Select Committee on International Development Minutes of Evidence

Memorandum submitted by the Department for International Development


  1.1  Governments everywhere are under pressure to take action against corruption. Across the world, the public, the private sector and governments are increasingly aware of the damage corruption brings to their economies, politics and to the lives of the people, especially the poor. Many countries are beginning to take action but progress will depend on maintaining a concerted global effort in developed and developing countries.

  1.2  The nature and impact of corruption are increasingly understood. There is a growing understanding in both developed and developing countries that corruption has adverse impacts on investment and growth. Cross country studies by the IMF and World Bank show that overall economic growth and investment levels are lower in countries with high levels of corruption due to the uncertainty created, the costs of bribes and time consuming bureaucracy. [1]

  1.3  The evidence of the impact of corruption on poor people is also striking. Participatory poverty assessments in 23 developing countries[2] consistently show that corruption reduces the access of the poor to basic services. Essential medicines and supplies go missing. Unofficial payments are often required for health, education and other services. Individuals go without services as a result. In many countries where the justice system is affected by bribery the poor are unable to obtain the protection of the law and their security is threatened by those who should protect them. This so-called "petty" corruption affects poor people especially. They are most often the victims and they are the most vulnerable.

  1.4  "Grand" corruption that involves leaders, politicians, senior officials and entrepreneurs in developing and transitional countries also undermines development and economic progress. This can take many forms. Bribes flow from developed country firms in order to win contracts or seek other favours from politicians and officials. Sometimes the corruption involves looting public assets within the country. It always leads to poor policies, discriminatory application of regulations, tax evasion and wasted resources. Corruption obviously leads to spending on sub-optimal projects. Cumulatively it holds back economic development and perpetuates poverty.

  1.5  This kind of corruption is usually supported by money laundering and together they form a cycle of interdependent and illegal activity. Corruptly acquired money is recycled through the international financial system so that it reappears "laundered" as apparently legitimately held funds very often in the developed world. All parts of this cycle need to be tackled if corruption is to be curbed effectively. Action needs to be global, as corruption can originate in any country; and those with corruptly acquired funds seek out weaknesses in international systems designed to prevent laundering. Banking secrecy or lax anti-money laundering regimes can be used to access the global financial system.

  1.6  Effective action therefore requires international cooperation between developed and developing countries and by countries within their own regions. Governments need to work in their own countries in partnership with the private sector and civil society.

  1.7  NGOs and civil society have played an important part in giving greater prominence to corruption and the need for international and national action. International organizations and development agencies are also beginning to realise that they will only have much greater impact if they collaborate. There has been an encouraging growth in collaborative arrangements affecting most aspects of anti-corruption and money laundering work.

  1.8  It is not only poor people and developing countries that stand to benefit from efforts to curb corruption. Corruption distorts competitiveness and constitutes an unfair barrier to trade. Curtailing bribery in international trade would help prevent the damage to the interests of legitimate businesses which otherwise suffer from reduced sales and market share. Wealthy countries are also affected when corruption flows through financial centres such as London. Failure to attack corruption and the associated money laundering could do substantial damage to the reputation of these centres.

  1.9  The scale of the problem is very great but the prospects for change have never been better. In the last five years there has been a transformation of attitudes towards corruption. Governments are increasingly aware of the costs of corruption and are more willing to take action. This commitment now needs to be translated into action.

  1.10  In parallel with national action there is increased activity at the international level. The anti-bribery conventions of the OECD and the Council of Europe illustrate a new commitment to action by developed countries. Both developed and developing countries are tackling money laundering in Europe, the Caribbean and elsewhere. Parts of the multinational private sector see the establishment of integrity standards as important for their reputation and business. The Government believes it is important to maintain the momentum for change by continuing to support action in all of these areas. More needs to be done to ensure full implementation of these initiatives.

  1.11  Several Government Departments are involved in efforts to curb corruption. The Treasury has oversight of action against financial crime and money laundering. The Home Office leads on the development of criminal law relating to bribery, money laundering and asset recovery. The DTI is responsible for UK commitments under the OECD Convention on bribery in international trade and for improving corporate governance in the UK business sector including adoption of codes of conduct relating to transparency and integrity. DFID promotes action on corruption in developing countries as an essential measure for improved poverty reduction. It provides technical and financial support for programmes to bear down on corruption and money laundering work in developing countries and internationally. DFID also seeks to ensure that other departments take account of development considerations when developing policy on corruption.

  1.12  This paper sets out the position of the Government on corruption in general and specifically as it affects developing and transitional countries. Sections 2 and 3 set out the policy and response being made by government in general and by DFID in particular. Section 4 outlines collaborative efforts between development agencies. Sections 5 and Section 6 deal with the global response to combating corruption particularly bribery by international business and money laundering. Section 7 describes the efforts of the UK private sector to prevent corruption affecting their own activities. The final section explains how development agencies can protect development assistance programmes from corruption.


  2.1  The Government has been developing a multipronged approach to guide its efforts in curbing the effects of corruption on international development. The key strategies are to:

    (i)  support anti-corruption strategies in developing and transitional countries committed to effective anti-corruption strategies;

    (ii)  drive out bribery from international trade and business;

    (iii)  deter laundering of funds corruptly acquired in developing countries;

    (iv)  protect development assistance from corruption.

  2.2  Governments in developing and transitional countries need to take the lead responsibility for addressing corruption in their countries. The international development community and developed countries also have an important role to play. Developed countries need to reduce their contribution to international corruption and constrain money laundering. International development agencies should support policy and institutional changes in developing countries and the development of the capacity in the state, civil society and private sector to address corruption.

  2.3  These efforts will be more effective in this area as in many others, if international development agencies work in close collaboration and avoid duplication and differences of approach. A key element of government strategy is therefore to work closely with the international financial institutions and to encourage greater co-ordination between the anti-corruption efforts of bilateral development agencies. This has been a weak area in the past but progress is now being made.

  2.4  The Government also recognises its responsibility for combating bribery in international trade caused by UK companies and the laundering of the proceeds of corruption through UK financial systems and institutions. Existing anti-corruption and anti-money laundering laws are under review and a higher priority is being given to investigating and prosecuting offenders.

  2.5  New legislation is being considered which will clarify the law on bribery by British firms and nationals. The Government has ratified the OECD Convention which seeks to eradicate bribery of public officials by international firms. The Convention is regarded as the primary international mechanism for dealing with bribery in trade. Our objective is to encourage its adoption by non OECD Countries and to push for full implementation by existing signatories. UK compliance with the Convention had been criticised in the OECD peer review and UK law will be updated and clarified taking into account our obligations under the Convention.

  2.6  The Government has recently been reviewing the law on money laundering and asset recovery with the aim of closing loopholes in the law and strengthening its enforcement. These include recent studies conducted by the Performance and Innovation Unit (PIU) of the Cabinet Office and an on-going review of mutual legal assistance. Improving compliance with the law will include strengthening oversight and investigative bodies such as the Financial Services Authority, the Serious Fraud Office and the National Criminal Intelligence Service (NCIS).

  2.7  International collaboration in the area of money laundering is crucial to the success of efforts to control the problem. The intergovernmental Financial Action Task Force (FATF) is encouraging harmonisation of laws, cooperation between jurisdictions and exchange of information between governments. The Government is a member of FATF and as part of its anti-corruption effort it supports the extension of FATF-type arrangements elsewhere in the world. A key objective over the next few years is to support the work of anti-money laundering groups in Asia and Africa and to build on the successful establishment of groups in the Caribbean and Central and Eastern Europe.

  2.8  Development programmes can themselves be vulnerable to corruption in aid procurement and misuse or diversion of development assistance. DFID has been improving procedures, upgrading its systems and training staff to ensure that procurement processes are open, transparent and free from bribery and that financial controls and audit procedures are tight enough to detect malfeasance and attempted corruption. It supports the strengthening of procurement systems in international development institutions and in developing and transitional countries.


Anti-corruption Strategies

  3.1  Strategies for tackling corruption effectively in most countries will include three main elements. The first involves curbing the discretionary powers of politicians and officials and thereby reducing their opportunities for corruption. The second involves reinforcing the positive incentives for higher standards of integrity and professionalism in politics, government and the private sector and eliminating the incentives for corrupt behaviour such as poor pay. The third element involves increasing the constraints on corrupt behaviour by holding corrupt individuals and institutions to account, by strengthening public and political pressure for such action and by strengthening anti-corruption laws and the state institutions responsible for investigating and prosecuting cases of corruption.

  3.2  The need for this kind of strategy is confirmed by World Bank studies[3] that illustrate that low pay, poor management and weak accountability in the public service are associated with higher levels of corruption. Corruption flourishes where there is a low risk of detection and punishment and the benefits of corruption are large in relation to public service salaries.

Reducing Opportunities for Corruption

  3.3  In many countries the implementation of law and policy allows multiple opportunities for ministers and officials to exercise their discretion in using their authority. Where the temptation is present and the constraints inadequate, they may use these powers to extract bribes in return for favourable legal, tax and regulatory decisions. Policy and institutional reforms that limit the opportunities for exercising discretion in decisions and reduce face-to-face interactions help reduce corruption.

  3.4  The old overextended and highly centralised states created a host of opportunities for corruption. Breaking up state monopolies, liberalisation and privatisation, removal of tax exemptions, and streamlining of business licensing requirements are all part of the changes required. But in some cases the process of privatisation was not handled well and it gave rise to new opportunities for corruption. Privatisation therefore needs to be carefully planned and executed to avoid creating new opportunities for corruption.

  3.5  Increasingly development efforts seek to create effective government systems which more effectively deliver services, provide appropriate regulation and impartial law enforcement. Effective governance requires reduced corruption. DFID is supporting the reform of tax systems and the strengthening of revenue administrations in South Africa, Malawi, Zambia, Tanzania, Uganda and Mozambique. This has reduced the scope for exemptions to be granted on imported goods by ministers. Opportunities for tax evasion through bribery were also reduced when face to face contact between taxpayers and revenue officials was limited; tax declarations were subject to more rigorous checking through computerised systems; and far fewer forms had to be completed by taxpayers and approved by officials.

  3.6  Improving other government systems is also important. More rigorous procurement systems that are open to public scrutiny reduce the opportunity for companies to secure contracts through bribery. Open and merit-based recruitment and promotion in the public service also reduce the opportunities for patronage.

see also Hellman, J et al "Seize the State, Seize the day". An Empirical Analysis of state capture and corruption in Transition Paper presented to World Bank Annual Conference, April 2000 and also Stapenhurst and Kpundeh "Curbing Corruption Toward a Model for Building National Integrity" World Bank, 1999.

Altering The Incentives for Corruption

  3.7  It is equally important to address the incentives for corrupt behaviour. Much corruption in poorer countries (and some developed countries) has its origins in politics. Vote buying is commonplace, either directly or through projects apparently funded by the local politician. Governments have been pressed to adopt multiparty systems with few limits on electoral expenditure. Such limits need to be popularised and have the support of political parties and parliaments, combined with tight monitoring, in order to reduce the incentive to steal public resources or sell favours to the private sector.

  3.8  In Uganda, Kenya and Zambia, DFID support through local NGOs has helped establish a more effective lobby for increased action on corruption, while in Zambia the programme for education on corruption is seeking to build an effective working relationship between the anti-corruption commission, government departments and civil society.

  3.9  When pay is below a living wage, public sector staff are bound to seek other ways of maintaining their families. Low pay also leads to low morale and bribes are less likely to be resisted. But it is not the very poor who tend to be the most corrupt. Managers and professionals have more opportunity. Better management systems, combined with adequate pay, improve standards of honesty in the public services.

  3.10  A number of developing and transitional countries are addressing the problem of incentives through public service reform. A key aim is typically to improve pay and to finance these improvements (which would not otherwise be affordable) by reducing the numbers of staff whilst minimising adverse consequences for the individuals involved by making severance payments. Associated efforts to improve management capacity and strengthen personnel systems, financial controls and service delivery systems are also critical for improving effectiveness. DFID is supporting programmes of this type in India, Tanzania, Kenya, Uganda, Zambia, South Africa, Ghana and Mozambique. Efforts to improve public administration are also being supported in Eastern and Central Europe.

  3.11  The overall record on Public Service Reform is mixed but where there is political commitment to these programmes, they have made considerable progress. In Tanzania average public service salaries are up by 70% in real terms and in Uganda by a factor of ten since 1991. Together with management changes this has improved motivation and reduced the pressure for moonlighting and petty corruption. Opportunities for corruption are gradually being closed off as financial systems are improved and better payroll management reduces the number of "ghost" workers.

Increasing Constraints and Sanctions

  3.12  International experience suggests that strengthening oversight and sanctions through independent, well-resourced and powerful public bodies, such as audit offices and anti-corruption commissions can reduce corruption. But corruption is greatest where the law enforcers are themselves corrupt and act with impunity. In such cases, cleaning up the law enforcers—the judiciary, the police and regulatory bodies—is both a priority and extremely difficult.

  3.13  A number of countries including Malawi, Zambia, Uganda and Sierra Leone have projects underway, which DFID is supporting, to strengthen anti-corruption laws and establish independent anti-corruption commissions. UK support is directed to building up the capacity of these commissions to educate state institutions on anti-corruption techniques, to detect and investigate instances of corruption and to prosecute corrupt officials and ministers. An important test of commitment is whether governments dismiss corrupt ministers and allow them and senior officials to be prosecuted.

Implementing the DFID Anti Corruption Strategy

  3.14  The UK, through the international development programme, is ready to support governments that are committed to bearing down on corruption. Indeed such a commitment is a pre-requisite for development assistance. In countries where corruption is a major problem, governments need to translate that commitment into a well-articulated anti-corruption strategy and to implement it. The Government is ready to support the development of such strategies and the wide range of governance measures that may form part of a comprehensive programme. DFID country strategy papers include an assessment of the scale and nature of corruption and of government's willingness to tackle it.

  3.15  The development of effective anti-corruption programmes and the existence of accountable financial systems is a precondition for many development agencies, including DFID, to move to sector-wide strategies and budgetary support. In these cases, DFID establishes special project and audit arrangements to safeguard UK taxpayers resources and their developmental use.

  3.16  Where developing and transitional country governments are unwilling to make the commitment required to address corruption, the level of development assistance provided is reduced. DFID makes every attempt to protect programmes that benefit the poor by channelling support through NGOs, local government and other agencies but such support can not lead to the improved government systems necessary to improve economic performance and services for all citizens and to make reform sustainable.

  3.17  In order to enhance DFID's effectiveness in supporting developing countries, in co-ordinating with international initiatives and collaborating in the Government's wider contribution to tackling corruption, DFID has appointed an Anti-Corruption Co-ordinator. DFID also plans to establish an anti corruption resource centre that can provide expertise and practical guidance on anti-corruption efforts.


  4.1  The effectiveness of support for anti-corruption programmes would be substantially enhanced by better co-ordination between development agencies. DFID is working with the international financial institutions and the bilateral donors to develop a common approach and to increase direct collaboration on anti-corruption work with joint donor funding of anti-corruption programmes in developing and transitional countries wherever possible.

Collaboration Through Poverty Reduction Strategy Processes

  4.2  A further key objective is to build consensus between governments, private sector and civil society on the need for action against corruption and the nature of the measures. An important opportunity for this is presented in the preparation of Poverty Reduction Strategies (PRS). These are becoming key documents, setting out how resources will be used to make progress toward the international development targets. The preparation of a full PRS is led by governments with the active participation of the private sector and civil society.

  4.3  While no rigid guidelines have been set for a PRS, it is expected that countries will address major impediments to poverty reduction such as corruption. DFID is proposing to the IMF and the World Bank and to the countries concerned that, where appropriate, the PRS should include an assessment of corruption and set out action to tackle the problem. The Bank has agreed to include these suggestions in future guidance. Commitments and plans for anti-corruption programmes can also be assessed when the PRS is presented to the IMF and the World Bank Boards.

Working With International Institutions

  4.4  In 1996 the World Bank's President spoke about the "cancer of corruption" and its devastating effects on development, and committed the Bank to take action. The Government supports the Bank's stance and its anti-corruption strategy which has set the standard for other development agencies. This has four main elements:

    —  preventing fraud and corruption in Bank projects and programmes;

    —  assisting countries that ask for help on corruption;

    —  mainstreaming corruption issues into country analysis and lending decisions;

    —  contributing to international efforts to tackle corruption.

  4.5  The Government has also strongly supported the more prominent role on corruption that the IMF and the World Bank have taken in recent years. At the 1997 Annual General Meeting of the IMF and the World Bank both organisations jointly highlighted the importance of better governance and the threat that corruption poses to sound economic management and economic development. In a policy statement released in 1997 the IMF set out the contribution it could make to improving governance in member countries including tackling corruption. Since then the IMF organisation has been more proactive in advocating anti-corruption policies and institutional change to eliminate opportunities for corruption. Corruption has been a major factor in lending decisions in Indonesia and Kenya.

  4.6  The IMF Fund has continued its efforts in detecting and acting upon incidents of both mis-reporting and misuse of its resources. The Fund has implemented requirements that all countries making use of its resources will publish annual central bank financial statements that are independently audited in accordance with international standards. They have also taken extensive measures to deal with incidents of mis-reporting.

  4.7  The UK encourages the IMF to take into account the level of corruption and the degree of commitment to tackle corruption. In the case of Kenya, the UK supported a suspension of new commitments until that Government made stronger and more convincing efforts to tackle corruption. This stance was supported by all the major donors and, a multi donor Economic Governance Group was established to co-ordinate the donor response and to promote dialogue on governance issues.

  4.8  The World Bank introduced an anti-corruption plan in early 1999 which focused on improving financial and procurement systems in borrowing countries as part of a wider effort to tackle corruption. Internal financial management and audit arrangements have also been enhanced. Changes have been made to the investigation of suspected bribery in the bidding or execution of contracts and its policy on the exclusion of companies from future tenders where there is convincing evidence of corruption or fraud. Whistle blowing facilities and an independent investigation committee have been established. 44 companies and nine individuals have been debarred from future procurement.

  4.9  A review by the US General Accounting Office in April 2000 of Bank controls over project lending concluded that the Bank had made significant progress in implementing effective management control systems. However concerns were raised about the failure of borrowers to comply with Bank procurement rules due to managerial weaknesses and lack of skilled staff. Also the Bank did not have a system for allocating its anti-corruption assistance among borrower countries based on the risks involved and monitoring was found to be generally weak. The review concluded that a more aggressive approach was needed to further strengthen management systems and to build borrowers capacity to fight corruption. It will take time for these efforts to have an impact and more needs to be done to extend programmes of anti-corruption into World Bank country programmes.

  4.10  DFID is working more closely with the Bank at country level to promote increased donor co-ordination and to press for firm commitments and action to address corruption. A collaborative programme is being developed which will support the efforts of Bank staff in 14 countries in Africa, Asia and Eastern Europe over the next few years. This will provide expertise to countries to help design anti-corruption plans which can be subsequently implemented with assistance from multilateral and bilateral donor programmes. This will be led by the World Bank Institute which aims to develop and share knowledge on corruption issues with developing countries and to facilitate their efforts to develop anti-corruption programmes.

The Utstein Initiative

  4.11  In May this year the Utstein group of donors which includes the Governments of the UK, Norway, Netherlands and Germany issued a joint statement setting out their proposals for tackling corruption in poorer countries and for a collaborative programme.

  4.12  Utstein members have committed themselves to give a higher priority to addressing the problem of corruption through their development assistance programmes and to do this in close collaboration with each other and with the IMF and World Bank. The Utstein group is also working to reduce the administrative burden on developing countries of multiple donor programmes and to increase the effectiveness and impact of their assistance. DFID is working with other Utstein members to agree common policies, to harmonise procedures and to provide joint funding and shared programme management in the area of anti-corruption.

  4.13  Utstein partners have agreed an action plan. It covers co-ordination of programmes of support to developing and transitional countries that are committed to reform and combating corruption. This includes one member taking the lead in each developing country to coordinate Utstein support and joint financing of new work by the World Bank Institute to generate political support for reform, as described in paragraph 4.10 above. As part of the planned assistance, Utstein donors will support the strengthening of financial management and procurement systems in developing and transitional countries.

  4.14  Utstein Partners will also join DFID in developing a resource centre in their countries dedicated to anti-corruption and money laundering expertise. The centre will help co-ordinate activities, develop networks, identify sources of expertise and act as a source of information and advice.


  5.1  The increasing global concern with corruption has resulted in the formulation and adoption of a number of international anti-bribery conventions. As well as signaling the condemnation of corruption by the states which are party to them, these have highlighted the importance of halting the practice of companies offering bribes to win business abroad. The Government strongly supports these initiatives because as they begin to bite they can help constrain one of the main sources of grand corruption in developing and transitional countries.

OECD Convention

  5.2  The OECD Convention on the Bribery of Foreign Public Officials (1997) represents a major step forward in tackling international corruption. So far 34 countries including the UK have signed the Convention. Each signatory country takes responsibility for the activities of its companies and what happens on its own territory. Signatories are required to "establish that it is a criminal offence under its law for any person to intentionally offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official".

  5.3  The 1997 Revised Recommendation on Combating Bribery in International Business Transactions also sets out measures which countries should take in the fields of accounting and public procurement. These require companies to maintain adequate accounting records, adopt internal company controls, and undergo external audits. In the area of public procurement, it is recommended that companies found guilty of bribing foreign officials be suspended from future public contract bids. Further, countries should cooperate in investigations and other legal proceedings in order to efficiently prosecute cases in which foreign public officials have been bribed.

  5.4  The Revised Recommendation also urges prompt implementation of the 1996 Recommendation on Tax Deductibility of Bribes to Foreign Officials which calls on countries to disallow the deductibility of bribes to foreign public officials.

  5.5  The Convention is open to non-OECD countries as well. As of June this year 21 countries had ratified the Convention including two non member countries (Brazil and Argentina). The inclusion of non member countries is a welcome trend. If non members can continue to be attracted to the Convention there is potential for it to have a steadily growing impact and geographical spread. The UK Government also regards corruption as a constraint on international trade and a key UK Government objective is to create a level playing field by extending the scope of the Convention.

  5.6  The Government also supports the commitment made by the OECD to monitor progress comprehensively and rigorously. The Convention includes a process of peer review of implementation carried out through the OECD Secretariat. The first phase has been assessing the conformity of signatory country legislation with the Convention. This phase will be completed by the end of the year and the OECD Ministerial meeting in June concluded that considerable progress was being made in most countries. Phase 2 will focus on the application of the law in practice.

  5.7  The UK is represented by DTI and the Home Office on the relevant OECD committees and will continue to play an active part in the management and supervision of the review process. The growing demands of the monitoring regime have stretched the resources of the OECD Secretariat. The Government, together with other Utstein partners, has indicated its willingness to provide additional finance to the OECD Secretariat for the extension and monitoring of the Convention and for awareness raising activities.

Implementation of the Convention by the UK

  5.8  The UK ratified the OECD Convention in November 1998 on the basis of existing statute and common law. Work was already underway on a review of the reform of the existing law of corruption and this review took account of the UK's international obligations. The Home Office published proposals for updating of the UK law on corruption[4] in June 2000 which would involve strengthening the law and consolidation of the existing Prevention of Corruption Acts (1906 and 1917) and the earlier Public Bodies Corrupt Practices Act of 1889.

  5.9  Subject to the outcome of the consultation process, these proposals will be incorporated in a bill which will be introduced when Parliamentary time allows. Consideration is being given to parallel changes to the law in Scotland which is now the responsibility of the Scottish Executive.

  5.10  When enacted the law will include a clear definition of the concept of corruption and enable its application to both the public and private sectors. The law will have wider applicability and there will be no doubt under the law that it is an offence to bribe a foreign public official to further a business transaction. The Government has also proposed that, exceptionally, this offence should be subject to extra-territorial jurisdiction: that is corrupt acts by UK nationals will be subject to prosecution in the UK courts including when the bribe is paid abroad. In addition the Government has proposed that jurisdiction should be taken over offences of bribery where any "relevant event" takes place within the jurisdiction; this is a similar pattern to the one provided for in Part 1 of the Criminal Justice Act 1993 in respect of offences of dishonesty.

  5.11  The OECD peer review of the UK was completed earlier this year. Doubts were expressed about whether existing legislation adequately addressed bribery of foreign public officials and the review urged the UK to adopt appropriate legislation as a matter of priority. The review also noted that new legislation was under consideration. The review recommendations will be fully addressed by the proposed legislation.

Council of Europe and Organisation of American States Conventions

  5.12  The Government strongly supports the development of regional Conventions that which can extend efforts to control corruption and bribery more widely. The Council of Europe's Criminal Law and Civil Law Conventions on Corruption are examples of attempts to create common standards for European countries in their relations with each other and with other countries in the region (the membership of the Council of Europe includes Eastern Europe and former Soviet countries). The Government has signed both Conventions.

  5.13  The Council of Europe Conventions create an opportunity for increased international harmonisation of legislation and mutual assistance between European countries with stronger enforcement of anti-corruption legislation. The Criminal Law Convention covers domestic and trans-national bribery, commercial bribery, trading in influence and money laundering. Its main features are requirements to criminalise:

    —  active and passive corruption of public officials;

    —  corruption of elected representatives of domestic bodies;

    —  corruption of foreign public officials, foreign elected representatives and members of international courts.

  The Civil Law Convention requires states to provide in their domestic law for civil compensation claims.

  5.14  Implementation of the Council of Europe Conventions is monitored by the "Group of States against Corruption (GRECO) which is part funded by the UK. GRECO had 22 members as of July 2000. Its function is to assess the compliance of its members with the requirements of the Convention. The UK delegate to the Council of Europe sits on its committee, and HM C&E, Inland Revenue and NCIS representatives all serve as national experts on the evaluation teams. The first round of evaluation (2000—01) will include visits by an evaluation team to member countries and a questionnaire which should be issued later this year.

  5.15  The Inter-American Convention Against Corruption, developed through the Organisation of American States sets out common principles including acting against bribery by firms. Such Conventions can promote mutual cooperation between governments on a regional basis. Similar conventions could be developed in other regions.

  5.16  The Government also supports efforts within the context of the annual meeting of Asian and European countries (ASEM). A UK/Thailand anti-corruption initiative is currently being developed which will promote exchange of best practice between all ASEM members.

  5.17  The UN established a Committee in 1998 to develop the draft of an international Convention against transnational organised crime. The draft Convention calls on member states to take action so that bribery involving public officials and the laundering of the proceeds of bribery become criminal acts. The General Assembly will be asked to approve the Convention later this year. A resolution calling for the preparation of a separate Convention specifically addressing corruption is also expected to be approved.

1   World Development Report, The State in a Changing World, 1997 p. 103. Back

2   Source: Global Synthesis Consultations with the Poor. World Bank 1999. Back

3   World Development Report, The State in a Changing World, 1997 p. 104. Back

4   "Raising Standards and Upholding Integrity: The prevention of Corruption". The Government's proposals for the Reform of the Criminal Law of Corruption in England and Wales, Cm 4759, June 2000. Back

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