate ownership

corruption data

ncc slide

anticorruption risks

swiss lawyer

trust v accounts switzerland