International law and the fight against corruption.

Author:Llamzon, Aloysius
Position:Proceedings of the One Hundred Second Annual Meeting of the American Society of International Law: The Politics of International Law
 
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This panel was convened at 2:45 p.m., Thursday, April 10, by its moderator, Sabine Konrad of Dewey & LeBoeuf, who introduced the panelists: Ahmed Jehani of the Economic Development Board of Libya; Robert Leventhal of the U.S. State Department; Aloysius P. Llamzon of Ateneo de Manila University Law School; and Glenn T. Ware of PriceWaterhouseCoopers (formerly Chief Investigative Counselor, Department of Institutional Integrity, World Bank). * ([dagger])

INTRODUCTION

By Sabine Konrad ([double dagger])

Corruption ranks among the most significant obstacles to good governance, development, and commerce throughout the world. International law has made headway in the fight against corruption in recent times, but significant progress remains to be made, particularly in countries where economic development is a challenge. This panel assessed the impact that international law has had on fighting corruption to date and considered what the future may hold in terms of progress on this front. In doing so, the panel explored how a growing number of international legal instruments has approached the problem of corruption, assessed the anti-corruption initiatives of international institutions relating to economic development, analyzed the trends and responses to corruption in the developing world, and reviewed the expanding jurisprudence relating to corruption issues in investor-state arbitration.

* The panel would like to thank Jonathan Sussman who served as reporter for this panel.

([dagger]) Mr. Jehani and Mr. Ware did not submit remarks for the Proceedings.

([double dagger]) Associate, Dewey & LeBoeuf.

INTERNATIONAL LEGAL STANDARDS ON CORRUPTION

By Robert Leventhal ([section])

There is now a series of regionally and substantively focused treaties on corruption, culminating most recently in the first global treaty--the United Nations Convention Against Corruption (UNCAC).

As recently as thirteen years ago, none Of these conventions existed. Now there is a wide body of defined and shared standards and measures. These conventions not only establish standards--they also express the highest-level recognition of the problem of corruption and a political commitment to cooperate to address it.

The path to the UNCAC was forged by the 1996 Inter-American Convention against Corruption; the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; the Council of Europe 1998 Criminal Law and 1999 Civil Law Conventions (1); and the 2003 African Union Convention. (2)

There are also EU instruments (3) and important instruments on related issues such as transnational organized crime and trafficking in persons (4), money laundering, etc., as well as "soft" initiatives in Eurasia (5), South Eastern Europe (6), Middle East/North Africa (7), and Asia (8), characterized by shared nontreaty commitments and coordinated capacity building.

We could likely spend all of our time on any one of the conventions. In brief, the InterAmerican Convention was the first multilateral instrument on corruption, and covers a range of optional preventive measures (9), mandatory but limited criminal provisions (10), and mutual legal assistance. At its inception, it lacked a follow-up mechanism, which was finally established in 2000 and is in its second round of peer reviews. (11) The United States is one of the thirty-three parties, and preparations are underway for next review of the United States in June 2008. Cites to implementing legislation and reports on country action are available on the OAS website.

The OECD Anti-bribery Convention is a substantively focused instrument targeting those who pay bribes to public officials to win or maintain business abroad, in effect internationalizing the U.S. Foreign Corrupt Practices Act. (12) The United States deposited its instruments of ratification in December 1998, and the Convention came into effect in February 1999. (13) The thirty-seven parties, which include all thirty OECD countries and seven nonmember countries (Argentina, Brazil, Chile, Bulgaria, Estonia, Slovenia and South Africa) collectively account for 76 percent of world Gross Domestic National Income and 84 percent of world trade.

Apart from requiring criminalization of transnational bribery (14), the convention requires parties to take "books and records" measures, such as prohibiting the establishment of off-the-books accounts and off-the-books or inadequately identified transactions. It requires that sanctions be "effective, proportionate and dissuasive" and that countries establish liability for legal persons. Implementing legislation is publicly available on the OECD website.

The convention has a particularly robust peer review follow-up process including expert site visits, with publicly available reports. Phase I reviews looked at legislation; Phase II is looking at implementation, including institutions, awareness, and application in practice. While the review process is structured and effective, implementation, in legislation and enforcement, could be more effective, including in the areas of:

* Providing enforcement agencies with adequate resources and training;

* Providing for nationality jurisdiction;

* Ensuring penalties are effective, proportionate, and dissuasive; and

* Ensuring clear coverage for bribery through an intermediary.

Most recent developments include the issuance of a publicly available Consultation Paper, seeking input on what steps might need to be taken to strengthen implementation--broken down by criminalization issues and detection/prevention. Also, discussion is underway on making the implementation review process permanent, upon the completion of the Phase I and Phase II reviews for all parties. Finally, the number of parties will likely increase with the invitation to Russia and Israel to join the OECD, which will require them to accede to the convention.

The Council of Europe Conventions are substantively broad but primarily subscribed to by Council of Europe member states in Western and Eastern Europe. The Criminal Law Convention entered into force in 2002 and has thirty-nine parties. It covers a broad range of active and passive bribery of domestic and foreign officials, and of international bodies. It also covers bribery within the private sector itself, account offenses, money laundering, liability of legal persons, and trading in influence. (15) The United States has signed but not ratified.

The Civil Law Convention came into force in November 2003 and has forty-two parties. (16) Novelties include provision for civil law remedies for persons injured by corruption, international cooperation in civil cases, voiding of contracts that effectuate corruption, sufficiency of statutes of limitations, and whistleblower protection.

The Group of States Against Corruption, or GRECO, is not a convention but the body that monitors compliance with the Criminal and Civil Law Conventions and other CoE standards through a process of mutual evaluation similar to the OECD process. (17) Country reports and recommendations are publicly available on the GRECO website upon authorization by the country. A country automatically joins GRECO when it ratifies a CoE Convention. But a country may also choose to participate only in GRECO, but not accede to the CoE Conventions this is the case for the United States. GRECO has forty-six member states, and it continues to grow; in 2007, three new states joined GRECO: Italy, Monaco and the Russian Federation. (18)

The African Union Convention entered into force in August 2006 and has twenty-four...

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