1. 1 FIGHT AGAINST CORRUPTION THE INTERNATIONAL LEGAL FRAMEWORK SUMMER SCHOOL FOR JUNIOR MAGISTRATES FROM SOUTH EASTERN EUROPE - European Standards in Justice and Home Affaires - VICTOR ALISTAR Transparency International Romania Executive Director

2. Contents 1. General standards regarding the treatment of corruption in Criminal law Civil law 2. The role of the international community in the fight against corruption 3. International conventions The United Nations Convention against Corruption The Council of Europe Civil law Convention on Corruption The Council of Europe Criminal Law Convention on Corruption The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 4. Discussion

3. The treatment of corruption in criminal law General principles (1) 1.Laws against corruption should comply with international human rights standards and afford a fair trial to those accused. 2.Laws should not be seen as unduly repressive or lenient, and they should enjoy popular public support; if not, they risk a lack of enforcement. 3.There should be clear guidelines on sentencing so that sentences are consistent between one offender and another, and fair, but not outrageously punitive. 4.Combining the various criminal laws dealing with corruption and secret commissions together in a single law reduces the possibility of loopholes and can demonstrate the seriousness with which the law treats this form of behaviour.

4. The treatment of corruption in criminal law General principles (2) 5.Regular reviews of the criminal law framework (including laws of evidence and of the adequacy of existing penalties) are essential. 6.Special provisions may be necessary in corruption cases involving illicit enrichment (i.e.: requiring individuals, once they are shown to be wealthy beyond the capacity of known sources of income, to establish the origins of that wealth).  particular difficulty: reversing the burden of proof 7.Special provisions will be needed to ensure that the proceeds of corruption can be recaptured by the state - the criminal law should provide for the tracing, seizure, freezing and forfeiture of illicit earnings from corruption. 8.Provisions will also be needed to ensure that the crime of corruption is seen to include both the payment as well as the receipt of bribes.

5. The treatment of corruption in civil law Reasons for having strong recovery mechanisms in the civil law (as opposed to the criminal law):  the burden of proof is not as demanding  evidence obtained through civil law need only establish guilt via a “balance of probabilities” rather than “beyond a reasonable doubt”  civil law has a broader reach  judgments obtained in civil courts can usually be enforced in a large number of foreign countries (to obtain the contents of foreign bank accounts and other assets Dealing with the practice of hiding officials’ wealth in family trusts or other vehicles:  declaring “matrimonial property” claims brought by spouses against assets illicitly acquired, as null and void and based on non-existent “ownership”  creating a presumption of “continuing control” of property by an accused arising from the circumstances in which the property was transferred

6. Remedies through civil law for the state  marked disincentive to bribers if they knew that they might be sued by the state and have to pay an amount equivalent to the original bribe;  the civil law should also clearly state that contracts which are obtained through corrupt means are enforceable only at the discretion of the state (disincentive for corruption in public procurement). The state is considered a victim of corruption because the moneys taken by a corrupt public official legally belong to the state

7. Remedies through civil law for the private citizen  included in the CoE Civil Law Convention on Corruption  unworkable for countries with systemic corruption  in cases where the state is not in a position to pay adequate compensation, it should consider empowering its citizens to take court action against corrupt officials when they have reason to believe that there may be sufficient assets to make such action worthwhile This type of remedy involves the potential liability of the state for the losses incurred by a citizen or groups of citizens through actions of a corrupt official.

8. The role of the international community  Corruption affects all countries, rich and poor, and has global consequences  International anticorruption conventions: Are the expression of consensus on the negative consequences of the phenomenon; Create common frameworks and standards for preventing, combating and punishing corrupt behaviour; The harmonization of states ’ internal legislation prevents the “ export ” of damages/ proceeds resulting from corruption abroad Cross-border corruption & specific mechanisms of international cooperation

9. The United Nations Convention against Corruption (UNCAC) Adopted: 31 October 2003 by the UN General Assembly Entry into force: 14 December 2005 Signed by 140 states & ratified by 84 states (as of Feb. 2007) Open to: all countries and regional economic organizations  the only anticorruption convention that is truly global  signals the international agreement on the importance of addressing corruption within a comprehensive framework and by setting common standards  covers preventive measures as well as aspects related to criminalization and law enforcement  establishes for the first time a global framework for asset recovery Note! When ratified, the UNCAC becomes an integral part of internal legislation and its provisions are directly applicable within a State Party.

10. The United Nations Convention against Corruption (UNCAC) Preventive measures (1) -The existence of specialized corruption prevention bodies, which are afforded the necessary independence within the country’s institutional and legal framework -Efficient, transparent and objective systems for the recruitment, hiring, promotion and retirement of civil servants and non-elected public officials -Transparency in the funding of political parties and electoral campaigns -Introduction and popularization of codes of conduct for public officials, enforced by disciplinary or other measures -Whistleblower protection: establishing measures and systems to facilitate the reporting by public officials of acts of corruption to appropriate authorities -Declaration of interests for preventing conflict of interests -Public procurement systems based on transparency, competition and objective criteria in decision-making, that are effective, inter alia, in preventing corruption -Allowing and facilitating freedom of information

11. The United Nations Convention against Corruption (UNCAC) Preventive measures (2) - Special provisions for to strengthen integrity and to prevent opportunities for corruption within the judiciary and prosecution services -Special provisions for the private sector - enhance accounting and auditing standards to prevent corruption and provide corresponding dissuasive penalties -Promoting the participation of civil society in the prevention of and the fight against corruption and in raising public awareness regarding the phenomenon -Introduction of comprehensive measures to prevent money laundering

12. The United Nations Convention against Corruption (UNCAC) Criminalization and law enforcement (1) Provides for the criminalization of the following: Bribery of national public officials, foreign public officials and officials of public international organizations Embezzlement, misappropriation or other diversion of property by a public official for his or her benefit or for the benefit of another person or entity Trading in influence and acceptance or solicitation of undue advantages The abuse of function or position by a public official Illicit enrichment, defined as “a significant increase in the assets of a public official that he or she cannot reasonably explain in relation to his or her lawful income” Bribery in the private sector (both active & passive), embezzlement of property in the private sector Laundering of proceeds of crime, and the establishment of a wide range of predicate offences (including, at a minimum, corruption-related offences), committed both within and outside the jurisdiction of a State Party Concealment of property, when the person involved knows that such property is the result of corruption-related offences

13. The United Nations Convention against Corruption (UNCAC) Criminalization and law enforcement (2) Provides for the introduction of:  liability of legal persons (criminal, civil or administrative)  long statute of limitations period in which to commence proceedings for corruption- related offences  Measures to allow for tracing, freezing, seizure and confiscation of proceeds of crime derived form corruption offences  protection from potential retaliation or intimidation for witnesses and experts who give testimony concerning corruption-related offences  an independent body or bodies or persons specialized in combating corruption through law enforcement  measures to encourage persons who participate or who have participated in the commission of a corruption offence to cooperate with law enforcement authorities (including the mitigation of punishment)  Cooperation among national authorities and between those and the private sector, esp. financial institutions

14. The United Nations Convention against Corruption (UNCAC) Asset recovery -financial institutions should verify and report the identity of their customers & beneficial owners of funds -increased security measures for accounts of so-called “politically exposed persons” (PEPs) – persons entrusted with prominent public functions, their family members and close associates -prevent the establishment of banks that have no physical presence and that are not affiliated with a regulated financial group -international cooperation: Information on suspect financial transactions should be available internationally (optional) establishment of a Financial Intelligence Unit responsible for receiving, analyzing and disseminating reports of suspicious financial transactions permit another State Party to initiate civil action in its courts to establish title to or ownership of property acquired through corruption offences in other states pay compensation or damages to the State Party harmed by such offences acknowledge a State Party’s claim to confiscated property allow competent authorities to give effect to an order of confiscation issued by a court of another State Party

15. The United Nations Convention against Corruption (UNCAC) International Cooperation Refers to:  extradition conditions  mutual legal assistance in investigations, prosecutions and judicial proceedings  transfer of criminal proceedings to another State Party  law enforcement cooperation  joint investigations Mechanisms for implementation The responsible body is the Conference of the States Parties to the Convention, with responsibilities in:  periodically reviewing the implementation of the Convention  facilitating cooperation between State Parties  making recommendations for improvement of the Convention  may put into place formal review mechanisms to asses the measures taken by State Parties (and difficulties encountered) to implement the Convention

16. The Council of Europe Civil Law Convention on Corruption Adopted: 4 November 1999 Entry into force: 1 November 2003 Signed by 40 states & ratified by 25 states (as of April 2006) Open to: Council of Europe member states; non-member states which participated in drafting the convention; non- member states by invitation; the European Community The first international attempt to define common international rules in the field of civil law and corruption

17. The Council of Europe Civil Law Convention on Corruption Measures to be taken at national level Compensation for damages as a result of acts of corruption:  Compensation may cover material damage, loss of profits and non-pecuniary loss  injured persons can claim compensation for damages from the State  the compensation can be reduced or disallowed if the plaintiff has by his or her own fault contributed to the damage or to its aggravation  the recovery of damages is subject to a limitation period of not less than three years Other provisions:  any contract or clause of a contract providing for corruption is null and void.  introduction of whistleblower protection – “ appropriate protection against any unjustified sanction for employees who have reasonable grounds to suspect corruption and who report in good faith ”

18. The Council of Europe Civil Law Convention on Corruption International Cooperation  in matters relating to civil proceedings in cases of corruption, especially concerning the service of documents, obtaining evidence abroad, jurisdiction, recognition and enforcement of foreign judgements and litigation costs Monitoring mechanisms  The competent body: Group of States Against Corruption (GRECO) which was established in May 2008 and became operational a year later  Process of mutual evaluation and peer pressure  Membership in the GRECO overlaps, but is not identical to membership in the CoE Convention (a State Party automatically joins GRECO when it ratifies the Convention, but the reverse is not true)

19. The Council of Europe Criminal Law Convention on Corruption Adopted: 4 November 1998, by the Council of Ministers Entry into force: 1 July 2002 Signed by 47 states (44 member states and 3 non-member states) & ratified by 33 states (as of April 2006) Open to: Council of Europe member states and 6 non-member states; EU and other states can be invited to join It represents crucial European consensus on criminalization and international cooperation with regard to corruption.

20. The Council of Europe Criminal Law Convention on Corruption Measures to be taken at national level Establish as criminal offences:  active and passive bribery of: domestic public officials members of domestic public assemblies (with legislative or administrative powers) foreign public officials members of foreign public assemblies officials of international organizations members of international parliamentary assemblies judges and officials of international courts bribery in the private sector  Trading in influence  Money laundering of proceeds from corruption offences  Account offences perpetrated in connection to corruption offences (accounting document or record containing false or incomplete information or unlawfully omitting to record a payment)  Participatory acts (aiding or abetting the commission of corruption offences)  Corporate liability (legal persons held liable for the criminal offences of active bribery, trading in influence and money laundering, as well as lack of supervision and control )

21. The Council of Europe Criminal Law Convention on Corruption Other measures to be taken at national level  penalties involving deprivation of liberty (which can give rise to extradition), monetary and other dissuasive sanctions, as well as confiscation of proceeds of corruption criminal offences  specialized and independent entities/ persons in the fight against corruption  protection of collaborators of justice and witnesses International Cooperation  mutual assistance by processing requests from foreign authorities with powers to investigate or prosecute corruption criminal offences  the criminal offences established in accordance with this Convention are extraditable offences  spontaneous information (forward to another Party information without a prior request)  designate a central authority to deal with international requests; central authorities should communicate directly with one another Monitoring mechanisms  the same as for the CoE Civil Law Convention against Corruption - GRECO

22. The OECD Convention Against Bribing of Foreign Officials in International Business Transactions Adopted: 21 November 1997 Entry into force: 15 February 1999 Signed & ratified by 36 countries (all 30 OECD member states and 6 non-member countries – Argentina, Brazil, Chile, Bulgaria, Estonia and Slovenia) Open to: all 30 OECD member states and 6 non-member countries; additional accessions are under consideration Exclusively focused on the “supply” side of corruption, recognizing that bribery is a widespread phenomenon in international business transactions.

23. The OECD Convention Against Bribing of Foreign Officials in International Business Transactions Obligations of the signatory Parties criminalize in their internal legislation the bribery of foreign public officials establish in their internal legislation the liability of legal persons for the bribery of a foreign public official ensure that the bribe and the proceeds of the bribery of a foreign public official are subject to seizure and confiscation make the bribery of foreign public officials a predicate offence for money laundering legislation adjust accounting, auditing and financial disclosure standards to prevent hiding bribery of foreign public officials provide promptly and effectively mutual legal assistance Monitoring Arrangements  Competent body: the OECD Working Group on Bribery  Phase 1 (completed): evaluating adequacy of country’s national implementing legislation in relation to the requirements of the Convention  Phase 2 (underway): evaluating application & enforcement of this legislation

24. Thank you for your attention! Questions?