1. Controlling Corruption Problems, Approaches and Best Practices Hans-Joerg Albrecht

2. Corruption Tehran 2014 Page 2 Content  Introduction: The phenomenon of corruption  International anti-corruption policies  Best Practices  Summary

3. The Phenomenon of Corruption

4. Corruption Tehran 2014 Page 4 The phenomenon of corruption  Forms of corruption –administrative/bureaucratic corruption –„… an advantage, to act or refrain from acting in accordance with his duty or in the exercise of his functions in breach of his official duties...“ –political corruption –CoE Recommendation (2003) on common rules against corruption in the funding of political parties and electoral campaigns –commercial corruption –promising, offering or giving directly or through an intermediary to a person who in any capacity directs or works for a private sector entity, an undue advantage of any kind, for that person or for a third party in order that that person should perform or refrain from performing any act in breach of that person's duties  Forms of corruption interact with –Petty or grand corruption –Structural (systemic/endemic) and situational corruption –Local and transborder/international corruption

5. Corruption Tehran 2014 Page 5 Corruption as a Social and Legal Problem  Corruption is viewed as a major social problem – a threat to the social fabric – a particular threat for developing countries – an obstacle to good governance – an instrument of organized crime groups  Corruption is Part of Global „Bads“: Transnational crime, organized crime, money laundering

6. Corruption Tehran 2014 Page 6 Transparency International Survey 2010 The TIS is a composite index, drawing on corruption-related data in expert surveys carried out by a variety of reputable institutions. It reflects the views of business people and analysts from around the world, including experts who are resident in the countries evaluated.

7. Corruption Tehran 2014 Page 7 Consequences (threats) of Corruption  Economic consequences –Increasing (transaction) costs –Parallel economies –Dislocation of public and private funds –Reciprocity and vulnerability  Social/political consequences –Distrust (vertical and horizontal) –Uncontrolled political, administrative and economic power –Weakening the state and governance

8. Corruption Tehran 2014 Page 8 Correlates (causes) of corruption  Corruption refers to rent seeking decisions  Vast administrative and political discretion and little control  Subsystems of mutual trust (old boys networks)  Extent of the state`s involvement in the private sector/economy  Freedom of the press and transparency  Independence of public prosecution and the judiciary  Civil service professionalism and civil service pay  Quality of democratic structures and the dependency of political elites and political parties from the public  A culture of generalized negotiation  Reluctant/weak political and law enforcement response to corruption

9. International Anti-Corruption Policies

10. Corruption Tehran 2014 Page 10 An international consensus on repressive anti-corruption policies  Corruption (administrative and commercial) is recognized as a high priority national and international political issue –Political corruption does not fall under international corruption conventions  Substantive criminal law should cover public sector and commercial corruption as well as transborder/international corruption  Corporate liability  Forfeiture and mutual judicial assistance in forfeiture cases, including the return of illicitly acquired assets  Reporting of corruption cases to be encouraged in order to compensate for the lack of victims interested in criminal complaints (witness and whistleblower protection, anonymity)  Collection of criminal evidence to be facilitated through proactive investigation and special investigative measures

11. Corruption Tehran 2014 Page 11 Consensus on the need for prevention  Repressive criminal law based approaches to corruption control should be backed up by comprehensive systems of (primary) prevention  Monitoring to be strengthened through external and internal audits  Adopting and implementing local, regional and national anti-corruption policies  Self control to be strengthened through codes of ethics and other internal compliance enhancing mechanisms (ombudsmen)

12. Corruption Tehran 2014 Page 12 International instruments against corruption  OECD –Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 1997  European Union –Convention on the fight against corruption involving officials of the European Communities or officials of the member states of the European Union of 1997 –Joint Action on Corruption in the private sector 1998 –Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector  Council of Europe –Civil and Criminal Conventions Against Corruption (1999) –Resolution (97) 24 on the twenty guiding principles for the fight against corruption  United Nations –Convention against Corruption 2003

13. A Four Pillar Approach  Prevention  Criminalization  International Cooperation (Mutual Legal Aid)  Asset Recovery Corruption Tehran 2014 Page 13

14. Corruption Tehran 2014 Page 14 Implementation of international instruments  Activation of peer pressure and support –GRECO (Groupe d´ états contre la corruption) –OECD Working Group on Bribery in International Business Transactions  Implementation of legal instruments must be backed up through financial and other assistance to developing countries and peer evaluation of national implementation of anti-corruption policies and laws

15. 1st Pillar Prevention

16. Anti-Corruption Policy Development  UNCAC and other international and regional anti corruption instruments request development of –Anti-corruption policies –Adjusted to the national legal etc. framework –Rule of law, transparency, accountability, protection of public resources –Effective practices –Monitoring and evaluation –International collaboration on best practices Corruption Tehran 2014 Page 16

17. Organizational/Corporate Culture  Establishing a culture of professional/business ethics averse to bribery/corruption  Involvement of senior management  Code of conduct/ethic rules –In particular with respect to gifts, hospitality, entertainement Corruption Tehran 2014 Page 17

18. Risk Control Process  Identification of risks (coming with specific administrative or commercial activities, professional roles)  Risk assessment  Follow up and monitoring Corruption Tehran 2014 Page 18

19. Measures to Control Risks  Compliance and internal audits  Due diligence and third party risks  Public procurement, tenders etc. –Transparency, public, clear rules, appeal possibilities  Clear procedures to establish public budgets  Public access to information Corruption Tehran 2014 Page 19

20. Anti-Corruption Commissions  UNCAC Art. 6 –Each country shall establish Anti-Corruption bodies –To implement anti-corruption policies –Independent –Adequate resources Corruption Tehran 2014 Page 20

21. Whistleblowing  What is whistleblowing? –Insider disclosure of evidence –Of illegal conduct (or other serious risks)  Best practices –Clear rules to be established –Internally and/or externally? Outside disclosure should be limited to ineffective internal practice –Confidentiality –Protection against retaliation (immunity) –ECHR No 28274/08, Judgment 21. July 2011 (Heinisch v. Germany) –Internal follow up procedure Corruption Tehran 2014 Page 21

22. 2nd Pillar Criminalization

23. Criminalization: Corruption  Relevant for Mutual Legal Aid –Dual criminality  Harmonization, approximation, mutual recognition  Standards of defining corruption/bribery  Elements –offering, promising, giving (no agreement/acceptance needed: endangerment) –Requesting, soliciting, accepting –Undue advantage –Acting or refraining to act –National or foreign official (including international bodies) Corruption Tehran 2014 Page 23

24. Criminalization: Trading in Influence  Elements (like corruption offence)  Anyone who asserts/confirms that he/she is able –To exert improper influence on national/foreign public official Corruption Tehran 2014 Page 24

25. Other Criminal Offences  Embezzlement  Abuse of authority  Money laundering (corruption, influence trade as predicate offences)  Obstruction of justice Corruption Tehran 2014 Page 25

26. Criminal Sanctions  Effective, proportionate, dissuasive sanctions –Significant differences between countries (and practices)  Removal from office, interdiction of professional activities  Forfeiture of illicit assets  Non criminal, not conviction based forfeiture (in rem) Corruption Tehran 2014 Page 26

27. Other Issues  Statutes of limitation  Immunity from prosecution  Crown-witnesses  Liability of legal entities Corruption Tehran 2014 Page 27

28. 3rd Pillar International Cooperation

29. Main Pillars of International Cooperation  Extradition  Mutual legal assistance Corruption Tehran 2014 Page 29

30. Conditions of Cooperation  Dual criminality  Treaty –(UNCAC serves as a statutory basis where a bilateral treaty does not exist)  Ordre public Corruption Tehran 2014 Page 30

31. Obligations Under UNCAC  Corruption –To be made an extraditable offence –Not to be declared a political offence  In case nationals are not extradited –Prosecution shall take place in the country where the suspect resides Corruption Tehran 2014 Page 31

32. Mutual Legal Assistance  In case of non-coercive measures and lack of dual criminality –MLA shall always be granted (UNCAC)  Coercive measures –Dual criminality principle can be waived  Bank secrecy shall be no ground to refuse mutual legal assistance Corruption Tehran 2014 Page 32

33. 4th Pillar Asset Recovery

34. Asset Recovery and Return  Confiscation, forfeiture rules have to be in place –Including freezing assets  Implementation of a confiscation order in a foreign country  Assisting a foreign country to freeze and confiscate assets  Which law applies in case of MLA? Corruption Tehran 2014 Page 34

35. Return of Assets and Asset Sharing  UNCAC provides for full return of assets aquired through corruption  Other instruments provide for asset sharing between requesting and requested country (TOCC)  Expenses for freezing and confiscating may be deducted from the assets Corruption Tehran 2014 Page 35

36. 5th Pillar Implementation

37. Corruption Tehran 2014 Page 37 Implementation of international instruments  Activation of peer pressure and support –GRECO (Groupe d´ états contre la corruption) –OECD Working Group on Bribery in International Business Transactions  Implementation of legal instruments must be backed up through financial and other assistance to developing countries and peer evaluation of national implementation of anti-corruption policies and laws  Peer review of implementation of legislation against corruption and compliance with the Council of Europe`s Convention against Corruption

38. Conclusions

39. Anti Corruption Resources  UNOCD Instruments, tools, model codes  http://www.unodc.org/unodc/en/corruption/publications.ht ml http://www.unodc.org/unodc/en/corruption/publications.ht ml  http://www.track.unodc.org/Pages/home.aspx  UNODC (database covering 175 legal systems) www.track.unodc.org/LegalLibrary/Pages/home.aspx?ch apter=5 www.track.unodc.org/LegalLibrary/Pages/home.aspx?ch apter=5  Stolen Asset Recovery (STAR) Initiative (Worldbank, UNODC) http://star.worldbank.org/corruption- cases/arwcaseshttp://star.worldbank.org/corruption- cases/arwcases Corruption Tehran 2014 Page 39

40. Corruption Tehran 2014 Page 40 Conclusions  Corruption is associated with a range of problems  An internationally formed system of corruption control has emerged which requires specialized legal knowledge  The system is based on five pillars –Prevention, criminalization, international cooperation, asset recovery and effective implementation  The pillars are interrelated and reinforce each other  Most important will it be to develop an system of mutual recognition