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Media Kit: Progress on a UN Convention against Corruption

The UN General Assembly soon will be considering a proposed international legal instrument that would help governments to fight corruption and to track down illegally transferred funds. Critical political support can come from the International Conference on Financing for Development.

Corruption has come to be recognized as a primary impediment to successful development and economic practice in all countries of the world. Since September 11, concern about the closely related issues of money laundering, international money transfers and "black" or "gray" money has taken on new urgency.

In 1996, World Bank President James Wolfensohn identified the fight against "the cancer of corruption" as a top Bank priority. That same year, broad international support for combating corruption took the shape of a landmark resolution of the UN General Assembly [A/RES/51/191], calling on States to outlaw payment of bribes to public officials in the course of international financial transactions and to disallow tax deductions for such payments. The Assembly in the same session also endorsed a framework Code of Conduct for Public Officials.

The issue surfaced again in intergovernmental meetings in preparation for the International Conference on Financing for Development, to take place in Monterrey, Mexico in March 2002. Broad support was indicated for moving ahead on a comprehensive and legally binding international instrument on corruption.

The General Assembly has already initiated work on an anti-corruption pact, issuing instructions [resolutions 55/61 and 55/188] to the Vienna-based UN Centre for International Crime Prevention to help the Assembly define the "scope and coverage" of an international convention. The GA also asked the Centre to take into account means to repatriate funds that are illicitly transferred internationally.

In August 2001, the Centre hosted a meeting of the Intergovernmental Open-ended Expert Group. The Group recommended that UN Member States should draft by the end of 2003 a broad anti-corruption treaty that defines preventive measures and criminalization sanctions and remedies. More specifically, the Expert Group envisioned provisions on difficult and complex issues, such as jurisdiction, seizures of property or funds, witness protection, liability of legal persons, the return of illegally transferred funds and international cooperation.

A General Assembly Ad Hoc Committee on the elaboration of an anti-corruption convention convened for the first time in Vienna from 21 January to 2 February 2002, to begin work on drawing up a draft treaty. The Committee will meet again in Vienna in June.

What the Convention would do

The content of the proposed Convention against Corruption remains to be written. But indications of some areas where agreement might be reached on potential provisions came from a 1999 meeting of the UN Expert Group Meeting on Corruption and its Financial Channels. Convened under a mandate from the UN Economic and Social Council, the Expert Group stressed the need to persuade insufficiently regulated financial centres to adopt rules that will allow them to participate in international efforts to trace and act against the proceeds of corruption. The Group concluded that bank secrecy and tax provisions at the national level should not hamper international anti-corruption efforts, and urged the supervision of financial systems and activities according to internationally accepted principles. Further, financial institutions should be required to accurately identify their customers, to exercise vigilance and to report suspicious transactions.

Measures to recover funds illicitly exported by corrupt leaders would need to address a series of practical difficulties, according to a report issued early in 2002 by the UN Secretary-General [E/CN.15/2002/3]. Such transfers generally involve immense sums and a high level of uncertainty as to their sources, current locations and who the legitimate beneficiaries of repatriation should be. In addition, a Government seeking repatriation may not have the necessary expertise or resources to trace funds that have passed through a series of multiple jurisdictions, electronic transfers and other sophisticated money-laundering maneuvers.

Existing measures

No comprehensive anti-corruption treaty of global scope currently exists. A number of related international and regional efforts are underway, however, as summarized below. [For a more comprehensive treatment, see Technical Note number 2 - document A/AC.257/27/Add.2 -prepared by the UN Secretariat.]

The UN Convention against Transnational Organized Crime was opened for signature by Member States at an October 2000 ceremony in Palermo, Italy. Under the Convention, governments are required to treat the following as serious offences (generally considered to warrant prison sentences of four or more years): participation in a group engaged in cross-border crime; corruption or intimidation of public officials, judiciary or witnesses; and money laundering (if the laundered funds are proven to be derived from criminal activity). For the first time in an international convention, businesses are liable for prosecution and subject to severe economic penalties. The treaty also contains measures to widen the reach of extradition and tighten international cooperation in tracking down and prosecuting suspects. It will come into force when 40 countries have ratified it. As of January 2002, six countries have done so.
Anti-money laundering provisions are found as well in the 1988 UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (also known as the Vienna Convention, in reference to the city in which the agreement was negotiated).
In 1997, the Organization for Economic Cooperation and Development adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. This legally binding treaty obliges signatories to treat the offer or promise of a bribe as well as its acceptance as criminal offences under national laws, and to facilitate mutual legal assistance and extradition. The OECD treaty entered into force in 1999, with the ratification by 33 of the original 34 country signatories. Although open to adherence by both OECD and non-OECD members, most developing countries have preferred to commit themselves to measures promulgated by a body with universal membership, such as the United Nations.
The OECD established the Financial Action Task Force on Money Laundering in 1990. The "Forty Recommendations" of the Task Force, drawing in part on the Vienna Convention, set standards for national legal systems, banks and financial institutions, such as in the areas of customer identification and record keeping. Guidelines are set for international cooperation. The Task Force is reviewing its recommendations in 2001-2002 and will revise them at the conclusion of that period.

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