Since 2002, when the Proceeds of Crime Act introduced a whole range of offences involving criminal property and money laundering, things have been getting tougher for those criminals who use corruption to fund their activities. In 2005, the UN Convention against Corruption introduced the first legally binding anti-corruption measure. 2009 started with a 543 million Euro fine on biggest bank, UBS, for aiding tax fraud, while the Swiss financial regulator FINMA swiftly ordered the bank to hand over about 250 customer names to the US Internal Revenue Service. Russia has just ratified a treaty on money laundering and the finance of terrorism (ratified on Christmas day, 2009).
The last decade has seen a clampdown on corruption and fraud involving money laundering. With Swiss banks under scrutiny and world governments keen to get their hands on tax money being laundered in foreign banks, it seems there is no place left to hide the proceeds of corruption. Or is there?
As money laundering laws tighten, criminals become more technologically savvy as well. According to a recent Kroll fraud report on corruption proceeds, "high level corruption usually involves powerful government officials who will have weakened, or allowed corruption to infiltrate many domestic institutions. Although current international arrangements require a high level of evidence before asset freezing and recovery can begin, much of this evidence may still be in the hands of the corrupt officials themselves." It's not just terrorists or criminal gangs who are involved, but high level officials, making detection and asset recovery all the more difficult.
In countries like Nigeria, 2009 saw most of the chief executives and senior management from the top 5 banks being prosecuted for financial misappropriation and money laundering. The reform in the sector also revealed the shady interplay between the major players in the stock market and top bank executives. This illustrates just how far the rot and corruption can go, from government officials to bank executives, stock brokers to heads of state. Even former vice president of the United States was under scrutiny when it was revealed that the company he had formerly headed, Halliburton, was implicated in a bribery consortium in Nigeria.
When corruption runs so deep as to involve lawyers, government officials, bankers, and leaders of multimillion dollar corporations, how can we expect to eradicate it? It is evident that an anti-corruption framework is needed in all countries, with information sharing, and a view that no one is above the law. Prevention is the key, compliance and regulatory scrutiny across all sectors and industries, in all countries. Insufficient anti-corruption enforcement and systemic weaknesses work together to encourage corruption, as do instability and political strife. In order to strengthen nations like Somalia and Afghanistan financially, the countries must be stabilised, and the measures against corruption should be strengthened. We are moving in the right direction, but are still years away from a workable solution for all nations.
Resources:
Transparency International global priorities in corruption
Kroll compliance and integrity services
UN Anti-Corruption Facebook page
Interpol Anti-Corruption Academy
Bindman's Business Crime Unit
No comments:
Post a Comment