G20 Policy Paper

August 2012

G20 Anti-Corruption Working Group Recommendations

For more information, please contact: John Ruthrauff Director, International Advocacy InterAction jruthrauff@interaction.org

We welcome the G20s two year extension of the Anti-Corruption Working Groups mandate. It is positive that the G20 endorsed the Working Groups principles for denial of entry for corrupt officials and those who corrupt them, as well as asset and financial disclosure for public officials. We support the G20 agreement to pursue those who receive and solicit bribes as well as those who pay the bribes. The substantial actions taken by G20 governments to identify and freeze illicit funds of Arab Spring countries are also welcome.

Please direct comments or questions about the statement to: Shruti Shah Senior Policy Director, Law & Regulation Transparency International-USA sshah@transparency-usa.org

Executive Summary G20 countries must ensure they implement and enforce the 2010 AntiCorruption Action Plan and prioritize the following in the new action plan: 1. Ensure civil society space and participation and whistle-blower protection. 2. Implement effective anti-money laundering actions. 3. Enforce foreign anti-bribery legislation. 4. Further expand global transparency standards in the extractive industries.
While appreciative of the progress which has already been made by the G20 AntiCorruption Working Group, we strongly urge that additional action be taken.

1. Ensure civil society space and participation and whistle-blower protection:

The G20 has acknowledged valuable input received from civil society. To enable greater civil society participation the Working Group should operate with a high degree of transparency and actively seek and take into account civil society input. Inclusion of civil society groups in the G20 mandated Legal Entity Identifier Project is a positive example of such practice. The Working Group also needs to strongly encourage member governments to abide by these standards by ensuring a safe space for civil society to engage the government, which should include protection for whistle-blowers.

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2. Implement effective anti-money laundering actions:

If countries continue to allow the incorporation of anonymous shell companies it will be impossible to close safe havens for corrupt proceeds. We urge the G20 to require the collection of beneficial ownership information upon incorporation and to step up enforcement of Know Your Customer policies to prevent financial institutions from becoming safe havens for illicitly acquired funds. We welcome the G20 renewal of the Financial Action Task Force (FATF) mandate and its singling out of high-risk jurisdictions. We are also supportive of efforts to better integrate anti-corruption policies into FATF work. More concrete steps are needed to stem illicit financial flows and facilitate the World Bank and the UN Office on Drugs and Crime (UNODC) Stolen Assets Recovery Initiative. These include: ensuring FATF standards are effectively enforced; adopting and enforcing a legal framework for asset recovery and responsible repatriation; developing mechanisms to promote the transparent use of returned funds; and creating registers that disclose the beneficial ownership of companies and the beneficiaries of trusts. This information should be available to relevant domestic and international enforcement authorities.

3. Enforce foreign anti-bribery legislation:

In 2010 G20 members pledged to implement laws against international bribery and to begin more active execution of the OECD Convention on Bribery of Foreign Officials. While individual countries have made limited progress in enacting anti-bribery laws, enforcement must improve. We also recommend that all G20 countries not currently a party to the OECD Convention become signatories and participate in its peer review process, including China and India.

4. Further expand global transparency standards in the extractive industries:

U.S. law requires listed extractive companies to publish payments paid to governments (Dodd Frank Act 2010, sec. 1504). Equivalent EU legislation has been proposed, which marks a watershed in the creation of global transparency standards. The G20 should establish a global standard on natural resource transparency, which must include open, competitive and transparent bidding processes, as well as budget and revenue transparency. This will help ensure that natural resources contribute to growth and development rather than incentivize corruption and conflict.

While the statement is not designed to be a consensus position of the contributors, it has been endorsed by InterAction leadership. The recommendations were developed by a team of task force members who are listed below. Global Financial Integrity Global Witness InterAction Oxfam America Transparency International-USA