Abstract
Public international law regulates corruption as a part of transnational criminal law, rather than international economic law. Like other transnational criminal law treaties, the United Nations Convention against Corruption, as well as other regional and international anti-corruption instruments, seek to ensure that domestic anti-corruption laws are relatively harmonized, and that states can cooperate with each other in investigations, prosecutions, and asset recovery. Public international law thus approaches the subject of corruption from a predominantly criminal law perspective, which focuses, in good part, on the criminalization of corrupt conduct by public officials as well as private actors, such as business entities. In the 1970s, however, the problem of corruption was approached by states and other actors partly within the framework of international economic law. Had this approach to the subject of corruption prevailed in the 1970s, then international instruments might also detail the measures that business entities should put in place in order to prevent corruption, such as internal compliance programmes. But efforts to regulate corrupt conduct through both a code of conduct and a treaty failed, and the issue of corruption lay dormant at international organizations until the 1990s, when states concluded a spate of ant-corruption treaties that provide for criminalization and cooperation. Today, international economic law, in particular free trade agreements, deal with corruption largely by cross reference to this substantial body of transnational criminal law treaties governing corruption.
The author is grateful for the research assistance of Claire Benn.
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Notes
- 1.
United Nations Convention against Corruption (adopted 31 October 2003, entered into force 14 December 2005) 2349 UNTS 41 (UNCAC).
- 2.
But see OECD, Good Practice Guidance on Internal Controls, Ethics and Compliance (18 February 2010) C(2010)19.
- 3.
For a more detailed discussion of the history of international anti-corruption law, see Rose (2021).
- 4.
See e.g. Inter-American Convention against Corruption (adopted on 29 March 1996, entered into force 6 March 1997) (1996) 35 ILM 724; Convention on the Fight against Corruption involving Officials of the European Communities or Officials of Member States of the European Union (Council of Europe, adopted 26 May 1997, entered into force 28 September 2005) OJ C 195; Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (adopted 21 November 1997, entered into force 15 February 1999) (1998) 37 ILM 1; Council of Europe Criminal Law Convention on Corruption (27 January 1999, entered into force 1 December 2009) CETS No. 173; Council of Europe Civil Law Convention on Corruption (adopted 4 November 1999, entered into force 1 November 2003) CETS No. 174; African Union Convention on Preventing and Combating Corruption (adopted 11 July 2003, entered into force 5 August 2006) (2004) 43 ILM 5.
- 5.
Boister (2003).
- 6.
The election took place on 4 September 1970. The Chilean Congress confirmed Allende’s election on 24 October 1970 and Allende’s inauguration was on 3 November 1970.
- 7.
Garavini (2012), pp. 136–138.
- 8.
United States Senate, Select Committee to Study Governmental Operations with Respect to Intelligence Activities, Covert Action in Chile, 1963–1973 (1975), p. 12.
- 9.
United States Senate, Select Committee to Study Governmental Operations with Respect to Intelligence Activities, Covert Action in Chile, 1963–1973 (1975), pp. 12–13.
- 10.
United States Senate, Select Committee to Study Governmental Operations with Respect to Intelligence Activities, Covert Action in Chile, 1963–1973 (1975), p. 25.
- 11.
Anderson J, Memos Bare ITT Try for Chile Coup. The Washington Post, 21 March 1972, B13; Anderson, J, ITT Pledged Millions to Stop Allende. The Washington Post, 22 March 1972, C23; I.T.T. Is Accused of Having Tried to Influence U.S. Policies. The New York Times, 23 March 1972.
- 12.
Address Delivered by Mr. Salvador Allende Gossens, President of Chile at the Inaugural Ceremony on 13 April 1972, Proceedings of the United Nations Conference on Trade and Development, Third Session, Santiago de Chile, 13 April to 21 May 1971, Volume I, Report and Annexes (UN 1973), p. 353, para. 62. Hamdani and Ruffing (2015), p. 8; Katzarova (2018).
- 13.
In 1972, ECOSOC created the Group of Eminent Persons to Study the Impact of Multinational Corporations on Development and on International Relations. ECOSOC Res. 1721 (LIII) The impact of multinational corporations on the development process and on international relations (28 July 1972). In 1974, the Group of Eminent Persons recommended the creation of the CTC. Report of the Group of Eminent Persons to Study the Impact of Multinational Corporations on Development and on International Relations in The Impact of Multinational Corporations on the Development and on International Relations, E/5500/Rev.1, pp. 51–53.
- 14.
Katzarova (2018), p. 81.
- 15.
The ITT scandal resulted in the creation of the Senate Subcommittee on Multinational Corporations which was chaired by Frank Church and held hearings between March 1973 and September 1976. The Subcommittee published its findings in seventeen volumes.
- 16.
Katzarova (2018), p. 77.
- 17.
See e.g. Bernstein C, Woodward B, FBI Finds Nixon Aides Sabotaged Democrats. The Washington Post, 10 October 1972. See further, Bernstein and Woodward (1974).
- 18.
United States Senate, The Final Report of the Select Committee on Presidential Campaign Activities (June 1974), pp. 445–447.
- 19.
United States Senate, Report of the Securities and Exchange Commission on Questionable and Illegal Corporate Payments and Practices, Submitted to the Committee on Banking, Housing and Urban Affairs (May 1976), pp. 6–13; US House of Representatives, Report No 95-640, Unlawful Corporate Payments Act of 1977 (28 September 1977), p. 4.
- 20.
The Hearings were held by the Subcommittee on Multinational Corporations of the Senate Foreign Relations Committee, chaired by Senator Frank Church. This was the same Subcommittee that had investigated ITT’s activities in Chile 2 years prior. For a detailed account of these hearings see Koehler (2012).
- 21.
- 22.
A Resolution to Protect the Ability of the United States to Trade Abroad, Report to Accompany S. Res. 265 (5 November 1975).
- 23.
The negotiations that took place at the OECD are beyond the scope of this historical summary.
- 24.
15 U.S.C. ss 78dd-1 to 78dd-3.
- 25.
- 26.
1975 UN Yearbook, pp. 486–487.
- 27.
1975 UN Yearbook, pp. 486–487.
- 28.
The resolution was sponsored by Algeria, Argentina, Benin, Bolivia, Colombia, Costa Rica, Cuba, Democratic Yemen, Ecuador, Egypt, Gabon, Guyana, Iran, Iraq, the Libyan Arab Republic, Madagascar, Nigeria, Pakistan, Peru, Romania, Somalia, the Syrian Arab Republic, Togo, the United Republic of Tanzania, the Upper Volta, Venezuela, and Yugoslavia. 1975 UN Yearbook, p. 487.
- 29.
UN General Assembly Resolution 3514, para. 1.
- 30.
UN General Assembly Resolution 3514, preambular paras. 2–3. The General Assembly launched the New International Economic Order in Resolutions 3201, 3202 (1 May 1974). The New International Economic Order emphasized, in part, the need to regulate the activities of transnational corporations in the countries where they operate (i.e. in developing host countries).
- 31.
1976 UN Yearbook, p. 460; ECOSOC Resolution 2041 (LXI).
- 32.
Active bribery refers to offering and giving a bribe, whereas passive bribery refers to soliciting or receiving a bribe.
- 33.
ECOSOC, Report of the Ad Hoc Intergovernmental Working Group on the Problem of Corrupt Practices on its First, Second, Third and Resumed Third Sessions, E/6006 (5 July 1977); Ad Hoc Intergovernmental Working Group on the Problem of Corrupt Practices, Major Issues to be Considered in the Examination of the Problem of Corrupt Practices, in Particular Bribery, in International Commercial Transactions by Transnational and Other Corporations, Their Intermediaries and Others Involved: Report of the Secretariat, E/AC.64/7 (17 March 1977), para. 19.
- 34.
See e.g. UN Security Council Resolutions concerning Southern Rhodesia: Resolutions 232 (16 December 1966), 253 (29 May 1968), 277 (18 March 1970), 388 (6 April 1976) (Southern Rhodesia); and UN Security Council Resolution 276 (30 January 1970), concerning Namibia.
- 35.
ECOSOC, Report of the Ad Hoc Intergovernmental Working Group on the Problem of Corrupt Practices on its First, Second, Third and Resumed Third Sessions, E/6006 (5 July 1977), Art. III.
- 36.
ECOSOC, Report of the Ad Hoc Intergovernmental Working Group on the Problem of Corrupt Practices on its Fourth, Fifth and Resumed Fifth Sessions, E/1978/115 (7 July 1978), para. 21.
- 37.
ECOSOC, Report of the Ad Hoc Intergovernmental Working Group on the Problem of Corrupt Practices on its Fourth, Fifth and Resumed Fifth Sessions, E/1978/115 (7 July 1978), pp. 10–11.
- 38.
ECOSOC, Report of the Ad Hoc Intergovernmental Working Group on the Problem of Corrupt Practices on its Fourth and Fifth Sessions, E/1978/39 (24 April 1978), p. 11.
- 39.
- 40.
General Assembly Decision 35/425 (5 December 1980).
- 41.
See e.g. the failure to negotiate the UN Code of Conduct on Transnational Corporations in the 1980s and the OECD Multilateral Agreement on Investment in the mid to late 1990s.
- 42.
Pub. L. No. 100-418, 102 Stat. 1415.
- 43.
OECD, Recommendation on Bribery in International Business Transactions (27 May 1994) C(94)75/FINAL; OECD Revised Recommendation of the Council on Bribery in International Business Transactions (23 May 1997) C(97)123/FINAL; Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (adopted 21 November 1997, entered into force 15 February 1999) (1998) 37 ILM 1 (OECD Anti-Bribery Convention).
- 44.
Inter-American Convention against Corruption (adopted 29 March 1996, entered into force 6 March 1997) (1996) 35 ILM 724.
- 45.
Convention on the Fight against Corruption involving Officials of the European Communities or Officials of Member States of the European Union (Council of Europe, adopted 26 May 1997, entered into force 28 September 2005) OJ C 195; Council of Europe Criminal Law Convention on Corruption (adopted 27 January 1999, entered into force 1 December 2009) CETS No 173 (CoE Criminal Law Convention); Council of Europe Civil Law Convention on Corruption (adopted 4 November 1999, entered into force 1 November 2003).
- 46.
United Nations Convention against Transnational Organized Crime (adopted 15 November 2000, entered into force 29 September 2003) 2225 UNTS 209.
- 47.
UNODC, Signature and Ratification Status. https://www.unodc.org/unodc/en/corruption/ratification-status.html (last accessed 8 January 2021).
- 48.
UNCAC Chapter II.
- 49.
Spörl (2019), p. 23.
- 50.
UNCAC Arts. 15–22.
- 51.
See e.g. the work of economists Rose-Ackerman and Palifka (2016), pp. 8–9 (identifying fraud, conflicts of interest and nepotism as forms of corruption).
- 52.
Kubiciel (2019).
- 53.
UNCAC Arts. 15, 16, 21.
- 54.
For an examination of state sponsored transnational crime from an international law perspective, see Decoeur (2018).
- 55.
UNCAC Arts. 15, 16.
- 56.
UNCAC Art. 21.
- 57.
Llamzon (2019).
- 58.
Llamzon (2019), pp. 201–203. See Art. 18(a) “The promise offering or giving to a public official or any other person, directly or indirectly of an undue advantage in order that the public official or the person abuse his or her real or supposed influence with a view to obtaining from an administration or public authority of the State party an undue advantage for the original instigator of the act or for any other person”.
- 59.
Rose (2019), p. 210. Article 19 provides “Each State Party shall consider adopting such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally, the abuse of functions or position, that is, the performance or failure to perform an act, in violation of laws, by a public official in the discharge of his or her functions, for the purpose of obtaining an undue advantage for himself or herself or for another person or entity”.
- 60.
Article 17 covers embezzlement, misappropriation, or other diversion of property by a public official: “Each State Party shall adopt such legislative and other measures as may be necessary to establish as criminal offences, when committed intentionally, the embezzlement, misappropriation or other diversion by a public official for his or her benefit or for the benefit of another person or entity of any property, public or private funds or securities or any other thing of value entrusted to the public official by virtue of his or her position”.
- 61.
Article 22 covers embezzlement of property in the private sector: “Each State Party shall consider adopting such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally in the course of economic, financial or commercial activities, embezzlement by a person who directs or works, in any capacity, in a private sector entity of any property, private funds or securities or any other thing of value entrusted to him or her by virtue of his or her position”.
- 62.
Hess (2019), p. 246.
- 63.
Art. 19: “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 her or her lawful income”.
- 64.
United Nations Office on Drugs and Crime, State of Implementation of the United Nations Convention against Corruption: Criminalization, Law Enforcement and International Cooperation (2nd ed, 2017), p. 13.
- 65.
OECD, 2017 Enforcement of the Anti-Bribery Convention (November 2018) Table 1A.
- 66.
United Nations Office on Drugs and Crime, State of Implementation of the United Nations Convention against Corruption: Criminalization, Law Enforcement and International Cooperation (2nd ed, 2017), pp. 42, 48.
- 67.
UNODC, State of Implementation of the United Nations Convention against Corruption: Criminalization, Law Enforcement and International Cooperation (2nd ed, 2017), p. 85; Borlini (2019), pp. 274–275.
- 68.
UNODC, State of Implementation of the United Nations Convention against Corruption: Criminalization, Law Enforcement and International Cooperation (2nd ed, 2017), p. 89.
- 69.
UNCAC Art. 26(1).
- 70.
UNCAC Art. 26(2).
- 71.
UNCAC Art. 26(4).
- 72.
UNODC, State of Implementation of the United Nations Convention against Corruption: Criminalization, Law Enforcement and International Cooperation (2nd ed, 2017), p. 91.
- 73.
UNCAC Art. 26(3).
- 74.
UNODC, State of Implementation of the United Nations Convention against Corruption: Criminalization, Law Enforcement and International Cooperation (2nd ed, 2017), p. 87.
- 75.
UNODC, State of Implementation of the United Nations Convention against Corruption: Criminalization, Law Enforcement and International Cooperation (2nd ed, 2017), pp. 91–92.
- 76.
UNCAC Art. 37.
- 77.
UNCAC Arts. 37(2), (3).
- 78.
UNCAC Chapter II.
- 79.
UNCAC Art. 5(1).
- 80.
UNCAC Art. 6(1).
- 81.
UNCAC Art. 7.
- 82.
UNCAC Art. 8.
- 83.
UNCAC Art. 9.
- 84.
UNCAC Art. 10.
- 85.
See e.g. OECD, Recommendation of the Council on Public Integrity, OECD/LEGAL/0435 (2017); OECD Guidelines for Managing Conflict of Interests in the Public Sector, OECD/LEGAL/0316 (2003); International Code of Conduct for Public Officials, UN Doc A/RES/51/59 (1997); Council of Europe, Model Code of Conduct for Public Officials, Appendix to Recommendation No. R (2000) 10.
- 86.
Financial Action Task Force, International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation: The FATF Recommendations (updated June 2019) (FATF Recommendations) Glossary, p. 115.
- 87.
Financial Action Task Force, International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation: The FATF Recommendations (updated June 2019) (FATF Recommendations).
- 88.
Relevant codes of conduct include: OECD Good Practice Guide on Internal Controls, Ethics and Compliance; OECD Principles on Corporate Governance; International Chamber of Commerce Rules of Conduct and Recommendations to Combat Extortion and Bribery; United Nations Global Compact, Business against Corruption: A Framework for Action; ISO 37001: 2016, Anti-Bribery Management Systems.
- 89.
UNCAC Art. 12(2).
- 90.
Hess (2019), p. 129.
- 91.
The World Bank and the International Monetary Fund encourage the use of such standards through the Report on the Observance of Standards and Codes (ROSC).
- 92.
Hess (2019), p. 128.
- 93.
Hess (2019), p. 128
- 94.
UNCAC Art. 12(3).
- 95.
UNCAC Art. 12(3)(a).
- 96.
OECD Anti-Bribery Convention, Art. 8.
- 97.
UNCAC Art. 12(4).
- 98.
UNCAC Art. 12(4).
- 99.
OECD, Council Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions (25 May 2009) C(2009)64; OECD, Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions (26 November 2009, amended on 18 February 2010) C(2009)159/Rev1/FINAL, C(2010)19.
- 100.
FATF, What is Money Laundering? https://www.fatf-gafi.org/faq/moneylaundering/ (last accessed 8 January 2021).
- 101.
United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (adopted 20 December 1988, entered into force 11 November 1990), Art. 3; UNTOC, Art. 6.
- 102.
Rose (2015), pp. 202–215.
- 103.
FATF Recommendation 10.
- 104.
The term beneficial owner refers to a “natural person who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted”. FATF Recommendations, Glossary, p. 113.
- 105.
FATF Recommendation 11.
- 106.
FATF Recommendation 20.
- 107.
FATF Recommendation 1.
- 108.
See e.g. OECD Multilateral Agreement on Investment.
- 109.
When allegations of corruption arise in the context of investor-state arbitration proceedings, for example, awards typically cite UNCAC and other anti-corruption treaties to support the proposition that the prohibition on bribery forms part of international public policy. See e.g. World Duty Free Company Limited v. Republic of Kenya, ICSID Case No. ARB/00/7, Award of 4 October 2006; Metal-Tech Limited v. The Republic of Uzbekistan, ICSID Case No. ARB/10/3, Award of 4 October 2013.
- 110.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Chapter 26. After the United States withdrew from the Trans-Pacific Partnership (TPP), the other signatories concluded the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which incorporates TTP. The current parties are Mexico, Japan, Singapore, New Zealand, Canada, Australia, and Vietnam. See also United States-Mexico-Canada Agreement, Chapter 27.
- 111.
Neither Malaysia nor the United States is party to CPTPP at the time of writing.
- 112.
United States Department of Justice, Press Release, U.S. Repatriates $300 million to Malaysia in Proceeds of Funds Misappropriated from 1Malaysia Development Berhad, 14 April 2020.
- 113.
UNCAC Chapter V.
- 114.
See e.g. Civil Society Principles for Accountable Asset Return. https://cifar.eu/what-is-asset-recovery/civil-society-principles-for-accountable-asset-return/ (last accessed 8 January 2021).
- 115.
Stakeholders in this context refers to individuals, civil society, non-governmental organizations, and community-based organizations. See UNCAC Art. 13.
- 116.
GFAR Principles for Disposition and Transfer of Confiscated Stolen Assets in Corruption Cases, Principles 4, 10.
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Rose, C. (2021). An International Economic Law Perspective on the United Nations Convention Against Corruption. In: Bungenberg, M., Krajewski, M., Tams, C.J., Terhechte, J.P., Ziegler, A.R. (eds) European Yearbook of International Economic Law 2020. European Yearbook of International Economic Law, vol 11. Springer, Cham. https://doi.org/10.1007/8165_2021_70
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