G20, China, corruption and asset recovery

G20, China, corruption and asset recovery

Behind the headlines at the G20 conference, the first such meeting hosted in China, is a new proposal by the Chinese on fighting corruption.

China, which is in the middle of an anti-corruption campaign that has seen hundreds of thousands of arrests and court cases in the country, wants to spread the net wider. Not only should money be returned by the people who stole it, but so should the people themselves.

China is now proposing world leaders adopt new High Level Principles on Cooperation on Persons Sought for Corruption and Asset Recovery, arguing that international cooperation is required to ensure the return of corrupt individuals to face justice.

In the Chinese context this raises a red flag: China scores just 37 on the 2015 Corruption Perceptions Index, indicating a serious problem with corruption, a score that has barely changed since the start of its anti-corruption campaign primarily because of its methods. These include forced confessions and a lack of an independent judiciary, which means that it is not possible to know if those arrested are political targets.

Given its push to win business around the world, China could have more impact on the G20 anti-corruption agenda if it took its commitment to investigate and prosecute Chinese companies that bribe foreign officials more seriously.

Stopping the tide dirty money

Trillions of dollars of illicit wealth are pushed through the financial system annually and they end up funding the luxury lifestyle of the corrupt, many of whom have fled their home countries. China’s well-known Operation Foxhunt has sought to locate and return corrupt officials now residing in a number of countries overseas, several of which are G20 members.

Transparency International believes corruption is a cross-border problem requiring cross-border collaboration between governments and law enforcement globally, and welcomes the fact that anti-corruption remains on the G20 agenda. But is the return of corrupt the only approach?

The G20 must realise that most of the world’s corrupt money is sitting in member countries. The buck stops with them to end the system that allows them to benefit from corrupt wealth.  We need real progress on forcing out the enablers of corruption: the secret companies that hide the wealth and the people who set them up. And the welcome mat should not be out for ‘investors’ – without doing the right checks to make sure their money is clean. – Cobus de Swardt, managing director, Transparency International

Denial of Entry v. Extradition

The new principles may seek to place emphasis on facilitating the return of people accused of corruption who have fled overseas and thus deny them safe haven. This approach would be a shift away from the current preventative approach the G20 has taken, adopting a Denial of Entry network in 2012 which seeks to ensure that corrupt individuals are denied the right to enter into countries in the first place, should there be conviction or sufficient other information.

Another preventative approach G20 countries should take is to strictly monitor the “golden visa” policies offered by certain jurisdictions (including G20 countries Australia, France, the UK and the US) that offer residency and/or citizenship to people who proffer significant investment sums.

We support a preventative approach. Our positions are here and we have run campaigns to promote denial of entry. The trouble is that not enough countries are doing the due diligence required to stop the corrupt from gaming the system.

The G20 should focus on stopping the instruments used to hide corrupt money – secret companies – and getting countries to enforce strict policing of the enablers of corruption that use these instruments: bankers, lawyers and real estate companies.

Extradition can take years and legal costs are high. Having extradition as a second option will add a weapon to the arsenal of corruption fighters. But stopping the corrupt from finding safe havens to enjoy their wealth comes first.

Editor's note: Later on 2 September, the fifth paragraph was amended to correct an error.

For any press enquiries please contact press@transparency.org

Latest

Support Transparency International

World Whistleblower Day 2019 – is this a landmark year for whistleblower protection?

Too often, whistleblowers face retaliation after bringing corruption, fraud and financial malpractice to light. Is change around the corner? This year, we celebrate World Whistleblower Day, 23 June, with some serious wins for whistleblower protection already behind us in 2019, and some encouraging developments on the horizon.

Austria’s Strache affair and the undue influence toolkit

A week ago, German newspapers published evidence of the former Vice-Chancellor of Austria and a colleague apparently negotiating corrupt deals with the purported niece of a Russian oligarch close to President Vladimir Putin. The scandal illustrates the tools and methods used by those who wish to enrich themselves from public funds and advance private interests over the public good.

Why corruption matters in the EU elections

What voters should know as they head to the polls.

Four ways the G20 can take the lead on anti-corruption

The globalisation of world trade and finance has been accompanied by an internationalisation of corruption. The G20 Anti-Corruption Working Group therefore has the potential to be a very important partner in the fight for a more just world.

Venezuela: Se necesitan instituciones sólidas para abordar la delincuencia organizada

La corrupción en las más altas esferas del Gobierno venezolano ha causado inestabilidad social y económica extrema y ha debilitado a las instituciones estatales que deberían proteger a la ciudadanía. Las redes de delincuencia organizada actúan con impunidad en todo el país.

Venezuela: Strong institutions needed to address organised crime

Corruption in the top echelons of the Venezuelan government has led to extreme instability and weak state institutions, and allows organised crime networks to act with impunity all across the country.

The trillion dollar question: the IMF and anti-corruption one year on

The International Monetary Fund (IMF) has made public commitments and adopted a new framework to address corruption - we check how the IMF is progressing with this one year later.

Social Media

Follow us on Social Media