SWITZERLAND

Statement by H.E. Mr. Gian Federico Pedotti

Mr. President,

Ministers,

Excellencies,

Ladies and Gentlemen,

We are gathered here in the prestigious city of Merida for a good reason - to celebrate the conclusion of two years of difficult work. The outcome is indeed a cause for celebration. On behalf of my country, Switzerland, I would also like to proffer my warm thanks to the Government of Mexico for its hospitality and to congratulate it on the excellent organization of this high-level meeting. But the beauties of the historic sites of the Yucatan Peninsula should not divert our attention from the purpose of our presence here: The "cancer of corruption" is undeniably one of the most serious obstacles to the development of nations, and by our respective signatures we are demonstrating our readiness to meet the challenge.

However, we must acknowledge that the most difficult part of our work still lies ahead of us, because corruption is one of those scourges which do not . always reveal the seriousness of their impact. Today, everything leads us to believe that the cases dealt with by the courts are only the tip of the iceberg.

If we accept World Bank figures, nearly 80 billion dollars a year are lost in under-the-table deals and bribery around the world.

This massive global fraud obviously comes at a cost. The first is economic. The growth of these covert transactions means lower tax revenues for a country and a weakening of its capacity to manage the national economy. The mechanisms of competition are no longer respected. It is the corrupters who determine the markets and no longer the most competitive or the most efficient. And of course it is our societies which pay the bill, because the costs of corruption have an inevitable effect on prices. At the level of society, corruption leads to the diversion of enormous sums which should be used for development. Moreover, it is generally recognized that the greater the corruption in a country, the less investment it attracts. This in turn puts the brakes on its economic and social development. Corruption also reduces the confidence of the citizens in their institutions, and a corrupt state is fertile ground for dictators and other demagogues who promise "to restore order".

Mr. President,

Switzerland welcomes the conclusion of negotiations by the ad hoc working group on a convention against corruption because it represents a major step in the international campaign against one of the major problems undermining our societies and sapping confidence in our authorities.

My government calls for the speediest possible ratification by the greatest number of states of this new instrument because it gives the international community another important tool to promote the good management of public affairs. What's more this Convention will make a substantial contribution to improving the rules governing international trade by reiterating the need for more transparence and equity in transactions.

I should also like to emphasize that this is the first multilateral treaty to contain the principle of mandatory restitution of certain proceeds from criminal activities. My country welcomes this progressive measure to which the Swiss delegation contributed actively during the negotiations of the working group.

It is an acknowledged fact that political leaders, high officials and other politically exposed persons (PEPs) choose financial centers outside their own countries to invest national assets. In itself this is not illegal, but in a number of cases these assets are of illegal origin, acquired mainly by corruption or the misappropriation of public funds. Most of the time, such investments are distributed over several countries and financial centers. The problems that arise as a result are on an international scale and can be solved only by the common application of high standards in the investigation of economic and financial fraud.

Through this universal convention, the international community has stated its determination to pursue crime not only where it was committed but also where it was supposed to work to the advantage of the criminals. Now, with the adoption of this new instrument, we are not only equipped with an additional working tool designed to promote criminal justice at the international level, but we are delivering a very clear signal that no one can escape justice: Functions, titles or status should no longer serve as a shield for the illegal activities of ill-intentioned people seeking their own personal enrichment at the expense of society.

Switzerland welcomes this achievement all the more because the adoption of this principle confirms the soundness of its more than 20-year-old national policy in the area of international mutual judicial assistance. However let us not underestimate the difficulties in achieving this goal. They are many. I shall mention only two here.

First of all, there are the investigative efforts needed to determine the origin of suspect funds and whether they are illegal. At the procedural level obtaining the evidence is frequently a long-term process. To enable our legal institutions to carry out their tasks under the best conditions, it is imperative that they operate in complete independence with the support, but without the interference, of our respective governments. And in my opinion this support begins with the dynamic promotion of different measures of international legal assistance. There is still much to do in this field.

Secondly we accept that the restitution of illicit funds involves the common responsibility of the states involved in such procedures. It is a responsibility which alms both to pursue the authors of the crime and to compensate the victims. Even if this principle seems to be self-evident, the reality shows that its implementation is complex and sometimes touches on the political sphere.

Mr. President,

All our efforts to eradicate corruption will be in vain if we do not knuckle down and attack the problem at its roots. To do this, Switzerland feels that the international community and international organizations must continue their efforts to prevent corruption.

Concretely this means, particularly in countries with important financial centers, promoting the adoption and rigorous application of stricter internationally recognized norms and standards relating to due diligence and to knowing the economic beneficiaries of bank accounts (know your customer rules) as well as the origin of the funds deposited. It is also necessary that all countries work unrelentingly to enact all measures enabling the sound and transparent management of public affairs. This last element presupposes not only the function of effective and independent judicial systems removed from all political influence, but also the recognition of the guarantee of freedom of expression and particularly freedom of the press. For civil society, the latter constitutes a guarantee of the transparence of government measures.

Switzerland is convinced that if these principles are applied commonly at the international level, they would have a dissuasive effect and subsequently an undeniable preventive effect on the flight of illegal capital.

The strengthening of preventive measure must be a priority in all areas of state influence. For its part and to cite only the most recent examples, Switzerland has introduced anti-corruption clauses in all development aid contracts, has developed an active information policy for companies working in international markets and has strengthened money laundering regulations.

Mr. President,

Switzerland is convinced that the universal convention against corruption represents progress towards a better application of the fundamental principles governing our legal system. It is a testimony to the common desire to strengthen equality and equity within our societies.

But the success of any international instrument - whatever it is - aiming to fight corruption can be measured against only one standard - its effectiveness in practice. For its part the Swiss government is determined to contribute to the necessary common effort to enable us to observe in the future a drop in endemic corruption, and to achieve clear progress in the application of the principles of good governance in our societies.

Thank you, Mr. President