FINANCIAL CRIMES

AND CORRUPTION G20

TIMUN TBS
MWTO 7th edition
ENGLISH
 Chairmanship
Letter :

Honorable Delegates,

It brings us great pleasure to greet each and every

one of you. We are Arij Moujehed, and Abir Ben Abdallah, and
we are pleased to serve as the committee's chairs.

As we embark on this journey together, I can't emphasize

enough the importance of active involvement and diplomacy
in building a meaningful and rich dialogue. I strongly advise
you to approach these sessions with an open mind and to be
prepared to listen, engage, and negotiate with your
esteemed colleagues.
Your extensive research and understanding of the
delegations assigned to you will definitely be beneficial in our
endeavors.

Let us work together to create an atmosphere of respect,

professionalism, and collaboration in which new solutions
and insightful ideas can flourish. I am confident that our joint
efforts will provide an instructive and rewarding experience.
I eagerly anticipate the opportunity to work with each and
every one of you in the coming days. Let us collaborate to
make this a memorable and successful experience.

Sincerely,
Chairmanship of the G20,
Arij Moujehed and Abir Ben Abdallah
Summary

01. Introduction to the G20

1- Definition
2- Members
3- Objectifs

02. Different Types of Financial Crimes:

A- Money Laundering
B- Frauds
C- Market Manipulation

03. General Context

04. America’s Big Scandal - FTX:
A- Chronicles of the case
B- Subtleties of the case

05. Germany Recent Scandal - Wirecard:

A- Chronicles of the case
B- Subtleties of the case

06. Saudi Arabian Purge 2017-2019:

A- Chronicles of the Case
B- Subtleties of the Case

07.Anti-Corruptions Instruments
A- Anti-corruption Institutions and Organisms
B- International Legal Framework to Fight Corruption
C- How to Evaluate an anti-corruption Strategy

08. Points to tackle

09. References
 01. INTRODUCTION TO G20 2-MEMBERS :
The G20 gathers the world’s
largest and most significant
1- DEFINITION economies. They represent around
85% of the global GDP, over 75% of
The G20, or "Group of 20," is an the global trade, and about two-thirds
of the world population.
intergovernmental forum for economic
The members are :
cooperation composed of 20 members. It Argentina.
was established in 1999 in response to Australia.
several economic crises. Following the Asian Brazil.
crisis of 1997, a meeting of the G7 was held Canada.
where it was decided that it was important to China.
France.
expand the number of economies
Germany.
participating in this forum. As a result, India.
thirteen other “systematically significant Indonesia.
economies” were added to create a new Italy.
forum called the G20. Since the financial Japan.
recession of 2008, a summit is held each Mexico.
Russia.
year under the presidency of one
Saudi Arabia.
participating country, which hosts the South Africa.
summit. The main purpose of the G20 is South Korea.
global financial stability. The Covid-19 Turkey.
pandemic, the 2008 financial crisis, the United Kingdom.
Iranian nuclear program, the Syrian civil war, United States.
The European Union.
and the Russian-Ukrainian war were tackled
during previous summits.
Each member country is represented
by the president, prime minister, or
minister of finance. The European
Union is represented by the European

02. Different Types of Financial Commission and the European Central

Crimes: Bank. Each year, the president who
prepares the "Agenda" and hosts the
summit, invites guest countries and
There exists a variety of financial crimes that may
international organizations to attend.
seem similar to the apparition. However, they differ
Spain is invited as a permanent guest.
in the process and legal consequences.
The president country for this year is
India, and ISA, CDRI, and ADB will be
invited to the 2023 summit.
TYPES OF
C- Market

CRIMES B- Money
Laundering:
Manipulation:

A- Frauds: It consists of
It is the process of artificially
The most financial assets’ affecting the
commited financial camouflage. Since supply or demand
crime is the fraud. It the money gained for a security, like
is, according to the illegally should causing stock
law, an international eventually be prices to rise or
criminal action to introduced into the fall dramatically,
secure unfair gains nation’s legitimate for instance. It is
like monetary gains, financial systems,
a passport, a travel done by spreading
criminals tend to
document, a false information
hide that money so
driver’s license, or about a company
it will not be
to deprive a victim engaging in a
confiscated and to
of a legal right. It series of
avoid sanctions.
can violate civil law transactions to
Lawbreakers such
or criminal law, in make a security
as drug dealers
some cases, it may appear actively
and arms’ dealers
not cause any loss traded and by
are the ones who
of money, property, commit most of rigging quotes,
or legal rights, but it these crimes in prior trades to
can still be an order to secure make it look like
element of another their selling there is more or
civil or criminal processes and less demand for a
wrong, not to expand their illegal security than
mention its impact enterprises. there actually is.
ethically.
03. General Context
From the Bernie Madoff Ponzi Scheme (2008) to the
Panama Papers (2016), scandals revolving around financial
crimes continue to shake the global community one after
another, seeming like an endless wrecking train. Although
many people argue that the methods to fight those financial
crimes are evolving with time, and the frequency of these
law violations puts the effectiveness of these methods into
question.
Financial crime is an umbrella term that encompasses a
wide range of illegal activities: fraud, money laundering,
cybercrime, Ponzi schemes, bribery and corruption, tax
evasion, counterfeit currency, etc. As those crimes and
banking services continue to witness exponential growth
and evolution, it makes moving money globally easier. It
goes without saying that globalization enlarges the scale of
financial crimes, which makes tracking illegal money
transactions harder. To get a clearer picture of the
situation, here is a simple statistic: 1% of criminal proceeds
generated in the EU are confiscated by authorities, and
0.5% of all transactions reviewed by bank compliance
officers lead to a criminal investigation.
Out of 1,000 transactions flagged, 50 are referred to law
enforcement, and 5 lead to an investigation.
The redundancy of financial offenses proves that it became
a common practice resulting in higher prices accompanied
by lesser government revenues from taxes which leads to
damaging the national economies of countries around the
world.
Some estimates say that the cost of financial crimes is
1.45 trillion dollars, which is 3.5 % of global turnover, but
due to the difficulty of procuring data and the media
blackout in some countries, it is almost impossible to come
up with a precise assessment and the real number could be
much higher. This huge amount of liquidity invested in
education or health can bring tremendous change and
represent a great leap toward 2030’s vision of a sustainable
world.
Apart from money, committing financial crimes, such as
money laundering, fraud, and embezzlement, harms global
trade and the economy in several ways:
-Erodes trust: Financial crimes undermine the trust in
financial institutions, leading to decreased investment and
reduced economic growth.
-Reduces foreign investment: Financial crimes can
discourage foreign investment, hindering economic
development and trade.
-Impacts currency value: Money laundering and other
financial crimes can lead to currency devaluation, making
exports more expensive and less competitive.
-Increases costs: Combating financial crimes requires
significant resources, leading to increased costs for
financial institutions and governments, which can
negatively impact the economy.
-Stifles innovation: Financial crimes divert resources from
more productive uses, such as innovation and job creation.
In addition to what preceded, financial crimes committed
by governments can be considered unfair competition as
they give them an advantage over other countries in terms
of their economies and financial markets. This creates a
distortion in the global trade flow and can result in an
uneven playing field, which is a clear violation of the WTO's
fundamental purposes.
“This has serious economic and social costs in terms of
the lost revenues to the national exchequer that could be
invested in social development and in terms of the impact
on individual lives.”
Che Sidanius, Global Head of Financial Crime and Industry
Affairs,
After a deep look into the historical background of financial
crimes, it would be only logical to find in the G20 2022-
2024 action plan a rigorous determination to fight this kind
of violation, especially after the COVID-19 crisis that
showed how much the global financial system is flawed and
uncompleted. The G20 anti-corruption working group will
be focusing on three main objectives:
1/ Promote the implementation of existing G20
commitments and treaty obligations to increase the
impact of the international anti-corruption agenda.
2/ Extend existing G20 anti-corruption commitments by
developing additional targeted actions on topics where the
G20 Anti-Corruption Working Group (ACWG) can best add
value through extensive consultation and joint
contribution, as well as increasing the impact of our work in
the broader international community.
3/ Meet new corruption challenges identified by the
international community and promote actions to prevent
and counter corruption in related areas.
Those objectives would hopefully be reached by focusing
on these three substantive areas:
1/ Transparency, integrity, and accountability of the public
sector
2/ Private sector transparency, integrity, and
accountability, anti-money-laundering, and beneficial
ownership transparency
3/ International cooperation, denial of safe haven, and
asset recovery

The Chronicles of the Case
FTX, short for futures exchange,
is a company that used to
operate a cryptocurrency
exchange and crypto hedge
fund.
In early November 2022, FTX
collapsed. The company faced a
liquidity crisis, meaning it could
no longer finance its current
liabilities from its available
assets. The collapse shook the
volatile crypto market and led to
numerous losses in the crypto
market. In fact, about a million
investors are directly impacted
by the scandal, with total losses
of nearly a billion dollars. The
company’s new CEO, John J. Ray
III, said FTX demonstrated “a
complete failure of corporate
controls,” which was helped
along by “faulty regulatory
oversight abroad.” This calls for
further government regulations,
like finding new benchmakers for
judging the value of financial
claims and pricing particular
assets objectively.
FTX’s CEO, Sam Bankman-Fried
resigned, and the company
ended up being bankrupt. Not a
long time after, the company got
hacked, which led to the theft of
hundreds of millions of dollars'
worth of tokens.
FTX According to Bankman-Fried’s
cases, he gave as much to GOP
SCANDAL
causes (the republican’s party)
through non-profit groups not
required to disclose their donors.
Also, one known trait about FTX
Subtleties of the case is that most of its donations
went to super PACs, groups that
Sam Bankman-Fried can accept unlimited donations
from individuals and corporations
was a prolific political but require that they stay
donor. He gave nearly separate from campaigns and
$40 million to whatnot since they run ads or
sponsor different
campaign
communications that can either
committees and support or oppose candidates.
various groups this
Look
cycle alone, the vast
majority of which,
I
according to federal
screwed
records, are
Democrats. Thus,
Bankman had broken
up.
campaign finance
laws by sourcing
donations from his
related crypto hedge Sam
fund, the affiliated
Bankman-Fried
trading firm Alameda
Research, and falsely
reporting them as
having a
different source.
Since 2020, the
CEO’s involvement in
democratic cases has
been surpassed only
by that of George
Soros, a liberal
financier.
According to federal campaign filings, he
gave nearly $7 billion to the two main
super PACs supporting Democratic
candidates for Congress in the 2022
elections. He donated to groups highly
focused on voter turnout and, in some
cases, to specific races.
Sam Bankman-Fried has contributed to
more than 60 federal candidates,
including members of both parties from
all over the country. He ran up against his
limits in these contributions. Many are
the limits of these crimes, which calls for
the question, "How will these actions be
sanctioned, and will the cryptocurrency
token users have their losses recovered,
if it is ever possible to get that sum of
money back?"
Bankman-Fried was arrested in the
Bahamas and eradicated in the US in late
December and pleaded innocent to all
criminal charges on January 3rd;
however, he still has an upcoming trial
on October 2nd, 2023.
 05. Germany Recent Scandal In 2005, it was listed on the

-Wirecard:
Frankfurt Stock Exchange, and
by 2018, it was able to ditch
The Chronicles the Commerzbank and join the
of the Case: Dax 30 index of Germany’s
leading blue-chip companies. It
Wirecard was a was also listed on Forbes's 100
financial services most innovative companies.
provider company This company found admiration
based in Munich. It from both German citizens and
started as an online politicians as it could represent
payment processor Germany in modern times. Like
mainly for porn- how IT companies such as
Facebook and Google well
-ography and gambling sites, in 1999. Then, in
established themselves in their
2006, it started expanding to offer banking
fields, Wirecard was placed as
services, and issuing credit and prepayment the innovation in the Fintech
cards. Wirecard has grown successful as it industry.
has operated in the right market: cashless
payment.

T hey differentiated themselves by offering innovative and

advanced payment technologies. Its CEO, Markus Braun, BRAUN
was viewed as the Steve Jobs of this nation. For example,
during her visit to China in 2019, Angela Merkel lobbied for
THE CEO : MARKUS

them to invest in this country. In the background,

allegations of wrongdoing did exist from different parties,
such as the Financial Times, short-sellers, and other
research firms. In fact, since 2008, financial irregularities
have been noticed, and EY was brought in to investigate. In
2015, the Financial Times started a series called "House of
Wirecard," under which it started reporting on the
company’s financial fraud. Later in the same year, J Capital
Research published an article where it claimed that
Wirecard’s Asian operations seemed to be inflated and
recommended shorting the company.
 In 2016, an unknown research firm, later revealed to be
Zatarra Research, published reports accusing Wirecard of
money laundering and fraud.
Nevertheless, the company’s stock was still rising sharply,
and the profits never seemed to be affected by the
circumstances. No matter how the economy is doing,
Wirecard always records a profit.

The main events that marked the collapse of Wirecard

happened in June 2020.
In early June, the Financial Times published an article
accusing Wirecard of inflating its activities through
roundtripping. This grabbed the attention of German
authorities, who began investigating, and it was revealed that
German prosecutors have been investigating the case since
2018.
Later that month, KPMG was assigned to audit the company
and revealed that around $2.1 billion was missing. This
amount represents the entire company’s operating profit. It
was first reported to be held in two banks in the Philippines
but those two banks denied any relationship with Wirecard. In
other words, in reality, the totality of the company’s profit did
not exist.
In less than a week, the company’s CEO, Markus Braun, was
arrested after resigning from his position. Moreover, the
company’s COO, Jan Marsalek, has fled, but he is still in
Germany and on Europol’s most wanted list. As he has a
strong network with the Russian intelligence service, he is
rumored to be hiding there. Christopher Bauer, the company's
former Asia manager, who was very close to Jan Marsalek,
died in the Philippines.

The Subtilities of the Case:
-Their reaction and the
implication of the government:
Wirecard denied these accusations
aggressively. Backed by the
German Financial Authority (Federal
Financial Supervisory Authority:
BaFin), Financial Times (FT)
journalists, investigators, and
whistleblowers faced intimidation
and strong bullying from Wirecard.
For example, Dan McCrum revealed
that he was followed by private
detectives, and there might be a
chance that Russian spies were
injected inside the company to
detect whistleblowers.
Furthermore, after publishing
reports on accounting fraud in
Asian operations, the German
government sued FT for ‘market
manipulation’. BaFin also banned
short-sellers from speculating on
the share price as it fell more than
40%.
-Criticism:
This scandal highlighted the failure not
only of the entire reporting ecosystem but
also of market regulation and control. In
fact, signs of crimes started to appear
over a decade ago (since 2008) and
could have been used to scrutinize the
financial statements of Wirecard.
Instead, the auditors (EY) and German
authorities may have allowed the
misstatements and fraud in the financial
statements of Wirecard that led to this
huge scandal.
Whistleblowers were threatened,
prosecuted, and followed by private
detectives and reportedly Russian
spies. BaFin could have left room for
these employees to be heard and
protected.
In times when serious allegations are
revealed especially from well-known
and reputable sources (Financial
Times), a more convenient action to
be taken is a thorough investigation of
the credibility of these accusations
instead of investigating the journal
itself.
This scandal also revealed major
weaknesses in companies' internal
control: corporate governance,
management accountability, and
supervisory board need to be
strengthened.
Furthermore, the auditing liability also
needs enforcement.
 Saudi Arabia
PURGE
The Chronicles of the Case:

It refers to the arrest and detention of prominent

Saudi Arabian businessmen and members of the
royal family. The crackdown was initiated by
Crown Prince Mohammed bin Salman, also
known as MBS, as part of an anti-corruption
campaign. The detentions took place at the Ritz-
Carlton hotel in Riyadh and resulted in the
confiscation of assets and a settlement for the
release of some of the individuals. In a statement
by the royal court, it was mentioned that 381
individuals had been summoned to "testify."The
detention ended with reaching agreements with
87 of them, refusing to let go of 56 individuals,
and “recovering” around 106 billion US dollars.

CHRONICLES
THE SAUDI PRINCE

This so-called purge was conducted under the authority of the anti-
corruption committee, with its chairman not surprisingly being the
crown prince, MBS, who at the same time spares no effort to
maintain an extravagant life by purchasing a 300 million dollars
mansion and a half billion-dollar painting. In an unprecedented
move the crown prince concludes the tasks of the committee as if
the KSA have knocked down all the doors leading to corruption; a
well-designed scenario the economist magazine describes as MBS
trial of seizing more power and authority .
Subtleties of the Case:

The event also had a significant impact on global trade, as many of the
detained individuals were key players in the Saudi Arabian economy. The
arrest of some of the country's wealthiest businessmen and investors led to a
drop in confidence in the Saudi Arabian market, causing ripples in the
global financial system.
This isn’t a first, the royal family has a long history with corruption, and it is
no surprise to find out that Saudi Arabia received the worst possible mark of
“F” in Transparency International’s (TI) “Government Defense Integrity
Index 2020." This rating is a result of the fact that all military spending is
controlled by the royal family and, in particular, MBS. Additionally, the
International Institute of Strategic Studies (IISS) estimates that three Gulf
and Middle Eastern states were among the top 15 military spenders in the
world in 2019. Saudi Arabia was the third largest spender, after the United
States and China, with $78.4 billion. Saudi Arabia was leading in arms’
procurement for total arms imports in 2018 and 2019 (7,433 TIV, or 13.7%
of the world’s total of 54,359 million), which represents a catalyst for
corruption, specifically when Saudi Prince Alwaleed bin Talal describes
defense-related projects as “highly secretive and subject to no ministry of
finance oversight or controls.”
In this monarchy of the Gulf where transparency is absent in arms
procurement, it represents an opportunity for Saudi princes to perform
embezzlement operations, and some of these operations end up fattening the
pockets of the ruling family or supporting extremist movements like the
Houthis.
As some Saudi social scientists state, “All those hundreds of princes must
make money somehow, so they buy lots of weapons and equipment where
they can skim off the top." For them, transparency is a foreign concept and
is negligible: "Nobody is checking the books, perhaps there are no books.”
 7. ANTI-CORRUPTION INSTRUMENTS
A) Anti-corruption Institutions and organizations .
The institutional approaches used by different countries to combat corruption vary greatly,
particularly in terms of specialization and centralization. Some countries have established
centralized and specialized instances to address fraud issues, while others have chosen to
strengthen the anti-corruption capabilities of their existing institutions. Many countries
have attempted to combine the two approaches, and some have chosen to form several
specialized organizations with similar goals. Nothing clearly outlines the most effective
strategy in the fight against corruption, and there is no predetermined plan of attack for
such a fight.
However, the effectiveness of these institutions appears to be correlated with their degree
of centralization. It has a significant impact on their resources, political support, and how
they interact with the nation's institutional and legal framework. In line with these claims,
the majority of international anti-corruption treaties encourage nations to create
independent, specialized organizations. Accordingly, Article 6 of the UN Convention
Against Corruption (UNCAC) explicitly calls on signatory states to establish one or more
independent anti-corruption organizations and to provide them with the necessary
training, materials,and specialized personnel.

Part 1 :Organizational dispositions within a

centralized anticorruption system
These organizations have specialized skills
that range from educational and preventive
roles to investigations and follow-ups. In
reality, most anti-corruption organizations
don’t have the authority to bring legal action;
that authority belongs to the Justice
Department. After the investigation, the case
is given to the general prosecutor, who has
the discretion to decide whether to pursue
criminal proceedings or not in light of the
evidence that has been provided to him.
Based on the authority they retain, the OECD
established a typology of the various anti-
corruption organizational models, identifying
three key types of institutions:
1- Organizations with multiple goals, Examples of this approach include
such as the anti-corruption agencies the Romanian National Anti-
in Hong Kong and the South China Corruption Directorate and the
Sea, are multiform institutions with Belgian Central Office for
specialized skills that concentrate Corruption Repression.
both preventive and repressive power.
They are in charge of a wide range of
3-Institutions that exclusively carry
activities (such as education,
out preventative duties. This
prevention, and sensitization) that go
category includes the French Central
beyond simple criminal investigations.
Service for the Prevention of
Corruption and the Albanian
2-The law enforcement agencies Corruption Watch Group.
responsible for enforcing the law
usually take the form of specialized
units or services within the police or
Bureau of Public Procurement.

Terms of effectiveness:
Numerous studies show that, despite their potential,
anti-corruption organizations are not a panacea for the
corruption problem. The UNDP asserts that there are
comparatively few examples of independent
organizations that are thought to be
effective in battling corruption 30.
Several efficacy requirements must be
considered:

HOW
TO
START FIXING
IT ?
1. Political Will: Effective anti-corruption
organizations have been put in place in
response to calls for reform coming from
a broad base at the national level31.
However, without the backing of a
genuine political will and a broad base of
support, establishing anti-corruption
organizations can be a showy response to
short-term problems and a quick fix for
money problems. An effective anti-
corruption campaign requires both
political and public support. This support
should be expressed in concrete terms
such as resource allocation, action
abilities, investigative skills, and other
words of a similar nature.
2. Resources and capacity for action: in
actual practice, anti-corruption
organizations frequently struggle with
underfunding, a lack of staff, a lack of
specialized knowledge, and constant
staff turnover. The organization's human
and financial resources frequently fall
short of its capabilities, which could be
detrimental to the institution's long-
term viability.
3. Adapted powers: To successfully carry out
their mission, anti-corruption organizations
also require broad skills and specialized
authority. They typically have more
extensive powers than the traditional
organizations in charge of enforcing laws
(special investigative and evidence-
gathering powers). Providing guarantees
regarding procedures and constitutional
rights is necessary to counterbalance this
concentration of power. Although they raise
significant expectations, in reality, anti-
corruption organizations frequently lack the
necessary skills to effectively conduct
investigations.

4.Equal power distribution and independence: To be

effective, an organization must be self-sufficient,
which means it must be able to carry out its
responsibilities without interference from powerful
individuals or members of the political elite . This
independence must be structural, material, and
operational. Clear policies and procedures must be
established for tasks such as allocating funds,
managing resources, keeping accounting records, and
nominating the organization's executives.
Nevertheless, maintaining the institution's
independence does not entail operating without
outside supervision. There must be a range of
monitoring tools accessible for organization
inspections. It is essential to ensure that anti-
corruption organizations operate impartially and are
not placed in a position where they can abuse their
autonomy.
5. Clear institutional structure and efficient
coordination
Organizational dispositions
The organizations fighting corruption weren't within a decentralized anti-
established in a political vacuum; rather, they are part corruption system :
of a national integrity system. However, the
organizations in charge of upholding the law are A significant number of
frequently not part of the system as a whole. They countries have opted for a
frequently deal with institutional ambiguity, conflicting centralized institutional system
mandates, competing priorities, a lack of coordination, to combat fraud. South Africa,
and ferocious competition over limited resources. Germany, and Bulgaria, for
Therefore, it is critical to take into account any example, have strengthened
potential skill gaps between institutions involved in the existing institutions rather than
fight against corruption. In order to preserve establishing new ones.
institutional clarity, establishing a specialized
organization should not interfere with the operations of
already-existing structures. This is particularly crucial
when numerous anti-corruption organizations coexist
simultaneously to address various corruption-related
offenses.

"In a comparable setting, the prosecutor

must have the legitimacy required to carry
out tasks such as prevention, coordination,
and interactions with the media and
educational system. This approach is
generally recommended for countries where
the institutions in charge of enforcing the law
function (relatively well). In these countries,
the establishment of specialized
organizations may implicitly jeopardize the
credibility of existing anti-corruption
mechanisms, particularly when these
organizations are established to curtail
corrupt or ineffective police services.

HOW
TO
START FIXING
IT ?
Terms of effectiveness:

If the existing legal system is capable of dealing with

corruption cases, the disadvantages associated with
establishing a specialized organization may outweigh
the benefits. In this situation, elements like
specialization and autonomy can be achieved by
creating specialized units within already-existing
organizations. Cooperation seems to be one of the
hardest problems to solve in nations that adopt this
strategy, and it might call for institutional solutions.

Coordination is a common challenge:

All institutions working to combat corruption, whether

centrally organized or decentralized, must
collaborate with one another. Failures in the anti-
corruption infrastructure are frequently exposed as
investigations progress and legal actions are taken.
No matter how centralized they are, organizations
fighting corruption need to work with a variety of
institutions to coordinate their efforts.
Among them are the following:

General Auditor (Court of Accounts): plays a vital

role in detecting cases of public resource
misappropriation.

The organization or commission in charge of public

service reform: To fulfill their prevention mission,
anti-corruption organizations must collaborate
closely with institutions in charge of public service
reform. The activities of reforming time-consuming
administrative procedures, managing public-sector
salaries, and developing recruitment all fall under the
purview of the administrative sector.

The courts: Attempts to find solutions through the

courts will be ineffective if the judicial system is
flawed (some nations, like Indonesia, have even
established special courts to hear corruption cases).
International anti-corruption laws are legal instruments that
provide a framework for preventing and combating corruption
on a global scale. These laws seek to establish measures for
international cooperation in the fight against corruption and to
promote transparency, accountability, and integrity in both the
public and private sectors.

United Nations Convention Against

Corruption (UNCAC):
International Legal Framework

What is UNCAC?

The United Nations Convention Against Corruption (UNCAC) is

an international treaty that was adopted by the United Nations
General Assembly in October 2003. It became effective in
December 2005, marking a significant accomplishment in the
fight against corruption on a global scale. This convention,
which has 188 signatories, is regarded as unique not only for its
comprehensive coverage but also for acknowledging the value
of both preventive and repressive measures. It also treats the
cross-border nature of corruption. States Parties, or nations that
have ratified the Convention, are obligated to work together in
criminal cases, support one another in investigations, and offer
technical assistance to each other.
The Convention also emphasizes the significance of citizens'
access to information and calls for civil society and non-
governmental organizations to participate in accountability
processes. The UNCAC's secretariat is located in Vienna at the
UN Office on Drugs and Crime (UNODC).

The UNCAC is divided into eight chapters and 71 articles. Many of

its provisions are legally binding. Those clauses usually begin
with "States Parties shall." There are some laws that carry an
obligation, stating that nations "shall consider or endeavor to
adopt." Other measures are entirely optional. Furthermore,
many of the Convention's provisions include clauses to prevent
conflicts with national legislation. This allows different
interpretations of these requirements in each country.
 How does UNCAC define corruption?

"Corruption" is not specifically defined by UNCAC. The convention instead

enumerates and defines a number of offenses that States Parties are required
to criminalize, such as the bribery of domestic and foreign public officials as
well as official theft. The Convention also addresses private-sector bribery,
money laundering, obstruction of justice, illegal enrichment, and support for
corruption.

International Legal Framework

Issues of concern

Despite providing an international legal framework for cooperation among States Parties,
the UNCAC has significant shortcomings. The way the so-called Vinna Spirit of Consensus
steers UNCAC discussions is a significant problem; rather than voting until there is no
objection, decisions are made through negotiations. While this strategy may result in more
support, it also gives those States Parties who oppose a strong international anti-corruption
framework more power and may lead to the lowest common denominator being adopted.
This diplomatic culture has led to the UNCAC's lack of transparency as well as the
contraction of the civil society sector.The names of states, for instance, are made
anonymous in reports analyzing the global application of UNCAC provisions. Additionally,
due to worries about policy issues related to anti-corruption efforts, some states have
temporarily halted UNCAC negotiations due to bilateral disputes.

Organization for Economic Co-

operation and Development
American business associations argued that the
(OECD) Convention on FCPA put them at a competitive disadvantage and
Combating Bribery of Foreign asked for its weakening. Instead, the
Public Officials in administration called on the OECD to
internationalize this anti-corruption effort. As it
International Business became increasingly clear that unilateral actions
Transactions: were insufficient to combat global corruption, the
international environment was favorable for
Historical context
several other initiatives to be successful.This rising
awareness fueled the convention negotiations.
The anti-bribery convention has
been a focus of the OECD's work
since 1989. Under its Foreign Corrupt
Practices Act of 1977 (FCPA), the
United States was the only nation at
the time where corporations faced
criminal penalties for bribes paid
anywhere abroad.
Principal Features
Only those laws intended to make
bribing foreign public officials
illegal were elevated to the status of
legally binding by the Convention.
The Convention's implementation is
to be monitored and promoted by
the Working Group on Bribery
(WBG).
According to the Convention,
nations must make bribing foreign
public officials a criminal offense
under their domestic law and make
sure that attempting to bribe foreign
public officials and conspiring to do
so are both equally punishable.
"Effective, proportionate, and
dissuasive criminal penalties" will
be implemented as sanctions.
Since the Convention's rules are not
self-executing, they must first be
rewritten before being incorporated
into the criminal laws of the
signatory nations. Although not
exhaustive, the provisions on the
jurisdiction, statutes of limitations,
and the scope and type of sanctions
provide an overview of the essential
elements that should be included in
national implementing rules.
Implementation
The convention's success depends on
monitoring how it is put into practice.
This responsibility falls under the
purview of the OECD’s WGB, whose
mandate also includes gathering data
from signatories, planning routine
reviews, looking into particular issues,
and informing the public on a regular
basis. Each year, the WGB provides
the OECD Council of Ministers with a
report. All convention signatories are
required to be active participants in the
WGB, whose work is supported by
employees of the OECD Secretariat.
Self- and mutual evaluation are
essential components of the WGB
country review process. To ensure that
countries uphold their commitments, it
adheres to the peer-review principles
used in all OECD fora.
Issues of concern
Most of the specific concerns that the WGB
raised are in relation to the first six articles
of the Convention. They arose from the
challenges of harmonizing various legal
systems and criminal laws. These articles
cover various topics, including the
crime of bribery, legal responsibility,
sanctions, jurisdiction, enforcement, and
statute of limitations.
How to Evaluate an anti-Corruption Strategy :
Every strategy is based on goals and ways to achieve them. That is even at the
heart of the strategy. The processes determining those goals and methods are
about strategic formulation and implementation. When analyzing a strategy, both
the process by which these decisions are made and put together (the strategic
process) as well as the selection of goals and execution mechanisms are taken
into consideration. The effectiveness of a strategy depends on both how well-
chosen the goals and means of implementation are and how pertinent they are to
the situation at hand.

regarding the content of regarding the strategic

the strategy process

First criterion: Fourth criterion:

A good anti-corruption The process that leads to

strategy should reduce, if not
eliminate, the opportunities
for corruption, particularly by
implementing policies that
simplify and clarify the
The framework for managing
monopolies over goods and
standards
services.
for assessing
anti- Second criterion:
corruption
policies As part of an anti-corruption
before they strategy, the system of pay
and evaluation for public
are
employees needs to be
implemen- changed in order to change
ted both their behavior and that
of the people who pay them,
lowering the benefits of
corruption for the former and
raising its costs for the latter.
the selection of the goals
and means of an anti-
corruption strategy should
encourage cooperation
between the affected
organizations, both public
and private, and it should
be open to the widest
possible participation .
Fifth criterion:
An anti-corruption
strategy must have strong
top-level leadership and
the backing of the key
stakeholders in order to
spur the necessary reforms
and provide the energy to
see them through.
 Third criterion: Sixth criterion:

An anti-corruption strategy The degree of coherence

must include measures to among a strategy's
increase the accountability of constituents determines
public and private decision- how effective it is in
makers so that the risks of combating corruption. The
legal repercussions are more closely the employed
significant enough to deter implementation
those considering corruption. mechanisms match the
established goals, the
more effective the strategy
is.

seventh criterion: Eighth criterion:

The validity of an anti- A strategy for preventing

corruption strategy must be corruption must serve as a
The supported by concrete, easily guide for both the actors
standards observable, and quantifiable involved and the general
results. public.
for assessing
anti-
The goal of an anti-
corruption corruption strategy should be
policies to change behaviors and
after they attitudes in order to create a
are collective anti-corruption
climate. A true cultural shift
implemente
is necessary for countries
d where corruption is severely
rampant, and this requires
long-term, sustained
collective efforts.
Points To Tackle :

The authority and effectiveness of the anti corruption and

financial crimes instances and legal frames

The root causes of every financial crime

The repercussions of financial crimes on global economy

The lack of governmental transparency hindering the

fight against corruption

Possible reforms and actions to prevent such outcome

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