Corruption, Integrity and the Law

Global Regulatory Challenges

Nicholas Ryder, Lorenzo Pasculli

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000028683
• Edition: 1
• Topic: Law
• Subtopic: Financial Law
• Index: Law

Globalisation has opened new avenues to corruption. Corrupt practices are proliferating not only within national borders but across different countries. Despite many national and international anti-corruption bodies and strategies, corruption far from being eradicated. There is an urgent global demand for a better understanding of corruption as a phenomenon and a thorough assessment of the existing regulatory remedies, towards the establishment of more effective (and possibly uniform) anti-corruption measures.

Our previous collection, Corruption in the Global Era (Routledge, 2019), analysed the causes, the sources, and the forms of manifestation of global corruption. An ideal continuation of that volume, this book moves from the analysis of the phenomenon of corruption to that of the regulatory remedies against corruption and for the promotion of integrity.

Corruption, Integrity and the Law provides a unique interdisciplinary assessment of the global anti-corruption legal framework. The collection gathers top experts in different fields of both the academic and the professional world – including criminal law, EU law, international law, competition law, corporate law and ethics. It analyses legal instruments adopted not only at a supranational level but also by different countries, in the attempt of establishing an interdisciplinary and comparative dialogue between theory and practice and between different

legal systems towards a better global promotion of integrity. This book will be of value to researchers, academics and students in the fields of law, criminology, sociology, economics, ethics as well as professionals – especially solicitors, barristers, businessmen and public servants.

Part I

Introduction

1 The global anti-corruption framework

Lights, shadows and prospects

Lorenzo Pasculli and Nicholas Ryder

Where were we?

Our previous book, Corruption in the Global Era (Pasculli and Ryder, 2019a), aimed at improving our understanding of the global causes, means, forms of perpetration and effects of corruption through an interdisciplinary dialogue between academics and practitioners, taking advantage also of the partnership between the Financial Crime Research Network (FCRN) at the University of the West of England and the Global Integrity Research Network (GIRN) at the Centre for Financial and Corporate Integrity (CFCI) of Coventry University. This volume complements those studies by focusing on global and local regulatory responses to corruption. It is not a handbook or a commentary, but a research book aimed at advancing the still limited assessment of the effectiveness of anti-corruption laws (cf. Isenring, Chapter 14) and enriching the scarce British literature on corruption and financial crime (cf. Ryder, 2018a: p. 247). Many of the authors are practitioners and the approach is still interdisciplinary: different fields of the law (criminal law, tax law, European law, corporate law, competition law), and issues in ethics, criminology, restorative justice, governance and political philosophy are covered. The perspective is international and comparative. The book explores not only international regulations but also their implementation in different countries, such as the United Kingdom (UK), the United States (US), Italy, Switzerland, Luxembourg and Nigeria.

This chapter brings together the findings of this book and formulates recommendations for future policies and research. One of its purposes is precisely to coordinate such findings with those of our previous research. Therefore, remands to our own works are not self-congratulatory but necessary to avoid reiterating arguments and references already expressed elsewhere. In the first section of this chapter, we will outline the sources of the current global anti-corruption framework and their limits. In the second section, we will illustrate the shortcomings of negative anti-corruption measures, while in the third, we will analyse positive measures. In the fourth section, we will articulate some recommendations. Finally, we will draw our conclusions.

The global anti-corruption framework and its sources

National and international anti-corruption laws and agencies are not yet integrated into a proper global system. Some distinctive common features concerning both the sources and the contents of such laws and agencies allow us to define them as a global anti-corruption framework (cf. Harris, 2018).

To cope with the transnationality of corrupt practices (Pasculli and Ryder, 2019b: pp. 7–10), the global anti-corruption framework largely relies on the mechanisms of harmonisation and cooperation. Many international and regional conventions,¹ now largely harmonised and superseded by the United Nations (UN) Convention against Corruption (UNCAC),² and soft law instruments oblige or encourage member states to adopt increasingly uniform anti-corruption measures (cf. Di Bitonto and Galluccio Mezio, Chapter 2, in this book; Provolo, Chapter 4; Bradshaw, Chapter 8; Lui and Turksen, Chapter 9; Lui and Turksen, Chapter 10). The transversality of transnational corruption (Pasculli and Ryder, 2019b: p. 10) suggests to include within the anti-corruption framework also instruments that, while not directly related to corruption, regulate sectors exposed to corrupt practices or forms of criminality connected to corruption offences, such as the OECD Common Reporting Standard (OECD, 2018: see Blanco and Arjona Sanchez, Chapter 11), the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters³ (MacLennan, Chapter 12), the EU Parliament Resolutions on Corporate Social Responsibility⁴ and the EU Directive on the disclosure of non-financial information⁵ (Petrassi, Chapter 13).

1 Notably, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions adopted by the Negotiating Conference on 21 November 1997; the African Union Convention on Preventing and Combating Corruption adopted by the Heads of State and Government of the African Union on 12 July 2003; the Arab Anti-Corruption Convention adopted by the League of Arab States on 21 December 2010; the Inter-American Convention against Corruption adopted by the Organization of American States on 29 March 1996; the Convention on the Fight against Corruption involving Officials of the European Communities or Officials of Member States of the EU Adopted by the Council of the European Union on 26 May 1997 [1997] OJ C195/1; the Council of Europe Criminal Law Convention and Civil Law Convention on Corruption, respectively adopted by the Committee of Ministers on 27 January 1999 (ETS No. 173) and on 4 November 1999 (ETS No. 174).

2 Adopted with General Assembly resolution 58/4 of 31 October 2003.

3 Developed jointly by the OECD and the Council of Europe in 1988 and amended by a new Protocol in 2010. Available at: https://dx.doi.org/10.1787/9789264115606-en [Accessed 17 August 2019].

4 European Parliament resolution of 6 February 2013 on corporate social responsibility: accountable, transparent and responsible business behaviour and sustainable growth (2012/2098(INI)) [2016] OJ C24/28 and European Parliament resolution of 6 February 2013 on Corporate Social Responsibility: promoting society’s interests and a route to sustainable and inclusive recovery (2012/2097(INI)) [2016] OJ C24/33.

5 Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups. Text with EEA relevance [2014] OJ L330/1.

Leaving the ultimate implementation of anti-corruption measures to nation-states, through the mechanisms of harmonisation and cooperation, does not allow to appropriately address the truly global causes and forms of manifestation of corruption. International anti-corruption instruments are often too generic to have a real impact (Di Bitonto and Galluccio Mezio, Chapter 2). For example, the vagueness of the UNCAC’s provisions on whistle-blowing⁶ allows states like Switzerland to refrain from implementing adequate regulatory protections (Lui and Turksen, Chapter 9). The fragmentariness and multiplication of anti-corruption instruments hinder interpretation and implementation (Di Bitonto and Galluccio Mezio, Chapter 2). Moreover, different states fulfil obligations of harmonisation and cooperation differently. Some states may lack resources and capacity, as it happens in many developing economies, such as Nigeria (cf. Lui and Apampa, Chapter 10). Others may lack the political will to implement anti-corruption measures that frustrate national interests (or those of governing elites). The reluctance of Switzerland and Luxemburg to accept international standards on tax transparency and whistle-blowing is an example (Blanco and Arjona Sanchez, Chapter 11; Lui and Turksen, Chapter 9). Some states may even refuse to become a party to an international instrument or they might withdraw from it, with an impact on anti-corruption – as in the case of Brexit (cf. Pasculli, 2019a and 2019b).

6 Article 33.

Negative measures

The contents of the global anti-corruption framework can be divided into negative and positive measures (cf. Pasculli, 2012). Negative measures aim to prevent and respond to corruption by restricting the rights and liberties of individuals and entities (e.g. criminal law and international sanctions). Positive measures aim to resolve the causes of corruption by promoting values of integrity through a range of initiatives to support individuals and organisations in the fair and lawful pursuit of their rights and interests and in the development of virtuous practices (e.g. codes of conduct, corporate social responsibility, education, training and information). The studies in this book reveal that the anti-corruption framework is unbalanced towards negative measures and that these are ineffective and insufficient. Negative measures can have, at best, retributive or deterrent effects, but they can never resolve the cultural, socio-psychological and political causes of corruption, as identified in our previous studies (Pasculli and Ryder, 2019a, 2019b; Pasculli, 2019b).

Criminal law: the escape from punishment

As a social phenomenon, corruption goes beyond criminal conduct and covers also illegal or merely unethical behaviours (cf. Topal, Chapter 15; Pasculli and Ryder, 2019b; Ellis and Whyte, 2016; Whyte, 2015; Beetham, 2015), such as, for instance, tax avoidance (cf. Blanco and Arjona Sanchez, Chapter 11 and MacLennan, Chapter 12). Nevertheless, as international conventions define corruption as a set of criminal offences,⁷ criminal law occupies a prominent place in anti-corruption (cf. Di Bitonto and Galluccio Mezio, Chapter 2; Johnson, Chapter 3; Provolo, Chapter 4).

7 Cf. UNCAC, articles 15 to 25.

The findings of our studies confirm that traditional national criminal justice is incapable to both retribute and prevent transnational corruption. First, criminal law and justice remain essentially local. Definitions of corruption offences vary from state to state and even internally the complexity of corrupt behaviours may mislead prosecutors in identifying the most appropriate offence (Johnson, Chapter 3). Territorial jurisdictional limits make the investigation of transnational crime and the apprehension and prosecution of transnational offenders very difficult (cf. Fouladvand, Chapter 5; Di Bitonto and Galluccio Mezio, Chapter 2). Second, corruption is committed in such secrecy that it is often very hard for state authorities to even detect it unless whistle-blowers or companies report misconduct (Lui and Apampa, Chapter 10; Lui and Turksen, Chapter 9). Third, many corruption offences are committed or orchestrated by corporations. The obligation set by UNCAC⁸ to establish the liability of legal persons for corrupt...

Table of contents

• Cover
• Half-Title
• Series
• Title
• Copyright
• Contents
• List of contributors
• Part I Introduction
• Part II Criminal justice: international and national frameworks
• Part III The escape from criminal law: deferred prosecutions agreements and financial sanctions
• Part IV Information as evidence: whistle-blowing
• Part V Information as integrity: bank secrecy and non-financial reporting
• Part VI Beyond ethical codes: reshaping culture and values
• Index