News 12th Apr 2016

How can we better police international corruption through national agencies?

Robert Barrington

Executive Director (former)

Robert served as Executive Director of Transparency International UK from 2013 until July 2019. He is now Professor of Anti-Corruption Practice at Sussex University’s Centre for the Study of Corruption.

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There are only a small number of nations that prosecute foreign bribery. Even then, the chances of success are diminished by two key factors: the lack of an effective international forum for cooperation between those countries that do prosecute foreign bribery and the lack of a sustained link between those law enforcement investigators and civil society investigators of corruption or anti-corruption whistleblowing centres. While national individual efforts to cooperate with each other and with civil society on an ad hoc basis have been important, we are lacking a forum to bring structure to this cooperation in a manner that is effective, ensures digital security over the transfer of evidence, and has the global legitimacy to be scaled up. Could this be about to change?

The Panama Papers show how difficult it can be to unpick the complex transactions put together by those who are trying to conceal corrupt money and transactions across multiple borders.  Without this one-off leak, we would know much less about corrupt capital flows, and this is just one leak from one of many law firms in one of many secrecy havens.   Aided by sophisticated law firms, accountants, private banks and trust & company service providers, corrupt individuals and companies can make use of numerous secret financial centres and layer upon layer of trusts and shell companies from London, to Guernsey to Panama.

Despite this global challenge, investigating and prosecuting corruption remains inadequate.

In 2015, 22 of the 41 OECD anti-bribery convention countries were reported as failing to investigate or prosecute any foreign bribery case during the last four years, reneging on their obligation to combat cross-border bribery. Only four of 41 countries signed up are actively investigating and prosecuting companies that bribe foreign officials to get or inflate contracts, or obtain licences and concessions. Six countries are classified as having moderate enforcement, while another nine have limited enforcement. Two countries could not be measured and the remaining 20 countries are doing little or nothing to ensure their companies do not spread corruption around the world, making up 20.4% of world exports.

Germany, the United Kingdom, Switzerland to a lesser extent, are rated by TI as active enforcers of the OECD Anti-Bribery Convention. There is also evidence of moderate enforcement Italy, Canada, Australia, Austria, Norway and Finland.

The US is the most active enforcer by any measure: it has good form on assertive investigations against international corruption. The reason that corruption in football is being investigated is due to the US prosecutors - with a knock-on effect globally for improvements in sports governance.  But there is a legitimacy gap, a moral gap, and an effectiveness gap if policing international corruption is left to US Prosecutors.

How could enforcement be done better?  One key area is greater cooperation between law enforcement agencies in different jurisdictions, given that so much bribery and corruption is cross-border.

Ahead of the London Anti-Corruption Summit in May, Transparency international has been calling for more effective cooperation between law enforcement authorities that do prosecute foreign bribery and related crimes such as money laundering.  We have also called for a new framework for sharing information collected by civil society, either by civil society investigators of corruption or the kind of whistleblower centre that TI operates in over sixty countries.  This on-the-ground information and evidence needs to be better connected to law enforcement investigations of corruption.   Likewise, companies are often in the frontline of bribery demands or corrupt competitors, and information from them need to be encouraged and protected.

Greater cooperation between law enforcement authorities, and with business and civil society, may sound less exciting that some of the other Summit outcomes, but it could make a big difference.  A potential stumbling block would be a solution that is too dominated by countries such as the US and the UK.  As with other Summit outcomes, there is probably no better way to discourage other countries from supporting the initiative than if the UK, the US, or any other country were to plant a national flag on an issue and tell others to follow the lead.

Any solution would need international legitimacy. That does not mean all countries need be involved. Indeed, in order to be effective, the risk of some national police agencies compromising evidence or the integrity of investigations needs to be carefully contained. However, TI believes that progress can be made. There is an opportunity to strengthen the cooperation between those countries that have experience in investigating international corruption and, according to the OECD, are actually enforcing the Anti-Bribery Convention.

In our 2015 crowdsourcing exercise to draw out ‘game changer’ policy proposals for tackling corruption,  it was proposed that a forum for such law enforcement agencies could be created, where the sensitivity of investigations is protected but channels for sharing information between a select group of law enforcement agencies and civil society groups can be enhanced. It could be a 'deliverable' at the 2016 London Anti-Corruption Summit that makes a real difference in combatting trans-national corruption. To be sustainable in the long term, it would need to be set up as a forum that commands international respect and legitimacy.   If the Summit delivers as we hope, life is about to get tougher for the bribe-payers.