+(,121/,1(

Citation: 14 Melb. J. Int'l L. 205 2013

Content downloaded/printed from

HeinOnline (http://heinonline.org)
Tue Feb 4 15:58:04 2014

-- Your use of this HeinOnline PDF indicates your acceptance

of HeinOnline's Terms and Conditions of the license
agreement available at http://heinonline.org/HOL/License

-- The search text of this PDF is generated from

uncorrected OCR text.

-- To obtain permission to use this article beyond the scope

of your HeinOnline license, please use:

https://www.copyright.com/ccc/basicSearch.do?
&operation=go&searchType=0
&lastSearch=simple&all=on&titleOrStdNo=1444-8602
 THE INTERNATIONAL LEGAL FRAMEWORK AGAINST
CORRUPTION: ACHIEVEMENTS AND CHALLENGES

JAN WOUTERS,* CEDRIC RYNGAERTt AND ANN SOFIE CLOOTS*

The article provides a tour d'horizon of the current international legal framework against
corruption, which has made substantialprogress over the last two decades. Nevertheless, both
the legal framework and its implementation continue to face challenges, some of which must be
addressed to ensure tangible improvements in the struggle against corruption. Part II of the
article sketches the genealogy of the internationallegal framework regardingcorruption, which
was strengthened by the Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, adopted after United States pressure that followed the
passing of the US Foreign Corrupt Practices Act. Part III outlines the achievements of the main
international anti-corruption instruments, complementing the discussion by highlighting their
main deficiencies. Special attention is paid to the United Nations and Organisationfor Economic
Co-Operation and Development instruments, as well as to the Council of Europe s monitoring
mechanism, the Group of States against Corruption. Asia remains remarkably absent from the
discussion, as the last continent without a regional anti-corruption convention. Anti-corruption
initiatives within the internationalfinancialinstitutions and the most important private initiatives
are also discussed Part IV of the article identifies thematic challenges to the current global
anti-corruption framework: definitional problems and cultural gfi-giving practices;
jurisdictional challenges regarding foreign corruption practices; asset recovery; the link
between corruption and good governance and that between corruption and human rights; and
private sphere corruption.

CONTENTS

I Introduction .......................................................................................................... 206

II A Genealogy of the Global Anti-Corruption Framework......................207
III International Anti-Corruption Instruments...........................................................216
A The United Nations Convention against Corruption....................216
1 B ackground .................................................................................. 2 16
2 R atification Status........................................................................217
3 Scope: Prevention, Criminalisation and International
C ooperation .................................................................................. 2 18
4 M onitoring ................................................................................... 220
5 Independent Domestic Anti-Corruption Authorities..............221
B European Instruments............................................................................... 222
1 European Union ........................................................................... 222
2 C ouncil of Europe ........................................................................ 225
C Other Regional Anti-Corruption Instruments...........................................227
1 Organisation for Economic Co-Operation and
Development ................................................................................ 227

* Professor Dr Jan Wouters is Jean Monnet Chair ad personam EU and Global Governance,
Full Professor of International Law and International Organizations and Director of the
Leuven Centre for Global Governance Studies and Institute for International Law at
KU Leuven.
t Professor Dr Cedric Ryngaert is Associate Professor of International Law at KU Leuven and
Utrecht University.
Ann Sofie Cloots is Research Fellow at the Research Foundation Flanders and
PhD candidate at the Leuven Centre for Global Governance Studies and Institute for
International Law at KU Leuven.

205
206 Melbourne Journal of InternationalLaw [Vol 14

2 Inter-American Convention against Corruption................. 229

3 African Instrum ents...................................................................... 230
D Anti-Corruption Initiatives in International Financial Institutions ........... 231
1 W orld B ank .................................................................................. 23 1
2 Other Multilateral Financial Institutions......................234
E Private Initiatives ..................................................................................... 234
1 Transparency International...........................................................234
2 The International Chamber of Commerce.....................236
3 O ther Fora .................................................................................... 237
IV C hallenges ............................................................................................................ 237
A D efinition ................................................................................................. 237
1 'Corruption' and 'Bribery'........................................................... 237
2 Facilitation Paym ents ................................................................... 239
3 The Local Law Exception ............................................................ 240
4 The Scope of Corrupt Acts Covered by the International
Anti-Corruption Instruments........................................................243
B Extraterritorial Jurisdiction over Foreign Corrupt Practices..............248
1 The Jurisdictional Provisions of the Convention on
Combating Bribery ofForeign Public Officials in
InternationalBusiness Transactions and the United
Nations Convention against Corruption........ ............... 249
2 The United States Foreign Corrupt PracticesAct: the
B enchmark ................................................................................... 252
3 Jurisdiction over Corruption in the United Kingdom............254
4 Jurisdiction over Corruption in Belgium.....................255
5 Jurisdiction over Corruption in the Netherlands................257
6 Assessing the Exercise of Extraterritorial Jurisdiction over
Corruption: Over- or Under-Regulation? . . . . . . . . . . . . . . .... ..
258
C A sset Recovery ......................................................................................... 261
D Corruption and Good Governance............................................................266
E Corruption and Human Rights ................................................................. 270
F Corruption in the Private Sphere .............................................................. 276
V C onclusion ............................................................................................................ 279

'The adoption of the United Nations Convention against Corruption will send a
clear message that the international community is determined to prevent and
control corruption. It will warn the corrupt that betrayal of the public trust will no
longer be tolerated ... The adoption of the new Convention will be a remarkable
achievement. But let us be clear: it is only a beginning'.

Kofi Annan1

I INTRODUCTION

The present contribution provides an overview of the current international

legal framework against corruption. The goal is not to describe each existing

1 United Nations Convention against Corruption, opened for signature 31 October 2003,
2349 UINTS 41 (entered into force 14 December 2005) Foreword ('UNCAC').
2013] The InternationalLegal Framework against Corruption 207

instrument in great detail; this exercise has been done elsewhere. 2 The aim is
rather to give a tour d'horizon of the genealogy and the main achievements,
features and objectives of the existing legal framework and to discuss the
challenges it faces. Part II of this article sketches the genesis of the international
legal framework regarding corruption. Part III outlines the main international
anti-corruption instruments. Special attention will be paid to the United Nations
and Organisation for Economic Co-Operation and Development ('OECD')
instruments, as these have proven especially influential. Next to these
instruments, we will refer to the Group of States against Corruption ('GRECO'),
the monitoring mechanism of the Council of Europe ('CoE'); some other
regional instruments outside Europe; anti-corruption initiatives within
international financial institutions; and a few noteworthy private initiatives. In
Part IV, specific challenges to the current global anti-corruption framework will
be assessed: definitional problems; jurisdictional challenges regarding foreign
corruption practices; asset recovery; the interface between corruption and good
governance and that between corruption and human rights; and private sphere
corruption. At the end, we provide a number of conclusions and present a
number of discussion points.

11 A GENEALOGY OF THE GLOBAL ANTI-CORRUPTION FRAMEWORK

On 9 December each year, the world celebrates International Anti-Corruption

Day. The fact that such a symbolic day exists (and immediately precedes Human
Rights Day on 10 December) reflects the international community's increased
recognition of the importance of anti-corruption measures. Various factors have
contributed to this, including the heightened awareness of the concrete impact of
corruption. Attention has turned, for example, to: the financing of terrorist acts; 3
the covering up of narcotics trafficking; and the impediments to the effective use
of aid for economic growth and development caused by corrupt practices.

2 See, eg, Tiziano Balmelli and Bernard Jaggy (eds), Les Traitis Internationaux contre la
corruption: L'ONU, I'OCDE, le Conseil de 1'Europe et la Suisse [International Treaties
against Corruption: The UN, the OECD, the Council of Europe and Switzerland] (Editions
Interuniversitaires Suisse Lausanne, 2004); Indira Carr, 'Fighting Corruption through
Regional and International Conventions: A Satisfactory Solution?' (2007) 15 European
Journal of Crime, Criminal Law and Criminal Justice 121; Daniel Dormoy, La Corruption
et le droit international [Corruption and International Law] (Bruylant, 2010);
Anna-Catharina Marsch, Strukturen der internationalen Korruptionsbektimpfung:
Wie wirksam sind internationale Abkommen? [The Structure of International Law
Combating Corruption: How Effective are International Agreements?] (Tectum Verlag,
2010); Alejandro Posadas, 'Combating Corruption under International Law' (2000) 10 Duke
Journal of Comparative & InternationalLaw 345.
3 See, eg, UNCAC Preamble para 2: 'Concerned also about the links between corruption and
other forms of crime, in particular organized crime and economic crime, including
money-laundering'.
208 Melbourne Journalof InternationalLaw [Vol 14

Corporate corruption scandals unearthed in recent years have provided further

impetus to the anti-corruption movement. 4
The surge in international anti-corruption tools, however, occurred
surprisingly recently. During the Cold War, parties on both sides of the Iron
Curtain were eager to support potential allies, with very little or no concern for
the level of corruption within those states. 5 In addition, some economists in the
1970s claimed that certain types of corruption could actually be beneficial to
society. 6 This belief was best summarised in Samuel Huntington's conclusion
that 'the only thing worse than a society with a rigid, overcentralized, dishonest
bureaucracy is one with a rigid, overcentralized, honest bureaucracy'.7 These two
factors, among others, impeded a comprehensive, in-depth anti-corruption policy
at the international level.
Domestic evolution in the United States was an important impetus for the
anti-corruption movement. In the late 1960s and 1970s, the US was afflicted by
corruption scandals (notably the Watergate scandal), which thrust the
anti-corruption debate onto the political agenda. 8 In 1977, the US Congress took
on a pioneering role and adopted the Foreign Corrupt PracticesAct ('FCPA'), 9
the first law prohibiting transnational bribery. The scope of the FCPA is limited

4 Well-known examples include the corruption allegations against BAE Systems and
Siemens: R (Corner House Research) v Director of the Serious Fraud Office [2009]
1 AC 756 ('BAE Case'); United States v Siemens Aktiengesellschaft (Plea Agreement)
(DC, No 1:08-CR-00367-RJL, 6 January 2009) ('Siemens Plea Agreement'). The corruption
charges against Siemens did not need to be decided at trial because they were resolved via a
plea agreement. In the BAE Case, the United Kingdom's Serious Fraud Office had launched
a criminal investigation into alleged corruption by BAE, who was the main contractor in an
arms contract between the governments of the UK and Saudi Arabia. The House of Lords
held that it was lawful for the investigation to be discontinued because of national interest
considerations, namely the threats to the lives of British citizens if the investigation was to
proceed. See also Indira Carr and Miriam Goldby, 'Recovering the Proceeds of Corruption:
UNCAC and Anti-Money Laundering Standards' (2011) 2 Journal of Business Law 170,
172.
5 Michael Kubiciel, 'Core Criminal Law Provisions in the United Nations Convention against
Corruption' (2009) 9 International Criminal Law Review 139, 140; Philippa Webb, 'The
United Nations Convention against Corruption: Global Achievement or Missed
Opportunity?' (2005) 8 Journal ofInternationalEconomic Law 191, 193.
6 James Thuo Gathii, 'Defining the Relationship between Human Rights and Corruption'
(2009) 31 University ofPennsylvaniaJournal ofInternationalLaw 125, 127, 134-7.
7 Samuel P Huntington, Political Order in Changing Societies (Yale University Press, 1968)
69. Huntington argues that an increase in corruption was a positive signal of a society's
evolution towards modemisation: at 59-62. He links corruption to modernisation in three
ways. First, modernisation implies a distinction between public office and private loyalty
and between public welfare and private interest. It requires meritocratic rewards based on
universalised standards instead of family or other private sphere ties. Huntington argues that
the introduction of achievement-based standards makes reliance on family-based identity
and support even more important, thus enhancing the (ab)use of public functions for private
(family) gain. Secondly, modernisation creates new sources of power and wealth, where the
existing norms have not yet provided for the integration of new groups of economic power
into the political process dominated by those who already held power. Corruption,
Huntington argues, provides a means for such integration, where relevant norms have not
followed the pace of the modernising process. Thirdly, according to Huntington,
modernisation goes hand in hand with centralising government and increased government
intervention, which in turn creates additional opportunities for corruption.
8 Posadas, above n 2, 348. The companies involved in the corruption scandals involved major
players such as Exxon, ITT and Lockheed: Gathii, above n 6, 138.
9 Foreign Corrupt PracticesAct of1977, 15 USC § 78dd-1 (1977) ('FCPA').
2013] The InternationalLegal Framework against Corruption 209

to corrupt practices related to business transactions; it does not cover corrupt

practices outside of the commercial sphere.
US corporations felt threatened by the stringent FCPA provisions and feared
losing business,' 0 whereupon the US government started lobbying for an
international anti-corruption treaty to level the international playing field.
Negotiations within the UN Economic and Social Council ('ECOSOC') focused
on the offering of bribes by transnational corporations from developed countries,
rather than on the demand for bribes by public officials in (mainly) developing
countries. States from the global South pressed for the anti-corruption
negotiations to be tied to the highly polarised discussions on a code of conduct
for transnational corporations. This highly sensitive political debate broke down
in 1981 due to divisions between the developed and developing worlds."
The US then refocused on a more promising international forum: the OECD.
The US efforts proved fruitful; in 1997, the OECD Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions
('OECD Convention') was adopted.12 Thereafter, the OECD surpassed the UN as
the leading international forum for anti-corruption instruments and issued several
recommendations, guidelines and anti-corruption tools.
Kenneth Abbott and Duncan Snidal describe the path between the adoption of
the FCPA and the OECD Convention as a process of '[g]radual [1]egalization as
a [f]ocal [p]rocess'.13 After the adoption of the FCPA, the US first attempted to
obtain a 'big bang' and pushed prematurely for an international anti-corruption
treaty. After the ECOSOC talks broke down, the discussions within the OECD
proved equally unfruitful. Abbott and Snidal assert that the US undertook a
'unilateral disarmament' by adopting its domestic FCPA, although the stringent
anti-corruption requirements imposed on US firms advantaged non-US firms.
Other countries had little incentive to level the playing field by agreeing to
global anti-corruption rules. As a result, the US shifted its 'big bang' strategy to
one of 'gradual legalisation'. Instead of adopting one focal point (criminalising
bribery through an international convention), the US adopted a gradual,
step-by-step approach. This systematic legalisation began with technical,
comparative studies on the legal frameworks of the various OECD member
states. These studies helped to inform states of the actual impact of corruption

10 Margot Cleveland et al, 'Trends in the International Fight against Bribery and Corruption'
(2009) 90 Journal of Business Ethics 199, 205. Reports varied in their estimates of how
much business was lost annually to non-United States corporations because of the FCPA,
with estimates of up to US$45 billion. The estimate of a US$45 billion loss relates to the
year 1995.
1 Kenneth W Abbott and Duncan Snidal, 'Filling in the Folk Theorem: The Role of
Gradualism and Legalization in International Cooperation to Combat Corruption' (Paper
presented at the American Political Science Association Meeting, Boston, 30 August 2002)
24 <http://www.intemational.ucla.edu/cms/files/DuncanSnidal.pdf>. As Webb indicates,
'[t]he South refused to discuss "demand" side measures like restrictions on solicitation of
bribes and the North resisted linking bribery rules to the proposed UN code of conduct for
multinational corporations': Webb, above n 5, 192.
12 Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions, opened for signature 17 December 1997, [1999] ATS 21 (entered into force
15 February 1999) ('OECD Convention'). See also Carr, above n 2; Posadas, above n 2,
376.
13 Abbott and Snidal, above n 11, 20.
210 Melbourne Journalof InternationalLaw [Vol 14

and potential points of convergence and divergence in their legal systems, which
reduced the legal uncertainty impeding cooperation. Later on, continued
lobbying efforts and the financial support of the US promoted agreement upon
soft law instruments. The Clinton Administration reprioritised the anti-corruption
crusade from 1993 onwards. Other factors played a role as well, such as the
establishment of Transparency International ('TI') by, among others, a former
World Bank Director. TI representatives were given the opportunity to address
the ad hoc OECD Working Group on Bribery in International Business
('Working Group on Bribery'). Its first recommendation, adopted in 1994,
captured the basic principles for an agreement to be reached,14 which were
'locked-in'. In 1997, a second recommendation elaborated on and added to the
basic provisions.' 5 Slowly but steadily, through continued negotiations and
studies by the low profile Working Group on Bribery, the principal challenges
and areas of convergence became clear and the main priorities were outlined.
Acting upon the points of agreement for the priority issues slowly allowed
harmonisation of the various positions. Certain points proved too divisive and
were ultimately excluded, but the OECD Convention eventually crystallised
earlier than the foreseen deadline.
Moral outrage after corruption scandals initially fuelled the enactment of the
US FCPA.1 6 Nevertheless, in due course, the stringent requirements for
US business gave the FCPA a more economic dimension; US efforts to achieve a
global anti-corruption treaty were predominantly aimed at eliminating the
competitive disadvantage of US firms resulting from the FCPA prohibitions. The
US alleged instances of trade distortion caused by corruption in other
World Trade Organization members and requested the WTO to assess and
investigate the link between trade distortion and corruption.' Asian countries
strongly opposed this movel 8 and the WTO eventually refused to accept this
link.19

14 Council, Organisation for Economic Co-Operation and Development, Recommendation of

the Council on Bribery in InternationalBusiness Transactions, OECD Doc C(94)75/FINAL
(27 May 1994).
15 Council, Organisation for Economic Co-Operation and Development, Revised
Recommendation of the Council on Combating Bribery in International Business
Transactions,OECD Doc C(97)123/FINAL (23 May 1997).
16 David A Gantz, 'Globalizing Sanctions against Foreign Bribery: The Emergence of a New
International Legal Consensus' (1998) 18 Northwestern Journal of International
Law & Business 457, 459.
17 Gantz notes that former US Trade Representative and Secretary of Commerce,
Mickey Kantor, 'has termed foreign bribery an unfair tariff barrier': ibid 465. Gantz
indicates that '[t]here has been some consideration of the issue as part of negotiations
relating to government procurement': at 465.
18 Kimberly Ann Elliott, 'Corruption as an International Policy Problem: Overview and
Recommendations' in Kimberly Ann Elliott (ed), Corruption and the Global Economy
(Institute for International Economics, 1997) 175, 212.
19 Gantz, above n 16, 467. On the issue of corruption and the WTO, see Philip M Nichols,
'Outlawing Transnational Bribery through the World Trade Organization' (1997)
28 Law and Policy in InternationalBusiness 305; Kenneth W Abbott, 'Rule-Making in the
WTO: Lessons from the Case of Bribery and Corruption' (2001) 4 Journal of International
Economic Law 275.
2013] The InternationalLegal Framework against Corruption 211

The decade after the end of the Cold War saw renewed anti-corruption efforts
worldwide. Nevertheless, post-Cold War conditions facilitated corrupt practices
in certain respects. These include, among others:
* the fall of communist regimes without an immediate replacement by
fully democratic and accountable institutions;
* the wave of privatisation and deregulation (though excessive
government intervention facilitates corruption as well); 20 and
* technological evolution facilitating quick communication and money
transfers. 2 1
The discussions on the renewed anti-corruption efforts after the Cold War
mirrored the content of the FCPA, which was at that point the only legal
instrument against transnational bribery. The commercial lens of the FCPA only
prohibits bribery conducted in international business transactions, but was a
significant influence on early discussions. The negotiations on an international
anti-corruption instrument within the OECD were especially influenced by the
example of the FCPA. Indeed, the US economic rhetoric in this area matched the
general OECD focus on economic development: the Preamble to the OECD
Convention refers to the distorting effect of corruption on international business
transactions and the need to assure equivalence of measures between the states
parties. Like the FCPA, the OECD Convention only covers corruption to the
extent it is related to business transactions. Moreover, it only covers active
corruption, which is the promise, offering or giving of a bribe. 22 This seems to
mirror early discussions in the UN, where developing countries focused on the
corrupting effect of the activities of Western corporations. 23 While the
UN discussions were spearheaded by developing countries focusing on active
bribery, the more recent discussions that lead to the 2003 United Nations
Convention against Corruption ('UNCAC') 24 also approached the passive side of
corruption, namely the bribe-takers, who are often public officials from
developing nations. At the same time, in these recent discussions, developing
nations emphasised that any definition should not impose a Western conception
of corruption, 25 which could prohibit certain traditional gift practices in
26
developing countries.
Although limited to corrupt practices in transnational business transactions,
the FCPA and OECD were a useful first step in sparking the debate. However,
the detrimental effects of corruption extend beyond both transnationalbusiness
transactions and business transactions in general. Accordingly, later instruments,

20 See, eg, Jean Cartier-Bresson, 'Corruption, liberalisation et democratisation' [Corruption,

Liberalisation and Democratisation] (2000) 41 Revue tiers monde 9.
21 Roberta Ann Johnson and Shalendra Sharma, 'About Corruption' in Roberta Ann Johnson
(ed), The Struggle against Corruption: A Comparative Study (Palgrave Macmillan, 2004) 1.
22 OECD Convention art 1.1.
23 Webb, above n 5, 205-6.
24 United Nations Convention against Corruption, opened for signature 31 October 2003,
2349 UNTS 41 (entered into force 14 December 2005).
25 Peter Fleming and Stelios C Zyglidopoulos, Charting Corporate Corruption: Agency,
Structure and Escalation (Edward Elgar, 2009) 4.
26 See below Part IV(A)(3).
212 Melbourne Journalof InternationalLaw [Vol 14

such as the UNCAC, apply to corrupt practices beyond those occurring in

transnational business transactions.
First, the issue of domestic corruption may not have received the attention it
deserves. Even when strictly adhering to economic reasoning, purely domestic
corruption in country A may have indirect but nevertheless substantial ripple
effects on the economic interests of country B. The detrimental effects of
corruption on development and good governance are no longer called into
question. Where corruption thrives in failed states, few economic opportunities
surface for businesses of any third country. In addition, corruption of the
domestic electoral process may affect the outcome thereof. Corruptly elected
heads of state or members of parliament may embezzle development aid or
require ever-increasing bribes from foreign companies. Corrupt governments
tend to under-invest in areas where bribery is more difficult, such as education or
health care. 27 These fields are, however, crucial to the economic development of
a state and, consequently, also for transnational investment. For example, a
Dutch firm might find it harder to reap the rewards of its investment in a country
where there are very few skilled labourers. These are all reasons why the
criminalisation of purely domestic corrupt acts is useful. 28
Secondly, these examples show why not only purely domestic business
transactions, but also private29 or public non-business related corrupt acts, could
have been covered by the FCPA and the OECD Convention.30 Whilst corruption in
the transnational business sector certainly covers a substantial part of corrupt
practices, these are not the only instances of corruption. There are a variety of
examples, including: bribery in football competitions; embezzlement of foreign
aid; 3 1 bribery for privileged access to an elite education; and bribes requested by
the local traffic police. While the concrete impact of such manifestations of
corruption may be less substantial in terms of dollar value, such practices may be
at least as detrimental as corruption in high value transnational business
transactions. People are confronted with this type of corruption far more often in

27 Paolo Mauro, 'The Effects of Corruption on Growth and Public Expenditure' in

Arnold J Heidenheimer and Michael Johnston (eds), Political Corruption:
Concepts & Contexts (Transaction Publishers, 3rded, 2002) 339, 343-4.
28 The UNCAC requires states parties to criminalise the bribery of domestic public officials.
This covers bribery of domestic officials by both foreigners and the local population. This
provision reflects the heightened attention to the bribe-taker (assumed to be mostly public
officials in developing countries), away from (exclusively) the bribe-giver (assumed to be
mostly transnational companies from developed countries). As such, the main thrust of the
provision was presumably not so much to cover entirely domestic corruption but, rather, to
oblige developing countries to also criminalise and prosecute their bribe-taking or
bribe-requesting public officials. Nevertheless, the wording of art 15 also covers purely
domestic acts of corruption (ie, between nationals of one state party).
29 See, eg, Asian Development Bank, 'Anticorruption: Our Framework of Policies and
Strategies' (Framework Report, July 1998) 9 <http://www.adb.org/sites/default/files/
pub/1998/anticorruption.pdf>.
30 See Mark Livschitz, 'Compliance: Praventive Massnahmen zur Korruptionsbekampfung im
privaten Sektor (gemass Ubereinkommen der UNO gegen Korruption)' [Compliance:
Preventative Measures for Combating Corruption in the Private Sector (According to the
UN Convention against Corruption)] (2009) 19 Schweizerische Zeitschrifi fur
internationalesund europaischesRecht 381.
31 Mauro, above n 27, 343.
2013] The InternationalLegal Framework against Corruption 213

their daily lives. Failure to tackle it may entrench the general mentality that
corruption is simply unavoidable or the 'way things work'.32
While the FCPA and the OECD Convention adopted an economic lens and
focused on the market distorting effects of corruption, 33 this limited approach
slowly but steadily shifted towards a much broader assessment of the problem of
corruption. Thus, the Preamble to the UNCAC refers to the detrimental effects of
corruption on political stability, 34 the rule of law, ethical values and
democracy. 35 Legal scholarship has further clarified the broad societal impacts of
corruption. Antonio Argandofia, for example, refers to the unequal and unjust
redistribution of income and wealth; obstruction to the emancipation of less
favoured groups; loss of legitimacy of policies and institutions; distortion in
decision-making; restriction of citizen rights; the eluding of political and legal
controls; and the undermining of the foundations of the rule of law and the
democratic system. 36
Such a broadened view on the detrimental impact of corruption beyond the
traditional economic notions is also reflected in the Inter-American Convention
against Corruption ('OAS Convention').37 The history of many Latin American
countries - which, at the time, had been recently freed of dictatorial
regimes - caused the Organization of American States ('OAS') to focus much
more on democratic institutions. Corruption was assessed from the perspective
that it was a risk to nascent democracy. Instead of introductory language
referring to the need to level the playing field, the Preamble to the OAS
Convention states that 'corruption undermines the legitimacy of public
institutions and strikes at society, moral order and justice, as well as at the
comprehensive development of peoples'.38
In the World Bank, the focus on anti-corruption efforts was also amplified,
culminating in anti-corruption efforts being integrated in the Bank's
'conditionality' for loans. In the early 1990s, the World Bank became aware of
the fact that a substantial part of its loans were diverted through corrupt
practices. 39 Specific scandals, such as corrupt practices in Kenya involving

32 See generally Emmanuelle Lavallee, Mireille Razafindrakoto and Frangois Roubaud,

'Ce qui engendre la corruption: une analyse microeconomique sur donnees africaines'
[What Generates Corruption: A Micro-Analysis on African Data] (2010) 24(3) Revue
d'economie du dveloppement 5.
33 Gathii, above n 6, 140-2.
34 UNCAC Preamble para 3. Note that former Russian President Dmitry Medvedev once called
corruption a threat to national security: see Fleming and Zyglidopoulos, above n 25, vii.
35 UNCAC Preamble para 1.
36 In addition, Argandofia refers to the moral argument against corruption - an argument that
many authors do not seem to find sufficiently tangible and measurable to refer to:
Antonio Argandofia, 'The United Nations Convention against Corruption and Its Impact on
International Companies' (2007) 74 Journal of Business Ethics 481, 482. Certain
international instruments, however, refer to the serious moral concerns about corruption,
such as the Preamble to the OECD Convention.
37 Inter-American Convention against Corruption, opened for signature 29 March 1996,
[2000] CTS 21 (entered into force 6 March 1997) ('OAS Convention').
38 Ibid Preamble para 1.
39 Johnson and Sharma, above n 21, 10.
214 Melbourne Journalof InternationalLaw [Vol 14

World Bank funds, instigated a change of focus at the Bank. 40 Previously, the
World Bank did not want to adopt anti-corruption language as it deemed this
contrary to its charter, which requires it to abstain from political considerations
in its lending practices. 4 1 At the time, one of the World Bank's regional
directors, Peter Eigen, even left the Bank as a result of his disappointment with
the Bank's refusal to tackle anti-corruption through its lending practices (he later
founded TI). 42 Under the presidency of James Wolfensohn - who labelled
corruption a 'cancer' 43 - the World Bank's policy was reversed. Corruption was
integrated into a larger good governance program, 44 launched at the World Bank
and imposed on borrowing countries through the Bank's now famous
conditionality. 45 The World Bank embedded anti-corruption conditionality into
its broader development narrative. Like the World Bank, the International
Monetary Fund ('IMF') was at first reluctant to adhere to the good governance
program, fearing it to be outside of its strictly economic goals. 46 In 1996-97,
however, the IMF acknowledged the economic impact of corruption and good
governance and followed the World Bank by including good governance
standards in its practices. 47 In addition to external anti-corruption policies, the
World Bank and the IMF have adopted internal policies to tackle corruption. 48
Like the multilateral development banks, the UN initially lagged behind in its
anti-corruption legal framework. As described above, the UN had been the initial
forum for multilateral anti-corruption policies but soon saw its negotiations
blocked by divisions between the developed and developing worlds, especially
because of the link made between the anti-corruption negotiations and those on
the international code of conduct for transnational corporations. After this
deadlock, however, the UN took renewed anti-corruption steps in 1996 with the

40 See, eg, Richard Calkins et al, 'Dealing with Governance and Corruption Risks in Project
Lending: Emerging Good Practices' (Note, World Bank, February 2009)
<http:/siteresources.worldbank.org/EXTGOVANTICORR/Resources/3035863-128162713
6986/EmergingGoodPracticesNote_8.11.09.pdf>.
41 International Bank for Reconstruction and Development, IBRD Articles of Agreement
(27 June 2012) World Bank, art IV s 10 <http:/go.worldbank.org/0FICOZQLQ0>.
42 Johnson and Sharma, above n 21, 11.
43 James Wolfensohn, 'People and Development' (Speech delivered at the Annual Meeting of
the World Bank and International Monetary Fund, Washington DC, 1 October 1996)
<http:/go.worldbank.org/PUC5BB8060>.
44 Gathii, above n 6, 127.
45 Johnson and Sharma, above n 21, 11. For an assessment of the effectiveness of the World
Bank and the International Monetary Fund's conditionality, see Stefan Koeberle et al (eds),
Conditionality Revisited: Concepts, Experiences and Lessons (World Bank, 2005).
46 International Monetary Fund, Articles of Agreement of the InternationalMonetary Fund
(3 March 2011) <http://www.imf org/external/pubs/ft/aa/pdf/aa.pdf>.
47 Gathii, above n 6, 145.
48 An assessment of the World Bank's internal anti-corruption policies is provided in
Parthapratim Chanda, 'The Effectiveness of the World Bank's Anti-Corruption Efforts:
Current Legal and Structural Obstacles and Uncertainties' (2004) 32 Denver Journal of
International Law & Policy 315. See also Ngaire Woods, 'The Challenge of Good
Governance for the IMF and the World Bank Themselves' (2000) 28 World Development
823; Carolina Pancotto Bohrer Munhoz, 'Corruption in the Eyes of the World Bank:
Implications for the Institution's Policies and Developing Countries' (2008) 26 Penn State
InternationalLaw Review 691.
2013] The InternationalLegal Framework against Corruption 215

adoption of the InternationalCode of Conduct for Public Officials ('ICCPO') 49

and the United Nations Declaration against Corruption and Bribery in
International Commercial Transactions ('UNDAC'). 50 These instruments
provided the basis for the UNCAC adopted in 2003. Once the pioneer of
transnational anti-corruption efforts, the US opposed several progressive draft
provisions - including a provision criminalising private corruption - during
the UNCA C negotiations.
In line with the OAS Convention and World Bank anti-corruption policies, the
UNCAC not only underlines the economic consequences of corruption but also
its developmental and political impacts. It refers to the impact on ethical values
and justice, although there is no explicit reference to the impact of corruption on
human rights. A human rights perspective has only recently been introduced into
the anti-corruption narrative.51
Nowadays, experts familiar with the anti-corruption subject seem to agree that
corruption is detrimental to a society's development and economic growth. 52 The
most quoted number for the annual global cost of corruption is the World Bank's
estimate of US$1 trillion.53 A climate of corruption may particularly
disadvantage societal sectors where rent-seeking opportunities are smaller and
which, consequently, receive less government support. 54 Education and public
healthcare are prominent examples of such sectors, whereas infrastructure is a
sector where rent-seeking is particularly profitable.55 Under-financing sectors
such as healthcare and education disproportionately harms the poor

49 Action against Corruption, GA Res 51/59, UN GAOR, 51st sess, 82 nd plen mtg,
Agenda Item 101, Supp No 49, UN Doc A/RES/51/59 (28 January 1997) annex
('InternationalCode of Conductfor Public Officials') ('ICCPO').
50 United Nations Declaration against Corruption and Briberyj in InternationalCommercial
Transactions, GA Res 51/191, UN GAOR, 51st sess, 86 plen mtg, Agenda Item 12,
Supp No 49, UN Doc A/RES/51/191 (21 February 1997) annex
('United Nations Declarationagainst Corruption and Bribery in InternationalCommercial
Transactions') ('UNDAC').
51 See, eg, Committee of Ministers, Council of Europe, Recommendation Rec(2003)4 of the
Committee of Ministers to Member States on Common Rules against Corruption in the
Funding of Political Parties and Electoral Campaigns (8 April 2003) Preamble
('Recommendation Rec(2003)4'). See also Part IV(E) below.
52 Rafael Di Tella and Robert MacCulloch, 'Corruption and the Demand for Regulating
Capitalists' in Susan Rose-Ackerman (ed), InternationalHandbook on the Economics of
Corruption (Edward Elgar, 2006) 352, 352-5. The impact of corruption on economic
growth has, however, differed from country to country. For example, widespread corruption
in China has not prevented the country from achieving impressive economic growth. For
further discussion on the specific case of China: see, eg, Jens Andvig, 'Corruption in China
and Russia Compared: Different Legacies of Central Planning' in Susan Rose-Ackerman
(ed), InternationalHandbook on the Economics of Corruption (Edward Elgar, 2006) 278,
287-313. Some authors, however, challenge this common assumption: see, eg, Anthony
Ogus, 'Corruption and Regulatory Structures' (2004) 26 Law & Policy 329, 329 (stating that
'[i]n fact, the connection between corruption and the lack of growth is more often assumed
than demonstrated'). Ogus suggests that the lack of empirical data may stem from too broad
a definition of 'corruption', rendering it more difficult to link corruption to economic
performance indicators.
53 World Bank, Six Questions on the Cost of Corruption with World Bank Institute Global
Governance DirectorDaniel Kaufmann (2013) <http:/go.worldbank.org/KQH743GKF 1>.
54 See Argandofia, above n 36, 481-2. See also David de la Croix and Clara Delavallade,
'Corruption et allocation optimale de l'investissement public' [Corruption and Optimal
Allocation of Public Investment] (2007) 58 Revue economique 637.
55 Mauro, above n 27, 347.
216 Melbourne Journalof InternationalLaw [Vol 14

and - especially with regard to education - seriously hampers development. In

the following sections, we will assess the extent to which the existing
international legal framework is capable of tackling these multiple challenges to
tackling corruption.

III INTERNATIONAL ANTI-CORRUPTION INSTRUMENTS

From the preceding brief summary of the international anti-corruption
movement's evolution, 56 it is clear that the OECD Convention was a catalyst for
further action. Therefore, an overview of the current multilateral anti-corruption
framework might logically start with the OECD Convention. Nevertheless, it
remains a tricky undertaking to classify the anti-corruption instruments based on
their impact or importance. It is equally confusing to rank the instruments
chronologically. For example, the OAS Convention was officially adopted before
the OECD Convention, but the former undoubtedly sailed on the tide of the
latter. The overview below is simply based on the geographical reach of the
various interstate instruments, in descending order, starting with the UN; it
concludes with a short reference to the anti-corruption framework of the
multilateral development banks and the two main private initiatives in the field.

A The United Nations Convention against Corruption

57
The UNCAC is the first truly global anti-corruption treaty, outlining a
'common language' 58 for the anti-corruption movement. It was adopted by the
UN General Assembly ('UNGA') on 31 October 2003 and was opened for
signature in Merida, Mexico, on 9-11 December 2003. The UNCAC entered into
force two years later, on 14 December 2005. The high number of signatories and
ratifications reflects the broad international consensus on the UNCAC. This
consensus was not only shared among states, but also among the international
private sector and civil society. 59

1 Background
As indicated above, the UNGA adopted the ICCPO in 1996. The text of the
ICCPO does not explicitly mention corruption - although the term is referred to
several times in the text of Action against Corruption (the resolution adopting
the ICCPO), which recommends that member states use the ICCPO as a tool to
guide their efforts against corruption. 60 However, the ICCPO touches upon very
similar and related issues, such as the receipt of gifts that may influence the
exercise of a public official's function and conflicts of interest.61 In the same

56 For an overview of anti-corruption instruments under international law: see generally

Balmelli and Jaggy, above n 2; Dormoy, above n 2; Marsch, above n 2.
57 For commentary: see, eg, Kubiciel, above n 5; Webb, above n 5; Argandofia, above n 36.
See also Rainer Hofmann and Christina Pfaff (eds), Die Konvention der Nationen zur
Bekampfung der Korruption: Betrachtungen aus Wissenschaft und Praxis [The United
Nations Convention against Corruption: Views from Research and Practice]
(Nomos, 2006).
58 Argandofia, above n 36, 485.
59 Ibid.
60 Action against Corruption, GA Res 51/59, UN GAOR, 51st sess,
82nd plen mtg,
Agenda Item 101, Supp No 49, UN Doc A/RES/51/59 (28 January 1997).
61 ICCPO, UN Doc A/RES/51/59, annex arts 5, 9.
2013] The InternationalLegal Framework against Corruption 217

year, the UNDAC was adopted. The UNDAC underlines the need to promote
social responsibility and standards of ethics on the part of companies and
recognises the link between corruption, fair and competitive business and
accountable governance. Member states 'commit' to criminalise bribery of
foreign public officials. Efforts to do so continued through a 1997 UNGA
resolution, which urged member states to ratify the already existing international
anti-corruption instruments. 62 A 1999 UNGA resolution 63 requested an Ad Hoc
Committee to explore the desirability of an international instrument against
corruption, ancillary to or independent of the pre-existing United Nations
Convention against Transnational Organized Crime ('Palermo Convention').64
The Palermo Convention had already recognised the relationship between
transnational organised crime and corruption. 65 After the adoption of the
Palermo Convention, the UNGA redirected the Ad Hoc Committee to draft a
separate convention on corruption, 66 and requested that it adopt a comprehensive
and multidisciplinary approach in order to negotiate a 'broad and effective
convention'.67 The Ad Hoc Committee was officially convened for the first time
in December 2001. After seven sessions, the Committee adopted the final text of
the Palermo Convention in October 2003, two months before the scheduled end
date of its activities. 68

2 Ratification Status
As of 1 January 2013, 165 states, including important global players such as
the US, China and India, have become parties to the UNCAC. This broad
participation can be seen as an indication of widespread global support.

62 International Cooperation against Corruption and Bribery in International Commercial

Transactions, GA Res 52/87, UN GAOR, 52nd sess, 3r plen mtg, Agenda Item 103,
Supp No 49, UN Doc A/RES/52/87 (12 December 1997).
63 Action against Corruption, GA Res 54/128, UN GAOR,
54 th sess, 83 rd plen mtg,
Agenda Item 107, Supp No 49, UN Doc A/RES/54/128 (28 January 2000).
64 United Nations Convention against Transnational Organized Crime, opened for signature
12 December 2000, 2225 UNTS 209 (entered into force 29 September 2003) ('Palermo
Convention'). See also Protocol to Prevent, Suppress and Punish Trafficking in Persons,
Especially Women and Children, opened for signature 12 December 2000, 2237 UNTS 319
(entered into force 25 December 2003); Protocol against the Smuggling of Migrants by
Land, Sea and Air, opened for signature 12 December 2000, 2241 UNTS 507 (entered into
force 28 January 2004); Protocol against the Illicit Manufacturing of and Trafficking in
Firearms, Their Partsand Components andAmmunition, Supplementing the United Nations
Convention against TransnationalOrganized Crime, GA Res 55/255, UN GAOR, 55th sess,
101st plen mtg, Agenda Item 105, Supp No 49, UN Doc A/RES/55/255 (31 May 2001)
annex ('Protocol against the Illicit Manufacturing of and Trafficking in Firearms, Their
Parts and Components and Ammunition, Supplementing the United Nations Convention
against TransnationalOrganized Crime'). The Palermo Convention contains two provisions
on corruption. Article 8 requires the criminalisation of active and passive bribery of
domestic public officials and asks member states to consider criminalising bribery of foreign
public officials. Article 9 requires member states to promote the integrity of domestic
officials and to ensure compliance and prosecution of violations of the Palermo Convention.
Liability of legal persons is required under art 10, though member states can decide whether
to impose criminal, civil or administrative sanctions, subject to its legal principles.
65 Palermo Convention Preamble para 10, art 8.
66 Argandofia, above n 36, 485.
67 Terms of Reference for the Negotiation of an International Legal Instrument against
Corruption, GA Res 56/260, UN GAOR, 56 th sess, 93 rd plen mtg, Agenda Item 110,
Supp No 49, UN Doc A/RES/56/260 (9 April 2002) paras 2-3.
68 Ibid para 6.
218 Melbourne Journalof InternationalLaw [Vol 14

However, the lack of ratification by a few states is noteworthy: Germany, Japan

and New Zealand have not ratified the UNCAC, despite signing it.69
The UNCAC is open for signature by regional economic integration
organisations provided that at least one member state of the organisation has
signed it. The European Union signed the UNCAC on 15 September 2005 and
ratified it on 12 November 2008.70 It is currently the sole regional economic
integration organisation that has become a party to the UNCAC.

3 Scope: Prevention, Criminalisationand InternationalCooperation

The UNCAC builds upon the achievements of earlier anti-corruption
instruments. For example, where the OECD merely recommends that member
states prohibit tax deduction of bribes, the UNCAC requires states parties to
prohibit such a practice. 7 ' The UNCAC is not only innovative in terms of the acts
it criminalises, but also because of its strong focus on prevention, as well as the
emphasis placed on international assistance and asset recovery.
Chapter II of the UNCAC, concerning preventive measures, is predominantly
phrased in non-mandatory terms and leaves substantial scope to states parties to
choose concrete implementation measures. Nevertheless, the UNCAC requires
states parties to adopt measures (without imposing a detailed one-size-fits-all
implementation) in a wide range of areas: they must set up
anti-corruption bodies; establish appropriate procurement systems; strengthen the
integrity of the judiciary; take measures to prevent private sector corruption;
promote the active participation of civil society; and institute a comprehensive
regulatory regime for banks and other financial institutions to prevent
money laundering. 72 These specific provisions are preceded by the chapeau
paragraph of art 5, which requires that states parties adopt comprehensive and
coordinated anti-corruption policies that promote the participation of society and

69 These states did ratify the OECD Convention. The report issued by the Organisation for
Economic Co-Operation and Development ('OECD') on Japan's implementation of
anti-corruption measures indicates that Japan still has a very weak legal framework on
anti-corruption: Working Group on Bribery in International Business Transactions,
Organisation for Economic Co-Operation and Development, 'Phase 3 Report on
Implementing the OECD Anti-Bribery Convention in Japan' (Report, Organisation for
Economic Co-Operation and Development, 16 December 2011) <http://www.oecd.org/daf/a
nti-bribery/anti-briberyconvention/Japanphase3reportEN.pdf>. Issued in December 2011,
the report states, that there have only been two convictions since the prohibition of bribery
of foreign public officials was inserted in 1999 in art 10(1) of the E
ILA (#545 19 H&f#M474o Af2 14, 30 H f#M30%) [Unfair
Competition Prevention Law 1993 (Act No 47 of May 19, 1993, as last amended by
Act No 30 of April 30, 2009] (Japan): at 10. For a Group of States against Corruption
('GRECO') report on Germany's anti-corruption efforts, see below n 149. On the role of
Germany vis-a-vis transnational standards against corruption, see Peter Hagell, 'L'Incertaine
mondialisation du contrdle: la France et l'Allemagne dans la lutte contre la corruption et le
blanchiment' [The Uncertain Globalisation of Control: France and Germany in the Fight
against Corruption and Money Laundering] (2005) 29 Deviance et socidtd 243.
70 Council Decision of 25 September 2008 on the Conclusion, on Behalf of the European
Community, of the United Nations Convention against Corruption [2008] OJ L 287/1.
71 Council, Organisation for Economic Co-Operation and Development, Recommendation of
the Council on the Tax Deductibility of Bribes to Foreign Public Officials,
OECD Doc C(96)27/FINAL (11 April 1996); UNCAC art 12.4.
72 UNCAC arts 6-14. While the basic thrust of these provisions is that states parties 'shall'
adopt such measures, this requirement is often weakened by adding qualifiers such as 'in
accordance with the fundamental principles of its domestic law': see, eg, art 13.1.
2013] The InternationalLegal Framework against Corruption 219

reflect the principles of the rule of law, proper management of public affairs and
public property, integrity, transparency and accountability. 73 The basic thrust of
this general provision is the requirement of good governance. 74
International cooperation also received a separate chapter in the UNCAC. 75
Cooperation is mandatory for criminal matters, though for civil and
administrative matters states parties need only 'consider' cooperation. 76
Cooperation from private sector entities such as banks is only to be
encouraged. 77 This is a regrettably weak provision, as cooperation from banks
and other entities is crucial in the recovery of the proceeds of corrupt acts.78
Requiring states parties to cooperate in criminal matters is a necessary but
insufficient condition for effective asset recovery, as banks and other entities will
often need to trigger prosecutions by identifying potentially corrupt transactions
and notifying official authorities of such transactions. The provision on bank
secrecy is more stringent: it requires states parties to ensure that bank secrecy
hurdles can be overcome when conducting corruption investigations. 79 This
mandatory provision does not leave much room to manoeuvre. The same holds
for art 46, which requires states parties to afford each other the widest measure
of mutual legal assistance in the investigation and prosecution of offences
covered by the UNCAC. 80
Asset recovery was a fundamental issue for developing countries during the
negotiations for the UNCAC. 8 1 Its importance is equally reflected in the fact that
a full chapter is dedicated to this topic. 82 Asset recovery is discussed in more
detail below. 83 It can be noted here that the chapter attempts to balance the
insistence by (mostly) developing countries on effective asset recovery with
procedural safeguards requested by (mostly) developed countries. The UNCAC
thus aims to strike a fragile balance: on the one hand, it contains detailed and
strong anti-corruption provisions, which developed countries requested; on the
other hand, developing countries were willing to accept these provisions in return
for strong cooperation and asset recovery provisions. The latter were acceptable
to developed countries on the condition that they were subject to sufficient
procedural safeguards. Article 46 of UNCAC, entitled 'Mutual Legal Assistance',
almost copies verbatim the wording of the mutual legal assistance provision in
the Palermo Convention.84 The latter, in turn, is based on the concomitant

73 UNCA C art5.
74 For a detailed discussion of good governance, see below Part IV(D).
75 UNCAC ch IV.
76 Ibid art 43.1.
77 Ibid art 39.1.
78 See below Part IV(C).
79 UNCAC art 31.77.
80 Ibid art 46.
81 Webb, above n 5, 207.
82 UNCAC ch V.
83 See below Part IV(B).
84 UNCAC art 46; Palermo Convention art 18.
220 Melbourne Journalof InternationalLaw [Vol 14

provision in the UN Convention against Illicit Traffic in Narcotic Drugs and

Psychotropic Substances.85

4 Monitoring
Whilst the UNCAC has introduced some innovations, its monitoring
mechanism is not groundbreaking. 86 It merely establishes a Conference of States
Parties ('the Conference'), to be convened 'regularly' to monitor
implementation. 87 At its third session, held in Doha in November 2009, the
Conference adopted 'Resolution 3/1', entitled 'Review Mechanism'. 88 In this
resolution, the Conference set up an Implementation Review Group. The
monitoring mechanism is conceived as a review cycle, focusing on specific parts
of the UNCAC. States parties must complete a self-assessment checklist
beforehand, which forms the basis for a peer review by two other states parties.
The whole procedure is a desk review, contrary to the anti-corruption
implementation process at the CoE (GRECO), 89 which includes country visits.
So far, only Executive Summaries on France and Togo; 90 Bulgaria and
Indonesia; 9 1 Jordan and Sdo Tome and Principe; 92 Fiji and the US; 93 Croatia and
Morocco; 94 Australia; 95 Georgia; 96 Switzerland; 97 Bangladesh 98 and

85 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, opened
for signature 20 December 1988, 1582 UNTS 95 (entered into force 11 November 1990)
art 7.
86 Webb, above n 5, 221.
87 UNCAC art63.2.
88 Conference of the States Parties to the United Nations Convention against Corruption,
'Resolution 3/1 - Review Mechanism' in Report of the Conference of the Parties to the
United Nations Convention against Corruption on Its Third Session, Held in Dohafrom 9 to
13 November 2009, UN Doc CAC/COSP/2009/15 (1December 2009) 3.
89 See below Part III(B)(2).
90 Implementation Review Group, Conference of the States Parties, United Nations
Convention against Corruption, Executive Summaries: Note by the Secretariat, 3 rd sess,
Agenda Item 2, UN Doc CAC/COSP/IRG/I/1/1/Add.3 (9 January 2012).
91 Implementation Review Group, Conference of the States Parties, United Nations
Convention against Corruption, Executive Summaries: Note by the Secretariat, 3 rd sess,
Agenda Item 2, UN Doc CAC/COSP/IRG/I/1/1/Add.4 (16 January 2012).
92 Implementation Review Group, Conference of the States Parties, United Nations
Convention against Corruption, Executive Summaries: Note by the Secretariat, 3rd sess,
Agenda Item 2, UN Doc CAC/COSP/IRG/I/1/1/Add.5 (31 January 2012).
93 Implementation Review Group, Conference of the States Parties, United Nations
Convention against Corruption, Executive Summaries: Note by the Secretariat, 3rd sess,
Agenda Item 2, UN Doc CAC/COSP/IRG/I/1/1/Add.6 (23 March 2012).
94 Implementation Review Group, Conference of the States Parties, United Nations
Convention against Corruption, Executive Summaries: Note by the Secretariat, 3rd sess,
Agenda Item 2, UN Doc CAC/COSP/IRG/I/1/1/Add.7 (2 May 2012).
95 Implementation Review Group, Conference of the States Parties, United Nations
Convention against Corruption, Executive Summary: Note by the Secretariat, 3 rd sess,
Agenda Item 2, UN Doc CAC/COSP/IRG/I/2/1 (15 May 2012).
96 Implementation Review Group, Conference of the States Parties, United Nations
Convention against Corruption, Executive Summary: Note by the Secretariat, 3 rd sess,
Agenda Item 2, UN Doc CAC/COSP/IRG/I/2/1/Add. 1(30 May 2012).
97 Groupe d'examen de l'application, Resume analytique: Suisse [Executive Summary:
Switzerland], 3rd sess, Agenda Item 2, UN Doc CAC/COSP/IRG/2012/CRP.4
(18 June 2012).
98 Implementation Review Group, Executive Summary: Note by the Secretariat, 3 rd SCSS,
Agenda Item 2, UN Doc CAC/COSP/IRG/2012/CRP.6 (20 June 2012).
2013] The InternationalLegal Framework against Corruption 221

Timor-Leste 99 have been published. As this country review mechanism has only
recently been launched, its effectiveness and impact remain to be seen. However,
it does not seem to possess the same levels of rigidity as the OECD or CoE
procedures.

5 Independent Domestic Anti-CorruptionAuthorities

Even though the multilateral implementation system is still in its infancy, the
UNCAC requires that states parties set up domestic corruption-preventing and
corruption-combating bodies.' 00 Both the UNCAC and the CoE Criminal Law
Convention on Corruption ('Criminal Law Convention')101 lay down certain
conditions that anti-corruption authorities should meet if they are to be effective.
These conventions refer to the requirements of, inter alia, independence,
adequate resources, training and specialisation.102
The UNCAC does not specify what conditions need to be met in order for
anti-corruption bodies to be considered independent. Clarification can be found
in an OECD study, which states that structural and operational autonomy, along
with a clear legal basis and mandate for the anti-corruption body, are all
important elements in achieving independence.1 03 In addition, it underlines the
importance of transparent procedures for the appointment (and removal) of the
director(s).1 04 Independence does not equate to unaccountability: as indicated by
the OECD study, such bodies should at all times adhere to the principle of the
rule of law, meet human rights standards, submit regular performance reports
and enable public access to information on their work.' 05 One model example of
a successful national anti-corruption body is the Independent Commission
against Corruption of Hong Kong, which helped the country to achieve
'spectacular success' in combating corruption.1 06

99 Implementation Review Group, Executive Summary: Note by the Secretariat, 3 rd sess,

Agenda Item 2, UN Doc CAC/COSP/IRG/2012/CRP.8 (22 June 2012).
100 UNCA C art6.
101 Criminal Law Convention on Corruption, opened for signature 27 January 1999,
ETS No 173 (entered into force 1 July 2002) ('Criminal Law Convention'). See also below
Part III(B)(2).
102 UNCAC art 6.2; Criminal Law Convention art 20.
103 Anti-Corruption Network for Eastern Europe and Central Asia, 'Specialised
Anti-Corruption Institutions: Review of Models' (Report, Organisation for Economic
Co-Operation and Development, 2008) 10, 24-7.
104 Ibid 10.
105 Ibid.
106 Stuart S Yeh, 'Ending Corruption in Africa through United Nations Inspections' (2011)
87 InternationalAffairs 629, 635.
222 Melbourne Journalof InternationalLaw [Vol 14

The OECD study distinguishes four areas of anti-corruption efforts on which

such national bodies should focus:
* policy development, research, monitoring and coordination;
* prevention of corruption in power structures (including prevention of
conflicts of interest, assets declaration by public officials,
anti-money laundering regulations, public procurement standards,
etc);
* education and awareness raising; and
* investigation and prosecution (including coordination with auditors,
tax authorities, the banking sector, public procurement authorities,
foreign law enforcement bodies, etc).1 07
Certain states, including the US, have adopted multi-agency models, which
focus on strengthening anti-corruption measures in already existing
governmental agencies.1 08 Other countries (such as Botswana, Hong Kong,
Korea and Thailand) opted for the single-agency model, which gives one
anti-corruption agency the primary responsibility of implementing an
anti-corruption program.109

B European Instruments
1 European Union
The EU started off with modest anti-corruption instruments that mainly
tackled the misdirection of EU funds in 1995.110 However, the EU broadened its
focus over the course of time, with the final step being a comprehensive two-year
review process of member states' general anti-corruption achievements.
The results of a 2012 EU Corruption Barometer underlined that even in the
EU, the fight against corruption is far from won. 111 According to the results of
the Barometer, 74 per cent of EU citizens thought that corruption remained a
major challenge in their country. Around 1 per cent of EU GDP, or around
C120 billion, is estimated to be lost annually due to corruption. Around 20 to

107 Anti-Corruption Network for Eastern Europe and Central Asia, above n 103, 5.
108 John R Heilbrunn, 'Anti-Corruption Commissions: Panacea or Real Medicine to Fight
Corruption?' (Working Paper, International Bank for Reconstruction and Development,
2004) 9 <http://wbi.worldbank.org/wbi/Data/wbi/wbicms/files/drupal-acquia/wbi/Anti-Corr
uption%2OCommissions%20by%2OJohn%2OHeilbrunn.pdf>.
109 Anti-Corruption Network for Eastern Europe and Central Asia, above n 103, 31-2.
110 On the issue of European Union fraud, see Centre d'etudes pour l'application du droit
communautaire en matiere penale et financiere [Centre for the Study of the Implementation
of Community Law in Criminal and Financial Matters], Corruption de fonctionnaires et
fraude europdenne [Corruption of Public Officials and European Fraud] (Bruylant, Brussels,
1998).
111 See European Commission, 'Commission Fights Corruption: A Stronger Commitment for
Greater Results' (Press Release, IP/11/678, 6 June 2011) <http:/europa.eu/rapid/pres
s-release IP-11-678 en.htm>; European Commission, 'Commission Steps Up Efforts to
Forge a Comprehensive Anti-Corruption Policy at EU Level' (Press Release, MEMO
11/376, 6 June 2011) <http:/europa.eu/rapid/press-releaseMEMO- 11-376_en.htm>;
European Commission, 'Frequently Asked Questions: How Corruption is Tackled at the EU
Level' (Press Release, MEMO 12/105, 15 February 2012) <http:/europa.eu/rapid/pres
s-release MEMO-12-105 en.htm>.
2013] The InternationalLegal Framework against Corruption 223

25 per cent of the value of public contracts is lost to corruption each year. These
numbers are astonishingly high.112
As corruption seriously hinders competition in the internal market, the EU
Parliament could have acted on this legal basis. It opted however for the (more
straightforward) legal basis of providing an area of freedom, security and
justice.113
In 1995, the European Council drew up the Convention on the Protection of
the European Communities' Financial Interests ('EU Convention').114 The
EU Convention covers the misappropriation of EU funds through fraudulent
statements or false documents. One year later, in 1996, a Protocol to the
Convention on the Protection of the European Communities' FinancialInterests
('Financial Interests Protocol') was drawn up.11 5 The Financial Interests
Protocol contains definitions of, and harmonised penalties for, offences of
corruption. In 1997, the Convention on the Fight against Corruption involving
Officials of the European Communities or Officials of Member States of the
European Union was drawn up.11 6 On 22 July 2003, the European Council
adopted Council Framework Decision 2003/568/JHA on Combating Corruption
in the Private Sector," 7 covering business activities within profit and non-profit
entities (excluding, for example, non-business activities of non-governmental
organisations ('NGOs'), sports clubs, etc).
In a decision of October 2008, the European Council set up a network of
contact points of the member states, in order to improve cooperation between
authorities in combating corruption in Europe.118 Furthermore, the Stockholm
Programme provides an EU roadmap for 2010-14 in the area of justice, freedom
and security, referencing anti-corruption outcomes as one of its goals.119
However, the EU realised that the various anti-corruption instruments were
rather fragmented and that success on this issue would be enhanced by
streamlining a coherent anti-corruption policy in all its activities. In addition,
reports that corruption worsened in certain newly acceded member states after
accession strengthened the view that the EU needs to maintain a vigorous
anti-corruption oversight that goes beyond merely imposing anti-corruption

112 For an assessment of corruption in the EU, see Luis Antonio Trejo Fuentes, 'Corrupcion y
desigualdad en la Union Europea' [Corruption and Inequality in the European Union]
(2010) 37 Revista de Estudios Sociales 106.
113 See, eg, Council Framework Decision 2003/568/JHA of 22 July 2003 on Combating
Corruption in the Private Sector [1993] OJ L 192/54, 54 [6].
114 Council Act of 26 July 1995 Drawing up the Convention on the Protection of the European
Communities'FinancialInterests [1995] OJ C 316/48.
115 Council Act of 27 September 1996 Drawing up a Protocol to the Convention on the
Protection of the European Communities' Financial Interests [1996] OJ C 313/1.
The protocol entered into force on 17 October 2002.
116 Convention Drawn Up on the Basis ofArticle K3(2)(c) of the Treaty on European Union on
the Fight against Corruption Involving Officials of the European Communities or Officials
ofMember States of the European Union [1997] OJ C 195/2.
117 Council Framework Decision 2003/568/JHA on Combating Corruption in the Private
Sector [2003] OJ L 192/54.
118 Council Decision 2008/852/JHA of 24 October 2008 on a Contact-PointNetwork against
Corruption [2008] OJ L 301/38.
119 The Stockholm Programme - An Open and Secure Europe Serving and Protecting Citizens
[2010] OJ C 115/1.
224 Melbourne Journalof InternationalLaw [Vol 14

requirements in negotiations for membership.1 20 Moreover, the recent 'Euro

crisis' made clear that differences in national ethics and governance can
endanger the very survival of the EU institutions. These considerations have led
the EU to elaborate a comprehensive anti-corruption framework.
In 2011, the European Commission ('the Commission') adopted a proposal
for harmonised procurement rules, including anti-corruption safeguards.121 In
June 2011, the Commission issued a new communication, 122 which focuses on
the enforcement of existing instruments. According to this communication, there
is an adequate anti-corruption framework on the international and European
level, but the main challenge is the enforcement of the existing provisions.123
The communication established a new EU Anti-Corruption Report
mechanism.124 As of 2013, the EU will release a report every two years, with
dual goals.125 First, it will provide a 'diagnosis' of corruption challenges in the
EU.126 Secondly, the report will highlight specific issues in each member state,
on the basis of country analyses.1 27 The recommendations made are not legally
binding, but will be monitored through follow-up reports. The aim is to work
closely together with GRECO - the CoE's anti-corruption enforcement
mechanism - and to avoid overlap in reporting mechanisms.1 28 Meanwhile, the
EU is negotiating membership of GRECO.1 29 Other ongoing measures include a
legislative proposal for the harmonisation of asset recovery rules across the
EU.1 30

120 Suzanne Mulcahy, 'Money, Politics, Power: Corruption Risks in Europe' (National System
Integrity Assessment Report, Transparency International, 6 June 2012) 3. Mulcahy refers in
particular to the Czech Republic, Hungary and Slovakia.
121 European Commission, 'Proposal for a Directive of the European Parliament and of the
Council on Public Procurement' (Proposal No COM(2011) 896 final, 20 December 2011)
art 55.1(b). See also European Commission, 'Proposal for a Regulation of the European
Parliament and of the Council on the Access of Third-Country Goods and Services to the
Union's Internal Market in Public Procurement and Procedures Supporting Negotiations on
Access of Union Goods and Services to the Public Procurement Markets of Third Countries'
(Proposal No COM(2012) 124 final, 21 March 2012).
122 European Commission, 'Communication from the Commission to the European Parliament,
the Council and the European Economic and Social Committee: Fighting Corruption in the
EU' (Communication No COM(2011) 308 final, 6 June 2011).
123 Ibid 3-4.
124 Ibid 6-8.
125 Ibid 4.
126 Ibid 6.
127 Ibid 7.
128 European Commission, 'Commission Steps Up Efforts to Forge a Comprehensive
Anti-Corruption Policy at EU Level', above n 111.
129 European Commission, 'Communication from the Commission to the European Parliament,
the Council and the European Economic and Social Committee: Participation of the
European Union in the Council of Europe Group of States against Corruption (GRECO)'
(Communication No COM(2012) 604 final, 19 October 2012).
130 European Commission, 'Proposal for a Directive of the European Parliament and of the
Council on the Freezing and Confiscation of the Proceeds of Crime in the European Union'
(Proposal No COM(2012) 85 final, 12 March 2012).
2013] The InternationalLegal Framework against Corruption 225

2 Council of Europe
As is known, the general focus of the CoE is on the development of common
and democratic principles in Europe, as well as on the rule of law and human
rights.131
On 6 November 1997, the Committee of Ministers of the CoE adopted the
Twenty Guiding Principlesfor the Fight against Corruption.132 These guidelines
set out a broad spectrum of anti-corruption measures, such as limiting immunity
for corruption charges, denying tax deductibility for bribes, ensuring free media
and preventing the shielding of legal persons from liability.
The Criminal Law Convention was adopted by the CoE in early 1999 and has
been ratified by 43 states.1 33 An Additional Protocol to the Criminal Law
Convention on Corruption was adopted in May 2003;134 it has been ratified by
31 states and signed by an additional 11 states.135 The CriminalLaw Convention
aims to harmonise the definition of a certain type of corruption, namely that of
public officials. Such harmonisation, as stated by the Explanatory Report that
accompanied the CriminalLaw Convention,136 would more easily allow for the
requirement of dual criminality to be met by the states parties.
The Civil Law Convention on Corruption ('Civil Law Convention') was
adopted on 4 November 1999 and entered into force four years later.137 It has

131 See Council of Europe, Our Objectives (2012) <http://www.coe.int/aboutCoe/index.asp?

page=nosObjectifs&l=en>.
132 Committee of Ministers, Council of Europe, Resolution (97)24 on the Twenty Guiding
Principlesfor the Fight against Corruption (6 November 1997).
133 The Criminal Law Convention has been ratified by the following member states of
the Council of Europe ('CoE'): Albania, Andorra, Armenia, Azerbaijan, Belgium, Bosnia
and Herzegovina, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia,
Finland, France, Georgia, Greece, Hungary, Iceland, Ireland, Latvia, Lithuania,
Luxembourg, the former Yugoslav Republic of Macedonia, Malta, Moldova, Monaco,
Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia,
Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine and the UK. Moreover, it has been
ratified by one non-member state, namely Belarus. It has been signed, but not yet ratified, by
the following member states: Austria, Germany, Italy, Liechtenstein and San Marino. Two
non-member states, Mexico and the US, have signed but not yet ratified it.
134 Additional Protocol to the Criminal Law Convention, opened for signature 15 May 2003,
ETS No 191 (entered into force on 1 February 2005) ('Additional Protocol').
135 The Additional Protocol has been ratified by the following member states: Albania,
Armenia, Azerbaijan, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus,
Denmark, Finland, France, Greece, Iceland, Ireland, Latvia, Lithuania, Luxembourg,
the former Yugoslav Republic of Macedonia, Moldova, Montenegro, Netherlands, Norway,
Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine and the UK.
In addition, the Additional Protocol has been signed but not ratified by the following
member states: Andorra, Georgia, Germany, Hungary, Iceland, Italy, Liechtenstein,
Lithuania, Malta, Poland, Portugal, Russia and San Marino.
136 Council of Europe, Criminal Law Convention on Corruption: ExplanatoryReport, [21]-[22]
<http:/conventions.coe.int/Treaty/en/Reports/Html/173.htm>.
137 Civil Law Convention on Corruption, opened for signature 4 November 1999, ETS No 174
(entered into force 1 November 2003) ('Civil Law Convention').
226 Melbourne Journalof InternationalLaw [Vol 14

been ratified by 34 states and signed by another eight.138 It focuses on effective

civil remedies for any damage caused by corrupt acts. Both the Criminal Law
Convention and the Civil Law Convention are open for signature by
non-European countries.
In addition to these treaties, the CoE has issued several soft law instruments.
One of them is the recommendation on codes of conduct for public officials,
adopted on 11 May 2000.139 On 8 April 2003, the Committee of Ministers
adopted a recommendation on common rules against corruption in the funding of
political parties and electoral campaigns.1 40
The CoE's anti-corruption efforts have received substantial attention mainly
because of the anti-corruption implementation mechanism. The CoE established
GRECO on 1 May 1999.141 Its function is to monitor compliance with the
Council's anti-corruption standards,1 42 serving as a platform for both the
exchange of best practices and peer pressure.143 States that are not members of
the CoE can become members of GRECO144 and states that become parties to
the Criminal Law Convention or the Civil Law Convention automatically become
members.145 Currently, GRECO has 49 members, of which only one (the US) is
not a member of the CoE.
Each member of GRECO appoints up to two representatives for GRECO's
plenary meeting and provides a list of experts who can take part in GRECO's
evaluations. Observer status has been granted to the OECD and the UN Office on
Drugs and Crime ('UNODC'). Negotiations on EU participation in GRECO are
ongoing.1 46
GRECO's monitoring procedure consists of an evaluation round and a
compliance procedure. The evaluation rounds, during which all members are
evaluated, have specific themes. The evaluation is based on both written replies
to questionnaires and information received from public officials and members of
civil society during country visits. An evaluation may be followed by either
recommendations or observations. Members are required to provide follow-up
reporting on recommendations within 18 months after the evaluation report. In

138 The Civil Law Convention has been ratified by the following member states of the CoE:
Albania, Armenia, Austria, Azerbaijan, Belgium, Bosnia and Herzegovina, Bulgaria,
Croatia, Cyprus, the Czech Republic, Estonia, Finland, France, Georgia, Greece, Hungary,
Latvia, Lithuania, the former Yugoslav Republic of Macedonia, Malta, Moldova,
Montenegro, the Netherlands, Norway, Poland, Romania, Serbia, Slovakia, Slovenia, Spain,
Sweden, Turkey and Ukraine. Moreover, it has been ratified by one non-member state,
namely Belarus. It has been signed, but not yet ratified, by the following member states:
Andorra, Denmark, Germany, Iceland, Ireland, Italy, Luxembourg and the UK.
139 Committee of Ministers, Council of Europe, Recommendation No R 2000(10) of the
Committee of Ministers to Member States on Codes of Conduct for Public Officials
(11 May 2000).
140 Recommendation Rec(2003)4, above n 51.
141 Committee of Ministers, Council of Europe, Resolution 99(5) Establishing the Group of
States against Corruption (GRECO) (1 May 1999) app ('Statute of the GRECO').
142 Ibid art 2.
143 Ibid art 1.
144 Ibid art 4(2).
145 Criminal Law Convention art 24; Civil Law Convention art 14.
146 European Commission, 'Commission Fights Corruption', above n 111.
2013] The InternationalLegal Framework against Corruption 227

theory, GRECO's Rules of Procedure contain a special procedure for members

whose follow-up on recommendations is deemed to be globally unsatisfactory.1 47
This procedure has, however, not yet been applied. For observations no such
formal requirement of follow-up reporting exists.
Austria, Germany, Italy, Liechtenstein, Mexico, San Marino and the US have
ratified neither the CriminalLaw Convention nor the Additional Protocol to the
48
Criminal Law Convention on Corruption.1 The Civil Law Convention has not
been ratified by Germany, Italy, Russia, Switzerland, the UK or the US.149

C Other Regional Anti-CorruptionInstruments

1 Organisationfor Economic Co-Operation and Development
The OECD anti-corruption efforts are significant for two main reasons. First,
as indicated above, the OECD was the driving force behind international
anti-corruption tools. When the debate in the UN stalled over disagreement
between developed and developing countries, the OECD provided an alternative
forum to keep the debate moving. Secondly, several of the largest players in
international trade are OECD member states. They are home to some of the
largest multinational companies.
The OECD Convention was signed on 17 December 1997 and entered into
force on 15 February 1999. As of 1 January 2013, 40 states have become parties
to the OECD Convention.'50 Its aim is to 'assure a functional equivalence' on
bribery of foreign public officials 'without requiring uniformity or changes in
fundamental principles' of a state's legal system.151 It is open to non-OECD
states.152

147 Group of States against Corruption, Council of Europe, Rules of Procedure (adopted
4-6 October 1999, last amended 15-19 October 2012) r 32.
148 The Additional Protocol has not been ratified by Andorra, Austria, Belarus, the Czech
Republic, Estonia, Georgia, Germany, Hungary, Italy, Malta, Mexico, Monaco, Poland,
Portugal, Russia, San Marino, Turkey or the US.
149 A 2011 GRECO compliance report on Germany indicates that Germany is awaiting
amendments to its Strafgesetzbuch [Criminal Code] before it can ratify the Criminal Law
Convention and its Additional Protocol: Group of States against Corruption, Council of
Europe, 'Third Evaluation Round: Compliance Report on Germany' (Report,
9 December 2011) 2-3, 15 ('GRECO Compliance Report'). The report indicates that the
German government 'is, in principle, still aiming for such ratification': at 2-3. However, the
report continues that no concrete steps on such amendments or steps to ratification have
been seen and GRECO 'very much regrets' that Germany, one of its founding members, has
not yet ratified the Criminal Law Convention or its Additional Protocol: at 3, 15.
150 Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, Colombia,
the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands,
New Zealand, Norway, Poland, Portugal, Russia, Slovakia, Slovenia, South Africa, Spain,
Sweden, Switzerland, Turkey, the UK and the US.
151 Working Group on Bribery in International Business Transactions, Organisation for
Economic Co-Operation and Development, 'Commentaries on the Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions'
(21 November 1997) in Organisation for Economic Co-Operation and Development,
Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions and Related Documents, OECD Doc DAFFE/IME/BR(97)20
(8 April 1998) 12, 12 [2] ('OECD Convention Commentaries').
152 Non-member states may become parties to the OECD Convention on the condition that they
become full participants in the OECD Working Group on Bribery in International Business
Transactions ('Working Group on Bribery'): OECD Convention art 13.
228 Melbourne Journalof InternationalLaw [Vol 14

The OECD adopted a number of recommendations, such as: the 1996

recommendation of the Development Assistance Committee on Anti-Corruption
Proposals for Bilateral Aid Procurement;153 the 1998 recommendation on
improving ethical conduct in the public service;154 the 2006 OECD Council
Recommendation on Bribery and Officially Supported Export Credits;155 the
2009 Recommendation of the Council on Tax Measures for Further Combating
Bribery of Foreign Public Officials in International Business Transactions;156
and the 2009 Recommendation of the Councilfor Further Combating Bribery of
Foreign Public Officials in InternationalBusiness Transactions.157 In 2010, the
OECD adopted the 10 Principlesfor Transparency and Integrity in Lobbying.158
Corruption is also mentioned in s VII of the OECD Guidelinesfor Multinational
59
Enterprises,1 which were first adopted in 1976 and updated, for the fifth time,
in May 2011. In addition, as was the case for the CoE, the OECD has published a
number of guidelines and tools related to anti-corruption efforts, such as the
'OECD Bribery Awareness Handbook for Tax Examiners'1 60 and the Principles
for Donor Action in Anti-Corruption.161
As mentioned above, the OECD Convention resulted from strong
US lobbying to adopt an international anti-corruption treaty after its domestic
FCPA and the restrictions on US companies resulting thereafter. After a few
non-binding instruments, which slowly but steadily outlined the 'Agreed

153 Development Assistance Committee, Organisation for Economic Co-Operation and

Development, Anti-Corruption Proposals for BilateralAid Procurement: Recommendation
Endorsed by the Development Assistance Committee at Its High Level Meeting,
6-7 May 1996, OECD Doc DCD/DAC(96)1 1/FINAL (7 May 1996).
154 Council, Organisation for Economic Co-Operation and Development, Recommendation of
the Council on Improving Ethical Conduct in the Public Service Including Principles for
Managing Ethics in the Public Service, OECD Doc C(98)70/FINAL (23 April 1998).
155 Trade Committee, Working Party on Export Credits and Credit Guarantees, Organisation for
Economic Co-Operation and Development, OECD Council Recommendation on Bribery
and Officially Supported Export Credits, OECD Doc TD/ECG(2006)24
(14 December 2006).
156 Public Governance Committee, Organisation for Economic Co-Operation and Development,
Recommendation of the Council on Tax Measures for Further Combating Bribery of
Foreign Public Officials in International Business Transactions, OECD Doc C(2009)64
(25 May 2009).
157 Working Group on Bribery in International Business Transactions, Organisation for
Economic Co-Operation and Development, Recommendation of the Council for Further
Combating Bribery of Foreign Public Officials in International Business Transactions
(26 November 2009).
158 Public Governance Committee, Organisation for Economic Co-Operation and Development,
Recommendation of the Council on Principlesfor Transparency and Integrity in Lobbying,
OECD Doc C(2010)16 (18 February 2010) annex ('Principles for Transparency and
Integrity in Lobbying').
159 Organisation for Economic Co-Operation and Development, OECD Guidelines for
Multinational Enterprises (OECD Publishing, first published 1976, 2011 ed). See also
Organisation for Economic Co-Operation and Development, Text of the OECD Declaration
on International Investment and Multinational Enterprises (25 May 2011)
<http://www.oecd.org/daf/inv/investment-policy/oecddeclarationoninternationalinvestment
andmultinationalenterprises.htm>.
160 Organisation for Economic Co-Operation and Development, 'OECD Bribery Awareness
Handbook for Tax Examiners 2009' (Handbook, December 2009) <http://www.oe
cd.org/tax/crime/37131825.pdf>.
161 Development Assistance Committee, Organisation for Economic Co-Operation and
Development, Principles for Donor Action in Anti-Corruption,
OECD Doc DCD/DAC(2006)40/REV1 (8 December 2006).
2013] The InternationalLegal Framework against Corruption 229

Common Elements', the OECD Convention was adopted. It strongly resembles

the FCPA. The scope of the OECD Convention is limited to active
bribery - hence focusing on the bribe-giver (presumed to be mostly
representatives of Western corporations).
The OECD monitoring mechanism is a very rigorous, two-step process. The
first phase involves a system of self-evaluation aimed to assess the extent to
which a state party has implemented the OECD Convention's provisions in its
legislation. The second phase evaluates the practical implementation through a
system of mutual evaluation. The monitoring process was implemented in
1991.162
One study found that subsidiaries of transnational corporations ('TNCs') in
Ghana encountered fewer requests for bribes by Ghanaian officials if their home
state had ratified the OECD Convention than TNCs whose home state had not
ratified it.163 This may suggest that a widely disseminated, well-known and rigid
anti-corruption instrument such as the OECD Convention can indeed exert
substantial influence on corrupt behaviour, even beyond the OECD member
states.

2 Inter-American Convention against Corruption

The OAS Convention was adopted by the OAS on 29 March 1996 and entered
into force around one year later. It was the first binding multilateral
anti-corruption treaty. Except for Barbados, all OAS members (including the US
and Canada) have ratified it. The OAS Convention is open for signature by any
state, although presently only OAS member states have become parties. Before
the adoption of the UNCAC, the text of the OAS Convention was the most
far-reaching of the international anti-corruption instruments. 164
The OAS initiative was led by Venezuela and strongly supported by the
US.1 65 Reminiscent of the former dictatorial regimes in Latin America, the
Preamble to the OAS Convention focuses on the stability of democratic
institutions, society's moral fibre and justice, rather than (merely) on economic
considerations.1 66 Not surprisingly, the OAS Convention also makes the link
between corruption and narcotics trafficking.167

162 Cleveland et al, above n 10, 205.

163 Jennifer Spencer and Carolina Gomez, 'MNEs and Corruption: The Impact of National
Institutions and Subsidiary Strategy' (2011) 32 Strategic Management Journal 280, 293.
A similar test for Eastern European countries did not provide significant positive results,
though the authors suggest this may be due to timing issues: the data for the East European
countries were gathered 'in the middle of the primary ratification time frame' for OECD
countries and may therefore have been premature: at 293-4.
164 Joongi Kim and Jong Bum Kim, 'Cultural Differences in the Crusade against International
Bribery: Rice-Cake Expenses in Korea and the Foreign Corrupt Practices Act' (1997)
6 Pacific Rim Law & Policy Association 549, 551, 553.
165 Webb, above n 5, 193. For further analysis of corruption in Latin America, see Mauricio
Morales Quiroga, 'Corrupcion y democracia: America Latina en perspectiva comparada'
[Corruption and Democracy: Latin America in Comparative Perspective] (2009) 28 Gestidn
y Politica Pz'blica 205.
166 OAS Convention Preamble paras 2-3.
167 Ibid Preamble para 8.
230 Melbourne JournalofInternationalLaw [Vol 14

In addition, the OAS adopted model laws, such as those on norms of conduct
for public officials168 and access to administrative information.1 69
The OAS Convention does not include any monitoring mechanism, merely
requiring states parties to set up oversight bodies.170 In 2002, eight years after the
adoption of the OAS Convention, a monitoring mechanism (the Mechanism for
Follow-Up on the Implementation of the Inter-American Convention against
Corruption)was set up.171 It is based on rounds of mutual evaluation.

3 African Instruments
The African continent has not been spared from the scourge of corruption
either. Certain authors trace endemic patterns of corruption in Africa back to the
colonial era, which dismantled traditional checks and balances in favour of the
colonial centralisation of power.172 Several anti-corruption initiatives have been
introduced on the African continent, but their effectiveness is yet to be proven,
according to NGO watchdog TI.173
The African Union Convention on Preventing and Combating Corruption
('A U Convention') was adopted in Maputo, Mozambique on 11 July 2003 and
entered into force approximately three years later.174 As of 1 January 2013, 45
states have signed the AU Convention and 31 have ratified it.
The A U Convention provides for an Advisory Board, comprised of 11 experts,
to monitor implementation.1 75 The first Advisory Board was established in 2009.
So far, it has focused merely on establishing its own organisational structure. The
2011-2015 Strategic Plan provided for an additional two-year period for
'building its organizational efficiency'.176 No country reviews have taken place
yet and the Strategic Plan describes the role of the Advisory Board as that of a
think tank.177 The monitoring role is only one of the Advisory Board's goals.
Reflecting the corruption discussions in the UN in the 1960s and 1970s that were
tied to the negotiations of a code of conduct for TNCs,178 another goal is to
'collect information and analyze the conduct and behavior of multi-national

168 Departamento de Cooperacion Juridica, Organizacion de los Estados Americanos

[Department of Legal Cooperation, Organization of American States], Ley Modelo sobre
Normas de Conductaparael desempeiho defuncionesp'blicas [Model Law on Standards of
Conduct for Public Functions] (2008) <http://www.oas.org/juridico/english/ley modelo no
rmas.pdf>.
169 Ibid.
170 OAS Convention art 111(9).
171 Mechanism for Follow-Up of Implementation of the Inter-American Convention against
Corruption, OAS GA Res 1784, 3 plen sess, OAS Doc AG/RES 1784 (XXXI-O/01)
(5 June 2001).
172 See Yeh, above n 106, 630 n 4.
173 For a detailed analysis of the African anti-corruption instruments, see Transparency
International, Anti-Corruption Conventions in Africa: What Civil Society Can Do to Make
Them Work (1 January 2006) <http://www.transparency.org/whatwedo/pub/anti corru
ption-conventions in africa what civil-societycan do to make the>.
174 African Union Convention on Preventing and Combating Corruption, opened for signature
11 July 2003, 43 ILM 5 (entered into force 5 August 2006) ('AU Convention').
175 Ibid art 22.
176 African Union Advisory Board on Corruption, 2011-2015 Strategic Plan (June 2011) iii.
177 Ibid.
178 See generally David Coleman, 'The United Nations and Transnational Corporations: From
an Inter-Nation to a "Beyond State" Model of Engagement' (2003) 17 Global Society 339.
2013] The InternationalLegal Framework against Corruption 231

corporations operating in Africa and disseminate such information to national

authorities'.179 Presumably, the activities of the Advisory Board will not, in the
near future, involve the imposition of a rigorous monitoring process similar to
the implementation procedures used by GRECO or OECD. One author has called
for the establishment of an African Commission against Corruption, which
would be supported by UN investigators and exert pressure on African
governments to investigate allegations of corruptions.180
The Southern African Development Community Protocol against Corruption
('SADC Protocol') was signed on 14 August 2001 and entered into force two
years later.181 The SADC Protocol aims to align member states' definitions of
corruption, in order to facilitate cross-border cooperation.1 82 It covers a wide
range of corrupt practices (in both the private and public sectors) and provides a
broad list of preventive measures, which states parties 'undertake' to adopt.183
However, the promising text of the SADC Protocol lacks an efficient
implementation mechanism. It sets up a committee of states parties, to which
individual countries need to report biannually.184 To date, this monitoring
mechanism has not yet taken off.
The Economic Community of West African States Protocol on the Fight
against Corruption('ECOWAS Protocol') was signed on 21 December 2001 but
has not yet entered into force.185 Like the SADC Protocol, the ECOWAS
Protocol provides for a wide range of preventive measures, including codes of
conduct for public officials, transparency in procurement, whistleblower
protection, NGO participation and asset disclosure.1 86 Remarkably, the ECOWAS
Protocol also refers to the freedom of press and the right to informationl 87 _-a
rare example of an anti-corruption instrument explicitly referring to basic
freedoms or human rights.

D Anti-CorruptionInitiatives in InternationalFinancialInstitutions
1 World Bank
Since 1996, anti-corruption efforts have been integrated into the World
Bank's good governance conditionality.18 8 Corruption was no longer seen as a
purely economic problem of levelling the playing field for transnational business
transactions, as the FCPA and the OECD Convention had done, but as a serious
impediment to a society's general development. The World Bank's method for

179 African Union Advisory Board on Corruption, above n 176, 11.

180 Yeh, above n 106, 637-48.
181 Southern African Development Community Protocol against Corruption, opened for
signature 14 August 2001 (entered into force 6 August 2003) ('SADC Protocol').
182 Ibid art 2.
183 Ibid arts 3,4.
184 Ibid art 11.
185 Economic Community of West African States Protocol on the Fight against Corruption,
opened for signature 21 December 2001 (not yet in force) ('ECO WAS Protocol').
186 ECO WAS Protocol art 5.
187 Ibid.
188 For further details on the World Bank, see below Part III(D)(2). For case studies on
corruption in World Bank-funded projects, see Courtney Hostetler, 'Going from Bad to
Good: Combating Corporate Corruption on World Bank-Funded Infrastructure Projects'
(2011) 14(1) Yale Human Rights & Development Law Journal 231.
232 Melbourne Journalof InternationalLaw [Vol 14

measuring the progress in anti-corruption efforts nevertheless remains largely

econometric. 189
According to the World Bank:
Governance consists of the traditions and institutions by which authority in a
country is exercised. This includes the process by which governments are
selected, monitored and replaced; the capacity of the government to effectively
formulate and implement sound policies; and the respect of citizens and the state
for the institutions that govern economic and social interactions among them. 190
The World Bank uses six governance indicators for the measurement of a
country's governance score, of which control of corruption is one. 191 The World
Bank's focus on good governance was supported by literature explaining the
causes of corruption mainly in terms of government behaviour. According to
these studies, several governmental policies enhance corrupt practices.1 92 These
policies include: trade restrictions; government subsidies; price controls; low
wages in the civil service; and licensing requirements (especially if coupled with
a monopoly for certain officials or departments to grant the licences).1 93 As these
governmental policies facilitate rent-seeking, World Bank conditionality and
deregulation aimed to correct this.194 Other factors, however, also induce
rent-seeking practices, which are not (at least not directly) related to governance
policies. These include sociological factors, such as strong family ties and ethnic
diversity. Hence an exclusive focus on governance indicators allows these
additional contributors to fly under the radar.
The Integrity Vice Presidency ('IVP') investigates allegations of corruption
by World Bank employees (internal corruption) and in the execution of
Bank-funded projects (external corruption). World Bank employees have access

189 Gathii, above n 6, 127.

190 World Bank, Worldwide Governance Indicators (2012) <http:/info.worldbank.org/govern
ance/wgi/resources.htm>.
191 Ibid. The other five indicators are:
(i) voice and accountability;
(ii) political stability and absence of violence/terrorism;
(iii) government effectiveness;
(iv) regulatory quality; and
(v) rule of law
192 This paragraph is mainly based on Mauro, above n 27, 341-2.
193 See Susan Rose-Ackerman, 'When Is Corruption Harmful?' in Arnold J Heidenheimer and
Michael Johnston (eds), Political Corruption: Concepts & Contexts (Transaction Publishers,
3 rd ed, 2002) 353, 355, 358. Centralising the authority to provide, for example, driving or
export licences to one body can enhance efficiency on the one hand. On the other hand, if
officials know that citizens have no other recourse to be provided the licence, they can more
easily extract a bribe.
194 The World Bank's updated strategy on corruption and good governance reiterates that
'anti-corruption strategies without effective broader governance strategies are unlikely to
succeed': World Bank, 'Strengthening Governance: Tackling Corruption - The World
Bank Group's Updated Strategy and Implementation Plan' (Report, 6 March 2012) 7. This
updated strategy softens the idea of imposing one-size-fits-all conditions and blanket
deregulation: for example, 'a modest global [governance and anti-corruption] program based
on the World Bank's role as convener, connector and generator of knowledge': at 4;
'[World] Bank clients demand services and borrow to fund their own priorities and to meet
their own aspirations': at 20.
2013] The InternationalLegal Framework against Corruption 233

to an internal ethics line, in case they have any corruption-related questions.195

The World Bank operates a multilingual, anonymous 24-hour alert line, which
whistleblowers can call for corruption complaints.196 Such whistleblower tools
are not equally efficient in all countries. Certain authors have argued that in
Russia, for example, informing authorities of alleged corrupt acts seems too
reminiscent of the very negative reputation of informants during the Soviet
era. 197 As a consequence, 'this legacy stigmatizes whistleblowing'1 98 and very
few individuals seem willing to blow the whistle for corrupt acts. 199 Other
factors may play a role, such as a lack of credibility to the claim that the
promised anonymity will be respected. 200 Such hurdles are of course not solely
related to World Bank whistleblower policies, but one-size-fits-all policies of a
multilateral institution such as the Bank may not be equally effective in all of its
member states because of such cultural sensitivities.
The IVP assesses:
* whether a corruption complaint received 'relates to a sanctionable
practice in World Bank Group-supported activities';
* 'whether the complaint has credibility'; and
* 'whether the matter is of sufficient gravity to warrant an
investigation'.201
Priority of a specific corruption allegation is based on the possible
reputational risk, the amount of funds involved and the quality of the information
or evidence provided. The priority of the first criterion, the reputational risk to
the World Bank Group, is especially surprising: one would expect this type of
reputational risk management from a listed company, but not necessarily from a
state-funded development bank. It is worth noting that the latest OECD
follow-up report on corruption in the Netherlands criticised the criterion of
reputational risk to Dutch trading and political interests contained in the Dutch
prosecution guidelines. 202

195 The World Bank Group, 'Living Our Values: Code of Conduct' (World Bank, 2009)
40 <http:/siteresources.worldbank.org/INTETHICS/Resources/WorldBank Group Co
de Of Conduct 11_06_09.pdf>.
196 Ibid.
197 See, eg, Johnson and Sharma, above n 21, 14.
198 Ibid.
199 Jasmine Martirossian, 'Russia and Her Ghosts of the Past' in Roberta Ann Johnson (ed),
The Struggle against Corruption: A Comparative Study (Palgrave Macmillan, 2004) 81, 95.
200 The authors would like to thank an anonymous referee for this valuable comment.
201 World Bank, Frequently Asked Questions: About INT (30 November 2009) <http://web.worl
dbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/ORGUNITS/EXTD
011/0,,contentMDK:20520936~menuPK:588945~pagePK:64168445~piPK:64168309~theSi
tePK:588921,00.html>.
202 Working Group on Bribery in International Business Transactions, Organisation for
Economic Co-Operation and Development, 'The Netherlands: Phase 2 - Report on the
Implementation of the Phase 2 Recommendations - Application of the Convention on
Combating Bribery of Foreign Public Officials in InternationalBusiness Transactionsand
the 1997 Revised Recommendation on Combating Bribery in International Business
Transactions' (Report, Directorate for Financial and Enterprise Affairs, Organisation for
Economic Co-Operation and Development, 17 December 2008) 4 [6] <http://www.oe
cd.org/netherlands/41919004.pdf> ('Netherlands Phase 2 Follow-Up Report').
234 Melbourne JournalofInternationalLaw [Vol 14

The World Bank publishes a list of debarred individuals and firms on its
website. The current list covers individuals and entities from a very wide variety
of countries, including Australia, Bulgaria, China, the Democratic Republic of
Congo, France, Germany, India, Indonesia, Iraq, Mexico, Morocco, Russia,
Uganda, the US, Vietnam and many more. 203 A cross-barring agreement is in
place between the various multilateral development banks, 204 which greatly
facilitates the delisting of fraudulent entities and individuals. It would be useful
to consider a similar cross-barring agreement between national anti-corruption
bodies. The impact of debarment policies depends on the number of individuals
and entities engaged in corrupt practices that are covered by the debarment, as
well as their calibre. 205

2 Other MultilateralFinancialInstitutions
With the World Bank taking on the pioneering role, the other multilateral
financial institutions followed suit. The policies of each of the individual
institutions cannot be described in detail. Suffice it to say that all of these
institutions have in some way addressed the problem of corruption, adopting
policies for both internal and/or external corrupt practices. 206

E Private Initiatives
1 Transparency International
Established by a former World Bank Director in 1993, the NGO TI has been a
driving force behind the global anti-corruption movement. Its most influential
anti-corruption tool is the Corruption Perception Index ('CPI'). The CPI ranks
countries according to the perceived level of corruption, based on polls of

203 World Bank, World Bank Listing on Ineligible Firms & Individuals (2013)
<http://web.worldbank.org/external/default/main?theSitePK=84266&contentMDK=640698
44&menuPK=1 16730&pagePK=64148989&piPK=64148984>.
204 Agreement for Mutual Enforcement of Debarment Decisions, signed 9 April 2010 (entered
into by the World Bank Group, Asian Development Bank, African Development Bank
Group, the European Bank for Reconstruction and Development and the Inter-American
Development Bank).
205 The authors would like to thank an anonymous referee for underlining this point.
206 See, eg, European Bank of Reconstruction and Development, 'Anti-Corruption
Report - 2010' (Report, 31 December 2010); European Bank of Reconstruction and
Development, 'Revised Enforcement Policy and Procedures' (Policy Document,
2 December 2011) <http://www.ebrd.com/downloads/integrity/epp.pdf>; Salvatore
Schiavo-Campo et al, 'Mid-Term Evaluation of IDB-9 Commitments: Combating Fraud and
Corruption' (Background Paper, Inter-American Development Bank Office of Evaluation
and Oversight, March 2013) annex A ('Action Plan to Support Countries in Their Effort to
Fight Corruption and Foster Transparency'); Asian Development Bank,
'Anticorruption - Our Framework Policies and Strategies', above n 29; Anti-Corruption
Initiative for Asia and the Pacific, 'Anti-Corruption Policies in Asia and the Pacific: Legal
and Institutional Reform in 25 Countries' (Asian Development Bank/Organisation for
Economic Co-Operation and Development, 2007); Asian Development Bank/Organisation
for Economic Co-Operation and Development Anti-Corruption Initiative for Asia and the
Pacific, 'Anti-Corruption Action Plan for Asia and the Pacific' (30 November 2001)
<http://www.oecd.org/site/adboecdanticorruptioninitiative/meetingsandconferences/350216
42.pdf>.
2013] The InternationalLegal Framework against Corruption 235

primarily international business people and experts (typically expatriates). 207

Household surveys have been excluded as of 2002.208 The perceptions of
expatriates correlate with those of the local residents.209
The actual occurrence of corruption is virtually impossible to measure. The
perception of corruption may therefore provide the best alternative variable.
Critics have argued that such a ranking is misleading, as the perceived level of
corruption does not necessarily reflect the actual degree of corruption. 210
Moreover, the data input for the CPI comes from different sources, which may
distort the final ranking. 21 1 Only countries for which sufficient data is available
are included in the ranking. 212 The number of countries may consequently differ
from year to year, which makes comparisons between a country's ranking in
different years unreliable.2 13 As the OECD reports concerning, inter alia, the
Netherlands and Belgium have indicated, 214 the mapping of corruption would be
significantly enhanced if national authorities would make a greater effort to
compile statistics on the phenomenon. Some have criticised TI's rankings for
pitting countries against each other, others have critiqued the moralising
approach of the anti-corruption campaign in general for its stigmatising effect. 215

207 Theresa Thompson and Anwar Shah, 'Transparency International's Corruption Perception
Index: Whose Perceptions are They Anyway?' (Discussion Draft Working Paper,
March 2005) 12 <http:/siteresources.worldbank.org/INTWBIGOVANTCOR/Resources/
TransparencyInternationalCorruptionIndex.pdf>. For an in-depth analysis of anti-corruption
indicators, see Francisco-Javier Urra, 'Assessing Corruption: An Analytical Review of
Corruption Measurement and Its Problems: Perception, Error and Utility' (Working Paper,
Georgetown University, May 2007) <http://unpanl.un.org/intradoc/groups/public/document
s/apcity/unpan028792.pdf>; Johann Graf Lambsdorff, 'Measuring Corruption - The
Validity and Precision of Subjective Indicators (CPI)' in Charles Sampford et al (eds),
Measuring Corruption (Ashgate, 2006) 81. See also Guillaume Louis, 'De l'Opacite a la
transparence: les limites de l'indice de perceptions de la corruption de Transparency
International' [From Opacity to Transparency: The Limits of the Corruption Perceptions
Index of Transparency International] (2007) 31 Deviance et socidtd 41.
208 Thompson and Shah, above n 207, 3.
209 Lambsdorff, above n 207, 87.
210 Thompson and Shah, above n 207, 20.
211 Lambsdorff, above n 207, 82.
212 The methodology is described on TI's website: Transparency International, Corruption
Perceptions Index 2012: Frequently Asked Questions (2012) <http://www.transparency.or
g/cpi2012/in-detail>.
213 Lambsdorff, above n 207, 83.
214 Netherlands Phase 2 Follow-Up Report, above n 202. The OECD phase 2 follow-up report
on Belgium indicated that Belgium did not intend to set up a whistleblower system in the
private sector, as the previous report had recommended: Working Group on Bribery in
International Business Transactions, Organisation for Economic Co-Operation and
Development, 'Belgium: Phase 2 - Follow-Up Report on the Implementation of the Phase
2 Recommendations on the Applications of the Convention and the 1997 Revised
Recommendation on Combating Bribery of Foreign Public Officials in International
Business Relations' (Report, Directorate for Financial and Enterprise Affairs, Organisation
for Economic Co-Operation and Development, 10 January 2008) 3 [4] <http://www.oecd.or
g/investment/anti-bribery/anti-briberyconvention/39937450.pdf> ('Belgium Phase 2
Follow-Up Report').
215 On the stigmatisation critique: see, eg, David Kennedy, 'The International Anti-Corruption
Campaign' (1999) 14 Connecticut Journal of InternationalLaw 455. In Kennedy's view,
'the anti-corruption campaign transforms the politically or ideologically contestable into the
technically necessary and the morally imperative': at 462.
236 Melbourne Journalof InternationalLaw [Vol 14

Notwithstanding these critiques, the individual country scores are widely quoted
in the international press and publications on the issue of corruption. 216
In addition to the CPI, TI publishes a Bribe Payers Index ('BPI') and a Global
Corruption Barometer ('GCB'). The GCB is based on surveys of more than
100 000 people in 100 countries and does not provide a ranking. 217 This renders
the uptake more limited than that of the CPI. The BPI provides a ranking of
leading exporting countries according to the perceived likelihood of their firms
to bribe abroad. It is based on a survey of business executives focusing on the
business practices of foreign firms in their country. 218 As is the case for the CPI,
data for the BPI stem from different survey conductors, using different interview
methods (phone, face-to-face, etc).

2 The International Chamber of Commerce

By 1977, the International Chamber of Commerce ('ICC') had already
adopted its first set of flagship rules against corruption. The ICC Rules on
Combating Corruption ('ICC Rules') 219 serve as a set of self-regulatory rules for
companies and are described on the ICC's website as providing for 'good
commercial practices in fighting corruption'.220 The ICC Rules were
significantly amended in 2011 and reflect the spirit of the UN Guiding Principles
on Business and Human Rights,221 including through the ICC Rules' reference to
due diligence with regard to the reputation and capacity of its business partners
to comply with anti-corruption laws. 222 The ICC Rules recommend integrating a
number of its own provisions into all contracts with business relations. 223

216 Christiane Arndt and Charles Oman, Uses and Abuses of Governance Indicators (OECD
Publishing, 2006) 25.
217 See Transparency International, Global Corruption Barometer (2013) <http:/gcb.transpar
ency.org/gcb201011 />.
218 The 2011 Bribe Payers Index ('BPI') was based on questionnaires filled in by firms in
Argentina, Austria, Brazil, Chile, China, the Czech Republic, Egypt, France, Germany,
Ghana, Hong Kong, Hungary, India, Indonesia, Japan, Malaysia, Mexico, Morocco, Nigeria,
Pakistan, Philippines, Poland, Russia, Senegal, Singapore, South Africa, South Korea,
Turkey, the UK and the US: Deborah Hardoon and Finn Heinrich, 'Bribe Payers Index
2011' (Report, Transparency International, 2011) 25.
219 ICC Commission on Corporate Responsibility and Anti-Corruption, ICC Rules on
Combating Corruption (International Chamber of Commerce, first published 1977, 2011 ed)
('ICC Rules').
220 Ibid.
221 John Ruggie, Report of the Special Representative of the Secretary-General on the Issue of
Human Rights and Transnational Corporations and Other Business Enterprises: Guiding
Principles on Business and Human Rights - Implementing the United Nations 'Protect,
Respect and Remedy'Framework, UN Doc A/HRC/17/31 (21 March 2011) annex ('Guiding
Principles on Business and Human Rights: Implementing the United Nations 'Protect,
Respect and Remedy' Framework') ('UN Guiding Principles').
222 ICC Rules, above n 219, art 3.F. A link could be made with the UN Guiding Principles.If it
can indeed be seen as good commercial practice for companies to ensure respect for the
human rights that may be impacted on by corrupt acts, then deviation from the ICC Rules
would arguably constitute a potential breach of a company's due diligence obligation to
respect human rights.
223 Ibid art 3.E.
2013] The InternationalLegal Framework against Corruption 237

3 Other Fora
Freedom House is a Washington-based NGO which focuses on several issues,
including corruption. 224 Its main focus is, however, on freedom of the press. Its
research on corruption is less disseminated than that of TI.
Another forum for anti-corruption discussions is the World Economic Forum
('WEF'),225 a Geneva-based NGO funded by business membership
contributions. In 2004, the WEF launched the Partnering against Corruption
Initiative ('PAC'), a voluntary code of conduct initiative that member
corporations can elect to join.226 PACI calls for signatory companies to adopt a
zero-tolerance policy on bribery. 227 Its dual monitoring system combines
self-evaluation with external verification.

IV CHALLENGES
Notwithstanding a surge in awareness and a plethora of international
initiatives, many hurdles remain on the road towards a corruption-free world. To
start with, there is no agreement as to what exactly constitutes corruption.
Different countries and actors apply differing definitions. Even where agreement
exists as to a corrupt act, jurisdictional problems may impede prosecution.
Moreover, even after a successful legal challenge of corrupt acts, the process of
asset recovery needs to overcome several legal and logistical hurdles in order to
be successful. In addition, the link between corruption and good
governance - and between corruption and human rights - remains the subject
of intense debate.

A Definition
1 'Corruption'and 'Bribery'
As the ExplanatoryReport to the CoE's CriminalLaw Convention states,
[p]ossible definitions have been discussed for a number of years in different fora
but it has not been possible for the international community to agree on a
common definition. Instead, international fora have preferred to concentrate on
the definition of certain forms of corruption. 228
Bribery is the most well-known form of corruption, although it is only one
type. While the concrete wording of the definition differs slightly, it is generally

224 See generally Freedom House, About Us <http://www.freedomhouse.org/about-us>.

225 See generally World Economic Forum, About Us: History <http://www.weforu
m.org/history>.
226 Participating companies include Rio Tinto, Siemens, Deloitte, Merck,
Coca-Cola, TNT Express, Tyco, BASF, PricewaterhouseCoopers and Royal Dutch Shell:
see World Economic Forum, Partnering against Corruption Initiative (PACI) Members
(April 2013) <http://www3.weforum.org/docs/IP/2013/PACI/WEFPACIMembers 201
3.pdf>. The current Partnering against Corruption Initiative board includes a representative
from TI and from the Working Group on Bribery: see, eg, Christoph Frei and Valerie
Weinzierl, 'Case Story: World Economic Forum Partnering against Corruption Initiative' in
Birgit Errath (ed), Business against Corruption: Case Studies and Examples
(United Nations Global Compact Office, 2006) 152, 154.
227 Cleveland et al, above n 10, 209.
228 Council of Europe, Criminal Law Convention on Corruption: Explanatory Report,
above n 136, [2].
238 Melbourne Journalof InternationalLaw [Vol 14

defined as the offering, promising or giving, or the request or receipt, by any

person, directly or indirectly, of any undue advantage to or by any public official,
for themselves or for anyone else, to act or refrain from acting in the exercise of
their functions. 229 Most international instruments use the term 'corruption' in
their titles, though the focus lies (sometimes exclusively) on bribery.
A non-exhaustive list of types of corruption may give an idea of the breadth
of the phenomenon: 230
* bribery and graft (extortion and kickbacks);
* kleptocracy (stealing and privatising public funds);
* misappropriation (forgery, embezzlement, misuse of public funds);
* non-performance of duties (cronyism);
* influence peddling (favour brokering and conflict of interest);
* acceptance of improper gifts ('speed' money);
* protecting maladministration (cover-ups and perjury);
* abuse of power (intimidation and torture);
* manipulation of regulations (bias and favouritism);
* electoral malpractice (vote-buying and election-rigging);
* rent-seeking (public officials illegally charging for services after
creating artificial shortage);
* clientelism and patronage (politicians giving material favours in
exchange for citizen support);
* illegal campaign contributions (giving unregulated gifts to influence
policies and regulations).
Some authors have raised the concern that corruption is becoming a catch-all
term, encompassing very distinct social problems. 23 1 These authors argue that
the simplistic definitions, such as the one formulated by the World Bank, are
easily copied by donors as they are relatively broad and, possibly, because they
give the impression that corruption is a rather straightforward problem that can
be easily classified and tackled. 232 An overly broad definition, in these authors'
view, undermines the analytical usefulness of the tool and impedes the
development of efficient policies. 233 Others have warned that as the standard

229 An almost identical definition is given in the CoE Criminal Law Convention art 2. The
definition in art VI of the OAS Convention is also very similar: the solicitation or
acceptance, or the offering or granting, directly or indirectly, by, or to, a government official
or a person who performs public functions, of any article of monetary value, or other
benefit, such as a gift, favour, promise or advantage for him- or herself or for another person
or entity, in exchange for any act or omission in the performance of his or her public
functions. Article 1.1 of the OECD Convention applies a similar definition, though limited
in its scope to active bribery of foreign public officials: namely to offer, promise or give any
undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign
public official, for that official or for a third party, in order that the official act or refrain
from acting in relation to the performance of official duties, in order to obtain or retain
business or other improper advantage in the conduct of international business.
230 Johnson and Sharma, above n 21, 2.
231 Christine S Cheng and Dominik Zaum, 'Selling the Peace? Corruption and Post-Conflict
Peacebuilding' in Christine S Cheng and Dominik Zaum (eds), Corruption and
Post-Conflict Peacebuilding:Selling the Peace? (Routledge, 2012) 1, 4.
232 Ibid.
233 Ibid.
2013] The InternationalLegal Framework against Corruption 239

definition of 'corruption' focuses on the abuse of public office for private gain, it
cannot easily be applied to corporate corruption, where no public office is
involved and where there may only be a gain for the company, not for the
individual employee. 234

2 FacilitationPayments
Even though the international community seems to agree that, at least, bribery
should be covered by international corruption instruments, there is no agreement
as to whether facilitation payments (also called 'grease payments') are a form of
bribery. These are payments made to speed up a certain procedure or decision,
which would have eventually been completed or made anyway. If bribery covers
only payments or other undue advantages made in order to change the behaviour
of a public official (that is, to make the official act or refrain from acting), then
facilitation payments do not fit into that definition. Even if they are seen as
corrupt acts, certain international instruments have provided exceptions for such
payments.
The FCPA excludes facilitation payments from its scope.235 The (voluntary)
ICC Rules state by way of principle that facilitation payments should not be
made. 236 However, they recognise that companies 'may be confronted with
exigent circumstances, in which the making of a facilitation payment can hardly
be avoided, such as duress or when the health, security or safety of the
enterprise's employees are at risk'.237 In such case, the ICC Rules recommend
that such payments be accurately reflected in the books. 238 The OAS Convention
does not exclude grease payments from its scope. The commentaries on the
Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions ('OECD Convention Commentaries') clarify that
facilitation payments are not made 'to obtain or retain business', hence are
excluded from the OECD Convention's scope. 239 This exclusion reflects the
OECD Convention's aim to tackle corruption as a distortion of free
competition - grease payments, in this view, do not distort competition. 240
The argument that facilitation payments are not made to 'obtain or retain'
business - and therefore fall outside of the scope of the OECD Convention - is
too positivistic a view. This technical legal argument ignores the broader
consequences of facilitation payments. For example, even though a company
would receive a permit in the absence of the payment, the fact that it receives it
earlier when a payment is made should be seen as altering (advancing) its
business operations, thus helping it to 'obtain or retain' business in the broad
sense. The OECD Convention Commentaries do acknowledge that such
facilitation payments should be eradicated, but state that 'criminalisation by

234 Fleming and Zyglidopoulos, above n 25, 5-6.

235 FCPA § 78dd-1(b).
236 ICC Rules, above n 219, art 6.
237 Ibid.
238 Ibid.
239 OECD Convention Commentaries, OECD Doc DAFFE/IME/BR(97)20, 12 [4] (on art 1
para 1 of the OECD Convention).
240 Kubiciel, above n 5, 153-4.
240 Melbourne Journalof InternationalLaw [Vol 14

other countries does not seem a practical or effective complementary action'.241

This remark does not make much sense; indeed, the same remark could be made
vis-a-vis criminalisation of corruption as such - its breadth is not limited to
facilitation payments. If one upholds the need to criminalise corruption, it seems
illogical to state that criminalisation is not appropriate for one form of corrupt
payments, namely those aimed to speed up a procedure.
The European Bank of Reconstruction and Development is not willing to
condone facilitation payments; it further states that '[s]uch payments, which are
illegal in most countries, are dealt with in accordance with relevant local laws
and international conventions'.242 It does not clarify its stance in case local laws
do not prohibit grease payments, though an international convention ratified by
the relevant country does so.
The UNCAC does not seem to provide an exemption for facilitation payments,
which could potentially fall under the prohibition of providing any 'other
advantage' related to business transactions. 243 A not-for-profit
membership-based organisation, TRACE, conducted a business survey on
corruption. In this survey, most of the companies indicated that they started to
refuse to make facilitation payments, which had not led to the disruption of their
activities and that the number of requests for such grease payments even
decreased. 244 TRACE holds that all types of grease payments should be
prohibited, except in case of a medical or safety issue of an employee. 245 If the
aim of anti-corruption instruments is to tackle and alter a corrupt mentality
within society, excluding facilitation payments would indeed seem to defeat the
purpose.

3 The Local Law Exception

In addition to the exclusion of facilitation payments, a 1988 amendment to the
FCPA under the Reagan Administration provided for two affirmative
defences. 246 Nevertheless, corrupt practices normally covered by the FCPA will
not be prosecuted in cases where payment: (i) is allowed under the laws of the
host country; or (ii) is a normal payment for travel and accommodation arising
out of promotional activities aimed at obtaining or retaining new business. 247
The legality defence (acts allowed under the laws of the host country) reflects, to
a limited extent, the critique by certain developing countries that the US-led
crusade against corruption is a form of modern moral imperialism, which does

241 OECD Convention Commentaries, OECD Doc DAFFE/IME/BR(97)20, 13 [9] (on art 1
para 1 of the OECD Convention).
242 European Bank for Reconstruction and Development, 'Fraud and Corruption - Definitions
and Guidelines for Private Sector Operations' in European Bank for Reconstruction and
Development, Accountability, Integrity and Anti-Corruption (2012) <http://www.ebr
d.com/pages/about/integrity.shtml>.
243 Kubiciel, above n 5, 154.
244 Alexandra Addison Wrage, 'The High Cost of Small Bribes' (Guidebook, TRACE
International, 2009) 3, 8, 16 <https:/secure.traceintemational.org/data/public/TheHighC
ost of Small Bribes_2-65416-1.pdf>.
245 Cleveland et al, above n 10, 222.
246 FCPA § 78dd-1(c), as amended by Omnibus Trade and Competitiveness Act of 1988,
Pub L No 100-418, § 5003(a), 102 Stat 1106, 1415 (1988).
247 Ibid.
2013] The InternationalLegal Framework against Corruption 241

not respect certain local gift-giving traditions. 248 The Philippines, for example,
opposed the US demarches at the WTO with a reference to 'unique cultures and
traditions' requiring due respect. 249
Along the lines of the Philippines' objection, certain authors stress that any
definition of 'corruption' should allow the accommodation of cultural
differences. They argue for a relative definition, along the lines of that given by
Arnold Heidenheimer, who, broadly speaking, defines corruption as whatever the
public perceives it to be. 250 India, for example, has for a long time been
organised along caste lines with a high importance attached to interpersonal
relations. Some authors have argued that such cultural background gives notions
of nepotism and corruption a different meaning in, in this case, India, than it has
in industrialised Western countries. 251 Imposing a one-sided Western definition
of 'corruption' implies that 'citizens of less-developed countries are indeed
somewhat one-sidedly exposed to the easy moral judgments of citizens of more
developed societies'.252 Moreover, it is claimed that corruption during the
transition phase of a traditional society towards modernisation can actually
empower previously disadvantaged groups. Where they are disproportionately
disadvantaged on the economic and political fronts, corruption by these groups
may allow them to seize the power from which they had previously been
excluded. 253 The UNCAC's flexible reference to an 'undue advantage' 254 reflects
this concern of moral imperialism. Different countries proposed different
definitions of corruption - hence the decision to not formulate any one
definition in the UNCAC. Certain provisions of the UNCAC, however, provide
definitions for specific types of corruption. 255 The Explanatory Report to the
CoE Criminal Law Convention equally reflects the moral imperialist objection
and excludes socially acceptable gifts from its coverage.2 56 The

248 Cleveland et al, above n 10, 206-7; Kim and Kim, above n 164, 551.
249 Gantz, above n 16, 467. See also Nichols, above n 19, 365, citing 'Philippines Rejects US
Proposal for WTO Accord on Bribery, Corruption' (1996) 13 InternationalTrade Reporter
880. In addition, certain countries called the efforts to have anti-corruption standards
enforced through the WTO a form of protectionism: see Kim and Kim, above n 164.
250 Arnold J Heidenheimer, 'Perspectives on the Perception of Corruption' in
Arnold J Heidenheimer and Michael Johnston (eds), Political Corruption:
Concepts & Contexts (Transaction Publishers, 3 rd ed, 2002) 141, 143, 152. See also
Maya Chadda, 'India: Between Majesty and Modernity' in Roberta Ann Johnson (ed), The
Struggle against Corruption:A Comparative Study (Palgrave Macmillan, 2004) 109, 123.
251 Arnold J Heidenheimer, 'Perspectives on the Perception of Corruption' in
Arnold J Heidenheimer, Michael Johnston and Victor T LeVine (eds), PoliticalCorruption:
A Handbook (Transaction Publishers, 1989) 149, 162; Chadda, above n 250, 123.
252 Kubiciel, above n 5, 145.
253 Huntington, above n 7, 64.
254 UNCAC art 15.
255 For example, bribery of national public officials (art 15), trading in influence (art 18), abuse
of functions (art 19) and illicit enrichment (art 20).
256 Council of Europe, Criminal Law Convention on Corruption: Explanatory Report,
above n 136, [38]. It can be noted that entrenched patterns of gift-giving are not necessarily
traditions in the sense of 'accepted' social practices. The line should be drawn between
entrenched patterns of corrupt practices and gift-giving that reflects longstanding cultural
traditions.
242 Melbourne Journalof InternationalLaw [Vol 14

OECD Convention Commentaries, on the other hand, clarify that the OECD
Convention prohibits advantages regardless of perceptions of local customs. 257
The tension between a transnational definition and the call for cultural
sensitivities is not necessarily insurmountable. The traditional definition of
'corruption' is generally formulated as the offering, promising or giving (or the
request or receipt) of an undue advantage to (or by) a public official to act or
refrain from acting in the exercise of their functions. An undue advantage
implies that the official would have acted differently in the absence of the
advantage. The advantage is thus linked to an official's specific behaviour.
Cultural gift-giving practices, however, are deemed to be a matter of social
courtesy: they do not necessarily constitute corruption as they are not aimed to
alter a specific act of a public official. Hence, even the traditional definition of
'corruption' could allow for the exclusion of social courtesy practices. But this
thin line between corruption and social courtesy leaves a degree of legal
uncertainty. The assessment of an undue advantage is based on a more
straightforward criterion: would the public official have behaved differently
without the bribe? To assess a social courtesy, courts need to resort to a variety
of factors, such as what the socially accepted practice is 25 8 and whether the
amount of the payment or level of advantage stays within the limits of that
practice.
The local law exception of the FCPA brings further legal certainty: there is no
corrupt practice if the act is allowed under the written law of the host country.
However, this formulation ignores the fact that social courtesy practices are often
not explicitly permitted by written laws. Hence, the question of informal social
courtesy practices remains unanswered.
The Supreme Court of Korea has, on several occasions, ruled on the question
of traditional ttokkap ('rice-cake') expenses. 259 The Court's approach reflects a
healthy dose of pragmatism. On the one hand, it strictly upholds anti-corruption
legislation, condemning any payment or other advantage aimed at altering an
official's behaviour. On the other hand, it excludes practices of social courtesy
from the definition of 'corruption'. The Court's main criterion is whether a
payment was 'sufficiently in consideration for action within an official's
duties'.260 Social courtesy gifts are not viewed as corruption insofar as they are
not made to alter an official's behaviour. In addition, the Korean Supreme Court
assessed whether the size of the payment remained within socially acceptable
limits. 26 1 The various nuanced judgments of the Korean courts on this point
suggest that any danger of creating a slippery slope, if socially accepted practice
is excluded from the coverage of anti-corruption instruments, may be
exaggerated. 262

257 OECD Convention Commentaries, OECD Doc DAFFE/IME/BR(97)20, 13 [7]

(on art 1 para 1 of the OECD Convention).
258 Socially accepted practice is here understood in the sense of socially supported, not socially
condoned.
259 See Kim and Kim, above n 164, 564-71.
260 Ibid 565.
261 Ibid.
262 Ibid 566-71.
2013] The InternationalLegal Framework against Corruption 243

A 2005 judgment by the Supreme Court of the Netherlands reflects a similar

view on where to draw the line between corrupt and non-corrupt acts: it correctly
held that gifts made 'in order to establish and/or maintain a relationship with that
public official with the aim being to obtain preferential treatment' should be seen
as corruption. 263

4 The Scope of Corrupt Acts Covered by the InternationalAnti-Corruption

Instruments
The one type of corruption that all international anti-corruption treaties have
in common is the bribery of foreign public officials. It is useful to recall the UN
ICCPO, which explicitly mentions that
[a] public office, as defined by national law, is a position of trust, implying a duty
to act in the public interest. Therefore, the ultimate loyalty of public officials shall
be to the public interests of their country, as expressed through the democratic
264
institutions of government.
This wording may reflect the remnants of the French Revolution: monarchy,
privilege, nepotism and hereditary tenure were replaced by representative
government. Bureaucrats became public servants and public office became a
public trust. 265 This idea of public trust is reflected in the fact that most
anti-corruption instruments - and even the relevant literature - focus almost
exclusively on bribery in the public sphere, that is, with the involvement of a
public official. Corruption in the private sphere has received much less attention,
even though its impact on a society's morale can be equally detrimental. 266
This focus on the public sector is reflected in the traditional World Bank
definition of 'corruption' as the use of public office for private gain.267 Most
scholars and organisations have adopted a similar definition, though certain
experts and entities have broadened the working definition. The Asian
Development Bank and TI, for example, include private sector corruption in their
definitions (even though TI's main anti-corruption indicator, the CPI, only
reflects public sector corruption). 268

263 Hoge Raad [Supreme Court of the Netherlands], Case No 03034/04 A, LJN AT8318,
27 September 2005, [4.4], quoted in Idlir Pegi and Eelke Sikkema, 'Corruption and Legal
Certainty; The Case of Albania and the Netherlands Implementation of the Criminal Law
Convention on Corruption in a Transitional and Consolidated Democracy' (2010)
6(1) Utrecht Law Review 101, 114.
264 ICCPO, UN Doc A/RES/51/59, art I(1).
265 Johnson and Sharma, above n 21, 15 n 1, citing Gerald E Caiden and Naomi Caiden,
'Administrative Corruption' (1977) 37 Public Administration Review 301.
See also Huntington, above n 7, 60.
266 Alina Mungiu-Pippidi et al, 'Contextual Choices in Fighting Corruption: Lessons Learned'
(Report 4/2011, Norwegian Agency for Development Cooperation, July 2011) 3-4. For a
definition of 'corruption' which includes private sector acts: see, eg, Argandofia, above n 36,
481. See also Part IV(F) below.
267 Most authors have formulated similar definitions: see, eg, Rose-Ackerman, 'When Is
Corruption Harmful?', above n 193, 353.
268 Asian Development Bank, 'Anticorruption - Our Framework Policies and Strategies',
above n 29, 9-10; Transparency International, What is the Corruption Perceptions Index?
(2013) <http://www.transparency.org/cpi2011/in detail>.
244 Melbourne Journalof InternationalLaw [Vol 14

The limitation to 'public office' is assessed below, 269 but the limitation 'for
private gain' also merits reflection. Certain documents only mentioned the
personal gain of the bribe-taker, which is too restrictive. 'Private gain' can be
interpreted more broadly than 'personal gain': a corrupt act takes place not only
when it benefits the bribe-taker personally, but also when it advantages, for
example, a family member, friend, acquaintance or even the political party or
company to which the bribe-taker belongs. 270 If corruption is defined as the
abuse of public office for private gain, the focus lies on the abuse that occurs,
rather than on the person who gains. 271 Nevertheless, the concrete impact of a
corrupt act could differ depending on who receives the benefits of the bribe: for
example, the advantage can be retained by one individual or shared among all
members of the bribe-taker's tribe. However, due to strong resistance from the
US, the UNCAC does not cover corruption perpetrated by members of political
parties. 272 Conversely, certain sound political decisions could also imply a
private gain, without amounting to what would commonly be perceived as
corruption. 273 There is a thin line between normal political lobbying in favour of
one's own constituency and corrupt practices. 274 The same thin line can be found
in private promotional or lobbying efforts. For example, if pharmaceutical
companies offer doctors free seminars in an exotic place to provide information
on new medicine, not everyone would deem this to be outright corruption. A
counter-example is tax evasion by a company or individual: as long as no bribe is
paid to a public official in the process, such fraudulent acts would not constitute
corruption under the international instruments that require the involvement of a
public official (such as the OECD Convention), even though they may be
perceived as corrupt. 275 As mentioned above, certain developing countries also
insist on distinguishing between corruption and traditional gift-giving.
Notwithstanding certain grey areas, however, most people seem to agree on most
instances of corrupt practices.
The various international anti-corruption instruments differ in scope. Some,
such as the OECD Convention, are clearly limited to a specific type of

269 See below Part IV(F).

270 Whilst the Wetboek van Strafrecht [Penal Code] (Netherlands) does not explicitly
criminalise indirect bribery, case law has interpreted the relevant provisions as criminalising
such indirect forms of corruption: see Pegi and Sikkema, above n 263, 113.
See also Rechtbank Rotterdam [Rotterdam District Court], Case No 10/000019-03, UN
AR7472, 14 December 2004, affd Gerechtshof's-Gravenhage [The Hague Court of Appeal],
Case No 22-007801-04, UN AW2327, 19 April 2006.
271 Kubiciel, above n 5, 148.
272 See below Part IV(D).
273 For example, members of parliament could vote in favour of a law allowing for the
establishment of one-person management companies. Many of those parliamentarians could
fall under the new law's scope, which would allow them to exercise their functions under
the management company structure - potentially providing them with a substantial tax
benefit compared with exercising those functions as a natural person. Depending on the
specific circumstances, such voting behaviour would not normally be considered a form of
corruption, even though the parliamentarians may obtain a private benefit from the new law.
274 See Ogus, above n 52, 330. One author raises the question as to the status of vote buying in
international fora, for example in the International Whaling Commission: Alexander
Gillespie, 'Good Governance, Corruption & Vote Buying in International Forums' (2004)
1New Zealand Yearbook ofInternationalLaw 103.
275 Mauro, above n 27, 343. Of course, such acts will probably be covered by the crime of
fraud.
2013] The InternationalLegal Framework against Corruption 245

corruption. Others cover bribery and some other forms of corruption, which they
define in broader or narrower terms. It is therefore difficult to rank international
instruments based on the breadth of their scope. Rather, when compared, certain
instruments are defined more broadly for one specific issue (for example, illicit
enrichment) but more narrowly on others (for example, international cooperation
provisions) when compared to other instruments.
As indicated above, the OAS and OECD Conventions are the earliest
multilateral anti-corruption instruments. The scope of the OECD Convention is
very limited. Subsequent multilateral instruments have broadened this scope,
both in terms of the persons covered ('rationepersonae') and types of corruption
covered ('ratione materiae').
In view of its early adoption (in March 1996, one and a half years before the
adoption of the OECD Convention) - and in view of Latin America's recent
recovery from corrupt dictatorships - the OAS Convention is remarkably broad
in scope. 276 The OAS Convention covers both active and passive bribery, of both
foreign and domestic officials. 277 Unlike the OECD Convention, no link with a
business transaction is required in order for an act to be classified as an act of
corruption under the OAS Convention. It suffices that there is bribery related to
any act or omission in the performance of an official's public position. 278 The
corrupt act may involve a bribe, gift, favour or advantage for either the public
official or another person or entity. 279 Similarly, the OAS Convention covers the
concealment of the proceeds of corrupt acts, 280 as well as illicit enrichment. 28 1
The criminalisation of illicit enrichment was intended to facilitate the
investigations of the Latin American judicial systems that were still being rebuilt
in the wake of dictatorial regimes. Canada and the US, however, held that
criminalising illicit enrichment would be contrary to the presumption of
innocence. The OAS Convention appeased these concerns, by making the
requirement to criminalise illicit enrichment subject to a state's constitution and
the fundamental principles of its legal system. 282 Nevertheless, both Canada and
the US made reservations to this article.
Under the OAS Convention, the criminalisation of other types of corruption is
stated to be merely 'desirable'; member states simply make undertakings to
'consider' prohibiting these other types, namely the improper use of classified or
confidential information, the improper use or diversion of state property and
trading in influence. 283 However, it is not required that the act of corruption
actually harms state property. 284 Furthermore, the fact that the corrupt act had a
political purpose does not, in itself, suffice to make it a political offence and
consequently shield it from regular criminal prosecutions. 285 In view of Latin

276 Kim and Kim, above n 164, 551, 553.

277 OAS Convention arts 111(10), VI(6).
278 Ibid art VI(1).
279 Ibid.
280 Ibid.
281 Ibid art IX.
282 Ibid.
283 Ibid art XI.
284 Ibid art XII.
285 Ibid art XVII.
246 Melbourne Journalof InternationalLaw [Vol 14

America's past of violent dictatorships, it seems especially useful to make such a

provision explicit.
As discussed above, the OECD Convention strongly mirrors the FCPA. Its
scope is limited to the active bribery of foreign public officials; 286 it does not
cover the bribery of domestic public officialS287 as the OAS Convention does. In
addition, under the OECD Convention, the bribery must be related to the conduct
of international business and the gaining or retaining of an undue advantage.
However, other forms of corruption are not covered by the OECD Convention.
The CoE Criminal Law Convention applies to active and passive bribery in
both the public and private sector. Its scope ratione personae is very broad: it
covers the bribery of domestic and foreign public officials, members of domestic
and foreign public assemblies, officials of international organisations, as well as
judges and officials of international courts. 288 The scope ratione materiae is
more limited: only certain types of corruption are covered, namely bribery,
trading in influence and the laundering of proceeds of crime. 289
The AU Convention equally covers a broad range of corrupt practices,
including active and passive bribery in the private sector and of public officials
(without distinguishing between domestic and foreign public officials), 290 as well
as influence peddling, illicit enrichment and the concealment of proceeds derived
from corrupt acts. 291 States parties 'undertake' to adopt legislation to criminalise
these acts, 292 but it is unclear what the exact legal implications of this wording
are. 293 The AU Convention further states that states parties 'shall' adopt
measures for the confiscation and seizure of the proceeds of corruption. 294
Arguably, if states are required to adopt legislation for the confiscation and
seizure of the proceeds of corruption, this implies that they should have
criminalised corruption in the first place.
The SADC Protocol also covers both active and passive corruption of public
officials, as well as corruption in the private sector. 295 However, the states parties
only 'undertake' to take the necessary measures to, inter alia, criminalise such
corrupt acts. 296 As far as the corrupt act is related to an economic or commercial
transaction, bribery of foreign officials only falls under the scope of the
SADC Protocol and is subject to the state's domestic law. 297 The scope of the
AU Convention and the SADC Protocol, as well as that of the

286 OECD Convention art 1.

287 See ibid art 1.1.
288 Criminal Law Convention arts 2-11.
289 Ibid arts 2-13.
290 Article 13(1) of the AU Convention stipulates that a state party has jurisdiction over acts of
corruption and related offences not only when committed on its territory, but also if
committed, inter alia, by one of its nationals or residents abroad. This implies that the scope
of the AU Convention also covers an act of corruption of a foreign public official, at least
when committed by a national or resident of the state party in question.
291 AU Convention arts 4, 6, 8.
292 Ibid art 5.
293 Webb, above n 5, 202-3.
294 AU Convention art 16.
295 SADC Protocol arts 2-3.
296 Ibid art 4.
297 Ibid art 6.
2013] The InternationalLegal Framework against Corruption 247

ECO WAS Protocol,298 however, have to be assessed in light of their very weak
monitoring mechanism.
The UNCAC, as the most recent and universal anti-corruption convention, is
also the most elaborate and detailed international anti-corruption instrument. The
scope ratione personae of the UNCAC is rather broad in that it provides a
functional definition of public official. 299 The UNCAC covers not only
corruption of foreign public officials, but also of domestic public officials and
officials of public international organisations. 300 In addition, employees working
for a public agency or enterprise, or an entity that provides a public service, 3 01
are considered public officials for the purposes of the UNCAC. 302 As there is no
official commentary to the UNCAC, there is no further official guidance as to the
exact scope of these provisions. Guidance can be found in the OECD Convention

298 The scope of the ECO WAS Protocol is not straightforward, as the definition of corrupt
practices is scattered over several articles, which at certain points do not seem to be
completely consistent. It requires states parties to criminalise active and passive bribery of
(foreign and domestic) public officials (arts 6.1(a), 6.2) and also the act of diverting state or
private assets by a public official (arts 6.1(e), 6.2). The ECO WAS Protocol does not require
states parties to criminalise illicit enrichment. However, it notes that if a state already has
the offence of illicit enrichment, this shall cover the situation in which a public official
cannot reasonably explain a significant increase in their assets (art 6.3). Creating or using
false invoices or other accounting documents or omitting to record payments shall equally
be criminal offences (art 4). The same holds for public officials or employees of companies
who accept bribes, or persons offering or giving such bribes, thereby acting in violation of
their duties (art 5). This seems to exclude facilitation payments from the
ECO WAS Protocol's scope, as these bribes are made to speed up a service which falls
within an official's or employee's normal functions. Influence peddling in both the public
and private sector should equally be criminalised, whether or not the influence has actually
been exerted. Hence, the ECO WAS Protocol only covers two instances of corruption in the
private sphere:
(i) bribery to act in violation of the functions of a private company's employee; and
(ii) influence peddling.
The latter is not limited to employees of private companies, but covers any such instance in
the private sphere (art 6.1(c)). It is not clear why the first instance is not equally broadened
up to bribery in the private sector at large (eg, bribery of a private school teacher for better
grading, or a private school principal for privileged access to the school). The concealment
of the illicit proceeds of corruption are to be criminalised in accordance with the
fundamental principles of a state's national law (art 7.2). The latter limitation seems
somewhat surprising - if corrupt acts are to be criminalised, it seems logical to also require
criminalisation of the concealment of the illicit proceeds of such acts. The
ECO WAS Protocol clarifies that it is applicable:
(i) whenever the corrupt act was committed in a member state;
(ii) whenever such act produces effects in a member state; or
(iii) when a national institutional system fails to provide the most basic preventive
measures enumerated in the ECO WAS Protocol (art 3).
The latter provision is noteworthy, especially as the preventive measures listed by the
ECO WAS Protocol are broad (drafting codes of conduct for public officials, ensuring civil
society participation). For further analysis of the influence of civil society and
democratisation on corruption, see Mark E Warren, 'La democracia contra la corrupcion'
[Democracy against Corruption] (2005) 47 Revista Mexicana de Ciencias Politicas y
Sociales 109 (freedom of press and the right to information, asset disclosure by public
officials, etc).
299 A functional definition has also been adopted in Belgian anti-corruption legislation:
see Belgium Phase 2 Follow-Up Report, above n 214, 24.
300 UNCAC arts 15-16.
301 As defined in the relevant states party's domestic law: see UNCAC art 2(a).
302 Ibid.
248 Melbourne Journalof InternationalLaw [Vol 14

Commentaries, which clarify that a public function includes any activity in the
public interest. 303 An official of a public enterprise is deemed to perform a public
function unless the enterprise operates on a normal commercial basis. 304
As far as the scope ratione materiae of the UNCAC is concerned, the mere
promise, offer or request of a bribe falls under the its scope. 305 The Explanatory
Report to the CoE Criminal Law Convention, however, requires that the
beneficiary at least keeps the gift for a certain time, so that the involuntary
receipt of a gift that is returned immediately would not constitute bribery. Such
an interpretation of corruption focuses more on the acceptance than on the offer,
which seems more appropriate. 306 Whilst the earlier UNDAC was limited (as its
title indicates) to corruption in transnational business transactions, the current
UNCAC is not limited in this way. Active and passive corruption by, or of,
domestic public officials falls under the scope of the UNCAC, if aimed at making
the official act (or refrain from acting) in the exercise of their official duties. 307
However, for corrupt acts involving foreign public officials or officials of a
public international organisation, a distinction is made between active and
passive bribery. 308 In order to be covered by the UNCAC, active bribery (where a
bribe is promised, offered or given to a foreign public official) should aim to
make the official act (or refrain from acting) in the exercise of their official
duties in order to obtain or retain business or other undue advantage 'in relation
to the conduct of international business'.309 For passive bribery (where a bribe is
intentionally solicited or accepted by an official), states parties shall 'consider'
criminalising such solicitation or acceptance, whether or not this is related to
business transactions. 310 The mere 'consideration' suggested by the UNCAC
reflects earlier UN negotiations on the issue of corruption, where developing
countries focused mainly on the supply side of bribes - more specifically the
offering of bribes by foreign multinationals. 31 1 Legally speaking, however, the
distinction between active and passive bribery seems tenuous: if offering a bribe
should be criminalised, so should accepting a bribe. The Netherlands, for
example, had already criminalised the passive bribery of public officials in the
1809 Criminal Code of the Kingdom of Holland.312

B ExtraterritorialJurisdictionover Foreign Corrupt Practices

An important aspect of the relevant anti-corruption conventions is that they
focus on foreign corrupt practices, which are practices committed outside the
forum state. States normally address these foreign corrupt practices by exercising
extraterritorialjurisdiction(or at least jurisdiction that is only in part territorial).

303 OECD Convention Commentaries, OECD Doc DAFFE/IME/BR(97)20, 13 [12].

304 Ibid.
305 UNCAC arts 15-16.
306 Kubiciel, above n 5, 147.
307 UNCAC art 15.
308 Ibid art16.
309 Ibid art 16.1 (emphasis added).
310 Ibid art 16.2.
311 As discussed in Part II above.
312 Criminal Code of the Kingdom of Holland 1809 (Holland), cited in Pegi and Sikkema,
above n 263, 111.
2013] The InternationalLegal Framework against Corruption 249

This section gives an overview of the relevant jurisdictional provisions of the

OECD Convention and the UNCAC, 313 and of their implementation and
enforcement in selected states: the US (which pioneered the exercise of
extraterritorial jurisdiction over corruption with the adoption of the FCPA),314
the United Kingdom (which adopted the Bribery Act in 2010,315 a statute
containing possibly wide-ranging jurisdictional options), 316 Belgium 317 and the
Netherlands. 318 It concludes by assessing whether the current jurisdictional and
enforcement framework amounts to over- or under-regulation of corruption.

1 The JurisdictionalProvisions of the Convention on Combating Bribery of

Foreign Public Officials in International Business Transactions and the
United Nations Convention against Corruption
Both the OECD Convention and the UNCAC feature rather extensive
provisions on the exercise of criminal jurisdiction over bribery and corruption in,
respectively, arts 4 and 42. These provisions draw on the classical principles of
jurisdiction, although, at times, they are given a wide interpretation. At the same
time - and this may appear regrettable - these conventions only require
contracting parties to exercise territorialjurisdiction, while leaving the exercise
of (active/passive) personality-based, protective or universal jurisdiction
optional.
As states can use a variety of principles to establish their jurisdiction over
corruption, one may be tempted to assume that normative competence conflicts
sometimes arise. In practice, however, given the low level of enforcement
regarding foreign corrupt practices, such conflicts are few and far between.
Moreover, given the international consensus on the undesirability and even
criminality of foreign corrupt practices, states may be unlikely to take issue with
other states' exercise of jurisdiction and may, on the contrary, be willing to
cooperate in the investigation and prosecution of corrupt practices. 319 Recently,
however, as will be shown below, enforcement efforts have been escalated. As a
result, conflict may be more likely to arise, especially if states have different
opinions about the punishability of certain corrupt practices (see the definitional
problems above).

313 The jurisdictional provisions of the OECD Convention and the UNCAC are further
discussed in Part IV(B)(1).
314 The FCPA is discussed in detail in Part IV(B)(2).
315 Bribery Act 2010 (UK) c 23 ('BriberyAct').
316 The jurisdiction over corruption in the UK is discussed further in Part IV(B)(3).
317 The jurisdiction over corruption in Belgium is discussed further in Part IV(B)(4).
318 The jurisdiction over corruption in the Netherlands is discussed further in Part IV(B)(5).
319 Cf Reagan R Demas, 'Moment of Truth: Development in Sub-Saharan Africa and Critical
Alterations Needed in Application of the Foreign Corrupt Practices Act and Other
Anti-Corruption Initiatives' (2011) 26 American University InternationalLaw Review 315,
330-1. Demas states that 'the supply-side anti-bribery standards contained in the
[US Foreign Corrupt Practices Act (which contains wide jurisdictional assertions)], in
theory, are broadly accepted across the West and beyond'. Wide jurisdictional assertions in
the field of antitrust, however, have met with more opposition, in particular because antitrust
standards are not necessarily universally shared (there is indeed no global antitrust treaty)
and restrictive business practices of national champions may be tolerated if they cause only
limited adverse effects within the champions' territory: see Cedric Ryngaert, Jurisdiction
over Antitrust Violations in InternationalLaw (Intersentia, 2008) 15-23.
250 Melbourne Journalof InternationalLaw [Vol 14

As far as territorial jurisdiction is concerned, the OECD Convention provides

in art 4.1 that '[e]ach Party shall take such measures as may be necessary to
establish its jurisdiction over the bribery of a foreign public official when the
offence is committed in whole or in part in its territory'. This is a classic
application of the ubiquity theory, pursuant to which territorial jurisdiction is
established as soon as one of the constitutive elements of the crime has taken
place in the territory of the forum state. Article 42.1(a) of the UNCAC provides
in general terms that '[e]ach State Party shall ... establish its jurisdiction
over ... offences [of corruption] ... when [t]he offence is committed in the
territory of that State Party'.320 One may assume that ubiquity also applies here.
The UNCAC also clarifies in its rather complicated art 42.2(c) that its jurisdiction
extends to extraterritorial participation in, association with or conspiracy to
commit, attempts to commit and aiding, abetting, facilitating and counselling the
commission of the laundering of the proceeds of crimes of corruption (money
laundering), provided that these preparatory or inchoate offences are committed
with a view to the commission of a territorial offence of money laundering. Such
jurisdiction - which is optional for that matter - may also be seen as an
application of the territoriality principle, based on the connexitj of an
extraterritorial and territorial offence. 32 1
Whilst pursuant to the cited provisions, the exercise of territorial jurisdiction
is obligatory, the exercise of active personality- or nationality-based jurisdiction
is, in contrast, normally only optional. Article 42.2(b) of the UNCAC provides
that a state party may establish its jurisdiction if the offence is committed by its
national (or a stateless person who has their habitual residence in its territory).
Pursuant to art 42.3 of the UNCAC, however, such jurisdiction becomes
obligatory for a state 'when the alleged offender is present in its territory and it
does not extradite such person solely on the ground that he or she is one of its
nationals'. Article 4.2 of the OECD Convention uses more general obligatory
language where it provides that
[e]ach Party which has jurisdiction to prosecute its nationals for offences
committed abroad shall take such measures as may be necessary to establish its
jurisdiction to do so in respect of the bribery of a foreign public official,
according to the same principles.
But this provision only requires that states parties which already have active
personality-based jurisdiction for other offences extend such jurisdiction to
corruption. 322 States which do not have such jurisdiction are not required to
establish it. However, most penal codes provide for active-personality based
jurisdiction, so that in practice, art 4.2 of the OECD Convention will be

320 Article 42.1(b) of the UNCAC adds that jurisdiction also extends to offences 'committed on
board a vessel that is flying the flag of that State Party or an aircraft that is registered under
the laws of that State Party at the time that the offence is committed'.
321 See Cedric Ryngaert, 'Territorial Jurisdiction over Cross-Frontier Offences: Revisiting a
Classic Problem of International Criminal Law' (2009) 9 International Criminal Law
Review 187, 202-8.
322 OECD Convention art 4.2.
2013] The InternationalLegal Framework against Corruption 251

obligatory. 323 Still, any conditions limiting the exercise of such

jurisdiction - such as the requirement of double criminality, the complaint of a
victim or the official communication by a foreign state - may arguably continue
to apply in respect of the prosecution of corruption.
The exercise of passive personality-based jurisdiction is not foreseen by the
OECD Convention. This may reflect the traditional view that corruption is a
victimless crime. 324 The UNCAC, by contrast, provides in art 42.2(a) that a state
party may establish its jurisdiction if the offence is committed against a national
of that state party. Note, however, that this provision does not require that the
national be a victim for jurisdiction to obtain; arguably, pursuant to art 42.2(a),
jurisdiction could be obtained over foreign nationals who bribe a nation of a state
party.
The exercise of protective jurisdiction was also not foreseen by the
OECD Convention. Again, the UNCAC goes further than the OECD Convention,
by providing in art 42.2(d) that a state party may establish its jurisdiction if the
offence is committed against it. This provision confers protective jurisdiction on
a state party in respect of acts of corruption committed against its officials
abroad.
Neither the OECD Convention nor the UNCAC provide for universal
jurisdiction. The UNCAC, however, contains an aut dedere aut judicare
[extradite or prosecute] clause in art 42.4:
Each State Party may also take such measures as may be necessary to establish its
jurisdiction over the offences established in accordance with this Convention
when the alleged offender is present in its territory and it does not extradite him or
her.
This clause allows a state party to establish its 'universal' jurisdiction over an
alleged offender, as it does not require any connection except the territorial
presence of the offender. Unlike the aut dedere aut judicare clauses in many
other conventions, however, the UNCAC clause is not couched in obligatory
terms. 325 This implies that a state party is still free not to exercise its jurisdiction
over offenders, even if it does not extradite them. Only if the offender is a
national is the state obliged to exercise its jurisdiction. 326 Clearly, the absence of
an aut dedere autjudicare requirement does not aid the effective prosecution of
corruption.

323 See, eg, Voorafgaande Titel van het Wetboek van Strafvordering [Preliminary Title of the
Code of Criminal Procedure] (Belgium) art l0quater [author's trans] ('PT CCP');
Code penal [Penal Code] (France) art 113-6. For an exploration of active personality,
see Paul Arnell, 'The Case for Nationality Based Jurisdiction' (2001) 50 Internationaland
ComparativeLaw Quarterly 955.
324 But see Part IV(E) (where it is argued that acts of corruption may adversely affect the
enjoyment of human rights).
325 Cf Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or
Punishment, opened for signature 10 December 1984, 1465 UNTS 85 (entered into force
26 June 1987) art 5.2 ('Convention against Torture'):
Each State Party shall likewise take such measures as may be necessary to establish
its jurisdiction over such offences in cases where the alleged offender is present in
any territory under its jurisdiction and it does not extradite him [or her] pursuant to
article 8 to any of the States mentioned in paragraph 1 of this article.
326 UNCAC art42.3.
252 Melbourne Journalof InternationalLaw [Vol 14

2 The United States Foreign Corrupt Practices Act: the Benchmark

Whether or not the jurisdictional grounds put forward in the
OECD Convention and the UNCAC are obligatory or merely optional, they do
incentivise states to prosecute the corruption of foreign officials. Accordingly,
much domestic legislation criminalising corruption (of foreign officials) finds its
roots in these conventions. However, as discussed above, the conventions
themselves have been modelled, at least in part, on US legislation. The FCPA,
which contains far-reaching jurisdictional provisions, 327 served as the benchmark
for later international efforts to tackle corruption of foreign officials.
The FCPA has two sets of provisions: the anti-bribery provisions 328 and the
accounting provisions. 329 The accounting provisions concern transparency and
the reporting of payments made to foreign officials, 330 whereas the anti-bribery
provisions provide the basis for prosecutions of individuals and corporations
involved in bribing foreign officials.331 The discussion below, on the
jurisdictional scope of the FCPA, focuses on the anti-bribery provisions.
The FCPA provides for a classic, active and personality-based jurisdiction
where it subjects all 'United States person[s]' to the FCPA, even if their acts of
bribing (foreign) officials have no nexus with the territory of the US. 332
However, the FCPA also applies to persons or entities that are organised under
the laws of a US state or have their principal place of business in the US, even if
they are not US nationals (the so-called 'domestic concerns'). 333 That said,
jurisdiction will not be established with regards to these persons if process
cannot be served on them (absence of in personam jurisdiction). 334
The nationality principle may be construed rather broadly under the FCPA,
but it is the construction of the territoriality principle that has rendered the
FCPA's application particularly far-reaching. For one thing, the FCPA applies to
all 'issuers', which are companies that register securities and file reports with the
US Securities and Exchange Commission. 335 In practice, this includes foreign
companies that have issued stock on US securities exchanges, including foreign
companies that list American Depository Receipts on such exchanges and
foreign agents of US issuers. 336 An exchange-based jurisdictional system could
be considered a variation on the territoriality principle, as it derives jurisdiction
from listing stock on an exchange located in a specific territory. Furthermore, in

327 FCPA §§ 78dd-1(g), 78dd-2(i).

328 Ibid §§ 78dd-1, 78dd-2, 78dd-3.
329 Ibid § 78m.
330 Ibid.
331 Ibid §§ 78dd-1, 78dd-2, 78dd-3.
332 Ibid §§ 78dd-1(g), 78dd-2(i).
333 Ibid § 78dd-2(h)(1).
334 See United States v Bodmer, 342 F Supp 2d 176, 192-3 (SDNY, 2004).
335 FCPA § 78dd-1(a), in conjunction with §§ 781 and 78o(d).
336 See United States v Panalpina Inc (Plea Agreement) (SD Tex, No 4: 10-CR-00765,
4 November 2010). The case ended in a settlement with the Department of Justice ('DoJ')
and the US Securities and Exchange Commission ('SEC'). Panalpina was a Swiss freight
forwarding company whose foreign subsidiaries had made illegal payments to various
officials in foreign countries, but was considered to be acting as an agent for US issuers.
See also Fritz Heimann, Gillian Dell and Kelly McCarthy, 'Progress Report 2011:
Enforcement of the OECD Anti-Bribery Convention' (Report, Transparency International,
October 2011) 75.
2013] The InternationalLegal Framework against Corruption 253

another variation on territoriality, the FCPA applies to 'any person' acting within
US territory, notably if it causes, directly or through agents, an act in furtherance
of the corrupt payment to take place within the territory of the US. 337 This allows
the US enforcement agencies (the Department of Justice ('DoJ') and the
Securities and Exchange Commission ('SEC')) to bring corruption proceedings
against foreign persons whose bribery acts may have had only a tenuous
connection with the US, for example routing payment through US bank accounts
or sending an email to a US company. 338 In practice, the relevant provisions may
bring foreign subsidiaries of US companies that are involved in the bribery of
foreign officials within the reach of the FCPA watchdogs, although such
subsidiaries could also be considered agents of US persons, issuers or domestic
concerns. However, foreign subsidiaries are not subject to the FCPA's
accounting provisions (they only apply to issuers), although failure to comply
with accounting requirements can engage the parent company's liability under
the FCPA. 339 A foreign subsidiary's failure to comply with the anti-bribery
provisions of the FCPA can also engage a US parent company's responsibility
under the FCPA, even if it had no knowledge or reason to know of the foreign
subsidiary's corrupt practices, 340 and even if those practices pre-dated the
parent's acquisition of the subsidiary. 34 1
The US jurisdictional claims on the basis of the FCPA are particularly
far-reaching. This is because they allow US enforcement agencies to bring
claims against foreign issuers for the bribery of foreign officials without any
nexus with the US (except the listing of stock on a US exchange), 342 and also (in
respect of foreign bribery) against foreign persons whose stock is not even listed
in the US, on the sole basis that some act furthering bribery has a link with the
US. 343 It is no exaggeration to state that US jurisdiction over corruption is
potentially quasi-universal.

337 FCPA §§ 78dd-1, 78dd-2, 78dd-3.

338 See, eg, United States v Technip SA (Plea Agreement) (SD Tex, No 4:10-CR-00439,
28 June 2010). See also Heimann, Dell and McCarthy, 'Progress Report 2011', above n 336,
75. The company had paid bribes to Nigerian officials through UK and Japanese
intermediaries and had used US banks to route payments (apart from having American
Depository Receipts listed on the New York Stock Exchange). It entered into a settlement
with the DoJ and the SEC, agreeing to pay US$338 million in criminal penalties and
disgorgement of profits.
339 FCPA § 78m(b)(5) (criminal law); §§ 78m(b)(2), (6) (civil law). See also HR Conf Rep
No 95-831, 14 (1977) ('the conferees intend to make clear that any issuer or domestic
concern which engages in bribery of foreign officials indirectly through any other person or
entity would itself be liable under the [FCPA]').
340 For example, the 2011 settlement between IBM and the SEC, in which IBM agreed to pay
US$10 million in connection with bribes paid by its subsidiaries to government officials in
China and South Korea: Securities and Exchange Commission, 'IBM to Pay $10 Million in
Settled FCPA Enforcement Action' (Litigation Release, 21889, 18 March 2011). See also
Heimann, Dell and McCarthy, 'Progress Report 2011', above n 336, 76.
341 See, eg, the regulatory SEC filing of Kraft Foods in 2011: Kraft Foods Inc, 'Annual Report
to Securities and Exchange Commission' (Report, Commission File No 1-16483,
28 February 2011) 16 <http://www.sec.gov/Archives/edgar/data/1103982/0001193125110
48979/dl0k.htm>. See also Heimann, Dell and McCarthy, 'Progress Report 2011',
above n 336, 77.
342 FCPA § 78dd-1(g).
343 Ibid § 78dd-2(i).
254 Melbourne Journalof InternationalLaw [Vol 14

Over the last decade, the DoJ and the SEC have vigorously enforced the
FCPA, bringing both criminal and civil suits against violators and imposing large
fines. 344 In 2010, 106 publicly disclosed investigations were being carried out.345

3 Jurisdictionover Corruptionin the United Kingdom

While the US has been the historic frontrunner in the criminalisation and
prosecution of foreign corruption, the UK was long considered a laggard. The
OECD did not shrink from taking the UK to task on this, even as late as 2008.346
Admittedly, in 2001, the UK had criminalised the corruption of foreign officials
by UK nationals or companies, 347 yet reliance on a strictly circumscribed active
personality principle did nothing to combat foreign corruption by UK-based
foreign nationals. 348 Responding to this criticism, the UK adopted the
Bribery Act in 2010. The jurisdictional scope of the Bribery Act is potentially
far-reaching and may arguably even go beyond the FCPA's jurisdictional
claims. 349 However, so far no 'extraterritorial' prosecution has been brought
under the Bribery Act. 350
The Bribery Act features three main jurisdictional provisions: ss 6, 7 and
12.351 Section 12 is the most straightforward one, providing for jurisdiction 'if
any act or omission which forms part of the offence takes place in ... the United
Kingdom' - ie, territorial jurisdiction. 352 Sections 12 confers the UK
jurisdiction over a person or entity bribing a foreign public official if the person
or entity has a close connection with the UK, even if the act or omission at issue
does not take place in the UK. 353 A person or entity has a close connection when,
for instance, that person or entity, was a British citizen, was an individual
ordinarily resident in the UK, or a body incorporated under the law of any part of

344 See generally Lucinda A Low and Owen J Bonheimer, 'Enforcement of the US Foreign
Corrupt Practices Act: Extraterritorial Reach and the Effects of International Standards'
(Paper presented at the International Bar Association Annual Anti-Corruption Conference,
Chicago, 19 September 2006).
345 For further details on bribery cases and investigations in the US, see Heimann, Dell and
McCarthy, 'Progress Report 2011', above n 336, 74-8.
346 Working Group on Bribery in International Business Transactions, Organisation for
Economic Co-Operation and Development, 'United Kingdom: Phase 2bis - Report on the
Application of the OECD Convention on Combating Bribery of Foreign Public Officials on
InternationalBusiness Transactions and the 1997 Recommendation on Combating Bribery
in InternationalBusiness Transactions' (Report, Directorate for Financial and Enterprise
Affairs, Organisation for Economic Co-Operation and Development, 16 October 2008) 4
<http://www.oecd.org/dataoecd/23/20/41515077.pdf>.
347 Anti-Terrorism, Crime and Security Act 2001 (UK) c 24, s 109 (which came into force on
14 December 2001).
348 F Joseph Warm, Charles Falconer and Michael S Diamant, 'The British are Coming!:
Britain Changes Its Law on Foreign Bribery and Joins the International Fight against
Corruption' (2010) 46 Texas InternationalLaw Journal 1, 5.
349 Ibid 28.
350 For a discussion of the first (domestic) prosecution brought (namely that of Munir Patel) and
fine imposed for failings in anti-bribery and corruption systems and controls (on Willis
Limited) under the Bribery Act (UK), see Steven Pitt and Barney Connell, 'A Year in the
Life of the UK Bribery Act' in Sidley Austin LLP, Insurance and Reinsurance Law Report
(2012) 35, 38-41 <http://www.sidley.com/files/upload/2012_IRLRUK%/o20 BRIBERYA
CT.pdf>.
351 BriberyAct (UK) c 23, ss 6, 7, 12.
352 Ibid s 12.
353 Ibid.
2013] The InternationalLegal Framework against Corruption 255

the UK. 354 This jurisdictional grant could be considered as an application of an

extended version of the active personality principle. The UK goes further in s 7,
however, by criminalising the failure of a 'relevant commercial organisation' to
prevent foreign bribery. 355 Section 7 gives the Bribery Act a particularly long
arm. It not only defines a 'relevant commercial organisation' (rather logically) as
'a body which is incorporated under the law of any part of the United Kingdom
and which carries on a business (whether there or elsewhere)' 356 or as 'a
partnership which is formed under the law of any part of the United Kingdom
and which carries on a business (whether there or elsewhere)', 35 7 but also as 'any
other body corporate (wherever incorporated) which carries on a business, or part
of a business, in any part of the United Kingdom' 358 or as 'any other partnership
(wherever formed) which carries on a business, or part of a business, in any part
of the United Kingdom'.359 Accordingly, the UK may entertain jurisdiction over
a failure to prevent foreign corruption under the Bribery Act (which also extends
to corruption of private persons) under an extended active personality
principle 360 and on the basis of - possibly tenuous - territorial links. 36 1
Therefore, any body corporate or partnership which carries on a business, or
even only part of a business, in the UK would be covered by the Bribery Act. It
will fall to the relevant enforcement agency to determine what territorial link is
sufficient for UK jurisdiction to be triggered, but a wide interpretation of
territoriality, like in the US, is not excluded. The potential jurisdictional scope of
the Bribery Act becomes even larger if 'relevant commercial organisation[s]' (to
which the Act applies) included foreign subsidiaries of UK companies, or foreign
companies in which UK companies have an interest.362 In any event, given the
global economic prominence of the UK, a considerable amount of foreign
companies have structural, territorial or personal links to the UK and may
accordingly become subject to the Bribery Act.363

4 Jurisdictionover Corruptionin Belgium

It has been submitted, even by the Belgian government itself,364 that Belgian
courts can exercise universal jurisdiction over offences of corruption under
Belgian law.365 Such jurisdiction would arguably go beyond what the OECD

354 For an overview of all instances of 'close connection': see s 12(4).

355 Ibid s7.
356 Ibid s 7(5)(a).
357 Ibid s 7(5)(c).
358 Ibid s 7(5)(b).
359 Ibid s 7(5)(d).
360 Ibid s 6(5), in conjunction with s 7.
361 Ibid s 12.
362 Warn, Falconer and Diamant, above n 348, 29-30 (submitting in this respect that
'section 7's requirements could effectively extend to even the remotest corners of a global
organization').
363 Ibid 37 (speaking of an 'extraordinary number of multinational corporations').
364 Explanatory Memorandum, Wetsontwerp tot aanpassing van de wetgeving inzake de
bestrijding van omkoping [Bill to Amend the Law on Combating Bribery], Kamer van
Volksvertegenwoordigers [Chamber of Representatives] 2677/001, 51st sess (2006) 11.
365 See also David C Weiss, 'The Foreign Corrupt PracticesAct, SEC Disgorgement of Profits,
and the Evolving International Bribery Regime: Weighing Proportionality, Retribution, and
Deterrence' (2009) 30 Michigan Journal ofInternationalLaw 471, 493.
256 Melbourne Journalof InternationalLaw [Vol 14

Convention requires from states parties. 366 However, the existence of universal
jurisdiction over corruption is only an impression resulting from poor legislative
drafting. Article 10quater, § 1 of the Voorafgaande Titel van het Wetboek van
Strafvordering [Preliminary Title of the Code of Criminal Procedure] sets forth
as the basic principle regarding the exercise of jurisdiction over corruption that 'a
person can be prosecuted in Belgium when outside the territory of Belgium he
[or she] commits [an act of corruption]'.367 However, this provision only applies
to acts of corruption committed by Belgian officials abroad; Belgian nationals
who are officials of foreign states or international organisations; and officials of
international organisations that are headquartered in Belgium. 368 Therefore, in
reality, this ground of jurisdiction is based on the protective principle. So much
was also admitted by the government. 369 That being said, Belgian law also
criminalises corruption of foreign officials who have no link with Belgium, in
accordance with Belgium's obligations under the relevant conventions, provided
however that the presumed offender is a Belgian national or a person who has
their main residence in Belgium and that the act is also punishable where it was
committed. 370 This is a classic application of the active personality principle,
although some limiting conditions for the exercise of jurisdiction based on this
37
principle have been abandoned with regards to the prosecution of corruption. 1
However, the limiting condition of double criminality remains in place. Whilst
this has been criticised by the OECD, the Belgian government has pointed out
that it interprets the requirement of double criminality as one of the 'principles'
cited by art 4.2 of the OECD Convention.372 This provision indeed does not
require that OECD member states introduce unbridled active personality-based
jurisdiction over presumed perpetrators of corruption. Instead, art 4.2 of the

366 Explanatory Memorandum, Wetsontwerp tot aanpassing van de wetgeving inzake de

bestrijding van omkoping [Bill to Amend the Law on Combating Bribery], Kamer van
Volksvertegenwoordigers [Chamber of Representatives] 2677/001, 51st sess (2006) 11.
367 This provision of the PT CCP was last amended by Act of 11 May 2007, which entered into
force on 8 June 2007. What acts exactly constitute corruption is defined in arts 246-9 of the
Strafivetboek [Penal Code] (Belgium) ('Belgian Penal Code').
368 The substantive articles of the Belgian Penal Code referenced by PT CCP
art 1Oquater, § 1 only relate to corruption of Belgian officials, as can be derived a contrario
from art 250 of the Belgian Penal Code, which concerns corruption of officials of foreign
states or international organisations, and from PT CCP art l0quater, § 2. PT CCP
art 10quater, § 1(1) concerns Belgian officials, whereas § 1(2) concerns other officials who
nevertheless have a link with Belgium.
369 Explanatory Memorandum, Wetsontwerp tot aanpassing van de wetgeving inzake de
bestrijding van omkoping [Bill to Amend the Law on Combating Bribery], Kamer van
Volksvertegenwoordigers [Chamber of Representatives] 2677/001, 51st sess (2006) 12.
370 PT CCP art 10quater, § 2.
371 Compare PT CCP art 10quater, § 2 with art 7, § 2 (ie, the general provision governing the
exercise of active personality-based jurisdiction, which requires a complaint of the victim or
a communication by the foreign government). As corruption is often regarded as a
victimless offence, it is unlikely that victims will come forward. In addition, foreign
governments, or at least their officials, may have an interest in the acts of (passive)
corruption and may thus be unlikely to communicate these acts to the home state of alleged
perpetrators of active corruption. Therefore, abandoning the restrictive conditions enshrined
in PT CCP art 7, § 2 could be viewed as a precondition for the successful prosecution of acts
of corruption.
372 Explanatory Memorandum, Wetsontwerp tot aanpassing van de wetgeving inzake de
bestrijding van omkoping [Bill to Amend the Law on Combating Bribery],
Kamer van Volksvertegenwoordigers [Chamber of Representatives] 2677/001,
51st sess (2006) 13.
2013] The InternationalLegal Framework against Corruption 257

OECD Convention merely requires that states which already have such
jurisdiction on their statutory books, extend it (arguably mitigated by
pre-existing limiting conditions) to bribery of foreign public officials. 373 As
noted above, it is regrettable that the drafters of the OECD Convention remained
so cautious.
TI has characterised Belgium as a 'moderate enforcer' of legislation against
foreign corrupt practices. Indeed, TI identified only four Belgian cases and some
EU-related cases referred to TI by the European Anti-Fraud Office. 374 In
addition, TI considered that insufficient resources were earmarked for combating
corruption (although the workload of investigating the EU cases may be partly to
blame); that 'the police and the judiciary do not have enough resources and
training to deal with these cases'; and that there is 'no administrative body to
handle complaints and lead administrative investigations'.375

5 Jurisdictionover Corruptionin the Netherlands

Prosecution of corruption in the Netherlands is possible on the basis of a
number of jurisdictional grounds. Dutch anti-corruption law is, pursuant to
art 5(1)(1) of the Wetboek van Strafrecht 1881 [Penal Code 1881] ('Dutch Penal
Code'),376 applicable to Dutch nationals who commit acts of bribery outside the
Netherlands. 377 Unlike in Belgium, the prosecution of these persons under the
active personality principle is not subject to a double criminality requirement. In
addition, Dutch law is applicable, arguably under the protective principle, to acts
of bribery committed abroad against Dutch officials (subject to a double
criminality requirement) 378 and to acts of bribery committed by a Dutch
official 379 or by an official of an international organisation established in the
Netherlands (also subject to a double criminality requirement). 380 It is noted that
corruption of private persons is punishable in the Netherlands, 38 1 but that Dutch
courts have no extraterritorial jurisdiction over such acts. 382

373 OECD Convention art 4.2.

374 Heimann, Dell and McCarthy, 'Progress Report 2011', above n 336, 19-20 (citing
investigations into the Iraq oil-for-food scandal and investigations into the practices of the
Belgian utility firm Tractebel, among others). Note that the European Anti-Fraud Office is
commonly known as 'OLAF', which is an acronym of 'Office de Lutte Anti-Fraude', the
French name for the Office: see European Commission, European Anti-Fraud Office
(26 April 2013) <http:/ec.europa.eu/anti fraud/>.
375 Ibid 20.
376 Wetboek van Strafrecht 1881 [Penal Code 1881] (Netherlands) art 5.1.1 ('Dutch Penal
Code').
377 Corruption of officials is criminalised by arts 177 and 177(a) of the Dutch Penal Code.
378 Dutch Penal Code art 4(10).
379 In case such a person had Dutch nationality, they would also be covered by the Dutch Penal
Code's active personality-based jurisdiction: art 5.1.1.
380 Ibidart 4(11).
381 Ibid art 328ter.
382 Cf ibid arts 4, 5.
258 Melbourne Journalof InternationalLaw [Vol 14

As far as enforcement is concerned, TI identified nine cases and three

investigations, and it characterised the Netherlands as a moderate enforcer. 383
Some Dutch companies have also entered into a settlement with US authorities
acting under the FCPA. 384 TI criticised the Netherlands in general for not
imposing sufficiently severe pecuniary sanctions on corrupt persons, and the
Rijksrecherche [National Police Internal Investigation Department] in particular
for not sufficiently focusing on combating foreign bribery (as opposed to passive
corruption by Dutch officials). 385 It is also observed that Curacao and Sint
Maarten have not ratified the OECD Convention, which in TI's view may
hamper mutual legal assistance. 386

6 Assessing the Exercise of ExtraterritorialJurisdiction over Corruption:

Over- or Under-Regulation?
As set out above, many states do have rather wide-ranging jurisdictional
provisions for the prosecution of corruption on their statutory books.
Enforcement, however, has been lacking. TI's 2011 Progress Report on the
enforcement of the OECD Convention noted that enforcement (regarding the
bribery of foreign officials) was generally inadequate. 387 According to TI, only
seven countries (Denmark, Germany, Italy, Norway, Switzerland, the UK and
the US) actively enforced the OECD Convention.388 This suggests that foreign
corruption may be under-regulated. However, the US has recently stepped up its
enforcement 389 and, with the adoption of the Bribery Act, the UK may follow
suit. If all states embark on a policy of actively enforcing their anti-corruption
legislation, companies may no longer get away with bribing foreign officials.
Given the long jurisdictional arm of many law enforcers, companies will have to
develop a global anti-corruption strategy that permeates their entire corporate
structure and business relationships. While closing the enforcement gap is to be
applauded, harmful over-regulation may well loom large. This may occur when
the various countries' prosecutorial policies are not transparent 390 and when
states have overlapping jurisdictional claims (thereby capturing the same conduct

383 One example is the investigation of Trafigura Beheer BV, a Dutch oil trader that had
allegedly paid bribes to Jamaican politicians: see 'Dutch to Probe Claims of Trafigura
Bribes in Jamaica', Expatica (online), 1 February 2011 <http://www.expatica.com/nl/n
ews/dutch-news/dutch-to-probe-claims-of-trafigura-bribes-in-jamaica 127033.html>, cited
in Heimann, Dell and McCarthy, 'Progress Report 2011', above n 336, 54.
384 Heimann, Dell and McCarthy, 'Progress Report 2011', above n 336, 54-5 (referring to the
Dutch company Snamprogetti settling with US and Nigerian authorities, in connection with
corrupt practices regarding a liquefied gas plant in Nigeria; Shell settling with
US authorities in connection with bribes paid to Nigerian officials by an agent; and Philips
going on trial in Poland in connection with payments made to managers of Polish public
hospitals).
385 Ibid 55.
386 Ibid.
387 Ibid.
388 Ibid 5.
389 For a discussion of US enforcement of its FCPA, see above Part IV(A)(2).
390 Joseph P Covington and Iris E Bennett, 'Signs of Life in International Anti-Bribery
Enforcement - Recent Enforcement of Anti-Bribery Laws Outside the US and Issues to
Consider for a Multi-Jurisdictional Defense Strategy' (Bloomberg Finance LP, 2009) 2
<http://www.jenner.com/system/assets/assets/1118/original/covington bennettpdfpdf? 131
7312702>.
2013] The InternationalLegal Framework against Corruption 259

twice or more) while failing to coordinate. 39 1 It is also not unforeseeable that

certain countries will bring bogus anti-corruption proceedings with a view to
punishing hostile corporations or their home states. 392
The OECD Convention and the UNCAC do not set great store by
jurisdictional restraint to prevent over-regulation. Admittedly, as discussed
above, these two conventions only require that states exercise territorial
jurisdiction over offences of corruption and do not require that states exercise
personality-based jurisdiction, protective jurisdiction or universal jurisdiction in
cases where they do not extradite offenders. Nevertheless, a number of
provisions in the OECD Convention and the UNCAC encourage states to provide
for a wider jurisdictional ambit than that required or suggested by those
conventions. Article 4.4 of the OECD Convention requires that each party review
'whether its current basis for jurisdiction is effective in the fight against the
bribery of foreign public officials and, if it is not, shall take remedial steps'.
Article 42.6 of the UNCAC provides that 'without prejudice to norms of general
international law, this Convention shall not exclude the exercise of any criminal
jurisdiction established by a State Party in accordance with its domestic law'.393
Moreover, these conventions do not set out an elaborate framework to solve
normative competence conflicts; they satisfy themselves with reminding states of
their obligations to consult and coordinate with each other in such cases. 394 By
way of comparison, in the antitrust field, some states/entities have
institutionalised the coordination of their antitrust enforcement action, especially
after a specific competence conflict arose between them. 395 In the field of
anti-corruption, such agreements have so far not materialised, but once
international enforcement becomes more vigorous, they may prove useful to
limit conflict 396 and to avoid deterring legitimate - and necessary - economic

391 Warm, Falconer and Diamant, above n 348, 71-2. According to Warn, Falconer and
Diamant, not only is it efficient for regulators in multiple jurisdictions to coordinate their
efforts against multi-jurisdictional corruption, it is in the interest of justice that multinational
companies are not investigated and punished repeatedly in different countries for the same
underlying wrongdoing. The case against Siemens proved that cross-jurisdictional
cooperation can work.
392 Weiss, above n 365, 505.
393 UNCAC art 42.6. Cf Convention against Torture art 5.3.
394 UNCAC art 42.5:
If a State Party exercising its jurisdiction ... has been notified, or has otherwise
learned, that any other States Parties are conducting an investigation, prosecution or
judicial proceeding in respect of the same conduct, the competent authorities of those
States Parties shall, as appropriate, consult one another with a view to coordinating
their actions.
See also OECD Convention art 4(3): 'When more than one Party has jurisdiction over an
alleged offence described in this Convention, the Parties involved shall, at the request of one
of them, consult with a view to determining the most appropriate jurisdiction for
prosecution'.
395 Agreement regarding the Application of Competition Laws between the Government of the
United States and the Commission of the European Communities, 30 ILM 1487 (signed and
entered into force 23 September 1991).
396 International coordination seems to take place on an ad hoc basis for the time being:
see, eg, the successful coordination by national anti-corruption enforcers in the Siemens
Plea Agreement: Warn, Falconer and Diamant, above n 348, 71-2; Weiss, above n 365,
504-5. Investigations into Siemens' practices were initiated in China, Greece, Hungary,
Indonesia, Italy and Norway and the US. Cooperation between Germany and the US was
particularly close.
260 Melbourne Journalof InternationalLaw [Vol 14

investment in (developing) countries. 397 Such agreements may establish a

jurisdictional hierarchy (which does not exist under general international law) 398
and identify the most appropriate jurisdiction based on a number of variables. 399
In addition, they may provide that penalties already paid shall be discounted
from penalties newly imposed.
In the short term, it is likely that a few states will more or less vigorously
enforce anti-corruption legislation, while a host of other states will have no
adequate legislative framework or, if they have one, not enforce it rigorously. Put
differently, a situation of partial under-regulation might persist. This situation
carries specific dangers. Persons and corporations having a nexus with a small
number of highly-regulated states may be subjected to onerous legislation and
enforcement when doing business abroad, while similarly situated persons and
corporations having a nexus with other states may be unencumbered by such
regulatory restraints and their attendant high compliance costs. This imbalance
400
may place the latter businesses at a competitive advantage vis-a-vis the former
40
and gradually sap the former's support for strict anti-corruption legislation. 1
Therefore, to prevent a backlash in the fight against corruption, the
enforcement playing field has to be levelled.402 Ideally, a level playing field
would involve all states enforcing anti-corruption legislation with equal force. In
the short run, this is not likely to occur. However, in the meantime, states that
vigorously enforce anti-corruption legislation could also single-handedly level
the playing field by extending their jurisdictional assertions. They may, for
example, give a broad interpretation to the territoriality or nationality principles,
or resort to the universality principle. Extending a state's jurisdictional arm may
capture foreign corrupt practices that might otherwise go unpunished (given
other states' enforcement failures), dent foreign businesses' competitive
advantages and put pressure other (home) states to assume their responsibility in

397 Weiss, above n 365, 505. Weiss states that informal agreements on the issue of international
regulatory cooperation do exist, but it is not clear that they can provide the predictability and
consistent calculation of penalties that are normatively desirable to avoid over-deterring
investment in foreign projects. While it would not be undesirable if corruption and bribery
disappeared entirely, over-deterrence and the resulting reduction in investment are harmful
from an efficiency standpoint.
398 On the system of concurrent jurisdiction in international law, see Cedric Ryngaert,
Jurisdiction in InternationalLaw (Oxford University Press, 2008) 127-9.
399 Cf Weiss, above n 365, 504 (submitting that 'it is one thing for a regulator to inform an
interested State that it is investigating a firm, but it is quite another for that regulator to
refrain from seeking fines within its grasp merely because of comity toward foreign
regulators').
400 Demas, above n 319, 337 (arguing that strict FPCA enforcement 'tends to place those
companies operating in Africa with a US connection at a competitive disadvantage').
401 Ibid 339, citing Fritz Heimann and Gillian Dell, 'Progress Report 2009: OECD Anti-Bribery
Convention' (Report, Transparency International, June 2009) 8.
402 Ibid 362-3. Note that US efforts to universalise the criminality of corruption have now
borne fruit after the adoption of, notably, the UNCAC and the OECD Convention. While
many states have duly implemented the provisions of these conventions, they have often
failed to enforce them. Put differently, the legislative playing field may have been levelled,
but the enforcement playing field has not. Accordingly, the classic US complaint that
US firms are put at a competitive disadvantage is still valid.
2013] The InternationalLegal Framework against Corruption 261

fighting foreign corruption. 403 Arguably, when it comes to protecting global

public interests such as a corruption-free world, broad jurisdictional assertions
may need to be tolerated or may even be necessary to improve worldwide
compliance with shared international legal standards.

C Asset Recovery
Asset recovery provisions aim to ensure that property that was taken from its
rightful owner through corrupt practices is returned. Its goal is to tackle the
economic incentive for corrupt acts: not only can the persons involved in
corruption be held criminally or civilly liable (with a focus on the individual),
but the proceeds from their corrupt acts can also be seized (with a focus on the
assets). Asset recovery has received increased attention in the international arena.
Calls for the recovery of assets taken from developing countries during colonial
times 404 have been reinforced by allegations that European financial institutions
had shielded money and assets belonging to dictators recently toppled during the
Arab Spring. 405 Furthermore, the current global financial crisis increases the
awareness that more transparency in the international financial system is
necessary to prevent fraudulent and corrupt practices.
Asset recovery is included in international anti-corruption instruments. 406 In
addition, it is addressed by international financial regulations that are not
(exclusively) focused on anti-corruption, but which will obviously interact with
the anti-corruption instruments. 407 Examples include the Financial Action Task

403 In the fight against climate change, this strategy has recently been adopted by the EU:
see Directive 2008/101/EC of the European Parliament and of the Council of19 November
2008 Amending Directive 2003/87/EC so as to Include Aviation Activities in the Scheme for
Greenhouse Gas Emission Allowance Trading Within the Community [2009] OJ L 8/3
(extending the European emissions allowance trading scheme to flights which arrive at or
depart from an aerodrome situated in the territory of a member state, including to flights by
aircraft registered in third states and flying over third states' territory), as upheld by the
European Court of Justice: Air Transport Association of America v Secretary of State for
Energy and Climate Change (Court of Justice of the European Communities, C-366/10,
21 December 2011).
404 See, eg, Michael J Reppas II, 'Empty "International" Museums' Trophy Cases of Their
Looted Treasures and Return Stolen Property to the Countries of Origin and the Rightful
Heirs of Those Wrongfully Dispossessed' (2007) 36 Denver Journal of InternationalLaw
and Policy 93.
405 European Parliament, 'Europe Should Stop Harbouring Dictators' Blood Money'
(Press Release, 6 February 2012) <http://www.europarl.europa.eu/news/en/headlines/conten
t/20120203ST037167/html/Europe-should-stop-harbouring-dictators%27-blood-money>.
Nevertheless, several financial institutions did freeze the assets of fallen dictators, acts that
were strengthened by UN Security Council resolutions imposing asset freezes:
see, eg, Financial Action Task Force, 'Laundering the Proceeds of Corruption' (Report, July
2011) 11 [23].
406 See, eg, UNCAC ch V. See also Saliou Bah, 'La Restitution des avoirs issus de la corruption
dans les conventions anti-corruption internationales: une avancee conceptuelle et normative
a la portee pratique limitee' [The Return of Assets Derived from Corruption in International
Anti-Corruption Conventions: A Conceptual and Normative Advance to a Limited Practical
Impact] (2010) 1Revue de droit des affaires internationales 15.
407 One example is international accounting standards. Following the example of the FCPA,
certain multilateral conventions contain separate provisions on accounting standards (for
example, OECD Convention art 8). Imposing stringent accounting requirements to a certain
extent brings the anti-corruption effort under the rigorous oversight of market and stock
exchange watchdogs such as the SEC in the US. The post-Watergate investigations in the
US caused several companies to report alleged wrongdoings specifically to the SEC:
see Cleveland et al, above n 10, 203.
262 Melbourne Journalof InternationalLaw [Vol 14

Force recommendations, 408 the guidance of the Basel Committee on Banking

Supervision 409 and the 'Wolfsberg Anti-Money Laundering Principles for
Private Banking', revised in May 2012.410 States' obligations under these
international financial instruments must be read together with their obligations
under international anti-corruption instruments.
The provisions on asset recovery form a separate chapter in the UNCAC, 41 1
reflecting the importance attached to this issue. 412 Developing countries in
particular prioritised asset recovery provisions during the UNCAC
negotiationS413 and their efforts were strengthened by US support on this
issue. 414 Coupled with asset recovery is the need for international cooperation
and assistance. 415 Asset recovery implies costly efforts and complex procedures,
for which developing countries often need the assistance of developed countries

408 Financial Action Task Force, 'International Standards on Combating Money Laundering and
the Financing of Terrorism & Proliferation: The FATF Recommendations' (February 2012)
('FATF Recommendations'). The Financial Action Task Force ('FATF') is an independent
intergovernmental body that develops and promotes policies to protect the global financial
system against money laundering and terrorist financing: see generally Financial Action
Task Force, About Us: Who We Are (2012) <http://www.fatf-gafi.org/pages/aboutus/>. See
also Financial Action Task Force, 'Laundering the Proceeds of Corruption', above n 405.
409 For documents issued by the Basel Committee on Banking Supervision ('BCBS'):
see generally Bank for International Settlements, Basel Committee - Last 3 Years
<http://www.bis.org/list/bcbs/index.htm>. The BCBS has released guidance on a number of
topics: see, eg, Basel Committee on Banking Supervision, 'Prevention of Criminal Use of
the Banking System for the Purpose of Money-Laundering' (Statement, December 1988)
<http://www.bis.org/publ/bcbscl37.pdf>; Basel Committee on Banking Supervision,
'Consolidated KYC Risk Management' (Guidance Document, Bank for International
Settlements, October 2004) <http://www.bis.org/publ/bcbsl10.pdf>; Basel Committee on
Banking Supervision, 'Due Diligence and Transparency regarding Cover Payment Messages
Related to Cross-Border Wire Transfers' (Guidance Document, Bank for International
Settlements, May 2009) <http://www.bis.org/publ/bcbsl54.pdf>.
410 Wolfsberg Group, 'Wolfsberg Anti-Money Laundering Principles for Private Banking
(2012)' (May 2012) <http://www.wolfsberg-principles.com/pdflWolfsberg-Private-Bank
ing-Prinicples-May-2012.pdf>. The Wolfsberg Group is an industry-led initiative comprised
of 11 global banks. The Group aims to elaborate standards on know-your-customer, money
laundering and counterterrorism financing issues: see generally Wolfsberg Group, Global
Banks: Global Standards (2012) <http://www.wolfsberg-principles.com/>.
411 UNCACch V.
412 For a detailed assessment, see Carr and Goldby, above n 4, 190.
413 Recent studies estimate a capital flight out of poorer countries of more than US$1.2 trillion
in 2008, of which around US$50 billion would be proceeds of corruption: see Financial
Action Task Force, 'Laundering the Proceeds of Corruption', above n 405, 9 [15]; Theodore
S Greenberg et al, 'Stolen Asset Recovery: Politically Exposed Persons - A Policy Paper
on Strengthening Preventive Measures' (Policy Paper, Stolen Asset Recovery
Initiative/World Bank, 2009) xiii, 3-4 <http:/siteresources.worldbank.org/EXTSARI/
Resources/5570284-1257172052492/PEPs-ful.pdf>'; Dev Kar and Karly Curcio, 'Illicit
Financial Flows from Developing Countries: 2000-2009 - Update with a Focus on Asia'
(Report, Global Financial Integrity, January 2011) i <http://www.gfintegrity.org/storage/
gfip/documents/reports/IFF2010/gfiiff update report-web.pdf>'; Raymond W Baker,
Capitalism's Achilles Heel: Dirty Money and How to Renew the Free-Market System (John
Wiley & Sons, 2005) 172. The Stolen Asset Recovery Initiative's ('StAR') estimates
indicate that around US$5 billion has been recovered in the period 1995 to 2010: Stolen
Asset Recovery Initiative, Frequently Asked Questions (2013) <http:/star.worldbank.org/
star/about-us/frequently-asked-questions>.
414 Webb, above n 5, 207.
415 On the legal framework and types of legal assistance, see Organisation for Economic
Co-Operation and Development, 'Typology on Mutual Legal Assistance in Foreign Bribery
Cases' (Report, 7 December 2012).
2013] The InternationalLegal Framework against Corruption 263

(not in the least because the proceeds of corruption often pass through Western
banks, which are therefore best placed to identify suspicious transfers).
Unsurprisingly, the UNCAC chapter on asset recovery is preceded by a chapter
on international cooperation 416 and followed by a chapter on technical assistance
and information exchange. 4 17
Previous UN documents had paved the way for this UNCAC requirement of
asset recovery. One of those documents was the Palermo Convention and its
provisions on money laundering 418 and confiscation and seizure. 419 Another
example is a 2001 UNGA resolution, 42 0 which called for increased cooperation
to repatriate illegally transferred funds to the countries of origin and called upon
all countries and entities concerned to cooperate in this respect. The 2001 UNGA
resolution further requested an expert group to assess this issue of repatriation of
transferred funds, to be reflected in the future UNCAC. 42 1
Article 23 of the UNCAC on the '[1]aundering of [the] proceeds of crime' is
formulated broadly, which is laudable. It goes beyond the laundering of money
to cover the laundering of any property (which includes, inter alia, company
shares and luxury goods). 422 The range of persons who can be held criminally
liable is also far-reaching: persons knowingly assisting in the covering up of the
proceeds of corrupt acts could include banks, lawyers and accountants, 423 real
estate agents, casino operators, antique traders and jewellers. 424 In other words,
as soon as a corrupt act takes place, it taints the whole chain of subsequent
transactions. The proceeds of corruption can be recovered through either
criminal or civil proceedings. Criminal proceedings require a prior criminal
conviction which focuses on the corrupt individual. When a criminal conviction
is impossible (for example, where the corrupt individual has passed away or
enjoys immunity) or otherwise unachievable, civil proceedings may be a
practical alternative. Such civil proceedings focus on the goods tainted by an
initial corrupt act, rather than on the corrupt individual. Hence, property can be
seized through civil proceedings without the user or owner being convicted for

416 UNCAC ch IV.

417 Ibid ch VI.
418 Palermo Convention arts 6, 7.
419 Ibid art 12.
420 Preventing and Combating Corrupt Practices and Illegal Transfer of Funds and
Re atriation o Such Funds to the Countries of Origin, GA Res 55/188, UN GAOR,
55 h sess, 2 plen mtg, Agenda Item 93, Supp No 49, UN Doc A/RES/55/188
(25 January 2001).
421 Ibid para 5.
422 Carr and Goldby, above n 4, 174-5.
423 Certain authors indicate that the role of lawyers and accountants in operationalising the
anti-corruption provisions should not be underestimated. Evidence suggests that lawyers and
accountants have strengthened the anti-corruption impetus of the FCPA by ensuring
compliance by US clients: see Gantz, above n 16, 462. The ICC Rules explicitly list
potential intermediaries that a company could use as conduits for corrupt acts, such as
lawyers, accountants, consultants, resellers or subcontractors: ICC Rules, above n 219, art 2.
424 Carr and Goldby, above n 4, 186.
264 Melbourne Journalof InternationalLaw [Vol 14

the initial corrupt act. 425 Confronted with the question whether such civil
proceedings, without the guarantees of a criminal procedure, infringe human
rights, a UK court has argued that civil forfeiture is a procedure in rem and is not
covered by the UK Human Rights Act.426 This allows for the standard of proof to
be on the 'balance of probabilities', rather than 'beyond reasonable doubt', as
required in criminal proceedings. This may greatly facilitate the recovery of
assets from corrupt acts, though of course this does not result in a criminal
conviction of the culprits. One practical impediment to the forfeiture of the
proceeds of corrupt acts is the requirement of quantifying those proceeds.
Identifying the value of the bribe is one step, but the actual benefit of the bribery
for the bribe-giver may be several times the amount of the bribe. A joint
OECD/Stolen Asset Recovery Initiative ('StAR') report aims to tackle such
difficulties by providing very detailed guidance on the calculation of the actual
benefit amounting from a bribe. 427
The 1996 OAS Convention equally stresses the importance of asset recovery,
requiring states parties to provide each other with 'the broadest possible measure
of assistance in the identification, tracing, freezing, seizure and forfeiture of
property or proceeds' of corrupt acts. 428 For the OAS Convention, cooperation is
one of its two explicitly listed purposes, 429 which again underlines the
importance attached to it. The OAS Convention encourages states to assist in the
investigation of corrupt acts by stipulating that the forfeited property may be
transferred, wholly or in part, to another state party that assisted in the
underlying investigation. 430 This non-mandatory provision is coupled with the
requirement that states parties afford one another 'the widest measure of mutual
assistance' when requested by a competent authority, as well as the 'widest
measure of mutual technical cooperation'.431
Not surprisingly, the AU Convention also requires states parties to freeze,
seize, confiscate and repatriate the instrumentalities or proceeds of corruption. 432
Under the OECD Convention, mutual legal assistance 'to the fullest extent
possible' is obligatory, 433 but no further provisions on asset recovery are
included. The OECD Convention requires states parties to provide prompt and
effective legal assistance for criminal investigations and proceedings concerning
offences within the OECD Convention's scope and also for non-criminal

425 An example is the fourth (formerly third) FATF recommendation, entitled 'Confiscation and
Provisional Measures': FATF Recommendations, above n 408, 12. See also Financial Action
Task Force, 'Best Practices: Confiscation (Recommendations 3 and 38)'
(Guidance Document, 19 February 2010) 7 [13]; Theodore S Greenberg et al, 'Stolen Asset
Recovery: A Good Practices Guide for Non-Conviction-Based Asset Forfeiture'
(Guidance Document, Stolen Asset Recovery Initiative, World Bank, 5 January 2009).
426 Walsh v Director of the Assets Recovery Agency [2005] NICA 6 (26 January 2005).
See also Human Rights Act 1998 (UK) c 42; Carr and Goldby, above n 4, 182.
427 Jeane-Pierre Brun et al, 'Identification and Quantification of the Proceeds of Bribery:
A Joint OECD-StAR Analysis' (Report, Organisation for Economic Co-Operation and
Development and Stolen Asset Recovery Initiative, World Bank, February 2012)
<http://www.oecd.org/daf/anti-bribery/50057547.pdf>.
428 OAS Convention art XV.
429 Ibid art II.
430 Ibid art XV(2).
431 Ibid art XIV.
432 AU Convention art 16.
433 OECD Convention art 9. 1.
2013] The InternationalLegal Framework against Corruption 265

proceedings concerning an OECD Convention offence against a legal person. 434

If legal assistance is conditional upon the state party's requirement of dual
criminality, such dual criminality is deemed to exist for offences under the
OECD Convention's scope. 435 Moreover, states parties cannot invoke bank
secrecy against a request for legal assistance. 436
In 2007, the World Bank and the UNODC launched StAR. StAR works with
developing countries and financial institutions in order to deny safe havens for
the proceeds of corruption. 437 In addition, StAR has published several best
practice documents, a practitioners' handbook and several other tools and
guidance documents. 438 Another interesting tool is their Grand Corruption Cases
Database, which can be used to look for grand corruption cases in specific
countries or involving specific companies or individuals. 439
The success of asset recovery is to a large extent dependent on the regulation
of the financial sector through, for example, rules on know-your-customer
('KYC'), mandatory registration of suspect transactions, record-keeping and
bank secrecy. Such financial regulations often complement and strengthen the
success of anti-corruption instruments, though there is still the risk that the two
regimes may contradict each other on certain points. 440 Corporate law also
impacts the success of asset recovery provisions. For example, a StAR report
highlights the use of complex corporate vehicles to launder the proceeds of

434 Ibid.
435 Ibid art 9.2.
436 Belgium Phase 2 Follow-Up Report, above n 214, 4 [5].
437 See Stolen Asset Recovery Initiative, About Us (2012) <http:/star.worldbank.org/star/ab
out-us/our-vision>.
438 See, eg, Jean-Pierre Brun et al, 'Asset Recovery Handbook: A Guide for Practitioners'
(Handbook, Stolen Asset Recovery Initiative, World Bank, 3 January 2011);
Kevin M Stephenson et al, 'Barriers to Asset Recovery: An Analysis of the Key Barriers
and Recommendations for Action' (Study, Stolen Asset Recovery Initiative/World Bank,
21 June 2011); Theodore S Greenberg et al, 'Politically Exposed Persons: Preventive
Measures for the Banking Sector' (Policy Paper, Stolen Asset Recovery Initiative/World
Bank, 11 May 2012); Greenberg et al, 'Stolen Asset Recovery', above n 425; Stolen Asset
Recovery Initiative, 'Management of Returned Assets: Policy Considerations' (Policy Note,
World Bank, 2009).
439 Stolen Asset Recovery Initiative, StAR Corruption Cases Search Centre (2013)
<http:/star.worldbank.org/corruption-cases/assetrecovery/?f[0]=bundle%/o3Apuppet maste
rs>.
440 For example, Carr and Goldby indicate that the FATF recommendations may conflict with
the UNCAC provision as to the requirement of double criminality: Carr and Goldby,
above n 4, 180. See also Financial Action Task Force, 'FATF 40 Recommendations'
(Report, 2010) 5. The FATF recommendations allow states to confiscate the proceeds of
corrupt acts if it would have been a criminal offence if it had been committed within its
territory, whether or not it was a crime on the country where the corrupt act took place. The
FATF recommendations have been amended in 2012. The interpretive note to the amended
Recommendation 3 still allows states to confiscate the proceeds of corrupt acts without
requiring double criminality. UNCAC art 23(2)(c), on the other hand, requires double
criminality:
However, offences committed outside the jurisdiction of a State Party shall constitute
predicate offences only when the relevant conduct is a criminal offence under the
domestic law of the State where it is committed and would be a criminal offence
under the domestic law of the State Party implementing or applying this article had it
been committed there.
Carr and Goldby, above n 4, 180.
266 Melbourne Journalof InternationalLaw [Vol 14

corruption. 44 1 It details how the corporate veil shields the corrupt from
investigations. 442
Private actors play a crucial role in the successful enforcement of asset
recovery provisions. KYC rules, for example, require banks to increase due
diligence 443 efforts for bank accounts of high-level politicians or large financial
transactions. 444 A limitation of such financial money laundering regulation is that
it would probably only detect grand corruption and, accordingly, be of limited
use for identifying and remedying petty corruption. 445 Other types of corruption
also continue to fly below the radar of money laundering standards in general,
including art 23 of the UNCAC. For example, the purchase of real estate or
jewellery may be detected, but bribery in the form of offering expensive
education, health care benefits or a lucrative position to a bribe-taker or their
relatives cannot be detected by money laundering standards. 446 Nevertheless,
such limitations should not render us sceptical but should merely underline the
necessity of a comprehensive anti-corruption approach.

D Corruption and Good Governance

As Alexander Gillespie states, '"[g]ood [g]ovemance" has become the
catch-cry of the international community'.447 It is not necessary to provide a
fully-fledged definition of good governance for the purposes of this
contribution. 448 It is clear, however, that corruption undermines specific values
that are encompassed by the concept of good governance, such as transparency,

441 Emile van der Does de Willebois et al, 'The Puppet Masters: How the Corrupt Use Legal
Structures to Hide Stolen Assets and What to Do About It' (Report, Stolen Asset Recovery
Initiative/World Bank, 24 October 2011).
442 Ibid ix, 9, 41, 59, 60, 117, 203.
443 The due diligence obligations reflected in the tenth (formerly fifth) FATF recommendation
are reminiscent of the due diligence concept put forward by the Ruggie framework and the
UN Guiding Principles. Instead of imposing one-size-fits-all substantive rules, the due
diligence concept, as a form of meta-regulation, requires banks and other private actors to
identify potentially corrupt act(or)s: FATF Recommendations, above n 408, 14.
See also UN Guiding Principles,UN Doc A/HRC/17/31, annex.
444 See, eg, Basel Committee on Banking Supervision, 'Customer Due Diligence for Banks'
(Guidance Document, Bank for International Settlements, October 2001) <http://www.bis.
org/publ/bcbs85.pdf>.
445 Carr and Goldby, above n 4, 188.
446 Ibid 189.
447 Gillespie, above n 274, 103.
448 For a fuller discussion, see Jan Wouters and Cedric Ryngaert, 'Good Governance: Lessons
from International Organizations' in Deirdre M Curtin and Ramses A Wessel (eds), Good
Governance and the European Union: Reflections on Concepts, Institutions and Substance
(Intersentia, 2005) 69.
2013] The InternationalLegal Framework against Corruption 267

accountability and the rule of law. 449 International anti-corruption instruments

frequently refer to those good governance values. 450
The embedding of anti-corruption measures into the broader good governance
framework reflects the high degree of consensus on the detrimental societal
impacts of corruption. Good governance measures aimed at tackling corruption
can take various forms. For example, requiring public officials to disclose their
privately held positions is one approach that could be adopted to prevent
undesirable acts. The Iraq War unveiled the close connections between a private
military firm, Halliburton, and Dick Cheney, former US Vice-President under
the Bush Administration, who was Halliburton's Chief Executive Officer for
several years. 45 1 Allegations arose that Halliburton profited from important
security contracts for the US government in Iraq and elsewhere, sometimes
awarded without public tenders. As a public company, Halliburton is required to
make certain disclosures in conformity with securities regulations. 452 For
positions held in non-public companies, other disclosure requirements may be
required to promote transparency in potential conflicts of interest, outside of
securities regulation. Financial disclosure obligations imposed not only on the
companies, but also on politicians, may be one useful approach to help shed light
on the close ties between politics and business that might induce corrupt
practices.
Legal attempts to prevent potential conflicts of interest can take various
forms. Requiring politicians or high-level public employees to disclose
simultaneously- or previously-held positions facilitates transparency. This is a
'governance' approach, in which transparency is presumed to lead to a form of
self-regulation. Another option is the 'regulatory' approach, where the legislator
imposes substantive rules instead of mere transparency-enhancing meta-rules.
This could include an outright prohibition to simultaneously hold (certain) public
and private positions.

449 On the concept of good governance: see, eg, Nicolas Meiseil and Jacques Ould Aoudia,
'L'Insaisissable Relation entre "bonne gouvernance" et developpement' [The Elusive
Connection between 'Good Governance' and Development] (2008) 59 Revue economique
1159; Brigitte Pereira, 'Ethique, gouvernance et corruption' [Ethics, Governance and
Corruption] (2008) 34(186) Revue frangaise de gestion 53.
450 See, eg, UNCAC Preamble: 'the principles of proper management of public affairs and
public property, fairness, responsibility and equality before the law and the need to
safeguard integrity and to foster a culture of rejection of corruption'; OECD Convention,
Preamble: 'Considering that bribery ... raises serious moral and political concerns,
undermines good governance'; AU Convention Preamble:
Cognizant of the fact that the Constitutive Act of the African Union, inter alia, calls
for the need to promote and protect human and peoples' rights, consolidate
democratic institutions and foster a culture of democracy and ensure good
governance and the rule of law.
See alsoAU Convention arts 2.5, 3.
451 See, eg, Demetri Sevastopulo, 'Halliburton Scandal Widens after Claims
of Pressure to Award Lucrative Contracts', Financial Times (online),
11 November 2004 <http://www.ft.com/cms/s/0/ec9ddf06-3386-1 1d9-b6c3-
00000e2511c8.html#axzz2ahpHPl7i>; Dana Milbank, 'Halliburton, the Second-Term
Curse?', The Washington Post (online), 9 November 2004 <http://www.washingtonpost
.com/wp-dyn/articles/A35234-2004Nov8.html>.
452 See Securities and Exchange Commission, Public Companies <http://m.investor.gov/i
ntroduction-markets/how-markets-work/public-companies#>.
268 Melbourne JournalofInternationalLaw [Vol 14

Thus, the UNCAC requests states parties to

endeavour ... to establish measures and systems requiring public officials to make
declarations to appropriate authorities regarding, inter alia, their outside activities
[and] employment ... from which a conflict of interest may result with respect to
their functions as public officials. 453
It might appear to be a lost opportunity that the UNCAC negotiators did not
make this a mandatory provision. Mandatory disclosure of simultaneously held
positions in the public and private sectors would not only greatly enhance
corruption prevention in developing countries but also in developed countries.
The OECD Convention does not contain any similar provision, even though the
risk of conflicts of interest in the transnational business transactions it covers is
tangible.
Like the UNCAC, 454 the OAS Convention requests states to draft standards of
conduct for public functions. 455 Along the same lines, under the A U Convention,
states parties commit to establishing a body to draft a code of conduct for public
officials and monitor compliance. 456 The CoE went beyond these efforts by
publishing a Model Code of Conductfor Public Officials,457 which stipulates that
the code of conduct becomes an integral part of the public official's contract. 458
It does not require public officials to declare any other position they hold in the
private sphere, but to withdraw from any outside position that is 'incompatible
with or detracts from the proper performance of his or her duties as a public
official'.459 In addition, the official should notify or obtain approval from their
supervisor if they wish to accept certain (unspecified) positions outside of the
public service. 460
Another related topic is the financing of political parties.461 This topic
provoked the most intense debate during the UNCAC negotiations. 462 A CoE
recommendation on corruption in the funding of political parties called those
political parties a 'fundamental element of the democratic system of states'. 463
The recommendation calls upon states parties to provide support to political
parties in a manner that does not interfere with their independence. 464 States are
also asked to make donations public, particularly those above a fixed amount. 46 5

453 UNCAC art 8.5.

454 Article 8 of the UNCAC merely requests that states parties 'endeavour to apply' codes of
conduct for public officials.
455 OAS Convention art 111.1.
456 AU Convention art 7.2.
457 Committee of Ministers, Council of Europe, Recommendation No R (2000)10 on Codes of
Conduct for Public Officials (11 May 2000) app ('Model Code of Conduct for Public
Officials').
458 Ibid art 2.2.
459 Ibid art 15.1.
460 Ibid arts 15.1, 15.2.
461 On this topic, see Arnold J Heidenheimer, 'Parties, Campaign Finance and Political
Corruption: Tracing Long-Term Comparative Dynamics' in Arnold J Heidenheimer and
Michael Johnston (eds), Political Corruption: Concepts & Contexts (Transaction Publishers,
3 rd ed, 2002) 761.
462 Webb, above n 5, 215.
463 Recommendation Rec (2003)4, above n 51.
464 Ibid app art 1.
465 Ibid app art 3.
2013] The InternationalLegal Framework against Corruption 269

As to donations from legal persons, states should require companies to register

donations in the books and even to inform shareholders of the donation. 466
During the UNCAC negotiations, Austria, France and the Netherlands
proposed a provision that would have required states parties to adopt certain
measures on the funding of political parties, including the declaration of
donations exceeding a certain limit.467 However, the US fiercely opposed this
proposition. 468 The US had been strongly in favour of extending the OECD
Convention to bribery of political party officials, even though this was not
retained in the final text of the OECD Convention. The US feared that not
including political party officials in the definition of public officials in the OECD
Convention 'would create a huge loophole for foreign countries, which could
then channel illicit payments to party officials rather than government
officials'.469 The US FCPA also covers bribery of a foreign political party, party
official or political candidate (on the condition that it is related to obtaining or
retaining business). 470 Nevertheless, the US held a different opinion as to the
funding of political parties and did not want to include any stringent mandatory
provisions in the UNCAC. Its view eventually prevailed and the proposal by
Austria, France and the Netherlands was withdrawn. The debate is, to a limited
extent, reflected in two non-mandatory paragraphs in which states parties are
requested to 'consider':
(i) prescribing criteria concerning candidature for and election to public
office; and
(ii) enhancing transparency in the funding of candidatures for elected
public office and, where applicable, the funding of political
parties. 47 1
Nevertheless, the UNCAC covers the corruption of a (national or foreign)
public official for the benefit of, among others, another entity, 472 which could be
a political party.
Good governance approaches to corruption are not limited to legal initiatives
in the form of multilateral anti-corruption instruments or broader legislative
efforts. There are less formalistic and more flexible options available. In the
context of aid, for example, donors can exert additional caution when recipients
of aid money intend to buy high-tech products for which there are only a handful
of producers, as this more easily allows for corruption. In post-conflict settings
where adequate state institutions are not yet installed, donors could prevent the

466 Ibid app art 5.

467 Ad Hoc Committee for the Negotiation of a Convention against Corruption, Proposalsand
ContributionsReceivedfrom Governments -Austria, Franceand Netherlands:Amendment
to Article 10, UN Doc A/AC.261/L.21 (24 January 2002).
468 Webb, above n 5, 217.
469 Gantz, above n 16, 486.
470 FCPA § 78dd.1 (a)(2). See also Cleveland et al, above n 10, 204; Gantz, above n 16, 486.
471 UNCAC art 7, paras 2 and 4.
472 Ibid art 15.
270 Melbourne Journalof InternationalLaw [Vol 14

immediate inflow of substantial aid. 473 Furthermore, the structure of aid agencies
themselves may impede robust anti-corruption monitoring. Donors focus on
providing aid, but much less on monitoring its (ab)use. Staffing of aid agencies is
often limited (especially administrative staff), which further limits their capacity
to focus on monitoring of aid disbursal. Additionally, donor budgets are often
organised on a fiscal-year basis; employees are rewarded for the disbursal of the
aid earmarked for that fiscal-year, not for the impact or effectiveness of the
money. Internal incentives within aid agencies may thus further diminish the
weight attached to ensuring that aid money is not diverted by corrupt practices.
Christine Cheng and Dominik Zaum add that there is no evidence that countries
that actively implement anti-corruption measures actually receive more aid from
international donors. 474 The fight against corruption should therefore not be
exclusively focused on transnational or even domestic legal instruments. A better
yardstick to measure countries' commitment to fight corruption on the ground is
the way in which they use the tools already at their disposal (such as
procurement and aid instruments) to implement their anti-corruption rhetoric.

E Corruption and Human Rights

Recently, the anti-corruption drive has been linked to human rights, arguably
as part of a larger tendency to 'humanise' international law by placing the
individual centre stage. 475 The following publications have been instrumental in
putting the impact of corruption on human rights on the agenda: Martine
Boersma's 2012 monograph; 476 and the International Council on Human Rights
Policy's ('ICHRP') 2009 report477 and 2010 book publication. 478 This may
potentially steer the agenda away from anti-corruption crusaders' traditional
emphasis on criminal law as an instrument of coaxing corrupting and corrupted

473 Cheng and Zaum, above n 231, 15-16. In such environments, donor countries also often
focus on democratisation and the rapid organisation of elections. However, those who profit
most during the conflict presumably have the means to buy votes. Often donors have to rely
on the few local partners that remain active during the conflict. The limited choice of local
partners to implement immediate aid programs further diminishes the possibility of
sanctioning corrupt partners.
474 Ibid.
475 Theodor Meron, The Humanization of International Law (Martinus Nijhoff, 2006). This
'humanisation' of international law has, for instance, also occurred in armed conflicts,
where international human rights law has been considered to be applicable alongside
international humanitarian law (the law that is specifically designed to regulate armed
conflicts): see Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion) [ 1996]
ICJ Rep 226, 240 [25]: 'The protection of the InternationalCovenant of Civil and Political
Rights does not cease in times of war, except by operation of Article 4 of the Covenant
whereby certain provisions may be derogated from in a time of national emergency'.
See also Jean-Marie Henckaerts and Louise Doswald-Beck, Customary International
HumanitarianLaw - Volume I: Rules (Cambridge University Press, 2005) 299-305.
476 Martine Boersma, Corruption: A Violation of Human Rights and a Crime under
InternationalLaw (Intersentia, 2012).
477 Magdalena Sepulveda Carmona, 'Corruption and Human Rights: Making the Connection'
(Report, International Council on Human Rights Policy/Transparency International,
June 2009) ('Corruptionand Human Rights Report').
478 Martine Boersma and Hans Nelen (eds), Corruption & Human Rights: Interdisciplinary
Perspectives (Intersentia, 2010).
2013] The InternationalLegal Framework against Corruption 271

actors into compliance,479 or its more recent emphasis on revenue transparency

in the extractive industry. 480
Proponents of making the connection between human rights infringements
and corruption are not simply engaging in an academic pastime. They are
highlighting various practical advantages of framing corruption as a human
rights issue, especially with regards to developing countries and those lacking
effective governance mechanisms. First, human rights framing might arguably
garner more institutional and popular support for anti-corruption measures as it
draws attention to the plight of victims of corruption. Secondly, in the face of
inaction of the public prosecutor, a human rights approach may allow individual
victims of corruption to avail themselves of specific constitutional rights-based
remedies against the government and government officials - particularly in
common law countries. 481 Or, alternatively, victims may seek human
rights-inspired tort remedies against private actors complicit in official
corruption (such as via the US Alien Tort Statute).482 Thirdly, framing corruption
as violating human rights may empower human rights monitoring bodies,
including national human rights institutions, 483 to look into issues of corruption,
thus further strengthening the fight against corruption. And fourthly, as a related

479 It is noted that the first paragraph of the Foreword to the UNCAC draws a causal link
between corruption and human rights:
Corruption is an insidious plague that has a wide range of corrosive effects on
societies. It undermines democracy and the rule of law, leads to violations of human
rights, distorts markets, erodes the quality of life and allows organized crime,
terrorism and other threats to human security to flourish.
However, the operational articles do not return to the issue.
480 See especially the multi-stakeholder, 'hybrid' Extractive Industries Transparency Initiative
('EITI') and the non-governmental organisation initiative Publish What You Pay ('PWYP').
These initiatives require (multinational) corporations - typically in the extractive industries
(oil, gas, mining) - to disclose their payments to the host governments and require the
governments to disclose the funds thus received. Neither EITI nor PWYP refer to human
rights, although it is clear that transparency may prevent embezzlement and make
governments more accountable vis-a-vis their populations in respect of the ways they spend
the wealth generated by (foreign) corporations' resource extraction activities. It is important
to note that these initiatives are essentially voluntary; as such, their successful coverage
extends to only a handful of countries. See also Extractive Industries Transparency
Initiative, What is the EITI? <www.eiti.org/eiti>; Publish What You Pay, The Stories behind
Our Campaign (2011) <www.publishwhatyoupay.org>.
481 John Hatchard, 'Adopting a Human Rights Approach towards Combating Corruption' in
Martine Boersma and Hans Nelen (eds), Corruption & Human Rights: Interdisciplinary
Perspectives (Intersentia, 2010) 7, 17-18.
482 Alien's Action for Tort, 28 USC § 1350 (2006). For a critical exploration of human
rights-inspired tort remedies against private actors complicit in official corruption,
see Cecily Rose, 'The Application of Human Rights Law to Private Sector Complicity in
Governmental Corruption' (2011) 24 Leiden JournalofInternationalLaw 715.
483 Some national human rights institutions already have a specific competence to investigate
corruption: see, eg, Constitution of the Republic of Ghana 1992 (Ghana) arts 218(a), (e).
The Commission on Human Rights and Administrative Justice (the Ghanaian national
human rights institution) is empowered to 'investigate complaints of violations of
fundamental rights and freedoms, injustice, corruption, abuse of power and unfair treatment
of any person by a public officer in the exercise of his [or her] official duties': at art 218(a)
(emphasis added). The Commission on Human Rights and Administrative Justice is also
empowered to 'investigate all instances of alleged or suspected corruption and the
misappropriation of public moneys by officials and to take appropriate steps, including
reports to the Attorney-General and the Auditor-General, resulting from such
investigations': at art 218(e).
272 Melbourne Journalof InternationalLaw [Vol 14

matter, human rights monitoring could usefully supplement corruption

monitoring, which is currently perceived by pundits as overly subjective,
inaccurate and insufficiently action-oriented. Integrating corruption into human
rights monitoring may notably allow for a human rights-based disaggregation of
the 'composite indexes' typically used by anti-corruption watchdogs such as
TI. 484 In particular, the impact of corruption on the most vulnerable groups could
be introduced as a variable. 485 This could in turn inform policy strategies that
specifically target those groups, who arguably suffer most from corrupt practices.
As far as the link between human rights infringements and corruption is
concerned, the ICHRP distinguishes between direct human rights violations
through corruption, indirect violations and remote violations. 486
A straightforward example of the first category - direct violation - is where a
party to a court dispute bribes a judge with a view to obtaining a favourable
judgment, thereby putting the opposing party at a disadvantage. The latter party
could reasonably argue that the act of bribing violated their right to a fair trial, as
enshrined in art 14 of the International Covenant on Civil and PoliticalRights
('ICCPR')487 or art 6 of the European Convention on Human Rights.488 An
example of the second category - indirect violation - is the rigging of a
construction tender through corruption, in favour of one bidder who might not
necessarily comply with adequate health and safety standards, thereby violating
residents' right to safe, healthy and adequate housing as enshrined in art 11(1) of
the International Covenant on Economic, Social and Cultural Rights.489 Another
example is the existence of a de facto requirement to pay user fees for services
which are supposed to be freely available, such as education - which in the
latter instance violates the right to education. 490 A remote human rights violation
through corruption may arise where an election is rigged, leading police to

484 See Gauthier De Beco, 'Monitoring Corruption from a Human Rights Perspective' (2011)
15 InternationalJournal of Human Rights 1107.
485 De Beco suggests basing the framework for monitoring corruption from a human rights
perspective on the structural-process-outcome indicator framework developed by the Office
of the High Commissioner for Human Rights ('OHCHR'): ibid 1120. This framework uses
structural indicators (measuring a state's intention to abide by human rights standards);
process indicators (measuring the efforts undertaken by states to implement human rights);
and outcome indicators (measuring a state's actual human rights performance): at 1115-16.
See also Report on Indicatorsfor Monitoring Compliance with InternationalHuman Rights
Instruments, UN Doc HRI/MC/2006/7 (11 May 2006); Report on Indicatorsfor Promoting
and Monitoring the Implementation of Human Rights, UN Doc HRI/MC/2008/3
(6 June 2008).
486 Corruption and Human Rights Report, above n 477, 27-8.
487 International Covenant on Civil and Political Rights, opened for signature
19 December 1966, 999 UNTS 171 (entered into force 23 March 1976) ('ICCPR').
488 Convention for the Protection of Human Rights and Fundamental Freedoms, opened for
signature 4 November 1950, 213 UNTS 222 (entered into force 3 September 1953), as
amended by Protocol No 14bis to the Convention for the Protection of Human Rights and
Fundamental Freedoms, opened for signature 27 May 2009, CETS No 204 (entered into
force 1 September 2009) ('European Convention on Human Rights').
489 International Covenant on Economic, Social and Cultural Rights, opened for signature
19 December 1966, 993 UNTS 3 (entered into force 3 January 1976).
490 Ibid art 13. For a lengthy discussion of violations of the right to education through
corruption, see Martine Boersma, 'Corruption as a Violation of Economic, Social and
Cultural Rights: Reflections on the Right to Education' in Martine Boersma and Hans
Nelen (eds), Corruption & Human Rights: Interdisciplinary Perspectives
(Intersentia, 2010) 51.
2013] The InternationalLegal Framework against Corruption 273

repress demonstrations, resulting in the violation of protesters' rights to life and

physical integrity. 49 1 Hovering between indirect and remote violations is the
adverse impact of embezzlement on the public funds available for realising and,
in particular, 'fulfilling' (economic and social) human rights. 492
More generally, it is arguable that any act of corruption violates the principle
of non-discrimination/right to equality, as enshrined in art 26 of the ICCPR, in
that the very essence of an act of corruption is that it unjustifiably favours the
corrupting person over other similarly situated persons. At the same time, it
should be noted that the fight against corruption may come with its own human
rights problems, as it may jeopardise the presumption of innocence. This may
occur when the law requires that the individual provide a satisfactory explanation
of their high standard of living - thus effectively shifting the burden of proving
an offence, at least in part, from the law-enforcement agencies to the
individual. 493
In spite of its proclaimed advantages, it is not clear whether the promises
raised by advocates of the connection between human rights infringements and
corruption can be fully met. There is no empirical evidence of the proposition
that the public does not sufficiently realise that corruption compromises the
enjoyment of their human rights; nor is it given that such a realisation would
spur the public to bring more pressure to bear on the government to step up its
efforts against corruption. In addition, the above categorisations of direct,
indirect and remote violations may serve useful didactic purposes, but it is highly
doubtful whether the causal link between the act of corruption and the violation
of human rights is in all these cases sufficiently strong to attract legal
responsibility for the corrupter, the corrupted or the state. 494 Moreover, it is not
clear whether the procedural advantage of empowering human rights monitoring
bodies to investigate cases of corruption will fully materialise. So far, these
bodies have not, or at least have hardly, considered corruption as falling within
their mandate - and it may not even be appropriate for them to do so, as a focus
on corruption as a human rights violation might divert scarce resources away
from human rights violations where causality and the identity of the perpetrators
are not contested. Finally, it is unclear, to say the least, whether victims of
private sector corruption can really avail themselves of international human
rights-based civil remedies against corporations complicit in government

491 ICCPR arts 6-7.

492 Cf Rose, above n 482, 718-19: 'Corrupt acts may inhibit such progressive realization when
they involve the state's diversion of resources away from the provision of public services,
thereby diminishing any improvement or progress'.
493 See especially UNCAC art 20:
Subject to its constitution and the fundamental principles of its legal system, each
State Party shall consider adopting such legislative and other measures as may be
necessary to establish as a criminal offence, when committed intentionally, illicit
enrichment, that is, a significant increase in the assets of a public official that he or
she cannot reasonably explain in relation to his or her lawful income.
494 Cf David Nelken, 'Corruption and Human Rights: an Afterword' in Martine Boersma and
Hans Nelen (eds), Corruption & Human Rights: Interdisciplinary Perspectives
(Intersentia, 2010) 241 (submitting that what proponents 'describe as a "remote link" - and
perhaps even some examples of indirect links - may be problematic not because of a lack
of scientific causation but because law sets limits to what it is prepared to consider a
connection which creates legal responsibility': at 246 (emphasis in original)).
274 Melbourne Journalof InternationalLaw [Vol 14

corruption, embezzlement or bribery. Apart from the obvious problem of

identifying a relevant forum to hear such cases (US federal courts acting under
the Alien Tort Statute could possibly qualify), it is doubtful whether, in the
current state of international law, private actors can be complicit in violations of
international human rights law (as opposed to international criminal law); 495
whether private actors are bearers of duties under international human rights law
(arguably, only states are); and whether the standard of constructive knowledge
('should have known') suffices for a corporation to be held complicit in
governmental corruption affecting human rights. 496
More fundamentally and also more controversially, some authors have
submitted that linking corruption to human rights violations may undermine,
rather than further, the cause of human rights. In particular, these authors
contend that making such a linkage entrenches a neoliberal world view of
development that attributes the absence of economic growth in developing
countries to good governance failures within these countries, rather than to
fundamentally unequal power relations between the global North and the global
South. 497 They argue that the world's focus on corruption in development studies
finds its roots in a Western-backed ideology that distrusts the state and state
actors and designs rules that shackle the state. 498 Institutional development
actors, so this argument goes, have imposed this ideology on developing
countries and have required good governance, including the taking of
anti-corruption measures, by local recipients of aid.499 Critics of linking
corruption to human rights violations essentially posit that, by tying the good

495 It is not disputed that natural persons can be complicit in international crimes: see, eg, Rome
Statute of the International Criminal Court, opened for signature 17 July 1998,
2187 UNTS 90 (entered into force 1 July 2002) art 25 ('Rome Statute'). Under the
Rome Statute, the International Criminal Court does not have jurisdiction over non-natural
persons, such as corporations, but this need not mean that under general international
criminal law the criminal responsibility of such corporations cannot duly be engaged. Note
that Rose, drawing on Clapham, applies per analogiam art 16 of the International Law
Commission's Articles on State Responsibility to corporate complicity in state violations of
international human rights law: Rose, above n 482, 726-7, citing Andrew Clapham,
The Human Rights Obligations of Non-State Actors (Oxford University Press, 2006) 266.
See also International Law Commission, Report of the InternationalLaw Commission on the
Work of Its Fifty-Third Session, UN GAOR, 56 th sess, Supp No 10, UN Doc A/56/10
(3 August 2001) ch IV(E) ('Draft Articles on Responsibility of States for Internationally
Wrongful Acts').
496 On these grounds, Rose logically concludes that 'it seems that international law is not yet
capable of capturing private sector complicity in human rights violations such as these':
Rose, above n 482, 736. But see UN Guiding Principles, UN Doc A/HRC/17/31, annex
[11]-[24] (emphasising, as the second pillar of the framework, 'The Corporate
Responsibility to Respect Human Rights').
497 This argument has been made most pointedly by Morag Goodwin and Kate Rose-Sender,
'Linking Corruption and Human Rights: An Unwelcome Addition to the Development
Discourse' in Martine Boersma and Hans Nelen (eds), Corruption & Human Rights:
Interdisciplinary Perspectives (Intersentia, 2010) 221, 235-6. But see Rose, above n 482,
717: Rose submits that 'the loose invocation of human rights rhetoric in anticorruption
literature may actually weaken the normative value of human rights law, particularly
economic and social rights'; that 'legal responses to corruption should be confined to the
fairly specialized criminal legal regimes on money laundering, bribery, and stolen asset
recovery'; and also highlights 'improvements in contract and revenue transparency'.
498 Goodwin and Rose-Sender, above n 497, 235-6.
499 See the emphasis that the World Bank places on good governance and anti-corruption as a
means of alleviating poverty: World Bank Institute, Collaborative Governance (2012)
<http://wbi.worldbank.org/wbi/about/topics/govemance>.
2013] The InternationalLegal Framework against Corruption 275

governance/anti-corruption model of development to a human rights discourse,

the good governance advocates may immunise their ideological model against
fair criticism, on the basis that their attacks on anti-corruption efforts can easily
be framed as unacceptable attacks on human rights proper.
In our view, whilst those critical of making the connection between corruption
and human rights are to be credited for challenging the pensede unique regarding
the framework linking development, good governance, anti-corruption and
human rights, they appear to overstate their claim. For one thing, the risk of
human rights forfeiting their emancipatory potential when being made
subservient to one particular development model appears to be exaggerated.
Throughout history, ideologists have relied on legal tools and legal techniques to
further their world view, without law (and more recently, without human rights)
necessarily being discredited as an instrument of regulation or emancipation.5 0 0
Thus, arguably, human rights considerations can still inform alternative
development models that highlight a global or Western responsibility for
developmental problems.
At the very least, critics of linking corruption to human rights infringements
may not so much criticise the adverse effects which corruption may have on
human rights (which they may duly recognise, at least in individual cases), so
much as question whether the anti-corruption movement truly furthers a
collective right to development, or an even more diffuse general concept such as
human dignity. These are questions of political economy which lawyers are not
particularly well-placed to answer.
In conclusion, the proponents of linking corruption to human rights
infringements have rightly drawn attention to the victims of the offence of
corruption. Corruption has historically been considered a victimless crime, a
perception that may have hampered the vigorous prosecution of this offence.
Indeed, enforcement efforts have been somewhat blunted by the elusiveness of
determining an exact causal link between instances of corruption and violations
of human rights. In particular, the impact of corruption on the enjoyment of
economic, social and cultural rights - which may be potentially wide-ranging,
but also diffuse and lacking individualisation - has proven hard to measure. In
any event, more social science research into the causal link between corruption
and human rights appears called for. But at the same time, assuming that such a
causal link could be established in certain situations, lawyers may want to
ascertain what degree of responsibility is legally relevant to attract liability under
human rights law. This, in turn, may greatly facilitate the role that human rights
bodies might play in monitoring corruption and, thus, ensure that the discourse
linking human rights with corruption has real practical consequences.

500 There is, for instance, some evidence that reliance on a 'thin' rule of law in apartheid South
Africa - a notion which emphasised the human rights of only a minority - has set the
stage for the entrenchment of a 'thicker' rule of law, which encompasses values such as
human rights for all, public participation and accountability of government, in
post-apartheid South Africa: see Evelyne Schmid, 'Thickening the Rule of Law in
Transition: The Constitutional Entrenchment of Economic and Social Rights in South
Africa' in Edda Kristjansdottir, Andre Nollkaemper and Cedric Ryngaert (eds),
International Law in Domestic Courts: Rule of Law Reform in Post-Conflict States
(Intersentia, 2012) 59.
276 Melbourne Journalof InternationalLaw [Vol 14

F Corruption in the Private Sphere

The focus of international anti-corruption efforts is on acts of corruption
involving a public official. 50 1 The traditional definition of 'corruption' - the
abuse of public office for private gain - does not easily allow for an application
to corrupt acts in the purely private sphere. 502 First, private corruption by its very
definition does not involve an abuse of any public office. 503 Secondly, it does not
necessarily involve private gain. For example, corporate corruption by an
employee may be solely focused on higher profits or another benefit for the
company, without any benefit for the employee himself or herself.504
Corruption scandals erupting in the private sphere, such as the Enron scandal
or the influence of lavish dinners or trips organised by pharmaceutical companies
on doctors' prescription behaviour, 505 demonstrate that the focus on the abuse of
public sector corruption may be too narrow.
Detecting certain types of corruption in the private sphere may be even more
difficult than in the public sphere. For example, it may be less difficult to detect
that a tender has been corrupted if the offer is granted to a company that charges
fees above the average level, or that a public employee has been appointed who
does not meet the official requirements, than to detect that a doctor has been
influenced in their prescription behaviour or that a company has offered a put
option to another company that is recorded in the books far below market value.
For those who are forced to offer a bribe to a public official (for instance, for a

501 R Gomez Monsivais, 'La Lutte contre la corruption des fonctionnaires' [The Fight against
Corruption of Officials] (2000) 94 Revue frangaise d'administration publique 231;
Jacques Godeaut, 'La Corruption dans le secteur public' [Corruption in the Public Sector]
(2000) 314 La Revue administrative:histoire, droit, socidtd 215; Alexis Blois, 'Infraction de
corruption d'agent public etranger et procedure penale nationale' [Bribery of Foreign Public
Officials and National Criminal Proceedings] (2006) 2 Revue de droit des affaires
internationales217.
502 Fleming and Zyglidopoulos, above n 25, 5-6.
503 The use of the term 'private corruption' does not imply that the consequences of the corrupt
act remain exclusively private. For example, if doctors prescribe more highly priced
medication because of lobbying by a pharmaceutical company, this has repercussions for the
budget of official health care institutions that reimburse the patients. Similarly, if a listed
company produces false financial statements, this misleads the financial regulatory
institutions and may impose a huge cost on the public treasury if the company goes
bankrupt, as was the case for Enron, for example. Another example is bribery in order to be
admitted to an elite private university. Again, this does not involve the bribery of a public
official but has important consequences beyond the purely private realm. Consequently,
'private' corruption is used to denominate corrupt acts that do not imply the active
involvement of a public official, but does not mean that the consequences of the corrupt act
necessarily remain within the purely private sphere.
504 Fleming and Zyglidopoulos, above n 25, 5, 7.
505 David Blumenthal, 'Doctors and Drug Companies' (2004) 351 New England Journal of
Medicine 1885, 1886, citing Ray Moynihan, 'Who Pays for the Pizza? Redefining the
Relationships between Doctors and Drug Companies. 2: Disentanglement' (2003)
326 British Medical Journal 1193. Even in the absence of special benefits being offered to
doctors, the mere promotional activities by pharmaceutical companies (in the sense of
information sessions to physicians) have not been proven to increase the quality of
prescription behaviour. On the contrary, one study suggests increasing prescribing
frequency, increasing costs and lowering prescribing quality: see Geoffrey Spurling et al,
'Information from Pharmaceutical Companies and the Quality, Quantity, and Cost of
Physicians' Prescribing: A Systematic Review' (2010) 7(10) PLoS Medicine 1. In the US in
2001, the ratio of pharmaceutical sales representative to physicians was 1:4.7:
see Blumenthal, above n 505, 1185-6.
2013] The InternationalLegal Framework against Corruption 277

driving licence) it may be easier to at least be aware of the bribery and speak out
against it, than it is for the doctor's patient or the company's shareholders to find
out about corrupt practices. Corrupt acts in the purely commercial sphere may,
due to their vast complexity or technicality, be especially hard to unearth - as
the example of Enron demonstrates.
A useful understanding of the complex phenomenon of corporate corruption
has been provided by Peter Fleming and Stelios Zyglidopoulos. 506 They explain
corporate corruption from a threefold perspective. First, any corrupt act is
performed by an individual (agency). Secondly, an individual may be induced to
engage in corrupt practices depending on the organisational pressure within the
company (structure). Thirdly, once an organisation condones one corrupt act, this
quickly leads to a snowball effect (escalation).5 0 7 This threefold view
(agency-structure-escalation) demonstrates the importance of not exclusively
prosecuting individuals, or exclusively companies, but to look at the interplay
between both. In addition, it underlines the importance of intra-company policies
against corruption and regular training. Moreover, it shows the importance of
tackling early-stage forms of corruption, such as insider trading before initial
public offerings, relatively small financial misrepresentations and even
anti-competitive behaviour such as price-fixing. 508 These acts may be symptoms
of an emerging and contagious corrupt corporate culture.
A study on the effects of corruption on cross-border corporate acquisitions
revealed that the shareholders of the target company in a country affected by
corruption pay a price for the corrupt culture in their country. 509 The study found
no evidence that domestic corruption would constitute a significant barrier for
foreign investment, only that the shareholders of the local target pay the price in
terms of a lower premium price for their shares, with an average of a 20 per cent
premium loss. 510 Local corruption may not only affect the type of investment
made (local start-up or takeover, which in turn may alter the extent of the
transfer of technology and transaction opportunities for local firms) and the
merger premiums paid by foreign investors, but it may also play a role in the
overall valuation of TNCs that operate in corrupt countries, as well as the type of
their local transactions. As for a TNC's overall valuation, a study on this issue

506 Fleming and Zyglidopoulos, above n 25.

507 Ibid viii.
508 Ibid 2-3, 6.
509 Utz Weitzel and Sjors Berns, 'Cross-Border Takeovers, Corruption and Related Aspects of
Governance' (2006) 37 Journal ofInternationalBusiness Studies 786.
510 Ibid 802.
278 Melbourne Journalof InternationalLaw [Vol 14

found that the overall valuation of TNCs is lower if they operate primarily in
countries with a high degree of corruption. 51 1
During the UNCAC negotiations, the subject of private sphere corruption was
one of the more contentious topics. The EU took the lead in favour of addressing
private sphere corruption but the US rejected this. 512 Eventually, it was decided
to include non-mandatory provisions on private sector corruption in the UNCAC.
States parties 'shall consider' criminalising active and passive bribery and
embezzlement in the private sector. 513 The prevention-valve is less freestanding,
given that states parties 'shall take measures' to prevent private sector
corruption, even though this requirement is softened by adding 'in accordance
with the fundamental principles of its domestic law'. 514 The reason for the US
resistance to the criminalisation of private sector corruption was that US business
feared it would lead to lawsuits in foreign courts over contract and procurement
irregularities. 515
At the soft law level, the UNGA resolution adopting the ICCPO explicitly
[u]rges Member States carefully to consider the problems posed by the
international aspects of corrupt practices, especially as regards international
economic activities carried out by corporate entities, and to study appropriate
legislative and regulatory measures to ensure the transparency and integrity of
financial systems and transactions carried out by such corporate entities ...516
Along the same lines, the introductory language of the UNGA resolution
adopting the UNDAC '[e]ncourages private and public corporations, including
transnational corporations, and individuals engaged in international commercial
transactions to cooperate in the effective implementation of the Declaration'.517
In September 2006, the ICC issued a memorandum to the Working Group on
Bribery, in which it recommended amendment of the OECD Convention so as to
include private sector corruption. The memorandum states that
private-to-private corruption, even though it does not affect directly public trust
vested in public officials, undermines the smooth functioning and credibility of
free, open and global competition. By adding an artificial and unwarranted

511 This suggests that investors are aware of the risks related to corruption: see Christos
Pantzalis, Jung Chul Park and Ninon Sutton, 'Corruption and Valuation of Multinational
Corporations' (2008) 15 Journal of Empirical Finance 387. This study was limited to
US Transnational Corporations ('TNCs') where the perceived risks of corrupt practices may
be deemed higher than for non-US TNCs due to the strict provisions of the FCPA. If the
TNC has a certain level of intangible assets, this conclusion no longer holds. For example,
there are fewer opportunities to extract bribes from a firm with technological know-how as
its main asset, than from a mining company that undertakes a large number of road
transports, which can easily be blocked when no bribe is paid. Because of high transaction
costs in countries seriously affected by corruption, it is more advantageous for TNCs with a
high level of intangible assets to internalise their operations, rather than entering into
(costly) corrupt transactions with external firms in the corrupt country: at 387, 414.
512 Webb, above n 5, 213.
513 UNCAC arts21-2.
514 Ibid art 12.
515 Webb, above n 5, 214.
516 Action against Corruption, UN Doc A/RES/51/59, para 7.
517 UNDAC, UN Doc A/RES/51/191, annex para 6.
2013] The InternationalLegal Framework against Corruption 279

element to the cost of business, it distorts the terms of exchange of international

business transactions and penalizes loyal market participants. 518
In short, the almost exclusive focus on public sphere corruption may gloss
over a wide range of corrupt acts that occur in reality. There is no reason to
exclude, a priori, purely private forms of corruption. Anti-corruption instruments
aim to send a strong signal to society and break through the defeatist attitude that
corruption is simply the status quo. It would defeat the purpose of such
instruments if private forms of corruption remain unchallenged. Pressure is
mounting to pay more attention to private corruption, especially to corporate
corruption. The recent financial crisis and the resulting rise in popular suspicion
of corporate greed may provide a further incentive to extend the scope of
anti-corruption instruments to the private sector.

V CONCLUSION

The international anti-corruption legal framework has been substantially

strengthened in the past two decades, with impressive progress being made at
both global and regional levels. Nevertheless, the work is far from over. For
example, the AU Convention is currently not supported by any tangible
monitoring mechanism. Even more remarkable is the absence of a regional Asian
anti-corruption instrument. 519 Notwithstanding the progress made on the
international level, 'the battlefield upon which this war is lost or won remains
national'.520 In order to bring this struggle to a good end, international
monitoring of national implementation and enforcement could use an extra
impetus, similar to the OECD and GRECO monitoring mechanisms.
It has been stated that 'incorruptible governments can be constructed only
using incorruptible citizens as their bricks and mortar'.521 Without a doubt,
discouragement and prosecution of corrupt practices is not only obtained through
international monitoring bodies or national prosecutions. The moral
condemnation of corruption should ideally reach such a critical mass that the
sheer reputational risk related to corruption is in itself a powerful disincentive. 522
In addition, more lenient sentencing guidelines for companies with a strong
internal prevention and detection system may provide additional incentives to

518 International Chamber of Commerce, Recommendations by the International Chamber of

Commerce on FurtherProvisions to be Adopted to Prevent and ProhibitPrivate-to-Private
Corruption - Memorandum to the Working Group on Bribery in International Business
Transactions (13 September 2006).
519 For examples of Asian Development Bank ('ADB') publications, see above n 206. See also
the Annual Reports issued by the ADB's Office of Anti-Corruption and Integrity to the
ADB's President: see, eg, Department of Policy and Business Practices, Office of
Anticorruption and Integrity, Asian Development Bank, 'Report to the President: Office of
Anticorruption and Integrity: Annual Report 2012' (Report, March 2013)
<http://www.adb.org/documents/report-president-office-anticorruption-and-integrity-annua
1-report-2012>.
520 Mungiu-Pippidi et al, above n 266, 82.
521 Gerald E Caiden, 0P Dwivedi and Joseph G Jabbra, 'Introduction' in Gerald E Caiden,
0P Dwivedi and Joseph G Jabbra (eds), Where Corruption Lives (Kumarian Press, 2001) 1.
522 Gantz, above n 16, 464.
280 Melbourne Journalof InternationalLaw [Vol 14

establish such internal mechanisms. These will presumably be strongly

influenced by international standards and guidance. 523
The battle has not yet been won and it is unrealistic to assume it will ever be
won completely. Nevertheless, the developments of the past two decades are
evidence that progress can be achieved. As one recent article concluded, '[t]he
donor community has spent too much time discussing the dynamics of
international crime and corruption, and too little time apprehending the
thieves'.524

523 The US Sentencing Commission issued sentencing guidelines for both individuals and
organisational offenders. These guidelines stipulate that the level of the appropriate penalty
will be directly influenced by 'the prior diligence of an organization in seeking to prevent
and detect criminal conduct': Cleveland et al, above n 10, 217 (citations omitted). See also
United States Sentencing Commission, Guidelines Manual (2010) <http://www.ussc.gov/
Guidelines>.
524 Steve Berkman et al, 'The Fight against Corruption: International Organizations at a
Cross-Roads' (2008) 15 Journal of Financial Crime 124, quoted in Djordjija Petkoski,
Danielle E Warren and William S Laufer, 'Collective Strategies in Fighting Corruption:
Some Intuitions and Counter Intuitions' (2009) 88 Journal ofBusiness Ethics 815, 815-16.