CRITICAL POLITICAL SUPPORT EXPECTED FOR AN INTERNATIONAL CONVENTION ON CORRUPTION

6 March 2002


MONTERREY SUMMIT


The Monterrey (Mexico) Summit on Financing for Development, on March 18-22, is expected to give a critical political support for an International Convention against Corruption and Illegally Transferred Funds.

Since the terrorist attacks in New York and Washington, on September 11, concern about the closely related issues of money laundering and international money transfers has taken a new urgency. The idea of an international legal instrument to fight corruption began to take shape in 1996. At the time, World Bank President James Wolfensohn identified the fight against "the cancer of corruption" as a top Bank priority, and the UN General Assembly adopted a resolution calling on States to outlaw payment of bribes to public officials in the course of international financial transactions. In the same session, the Assembly also endorsed a framework Code of Conduct for Public Officials.

But no comprehensive anti-corruption treaty of global scope currently exists. Corruption and its collateral effects have come to be recognized as a primary impediment to successful development and economic practice in all the countries of the world. The issue surfaced again in intergovernmental meetings in preparation of the Monterrey conference, and a broad support emerged for moving ahead on a comprehensive and legally binding international instrument on corruption.

An intergovernmental expert group, hosted last August in the Vienna-based UN Center for International Crime Prevention, has already considered a series of provisions on complex issues, such as jurisdiction, seizure of property or funds, witness protection, integrity of legal persons, the return of illegally transferred funds and international cooperation.


Mandated by the UN Economic and Social Council, a commission of experts on corruption and its financial channels reached some conclusions which could be part of the proposed Convention:

to persuade insufficiently regulated financial centers to adopt rules that will allow them to participate in international efforts to trace and act against the proceeds of corruption ;
to ensure that bank secrecy and tax provisions at the national level do not hamper international anti-corruption efforts ;
to check that the supervision of financial systems and activities is done according tointernationally accepted principles ;
to require financial institutions to accurately identify their customers, to exercise vigilance and to report suspicious transactions.

A report issued early this year by the UN Secretary-General stresses the need to address a series of practical difficulties to recover funds illicitly exported by corrupt leaders. Such transfers generally involve immense sums and a high level of uncertainty as to their sources, current locations and who the legitimate beneficiaries of repatriation should be.

The Monterrey meeting will also deal with the different aspects of international cooperation on tax matters, taking into account that globalization and e-commerce have created a host of complications regarding the fair collection of taxes, while facilitating tax dodges. Moves to tighten tax collection mechanisms and to close up globalization loopholes match the current global drive to crack down on money-laundering, illegal money transfers, transnational crime and international terrorism.

But for the time being, the idea for an International Tax Organization, submitted by a panel of independent financial experts chaired by former Mexican President Ernesto Zedillo, was not considered as implementable in the near future. While a precise mechanism for deeper international cooperation on tax matters has not yet crystallized, there has been considerable interest, during the final preparatory committee meeting prior to Monterrey, in helping governments to strengthen their tax resources in support of their financing for development.




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