“Anti-corruption: measuring success” Collingwood Thompson QC published in The Law Society Gazette

On 12 May David Cameron will host a much publicised Global Anti Corruption Summit in London.

According to a Government Press Release:

“It will be the first Summit of its kind, bringing together World Leaders, Business and Civil society to argue a package of practical steps to:

• Expose corruption so there is nowhere to hide.
• Punish the perpetrators and support those affected by corruption.
• Drive out the culture of corruption wherever it exists.”

Given that transparency is likely to be a key theme of the Summit, especially in relation to the beneficial ownership of companies and trusts, it is ironic that details of what these practical steps are, or indeed even who will attend the Summit, appear to have been so far kept confidential.

An issue that will undoubtedly be debated at the Summit will be the role of the United Kingdom’s Crown Dependencies and Overseas Territories as tax havens and also their provision of off-shore companies and trusts which have been undoubtedly used to conceal corruptly acquired assets. Anti-corruption campaigners have taken the view that the United Kingdom could do more to insist that these Territories maintain public registers of beneficial ownership of companies and trusts a move that has been resisted. So far the maintenance of a register of beneficial ownership of companies that is open to inspection by overseas law enforcement agencies is the limit of their agreement. Whether their stance will change is open to doubt.

This highlights one of the difficulties facing Mr Cameron at this Summit. Whilst his campaign against corruption is to be welcomed, the Summit may raise unrealistic expectations as to what can be achieved in the short term in the fight against corruption. The danger is there may be a major difference between what the official communiqués will say, and the practical actions taken thereafter.

A vivid illustration of this expectation gap comes from the 2005 United Nations Convention Against Corruption, to which the United Kingdom was a signatory some 10 years ago. In the foreword to that Convention Kofi Annan, the then Secretary General of the UN, wrote:-

“These provisions – the first of their kind – introduce a new fundamental principle as well as a framework for stronger co-operation between States to prevent and detect corruption and to return the proceeds. Corrupt officials will in future find fewer ways to hide their illicit gains…”.

Since 2005 some 140 signatories have adopted the Convention. Yet over 10 years later corruption is seen as having continued to flourish to such an extent that the United Kingdom Property Market, particularly in London, has obviously been regarded as a safe haven for corrupt money, as forcefully pointed out by Transparency International in their recent report “Corruption on your doorstep”.

In fact David Cameron will undoubtedly face some uncomfortable truths at this Summit. There are plainly countries who have signed up to the UN convention who do little or nothing to discourage corruption. Whether these countries will be represented at the Summit remains to be seen. However, the impact that such countries have on the ability of law enforcement agencies to detect and punish corruption is clear.

In April 2016 H.M. Treasury and the Home Office produced an “Action Plan for anti-money laundering and counter-terrorist financing”. In the context of considering whether law enforcement agencies needed new powers beyond those available under the Proceeds of Crime Act 2002, (“POCA”) the paper stated:

“2.3.2 The experience of UK law enforcement agencies in investigating the proceeds of international corruption suspected to have entered the UK in recent years has demonstrated POCA’s limits. In cases in which offences were conducted abroad UK law enforcement authorities are forced to rely on the co-operation of the country in which the offence took place if they are to conduct a money laundering investigation with a realistic chance of successfully securing a conviction. But in many cases the country in which the offence takes place lacks either the will, the capability or the human rights record that would allow effective co-operation to take place. This can result in assets suspected of being the proceeds of crime overseas remaining in the UK out of the reach of our law enforcement authorities.”

This conclusion is in fact supported from another source. Many countries are also signatories to another Convention, namely the 1997 OECD Convention on Combating Bribery of Foreign Public Officials. As of 2015, 41 countries had ratified or acceded to the Convention. In 2015 Transparency International carried out an assessment of the enforcement of the Convention by its signatories. Four countries only (including the US and the UK) were assessed as having active enforcement regimes. A further six countries were classified as only taking moderate steps to enforce the Convention, whereas a total of 29 countries were assessed as having either limited enforcement or little or no enforcement of the Convention. That is a graphic illustration of the problems facing those working in the anti-corruption field.

Allied to this is the issue of making financial sources available to maintain an effective law enforcement presence in relation to combating corruption. In this regard it was disappointing to note that in The Times on Saturday 7th of May there was a headline entitled “Corruption Summit agenda watered down before it starts”. The article alleged that a pledge contained in the original draft of the Summit communiqué “to ensure that national anti-corruption agencies are sufficiently financed from our domestic resource”, had been removed. As those involved in combating corruption know, particularly in relation to foreign officials, these investigations are extremely resource intensive because of their complexity and involvement of multi-jurisdictions. Yet in recent years law enforcement budgets in the UK have been slashed. Consequently the UK’s commitment to fighting corruption has been questioned.

Overall the UK’s and David Cameron’s initiative in organising the Summit is to be commended. However its success will be judged by what follows, not simply on the communiqué issued after the Conference.

Article first published on 11/05/16 in The Law Society Gazette.

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