Who Should Get the Money from Settlements Involving Corrupt Multinational Firms?

Welcome everyone! This is Adrian Fozzard and Tim Steele. We both work with the Stolen Asset Recovery Initative. We will be answering these questions together.

Yes there is an international agreement that 147 countries have ratified: the United Nations Convention against Corruption. Among the countries that have yet to ratify are four members of the G20: Saudi Arabia, India, Japan and Germany.

As for the systems for tracking these kinds of crimes, the answer is no, there is no international system. Corruption crimes are recorded by national authorities. The quality of record keeping and extent of public reporting varies greatly: some countries keep up to date statistics and records of cases that have gone to court, in other s little attempt is made to consolidate court records. StAR is currently compiling a record of corruption related international asset recovery cases, but these represent a subset of the total population of corruption cases. For the specific crime of bribery of foreign public officials, OECD countries report on convictions last year. Internally the OECD Working Group on Bribery reports on the progress of cases through a tour de table. This exchange of information is intended to facilitate cooperation between countries. The information is not made public.

National authorities are responsible for the prosecution of corruption crimes. There are mechanisms to facilitate international cooperation where these crimes cross international borders, through global conventions (UNCAC), regional conventions (the OECD convention, and the InterAmerican Convention) and bilateral agreements between countries.

Transnational bribery inolves bribe givers and bribe takers in more than one jurisdication. Typically, a foreign firm bribes a public official in order to gain a contract, a concession or other economic benfit. We can bring justic to the victim coutnries by: prosecuting the individual responsible ofr giveing the bribe; prosecuting the company that is responsbile for giving the bribe where they have been complicit or negligent; recovering the proceeds of the bridbery, which may include the value of the birbe, the value of contrct and possibly additinal fines or sanctions; and finally, by prosecuting the public official that takes the tbribe. An effective sanctions regime, accompanied by measures to recover the economic benefits to the bribe giver and any damages to the victim country, should provide an effective deterrence.

We can certainly point to successes and a clear trend towards a growing number of successful international corruption cases. Transparency Internalional complies interesting statistics on the number of investigations underway in OECD countries. These clearly show that the number of investigations is tending to increase ove time: there are countries that are in lead, the USA is defintely way ahead of other countries in terms of hte number of successful proecutions and hte value of the sanctions imposed on the companies involved. This clearly having a deterrence effect: a whole industry has now developed to support companies strengthen their internal complainance regimes. In our field, asset recovery, we can point to the big name cases that have been dealt with over the last decade or so: Abacha, Montessinos for example.

There's also a growing number of cases with more countries getting invlved. In the last couple of weeks, assoeciates of James ibori, a former Nigerian Governor, were convicted of laundering the proceeds of corruption in the UK. Obviously there's much more that can be done, more countries need to step up to the plate, but we're optimistic,

Of course, this depends on what the national authorities of the countries that recover the proceeds of corruptin want to do with the money they recover. The UN COnvention against Corruption makes it clear that this is a sovreign decision. That said, countries that have involved scivil society in these decisins and ensured that mechanisms are in place to use these funds transparently have benefitted from this approach.

All fianncial transactions are at risk of fraud. I do not see this as being a reason not to recover the proceeds of corruption and secure reparations for damages caused by corrupt acts. The key here is to ensure that mechanisms are in place to verify how funds are used and ensure accountability. As we mentionned in the previous answer, civil society can play a very useful role here.

I can't answer the specifics of these cases. The USA is one of several countries that has established a fund for the proceeds of crime and part of these funds are used in financing law enforcement efforts. One of the key issues for us is how to promote the repatriation of the proceeds of corruption to the countries that have been the victims of the crime. We are currently working with the OECD and OECD member countries to explore how to quantify the procededs of bribery. That's oen of the first steps in working out how to streamline the process of repatriation and restitution.

Traditionally the proceeds of corruption have been returned the state from which the money has been stolen. In most cases the state is the victim of the crime. However, there may be other victims from corruption - eg. patients that received out of date and inneffective medicines. The mechanisms by which thse individuals can recver damages will depend on the legislation in their country. The UN Convention encourages countries to put in place legislation that would allow vicitims to puruse legal remedies.

The answer depends on whether the case involved a Bank-financed activity or not. For Bank-financed activities, the Bank has an Integrity Vice Presidency which is responsible for investigating all complaints of bribery or other corrupt practicdes. These investigations may lead to sanctioning of the individuals and firms and involved. The results of investigations are also shared with national authorities concerned so that they can follow-up, in some cases that may lead to legal prosecutions.

For cases that do not involve Bank-fiannced activities, the national authorities can request assistance from StAR. We are focused on the recovery of the proceeds of corruption for developing countires. StAR can help countires cooperate with jurisdictions where the bribe-giver is to pursue criminal or civil proceedings aimed at recovering hte proceeds of bribery.