G20: the anti-corruption record

Filed under - Conventions

Posted 15 June 2012
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“To see a group of the most powerful states on the globe, make such solid commitments creates the potential for unprecedented progress in the fight against corruption.”

Transparency International chair Huguette Labelle on the G20, read the full interview here

On 18 June 2012, the world’s attention falls on the summit of the Group of 20 leading economies, or G20. Accounting for 85 percent of the world economy, the G20 will discuss the most pressing issues of the day, such as the global economic and financial crisis, and, the world hopes, produce bold solutions to address them.

The 2010 summit in Seoul delivered one such bold measure: a nine-point anti-corruption action plan. The action plan included a committment to punish companies for bribing foreign officials and, by the end of 2012, better protect people who blow the whistle on corruption.

What made it different to the usual summit statement was that a G20 anti-corruption working group has been set up to monitor implementations. At the 2011 G20 summit in Cannes, it published an anti-corruption progress report.

As G20 leaders meet in Mexico a year and a half after the plan was announced, how have the G20 delivered on their promise to fight corruption?

G20 in numbers

11: number of G20 members who score less than five out of 10 on Transparency International’s Corruption Perceptions Index

56 per cent: of citizens in G20 countries think corruption has increased in their country in the last three years, according to Transparency International’s Global Corruption Barometer (Saudi Arabia was not covered by the survey). Only 29 per cent assess their government’s actions in the fight against corruption as effective.

US $4.8 trillion: the proceeds of financial crimes such as bribery and tax evasion that have flowed out of the G20’s 10 emerging economies from 2000-2009, according to Global Financial Integrity

451: number of anti-bribery cases completed in G20 countries signed up to OECD anti-bribery convention by the end of 2010, but the US and Germany together account for 80 per cent of this.

Three G20 Successes

  • Criminalising foreign bribery
    New legislation passed in China, Russia and the UK. New legislation is also going through parliament in India and Indonesia
  • Protecting people who report corruption
    New whistleblower protection legislation has been passed in some countries, such as South Korea.
  • Preventing tax evasion
    The G20 have committed to the Multilateral Convention on Tax Information Exchange. A common framework like this convention will provide a common understanding for authorities to work together, instead of working on the basis of numerous individual agreements made between different nations. The convention will also make it possible for tax information to be exchanged automatically, making it easier for officials to react quickly, which is vital in an economy where money can be moved to a tax haven at the click of a button.

    By revising the standards of the Financial Action Task Force, the G20 has made tax evasion a predicate offence for money laundering. Money laundering is defined as taking the proceeds of a crime and making them legitimate. Until now moving the proceeds of tax evasion would not necessarily be considered money laundering. Now that it is, it can be tackled by the authorities accordingly.

    The G20 anti-corruption working group also deserves credit for its openness to business and civil society: read more about Transparency International’s work with the G20 anti-corruption working group here and the B20 (Business 20) here.

Securing the return of stolen assets

The proceeds of corruption often find their way to the world’s financial centres, so the G20 can play a big role in preventing the laundering of stolen assets and aiding their return for countries that suffer their loss, such as the North African countries most affected by the Arab Spring.

The G8, for example, have agreed a stolen asset recovery action plan. Read more here. The G20 could follow this with further measures:

  • Visa denial: agree a common basis for denying corrupt officials safe haven
  • Agree principles for obliging public officials to disclose their assets
  • A mutual legal assistance guide for all G20 countries

Three G20 failures

  • Failing to support global anti-corruption laws
    Three members of the G20 have still not ratified to world’s biggest anti-corruption commitment: the UN Convention against Corruption. To date 160 countries world wide have ratified this treaty, but Germany, Japan and Saudi-Arabia have still not. If the G20 is to drive wider take up of common anti-corruption policies, these countries need to lead, not lag. Other G20 members could boost the UN convention as a universal tool by boosting civil society participation in the reviews of their implementation of the convention.
  • Lack of enforcement of anti-bribery legislation
    Ten years after the OECD anti-bribery convention, 9 of the 15 G20 members signed up to the treaty have not done enough to investigate and prosecute companies for bribing foreign officials (read more here). It is vital that these countries start implementing the commitment which they made over 10 years ago.
  • Financial transparency
    Despite legislative progress in the United States and European Union, the G20 has not committed to mandatory country-by-country reporting by multinational companies. We are also still waiting for the G20 to commit to the creation of a register of beneficial ownership of companies and trusts. These measures would make it harder to conceal financial crimes such as bribery, tax evasion and money laundering.

“By failing to deliver on financial reform, G20 continues to tackle the symptoms and not the causes of the financial crisis”
Transparency International response to G20 Cannes Summit 4 November 2011

Looking ahead

To build on its achievements in fighting corruption, the G20 Cabo summit should make concrete commitments in three key areas:

  • Tackle conflicts of interest issues in the financial sector between regulators and financial institutions.
  • Define principles for preventing corruption in projects to prevent and respond to climate change
  • Require greater corporate transparency, by obliging public disclosure of profits and payments on a country-by-country basis. There should also be greater public disclosure of financial institutions’ risk profiles, including anti-bribery procedures.

Resources

Press contact(s):

Thomas Coombes
Media and Public Relations
press@transparency.org
+49 30 3438 20 666

Country / Territory - International   
Region - Global   
Language(s) - English   
Topic - Conventions   
Tags - corruption   |   Financial crisis   |   Anti-bribery   |   OECD Anti-Bribery Convention   |   Tax evasion   |   Tax havens   |   G20   |   Stolen assets   |   Private Sector   

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