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INDEPENDENT COMMISSION AGAINST CORRUPTION

http://www.icac.mu fb.com/icacmauritius youtube.com/icacmu Newsletter Jun 2019 - ISSN 1694-2906

The Declaration of Assets Act 2018 Explained The Declaration of Assets Act 2018 was enacted by the National Assembly on 12 December 2018 and came into force on 01 June 2019. The Act provides for a new legal framework governing the declaration of assets in the public sector in Mauritius. Under section 4 of the 2018 Act, any person referred to under Section 3 of the Act (declarant), has an obligation to file his declaration of assets and liabilities with the ICAC, including the assets and liabilities of his spouse and minor children and, property sold, transferred or donated to his children of age and his grandchildren (Section 4(4)). A declarant in office at the date of commencement of the Act also have the obligation to make a declaration of his assets and those of his spouse, his minor children, and property sold, transferred or donated to his children of age and grandchildren. (Section 16 – Transitional Provisions and Section 4(4)). Furthermore, any person required to make a declaration of his assets and liabilities under any other enactment, shall not be required to make a declaration of his assets and liabilities…

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Declaration of Assets: The evolution of the local legislation Asset declarations of elected members and public officials are a powerful tool to prevent and combat corruption, money laundering, illicit enrichment and conflicts of interests. According to the World Bank, more than 150 countries have introduced asset disclosure requirements for their public officials. Many of these countries make asset declarations available for public scrutiny. The main objective of the DoA Act 2018 is to provide a new legal framework governing the declaration of assets in the public sector in Mauritius. In order to fully appreciate the value and significance of the 2018 Act, and its evolution from the 1991 Act, a quick glance at the past is enlightening. On 5 June 1985, the Declaration of Assets Act 1985 was proclaimed. This marked the first declaration of assets regime of our country for every member of the legislative assembly. The definition of assets under the 1985 Act was limited to immovable property, motor vehicles, boats, shares and any interest in a partnership, société or company. However, it was only a matter of filing with the clerk of the legislative assembly…

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Public Disclosure of Asset Declarations There is now a growing trend towards requiring the disclosure by government officials, of their assets and liabilities declarations, in order to combat corruption, foster public confidence in government, and encourage foreign investment. The disclosure of assets and liabilities to the public represents a major breakthrough in terms of ensuring greater transparency in the management of public affairs. However, the issue of disclosure to the public of the assets and liabilities of members of parliament and other representatives of the population, is often linked to the issue of privacy. Section 7(1) of the DoA Act 2018 provides a list of persons whose declarations have to be disclosed to the public. This includes: (a) the declarations made by members of the National Assembly, including the Speaker; (b) members of the Rodrigues Regional Assembly, including the Chairperson of the Rodrigues Regional Assembly; and (c) councillors of a Municipal City Council, Municipal Town Council or District Council...

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A publication of the Independent Commission Against Corruption

Réduit Triangle, Moka

Republic of Mauritius

Tel: 402 6600 - Fax: 402 6959 - Hotline 142 - email: [email protected]

http://www.youtube.com/icacmu

http://www.icac.mu

http://www.facebook.com/icacmauritius

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ICAC Newsletter May 2019 issue - www.icac.mu - www.facebook.com/icacmauritius- www.youtube.com/icacmu

The Declaration of Assets obligation is one component of a multidisciplinary approach to combating financial crime, including corruption, fraud, and money laundering. It complements the other well-known components of the financial crime strategy ranging from investigation and prosecution, prevention, education, asset forfeiture and unexplained wealth orders (UWOs). An asset declaration system provides an additional powerful tool to monitor, and can contribute to combating, such crimes by either reducing the incidence of conflicts of interest, or by helping to identify and prosecute cases of corruption,

money laundering and illicit enrichment by public officials. Corrupt officials and corrupt politicians, can often hide their assets under the names of their relatives, their spouses and other individuals. Therefore, it should be possible to monitor not only their wealth, but that of close relatives. In addition, asset declaration systems, also referred to as financial disclosure, or declaration of interest systems, are an important element of building successful anti-corruption programs and a culture of integrity in public service. Declarations of Assets systems seek to develop a higher norm of integrity among public officials including those elected or appointed in the legislative and executive branches of

government as well as senior public officials and the judicial profession. Building integrity in the public and judicial sectors are critical to ensuring a higher standard of conduct. As will become clear throughout this Newsletter, the Declaration of Assets Act 2018 is a landmark step in the direction of combating corruption, money laundering and illicit assets as well as monitoring conflicts of interest. It illustrates a significant evolution from the 1991 legislation. The Independent Commission against Corruption (ICAC) is the agency designated to manage the 2018 Declaration of Assets Act. It had previously, since 2002, been the depositary of the 1991 Declaration of Assets Act. It is also given this responsibility in view of the nature of its mandate as the anti-corruption and anti-money laundering agency, to “monitor the assets and liabilities of any declarant for the purpose of detecting and investigating corruption and money laundering offenses or illicit enrichment” (sec 9). The 2018 Act, however, provides the Commission with a new two-tier mandate to administer the Act. The two-tier approach is explained in terms of, first, a new and progressive mandate covering three main responsibilities, and, second, an extensive scope of coverage of “declarants” (those with the obligation to make a declaration) combined with a wider and extensive definition of assets. In the first case, the three main responsibilities include: a) the reception of all declarations made by the declarants; b) the obligation to monitor those declarations for purposes of, first, ascertaining their correctness and compliance with the law and, second, to monitor the assets and liabilities of any declarant for the purpose of detecting and investigating any

Message from the Director-General

corruption, money laundering or illicit enrichment, and c) to disclose to the public the category of declarations as defined under the law. Secondly, it evolves and demarcates itself from the previous (1991) regime by: a) it creating a category of new declarants, including declarants, as defined, required to make a declaration of his assets and liabilities under any other enactment, and b) expanding the definition of assets to include different types of assets and the nature of those assets subject to the limitations defined in the Act. The above illustrate how and to what extent the new law is a path-breaking development, and the extent to which it demarcates itself from the previous regime, in the fight against corruption and money laundering. The ICAC hails the new legislation as a laudable initiative by setting out a statutory framework in line with international best practices. The global trend is that many countries have adopted declaration of assets legislation as part of their anti-corruption framework. In adopting this legislation, Mauritius lines up with the numerous countries and gives an indication of its commitment to international obligations regarding the anti-corruption and anti-money laundering strategy. Finally, however, the value of the legislation depends on its effective implementation which, in turn, depends on the collaboration of every person concerned to comply with the provisions of the law and with the ICAC. At the ICAC, we see in this legislation an opportunity to develop and enhance a culture of good governance and accountability in the public service based on proactivity and constant monitoring. The ICAC, therefore, calls for the collaboration of all stakeholders for an effective implementation of the DoA Act 2018 which will definitely act as a deterrence to corruption, money laundering and other financial crimes. It is with great pleasure that I am announcing through this newsletter, the setting up of a dedicated unit that will be responsible to manage the different obligations cast under the law. The newsletter provides details of the different aspects of the law, including the mandate of the ICAC, the different obligations created under the law, the definition of “declarants”, the meaning of “assets”, among others. However, while the newsletter provides additional information about the new law, it is not a substitute for the law. All concerned should rely on the law.

Navin Beekarry

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1. Who should declare?

Persons currently in post: Every member of the National Assembly, including the Speaker of the National

Assembly, and every Minister. Every member of the Rodrigues Regional Assembly (RRA), including the

Chairperson of the RRA, and every Commissioner. Every Councillor of a Municipal City Council, Municipal Town Council or District

Council. Every Lord Mayor, Deputy Lord Mayor, Mayor, Deputy Mayor, Chairperson or

Vice-Chairperson of a Municipal City Council, Municipal Town Council or District Council.

Every judicial officer in the grade of District Magistrate and above; and senior public officer of the grade of, or drawing salary at the level of, Deputy Permanent Secretary and above.

Every Chief Executive of a Municipal City Council, Municipal Town Council or District Council, and every officer of such Councils drawing salary at the level of Deputy Permanent Secretary and above.

Every Chairperson and Chief Executive Officer of State-owned enterprises and statutory bodies, and every officer of such enterprises and statutory bodies drawing salary at the level of Deputy Permanent Secretary and above.

The benchmark salary of Deputy Permanent Secretary shall be the starting salary

on the scale provided in the latest report of the Pay Research Bureau. The benchmark salary shall be readjusted upon the effective date of implementation of

any new PRB report for the grade. The current benchmark DPS salary is Rs 64,800 as per the 2016 PRB Report.

Every adviser and officer employed on a contractual basis in Ministries, drawing

salary at the level of Deputy Permanent Secretary and above. Such other persons as may be prescribed under Section 3 (i) of the Act.

Elected officials

Senior public officials

Contractual public officials

THE DECLARATION OF ASSETS ACT 2018 EXPLAINED

This section illustrates selected extracts from the Declaration of Assets Act 2018 but is not a substitute for the law. Declarants are invited to consult the legislation.

2. How to declare?

Declarations should be made on the prescribed Assets Declaration forms of the First and Second Schedules of the Declaration of Assets Regulations, that can be downloaded from the ICAC website www.icac.mu or collected at the

reception desk of the ICAC, Reduit Triangle, Moka.

Declarations submitted directly to the ICAC Every person referred to in section 3(1)(e) to (i): Every judicial officer in the grade of District Magistrate and above; and senior public officer of the grade of, or drawing

salary at the level of, Deputy Permanent Secretary and above; Every Chief Executive of a Municipal City Council, Municipal Town Council or District Council, and every officer of such

Councils drawing salary at the level of Deputy Permanent Secretary and above; Every Chairperson and Chief Executive Officer of State-owned enterprises and statutory bodies, and every officer of such

enterprises and statutory bodies drawing salary at the level of Deputy Permanent Secretary and above; Every adviser and officer employed on a contractual basis in Ministries, drawing salary at the level of Deputy Permanent

Secretary and above; Such other persons as may be prescribed under Section 3 (i) of the Act; shall, not later than 30 days after being appointed; and his office becomes vacant, make a declaration of his assets and liabilities with ICAC on the Second Schedule of the Declaration of Assets Form. Officers referred to under Section 4(1) and (2) (referred to above as elected officials) shall make their declaration by way of affidavit on the prescribed form of the First Schedule of the Declaration of Assets Regulations, sworn before the Supreme Court and submitted to the ICAC within the specified period (see section When to Declare). For those, the declaration can be submitted by registered post addressed to the Director-General on the address above or deposited at the reception desk of the ICAC.

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3. What to declare?

Money, in any currency, in local banks and foreign banks.

Cash in hand, exceeding one million rupees in any currency.

Securities, including stocks, bonds, treasury bills or other units held in Mauritius or abroad.

Shares or any interest in a company, société or

partnership.

Motor vehicles, boats, ships or aircrafts Any item of jewelry, precious stone or metal, or watch,

exceeding 500,000 rupees in value.

Any freehold or leasehold immovable property, registered in Mauritius or abroad, and which, at the time of declaration, has been purchased but is still subject to registration in Mauritius or abroad.

Include the assets and liabilities of spouse and minor children. Specify any property sold, transferred or donated to his children of age and grandchildren,

in any form or manner whatsoever, including income or benefits from any account, partnership or trust.

Declarants should:

Be required to specify the value of any asset included in the declaration, except where such asset consists of cash.

Declarants shall not:

Assets to be declared under section 2 of the act are:

Any liabilities in relation to those assets, including any joint liability and any other liabilities which are not in relation to those assets

Any asset held by a person for and on behalf of the declarant in the declarant’s capacity as ultimate beneficiary.



Table 2

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Who should declare – (Section 3) When to declare (Section 4) Fresh declaration

National Assembly

Every member Not later than 30 days after: - the first sitting of the National Assembly - being elected to the National Assembly,

following a by-election - his seat becomes vacant pursuant to

Section 35 of the Constitution

Within a period of 30 days, inform ICAC, in writing, where he acquires or disposes of: - any freehold or leasehold

immovable property in Mauritius or abroad;

- a motor vehicle, boat, a ship or an aircraft

Speaker

Every Minister

Not later than 30 days after: - being appointed - his office becomes vacant pursuant to

Section 60 of the Constitution

Rodrigues Regional Assembly

Every member Not later than 30 days after:

- the first sitting of the Rodrigues Regional Assembly

- being elected to the Rodrigues Regional Assembly, following a by-election

- his seat becomes vacant pursuant to Section 19 of the Rodrigues Regional Assembly Act

Chairperson

Every Commissioner

Not later than 30 days after: - being appointed - his office becomes vacant pursuant to

Section 37 of the Rodrigues Regional Assembly Act

Municipal City Council

Municipal Town Council

District Council

Every Councillor

Not later than 30 days after: - the first sitting of the Municipal City

Council, Municipal Town Council or District Council

- being elected to Municipal City Council, Municipal Town Council or District Council, following a by-election

- his seat becomes vacant pursuant to Section 40 of the Local Government Act

Every Lord Mayor Deputy Lord Mayor Mayor Deputy Mayor Chairperson Vice-Chairperson

Not later than 30 days after: - being elected - his office becomes vacant pursuant to

Section 41 of the Local Government Act

Every Chief Executive

Not later than 30 days after: - being appointed - his office becomes vacant

Make a fresh declaration with ICAC : - at every interval of 5 years

following the date of the first proclamation

- within a period of 30 days after leaving office

Every Officer drawing salary at the level of Deputy Permanent Secretary (DPS) and above

Judicial Officer

In the grade of District Magistrate and above

Senior Public Officer

In the grade of, or drawing salary at the level of DPS and above

State-owned enterprises Statutory bodies

Chairperson Chief Executive Officer Every Officer drawing salary at the level

of DPS and above

Within a period of 30 days, inform ICAC, in writing, where he acquires or disposes of: - any freehold or leasehold

immovable property in Mauritius or abroad;

- a motor vehicle, boat, a ship or an aircraft

Every adviser and officer employed on a contractual basis in Ministries, drawing salary at the level of Deputy Permanent Secretary and above

Such other persons as may be prescribed

4. When to declare?



Persons (declarants) in Office at Commencement of the Act (section 16)

Every declarant in office at the commencement of the Act is required to make his declaration under section 16(1) and (2) coupled with section 3 of the Act. Declarants covered under section 16, that is, those in office at the commencement of the Act, have a period of 90 days from the commencement of the Act to make their declarations. Officers taking post after the

date of commencement of the Act have to abide by the period of filing referred to in the table above.

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5. What will be disclosed?

What ICAC shall disclose to the Public

Pursuant to Section 7 of the Declaration of Assets Act 2018, the ICAC shall disclose to the public the declarations made by members of the National Assembly, including the Speaker, members of the Rodrigues Regional Assembly, including the Chairperson of the Rodrigues Regional Assembly, and Councillors of a Municipal City Council, Municipal Town Council or District Council.

What ICAC shall not disclose to the public

ICAC shall not, in relation to the persons referred to in the section above, disclose to the public information pertaining to – money, in any currency, in local banks and foreign banks; any item of jewelry, precious stone or metal, or watch, exceeding 500,000

rupees in value; and cash in hand not exceeding one million rupees in any currency accepted as

legal tender in any country.

ICAC shall keep confidential and not disclose to the public any declaration, other than a declaration referred to in Section 4(1) and (2).

Disclosure to any Enforcement Authority Any enforcement authority (“Enforcement authority” means the Police, the Enforcement Authority under the Asset Recovery Act, the Mauritius Revenue Authority, ICAC, the Financial Intelligence Unit, the Integrity Reporting Services Agency under the Good Governance and Integrity Reporting Act, or such other body as may be prescribed) may apply to the Judge in Chambers for the disclosure of a declaration and the Judge in Chambers may, on good cause shown, order the disclosure of the declaration.

6. What are the offences and penalties?

Any person who fails to make a declaration or who wilfully makes a false declaration shall commit an offence and shall, on conviction, be liable to a fine not exceeding one million rupees and to imprisonment for a term not exceeding 5 years. Any person who, in any other manner contravenes the Declaration of Assets Act 2018 or any regulations made under it, shall commit an offence and shall, on conviction, be liable to a fine not exceeding 10,000 rupees. Any spouse who, without any reasonable excuse, fails to collaborate in disclosing his or her assets and liabilities for the purpose of fulfilling a requirement under this Declaration of Assets Act 2018, shall commit an offence and shall, on conviction, be liable to a fine not exceeding 10,000 rupees and to imprisonment for a term not exceeding 6 months. Where a person fails, without reasonable excuse, to submit a declaration within the specified period, he shall be liable to pay to ICAC a penalty representing 5,000 rupees per month or part of the month, until such time as the declaration is submitted,

provided that the total penalty payable shall not exceed 50,000 rupees. Any person who is dissatisfied with a decision of ICAC relating to the imposition of a penalty may, within 28 days of the imposition of the penalty, apply to the Supreme Court for a judicial review of such decision.

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Declaration of Assets: The evolution of the local legislation

Asset declarations of elected members and public officials are a powerful tool to prevent and combat corruption, money laundering, illicit enrichment and conflicts of interests. According to the World Bank, more than 150 countries have introduced asset disclosure requirements for their public officials. Many of these countries make asset declarations available for public scrutiny. The main objective of the DoA Act 2018 is to provide a new legal framework governing the declaration of assets in the public sector in Mauritius.

What has changed? In order to fully appreciate the value and significance of the

2018 Act, and its evolution from the 1991 Act, a quick glance at the past is enlightening. On 5 June 1985, the Declaration of Assets Act 1985 was proclaimed. This marked the first declaration of assets regime of our country for every member of the legislative assembly. The definition of assets under the 1985 Act was limited to immovable property, motor vehicles, boats, shares and any interest in a partnership, société or company. However, it was only a matter of filing with the clerk of the legislative assembly. In 1991, the 1985 Act was repealed and replaced by a new Declaration of Assets Act. The 1991 Act did not constitute a drastic change of the 1985 asset declaration regime, save and except that it: (a) expanded the definition of people covered with the duty to make a declaration by including any Councillor of a Municipal City Council, Municipal Town Council or District Council; and (b) extended the duty for the declarants to include the assets and liabilities of their spouse and children. The DoA Act 2018 provides for an extensive definition and scope of “declarant” by enlarging the categories of people under the obligation to declare their assets and liabilities. It also significantly widens the definition of assets. The declarant under the 2018 law not only includes members of the National Assembly, every member of the Rodrigues Regional Assembly and every Councillor of a Municipal City Council, Municipal Town Council or District Council (which was already present in the 1991 Act), but also includes: (a) every Lord Mayor, Deputy Lord Mayor, Mayor, Deputy Mayor, Chairperson and Vice-Chairperson of a Municipal City Council, Municipal Town Council or District Council; (b) every judicial officer and senior public officer; (c) every Chief Executive of a Municipal City Council, Municipal Town Council or District Council, and every officer of such Councils drawing salary at the level of Deputy Permanent Secretary and above; (d) every Chairperson and Chief Executive Officer of State-owned enterprises and statutory bodies, and every officer of such enterprises and statutory bodies drawing salary at the level of Deputy Permanent Secretary and above; (e) every adviser and officer employed on a contractual basis in Ministries, drawing salary at the level of Deputy Permanent Secretary and above. In addition to the 1991 Act, where declarants still have to declare the assets and liabilities of their spouses and minor children, the 2018 law includes grandchildren where a declarant has sold, transferred or donated to his children of age and to his grandchildren, in any form whatsoever, any

property, including income or benefits from any account, partnership or trust. Another major evolution in the 2018 law is the obligation to disclose to the public a category of those declarations. This new law addresses a deficiency in the previous legislation which did not include this obligation. Furthermore, the 2018 legislation creates an additional obligation for the ICAC to monitor the assets and liabilities of declarants. In the previous law, there was no obligation to monitor and to disclose declarants’ assets and liabilities. Without monitoring, declaration of assets becomes a box-ticking administrative step. Monitoring breathes life into the declaration of assets, thus rendering it effective, as a tool

both for deterrence and detection.

The role of ICAC The legislator has entrusted ICAC as the depository of the declarations of assets. Its mandate to monitor the declaration of assets is determined by sections 4, 6, 7, 8, 9, 10 of the DoA Act 2018 and section 20(1)(s), 20(1)(t) and 20(1) (u) of the Prevention of Corruption Act 2002. The mandate includes: (a) receiving and managing declarations; (b) monitoring fresh declarations to the ICAC at the different intervals, following the submission of the first declarations; (c) monitoring fresh declarations after leaving; (d) disclosure to the public of a category of those declarations; (e) issuing directives to any person to whom the DOA Act 2018 applies; (f) monitoring the assets and liabilities of any declarant for the purpose of detecting and investigating corruption and money laundering offences or illicit enrichment; (g) imposing penalty for late submission of declaration; and (a) follow-up on cases of judicial reviews by persons dissatisfied with decisions of the ICAC relating to the imposition of a penalty pursuant to section 10(1) of the DOA Act 2018. The reasoning behind the choice of the anti-corruption agency for the above mandate is due to the interconnectedness of the ICAC’s mission as per the Prevention of Corruption Act in terms of prevention, education and investigation of corruption offences, as well as money laundering under the Financial Intelligence and Money Laundering Act. The addition of the Declaration of Assets Act is the logical evolution of the existing arsenal. Hence, it reinforces the financial crime strategy. Ancillary to the statutory duties of the ICAC, the following will be required for the proper implementation of the DOA Act 2018: (b) managing the database of declarants; (c) safe custody of declarations; (d) systematic verifications, recording and filing of declarations in the database: (e) assisting public officials to fill in declaration forms; (f) sensitizing and educating declarants on their obligations under DoA Act 2018; (g) investigation of suspected violations of the law; (h) proper administration and continuous development of the Declaration of Assets Systems.

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Whose assets will be disclosed to the public? Section 7(1) of the DoA Act 2018 provides a limited list of persons whose declarations have to be disclosed to the public. This includes: (a) the declarations made by members of the National Assembly, including the Speaker; (b) members of the Rodrigues Regional Assembly, including the Chairperson of the Rodrigues Regional Assembly; and (c) councillors of a Municipal City Council, Municipal Town Council or District Council. Public disclosure of the private assets of public officials and family members should not clash with the rights to privacy and data protection. Both these rights are, however, not absolute and can be restricted provided there is a basis in law and a legitimate public interest justifies the restriction. Prevention of corruption and exposing unexplained wealth of officials are serious and legitimate public interests. Hence, the limitations on the privacy of public officials by requiring them to disclose their income, assets and liabilities would serve the public interest. The legal basis would be the Declaration of Assets Act 2018.

Case before the European Court of Human Rights In the case Wypych v. Poland (October 25, 2005, application no. 2428/05) which was decided by the European Court of Human Rights, the application of Article 8 of the European Convention of Human Rights was considered. The Court found that the requirement to submit the declaration and its online publication were indeed an interference with the right to privacy, but that it was justified and the comprehensive scope of the information to be submitted was not found to be excessively burdensome.

PUBLIC DISCLOSURE OF ASSET DECLARATION

There is now a growing trend towards requiring the disclosure by government officials, of their assets and

liabilities, in order to combat corruption, foster public confidence in government, and encourage foreign investment. The disclosure of assets and liabilities has always been questioned on the basis of the need to

preserve the right to privacy of the individual. But such rights are not absolute and often have to be interpreted in the larger context of public interest and public order. The question as to whether or not the disclosure, to the

public of the assets and liabilities of members of parliament and other representatives of the population, can be

curtailed by the right of an individual to privacy has been addressed by the European Court of Human Rights.

The European Court of Human Rights considered “that it is precisely this comprehensive character which makes it realistic to assume that the impugned provisions will meet their objective of giving the public a reasonably exhaustive picture of councilors’ financial positions ... that the additional obligation to submit information on property, including marital property, can be said to be reasonable in that it is designed to discourage attempts to conceal assets simply by acquiring them using the name of a councilor’s spouse.” The European Court of Human Rights also endorsed the publication and internet access to declarations arguing that “the general public has a legitimate interest in ascertaining that local politics are transparent and Internet access to the declarations makes access to such information effective and easy. Without such access, the obligation would have no practical importance or genuine incidence on the degree to which the public is informed about the political process.” The new law will not be operating in a vacuum. It provides safeguard such as the fact that the following asset will not be disclosed to the public as per section 7(2) of DoA Act 2018: (a) money, in any currency, in local banks and foreign banks; (b) any item of jewelry, precious stone or metal, or watch, exceeding 500,000 rupees in value; and (c) cash in hand not exceeding one million rupees in any currency accepted as legal tender in any country. The DoA Act 2018 provides the foundation for building a highly effective asset declaration system whilst ensuring the safeguard of all confidential data. It sets a clear legal basis for collection and publication of personal data in asset declarations. The law explicitly sets out which part of the declaration will be disclosed

to the public and which part will be kept confidential.

The European Court of Human Rights

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DECLARATION OF ASSETS: AN INTERNATIONAL PERSPECTIVE

Apart from a few earlier cases, systems of public officials’ declarations began to evolve into their modern

versions after the Second World War. In the United

States, starting in 1965, President Lyndon B. Johnson introduced a requirement that federal officials should

disclose information about their private finances to the public authorities. However, growing government and

recurrent corruption scandals created impetus for initiatives to strengthen public integrity. It took Watergate and other scandals before the US Congress enacted the Ethics in Government Act in 1978. The Act, still in force today, requires detailed public financial disclosure by government employees above a certain level in all three branches of the federal government. In Western Europe, the disclosure of public officials’ income, assets and financial interests came later despite early reluctance to impose strict disclosure systems, although the United Kingdom adopted its Prevention of Corruption Act as early as 1889. However, despite a 1969 select committee’s conclusion that there was no need for a register of interests, in 1974, the House of Commons introduced the Register of Interests. Declarations for public officials started to gain interest in Western Europe in the 1980s when, in 1982, a law on declarations was adopted in Spain while, in Italy, in that same year, Italian members of parliament became obliged to disclose their additional income and property status. In 1983 a law for public control of the wealth of elected officials was adopted in Portugal. All countries of the Central and Eastern region that joined the European Union in 2004 and 2007 had adopted their declaration systems by 2000. This can be explained by conditions for EU accession but the trend continues into the 21st century, when both new aspirants for EU membership and former Soviet Republics developed their disclosure rules. The earliest European standard is found in the Recommendation Nr. R (2000) 10 of the Committee of Ministers to Member States on codes of conduct for public officials (adopted on 11 May 2000), where Article 14 refers to declarations, i.e., “The public official who occupies a position in which his or her personal or private interests are likely to be affected by his or her official duties should, as lawfully required, declare upon appointment, at regular intervals thereafter and whenever any changes occur the nature and extent of those interests.” The recommendation emphasizes the declaration’s purpose of controlling conflict of interest – not that of wealth monitoring, which is also viewed as important in a number of countries. The conditions that applied to the countries wishing to accede to the European Union generally did not contain an explicit requirement to establish a declaration system for public officials (there is no EU law – or acquis communautaire – on declarations). The EU position, stated in broad terms, included the requirement “that the candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights...”. Meantime the candidate countries were expected to fulfil the requirements of relevant international standards and introduce various anti-corruption procedures. Moreover, particular countries received concrete requirements to implement or strengthen measures to control the conflicts of interest and verify assets of public officials as a part of the EU demand to control corruption. Thus, even though there is no binding legal basis and no conclusive proof of effectiveness, declarations for public officials have become a de facto standard of the European Union vis-a-vis candidate members. The functioning of declaration systems continues to be under the scrutiny of the European Commission in current candidate countries.

The 1990s saw not only the spread of declarations in transition countries but also the emergence of mainly soft international standards to this end. One of the earlier international documents that foresaw public officials’ declarations was the Inter-American Convention Against Corruption (adopted in 1996). The Convention sets a requirement for states parties to consider measures to create, maintain and strengthen inter alia“ systems for registering the income, assets and liabilities of persons who perform public functions in certain posts as specified by law and, where appropriate, for making such registrations public”. Nowadays public officials’ declarations have become a part of the global standard that is embodied in the United Nations Convention against Corruption (adopted in 2003). Article 8 (Paragraph 5) contains a soft standard, which requires state parties to “endeavour, where appropriate and in accordance with the fundamental principles of its domestic law, to establish measures and systems requiring public officials to make declarations to appropriate authorities regarding, inter alia, their outside activities, employment, investments, assets and substantial gifts or benefits from which a conflict of interest may result with respect to their functions as public officials.” The Convention returns to the issue of disclosure in the context of asset recovery by requiring that “each State Party shall consider establishing, in accordance with its domestic law, effective financial disclosure systems for appropriate public officials and shall provide for appropriate sanctions for non-compliance. Each State Party shall also consider taking such measures as may be necessary to permit its competent authorities to share that information with the competent authorities in other States Parties when necessary to investigate, claim and recover proceeds of offences established in accordance with this Convention” (Article 52, Paragraph 5). The requirements of the UN Convention do not amount to more than the obligation to consider. Still, borrowing language from the Legislative Guide for the Implementation of the UN Convention Against Corruption (UN, 2006, Paragraph 12, p. 4), it is clear that states are urged to consider adopting such declaration systems and to make a genuine effort to determine whether they would be compatible with their legal system. Further recommendations are provided in the Technical Guide to the UN Convention (UN, 2009, pp. 25-26), and include the following: • disclosure covers all substantial types of incomes and assets of officials (all or from a certain level of appointment or sector and/or their relatives); • disclosure forms allow for year-on-year comparisons of officials’ financial position; • disclosure procedures preclude possibilities to conceal officials’ assets through other means or, to the extent possible, assets held by those against whom a state party may have no access (e.g. held overseas or by a nonresident); • a reliable system for income and asset control exists for all physical and legal persons – such as within tax administration – to access in relation to persons or legal entities associated with public officials; • officials have a strong duty to substantiate/prove the sources of their income; • to the extent possible, officials are precluded from declaring nonexistent assets, which can later be used as justification for otherwise unexplained wealth; • oversight agencies have sufficient manpower, expertise, technical capacity and legal authority for meaningful controls; • appropriate deterrent penalties exist for violations of these requirements.

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Asset declarations of public officials are a powerful tool to prevent corruption, detect illicit enrichment and conflicts of interests. According to the World Bank, more than 150 countries have introduced asset disclosure requirements for their public officials. Many of these countries make asset declarations available for public scrutiny. The major purpose of the declaration of assets regimes is to ensure that corrupt public officials will not be able to conceal the proceeds of any illegal activity. Furthermore, declaration of assets by public official has the aim of establishing measures and systems requiring public officials to make declarations to appropriate authorities regarding, inter alia, their outside activities, employment, investments, assets and substantial gifts or benefits from which a conflict of interest may result with respect to their functions as public officials. The aim is to avoid potential conflicts of interest in the future and to facilitate the management of such conflicts, where appropriate. Another important aspect of a declaration of assets system is the need for transparency regarding the declarations. Public access to decclarations multiplies their anti-corruption value, as they can often play a crucial role by uncovering irregularities and triggering formal verification of declarations by anti-corruption/asset declaration agencies. However, while there is a global trend towards greater disclosure, striking the right balance between public disclosure and protection of privacy remains a subject of debate. There are strong reasons for disclosing, at least partially, data of political officials, such as MPs. Politicians should be prepared to provide explanations regarding the disclosed information, if there are any serious concerns raised in the media or by civil society. Academic studies have shown that public access to declared information is associated with lower levels of perceived corruption. Country experiences also indicate that public access can greatly increase the ability of disclosure systems to deliver results. Despite the growing demand for guidance, there is at present no unified international standards on disclosure by public officials. We can however, inspire ourselves from the leading international instruments to measure whether we meet the basic requirements and whether we have gone the extra mile. These international instruments are: - (a) The United Nations Convention against Corruption

(‘UNCAC’) – at Article 8 Paragraph 5 and Article 52, paragraph 5;

(b) The African Union Convention on Preventing and Combating Corruption – at Article 7 Paragraph 1; and

(c) Good Practices in Asset Disclosure Systems in G20 countries

UNCAC

The requirement for financial disclosure systems by public officials is a relatively modern phenomenon. Most of the modern asset and interest disclosure systems were developed following the adoption of the UNCAC, in response to the requirements of Article 8 of the Convention. Mauritius had its first declaration of assets back in 1985, with very limited success (to say the best). The growing prominence of the anti-corruption agenda worldwide is a testament to the realization of the scourge

corruption can be. As at 26 June 2018, 186 countries are state parties to the UNCAC. Declaration of assets of public official and members of parliament have since the coming into force of the UNCAC always been a pivotal tool in the fight against corruption. Article 8, paragraph 5 of the UNCAC provides: “[…] Each State Party shall endeavour, where appropriate and in accordance with the fundamental principles of its domestic law, to establish measures and systems requiring public officials to make declarations to appropriate authorities regarding, inter alia, their outside activities, employment, investments, assets and substantial gifts or benefits from which a conflict of interest may result with respect to their functions as public officials […]” With regards to the issue of disclosure in the context of asset recovery, at Article 52, paragraph 5, of the UNCAC: “each State Party shall consider establishing, in accordance with its domestic law, effective financial disclosure systems for appropriate public officials and shall provide for appropriate sanctions for non-compliance. Each State Party shall also consider taking such measures as may be necessary to permit its competent authorities to share that information with the competent authorities in other States Parties when necessary to investigate, claim and recover proceeds of offences established in accordance with this Convention”. African Union Convention on Preventing and Combating

Corruption Article 7, paragraph 1 of the African Union Convention on Preventing and Combating Corruption states: “In order to combat corruption and related offences in the public service, State Parties commit themselves to: 1. require all or designated public officials to declare their assets at the time of assumption of office during and after their term of office in the public service […]” It is to be noted that Article 7 of the AU Convention on Preventing and Combating Corruption and Article 8, paragraph 5 of the UNCAC are not mutually exclusive. They share the same principles of disclosure and accountability for persons holding public offices.

Good practices in asset disclosure systems in G20 countries

Following up on the work undertaken on the contribution of asset disclosure systems to the fight against corruption, the G20 Anti-Corruption Action Plan for 2013-2014 states that members will follow-up by: - “building on the common principles adopted in Los Cabos for financial and asset disclosure systems for public officials, beginning, for the purpose of peer learning, by considering G20 countries current systems in light of these principles, and exchanging relevant experiences” . In order to pursue this objective, the G20-Anti Corruption Working Group (‘ACWG’) requested the World Bank and the OECD to identify draft good practices in the design and implementation of asset disclosure systems in G20 countries, while providing the opportunity to learn from each other’s experiences to improve the effectiveness of disclosure systems in the member countries and beyond. The common principles

International Instruments and Declaration of Assets

BEST INTERNATIONAL STANDARDS AND PRACTICES

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enunciated above are embodied in the following list of good practices (‘GP’): (a) “Disclosure requirements should be set forth clearly for the

public official and for the general public and should be an integral component of laws, regulations and/or administrative guidelines, as appropriate, governing the conduct of public officials in order to establish shared expectations for accountability and transparency. Disclosure systems should be as comprehensive as necessary to combat corruption but should require only the submission of information reasonable and directly related to the implementation of laws, regulations, and administrative guidelines, as appropriate, governing the conduct of public officials” (hereinafter referred to as “GP1”);

(b) “Disclosed information should be made as widely available

as possible, both within the government and to the general public, in order to facilitate accountability while still taking into consideration reasonable concerns for personal and family safety and privacy and for the laws, administrative requirements and traditions of the Economy. Information about the overall administration of the disclosure system, including information about disclosure compliance rates and enforcement activities, should be made available to the public, in accordance with applicable law, regulation and/or administrative guidelines.”( hereinafter referred to as “GP2”);

(c) Disclosure should first be required of those in senior

leadership positions and then, as capacity permits, of those in positions most influencing public trust or in positions having a greater risk of conflict of interest or potential corruption.” (hereinafter referred to as “GP3”);

(d) “Disclosure system administrators should have sufficient

authority, expertise, independence, and resources to carry out the purpose of the system as designed” (hereinafter referred to as “GP4”);

(e) “Disclosed information should be readily available for use in

preventing, detecting, investigating, imposing administrative remedies for and/or prosecuting corruption offenses regarding conflicts of interest, illicit enrichment, and /or other forms of corruption. Disclosure should be required on a consistent and periodic basis so that the information reflects reasonably current circumstances” (hereinafter referred to as “GP5”).

(f) “Penalties and/or administrative sanctions for late

submission of, failure to submit, and submitting false information on a required disclosure report should be effective, proportionate, and dissuasive”( hereinafter referred to as “GP6”)

How does the new Declaration of Assets Act 2018

compare against the best international standards and practices?

The new salient features of the DoA Act 2018, expands the scope of declarants from only members of the legislative assembly to include inter alia high ranking officials, every Chairperson and Chief Executive Officer of State-owned enterprises and statutory bodies, and every officer of such enterprises and statutory bodies drawing salary at the level of Deputy Permanent Secretary. The compliance of Mauritius with the UNCAC was reviewed during the first cycle of the second year of the Implementation Review Mechanism (CAC/COSP/IRG/I/2/1/Add.21). It was seen in that review that: “Some public officials are subject to regular, confidential asset declarations, including staff of ICAC, MRA, the FIU and the Procurement Policy Office. All elected officials,

including members of the National Assembly, the Rodrigues Regional Assembly and local authorities, are subject to mandatory asset declarations (section 3, Declaration of Assets Act). Non-submission of declarations is sanctioned (section 6); however, no established verification and monitoring mechanism is in place. POCA section 84 on possession of unexplained wealth can be used in the course of an investigation.” The Declaration of Assets 1991 (“DoA Act 1991 did not cater for a monitoring system. Previously, compliance with the law only involved the filing of the declarations but no monitoring was performed as the law did not provide for such a power neither to the ICAC which was the depository of the declaration of assets under the 1991 Act nor to any other Law Enforcement Agency. The new law caters for a monitoring mechanism. It is also to be noted that non-compliance with the DoA Act 2018, is meted with harsher sentence (Please see Table 2 for offences under the DoA Act 2018 at page 3). When analyzing the provisions of DoA Act 2018, it is found to be in line with the Good Practices in Asset Disclosure Systems in G20 countries as follows: (a) GP1: The Declaration of Assets forms that are annexed to

the DoA Act 2018 Act, provide for the assets and liabilities that have to be declared. The disclosure requirements are set forth clearly for the public official. Furthermore, the information requested is reasonable and appropriate for the governing the conduct of public officials;

(b) GP2: Disclosure of declarations which has been previously removed in the DoA Act 1991 has been incorporated in the DoA Act 2018 for members of the National Assembly, including the Speaker, members of the Rodrigues Regional Assembly, including the Chairperson of the Rodrigues Regional Assembly, and Councillors of a Municipal City Council, Municipal Town Council or District Council;

(c) GP3: The law used to provide for only members of the National Assembly, every member of the Rodrigues Regional Assembly and every Councillor of a Municipal City Council, Municipal Town Council or District Council and has now been extended to various other public officials (see Article on “When to Declare” at page 6)

(d) GP4: The ICAC is a specialized agency in the fight against corruption and money laundering. As such it is more than capable of fulfilling its obligations of monitoring as it has the resources and know-how to monitor the declaration of assets. This is in line with the GP4;

(e) GP5: Under the DoA Act 2018, declaration made pursuant to the Act may be disclosed enforcement authorities upon an order of the judge in chambers;

(f) GP6: The DoA Act 2018 provides for harsher sentence in cases of non-compliance and late submission of the Declaration.(see table 2 for offences under the DoA Act 2018 at page 3)

Based on the new offences, Mauritius has gone beyond what it required. There are now harsher sentence for late submission and false disclosure. It is also to be noted that it is now an offence for a spouse who without any reasonable excuse fails to collaborate in disclosing his/her assets and liabilities.

CONCLUSION It would be an understatement to say that the DoA Act 2018 has been long overdue. The element of “monitoring” and “disclosure” which are at the heart of the present legislation in line with the international best practices, be it the UNCAC, the African Union Convention on Preventing and Combating Corruption, and the Good practices in asset disclosure systems in G20 countries. The failure of the DoA Act 1991 is largely due to a lack of monitoring system which is catered for in the new Act.

BEST INTERNATIONAL STANDARDS AND PRACTICES

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The need for a declaration of assets system has always been explained in terms of three main aspects of combating corruption: a) conflict of interest control, b) transparency and accountability, and c) verification of the legitimacy of income and wealth. First, the United Nations Convention against Corruption makes explicit reference to the possibility of a conflict of interest as a benchmark for what information is to be declared. This reflects the fact that conflicts of interests control is the most common purpose for the use of declarations of public officials. One could say that the conflict of interest prevention focuses somewhat narrowly on whether a particular interest can interfere with the discharge of official duties. In the meantime there are also broader concerns with public accountability, raising the more general possibility of evaluating the activities of a public official, including what personal motives he/she may have. Second, along with the prevention of conflicts of interest, more general concerns for transparency, public accountability, trust and integrity constitute the most commonly stated purposes of the declaration systems. These purposes are in no way contradictory; they reflect the political emphasis associated with one or another system. Historically, the right to petition the government was extended to the broader right to know information held by the government. Where the content of public officials’ declarations is available to the public, this tool essentially extends coverage of this right. Third, is the need to ensure that declarations are monitored as regards the assets of public officials. Nevertheless, in some countries the idea is accepted that declarations of public officials should serve as a special tool of wealth monitoring. While the adoption of laws and rules requiring public officials to declare their wealth and assets either upon entry into the public service or promotion into a position with potential for illicit enrichment, serves a preventive function, they also have an investigative function. They provide valuable information that may help uncover misconduct, corruption, money laundering, and illicit enrichment after it takes place. Asset declaration schemes generate baseline information against which later disclosure can be compared to identify which wealth is not attributable to income, gifts and loans, and warn against illicit enrichment from sources such as bribery, fraud and corruption. In doing so, compulsory periodic disclosure of assets and liabilities by public officials is considered an effective measure to prevent corruption. It also demonstrates the leadership’s commitment to fight corruption and helps the public to hold the government accountable. The rationale is that public officials should undergo stronger scrutiny than the rest of the population. As corruption is a difficult crime to prove, investigation techniques proving bribery can easily be abused and threaten civil liberties. In comparison, the filing of false and misleading declarations is easier to monitor, detect and punish. This can even be made easier by providing incentives for potential accomplices such as bankers or

accountants helping to hide assets or to report misdeeds (e.g. a percentage of the amount they are being asked to hide). In principle, to have a deterrent impact, sanctions for not complying with declaration requirements should be made as severe as for indulging in corrupt practices themselves. Hong Kong was first to use financial disclosure to monitor the wealth of officials (Messick, 2009, p. 13). Although it is not so common, some other countries also place emphasis on monitoring assets. For example, in Albania, the stated purpose of the Law on the Declaration and Audit of Assets, Financial Obligations of Elected Persons and Certain Public Officials is “the determination of rules for the declaration and audit of assets, the legitimacy of the sources of their creation, financial obligations for elected persons, public employees, their families and persons related to them.”

Expected outcomes The Transparency International Global Corruption Report 2006 presents the findings of a comparative analysis of asset disclosure laws in 16 countries, seeking to establish how effective officials’ asset declaration laws are in reducing corruption. A series of statistical tests were performed to measure the association between the existence and scope of such laws in these countries and their perceived levels of corruption. The findings established that: • Countries with a longer tradition of asset declaration by

public officials had significantly lower perceived levels of corruption than countries with newer laws.

• There was no significant correlation between the perceived levels of corruption and which level of officials must declare their assets. Levels of corruption in countries requiring asset declaration for all public officials were not perceived significantly lower than in other countries, where only higher ranking officials must declare their assets.

• Perceived levels of corruption were lower in countries whose declaration laws permitted prosecution of the offending officials.

• Countries that verified officials’ statements had significantly lower perceived levels of corruption than countries that do not verify declaration content.

• Countries that gave public access to officials’ asset declaration had significantly lower perceived levels of corruption than other countries.

• The analysis further demonstrated that the combination of content verification and public access to declarations demonstrated an even greater association of reduced corruption. These preliminary findings, corroborated by the findings of an expanded dataset of 42 countries, suggest that asset declaration laws have important potential in the fight against corruption, provided they are designed in an effective and credible manner.

THE DECLARATION OF ASSETS ACT AT A GLANCE:

RATIONALE, OBJECTIVES AND EXPECTED OUTCOMES

independent commission against corruption · among public officials including those elected or ......

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