“(1) In its resolution 55/61 of 4 December 2000, the General Assembly recognized that an effective international legal instrument against corruption, independent of the United Nations Convention against Transnational Organized Crime (resolution 55/25, annex I) was desirable and decided to establish an ad hoc committee for the negotiation of such an instrument in Vienna at the headquarters of the United Nations Office on Drugs and Crime (UNODC). The text of the United Nations Convention against Corruption was negotiated during seven sessions of the Ad Hoc Committee for the Negotiation of the Convention against Corruption, held between 21 January 2002 and 1 October 2003. The Convention approved by the Ad Hoc Committee was adopted by the General Assembly by resolution 58/4 of 31 October 2003. The General Assembly, in its resolution 57/169 of 18 December 2002, accepted the offer of the Government of Mexico to host a high-level political signing conference in Merida for the purpose of signing the United Nations Convention against Corruption. In accordance with article 68 (1) of resolution 58/4, the United Nations Convention against Corruption entered into force on 14 December 2005. A Conference of the States Parties is established to review implementation and facilitate activities required by the Convention.
(2) First International Forum on Tax and Crime ∙ Oslo ∙ 21-23 March 2011. Issues related to greater inter-agency co-operation were discussed by more than 150 delegates from 54 delegations who participated in the first tax and crime forum on 21-23 March 2011 in Oslo hosted by the Norwegian government. The conference brought together representatives from a range of OECD and non-OECD governmental agencies, including Tax Administrations, Finance and Justice Ministries, Financial Intelligence Units, Central Banks, FATF, International Organisations, as well as business and NGOs. Second International Forum on Tax and Crime ∙ Rome ∙ 14-15 June 2012. This Forum brought together senior policy makers from different government agencies including the tax, anti-money laundering and anti-corruption communities, as well as private sector representatives, NGOs and other interested stakeholders. Participants examined best practice approaches to closer inter-agency co-operation at the domestic level and explore how to improve international cooperation. The conference also showcased specific key risks in the tax and crime area, allowing countries to target resources and learn from the experience of others. Building on previous events in Oslo and Rome, the Third Forum on Tax and Crime provided an opportunity for senior government officials from tax and customs administrations, anti-money laundering and anti‑corruption authorities, police and law enforcement, public prosecutors, financial regulators and government Ministries, as well as international organisations and NGOs, to discuss current issues and country experiences on key policy and operational topics in combating all forms of financial crime.
(3) The 4th Joint African Union Commission/United Nations Economic Commission for Africa (AUC/ECA) Conference of African Ministers of Finance, Planning and Economic Development was held in 2011. This Conference mandated ECA to establish the High Level Panel on Illicit Financial Flows from Africa. Illicit financial flows out of Africa have become a matter of major concern because of the scale and negative impact of such flows on Africa’s development and governance agenda. By some estimates, illicit flows from Africa could be as much as US $50 billion per annum. This is approximately double the official development assistance (ODA) that Africa receives and, indeed, the estimate may well be short of reality as accurate data does not exist for all transactions and for all African countries.
Fronting means a deliberate circumvention or attempted circumvention of the South African B-BBEE Act and the Codes. Fronting commonly involves reliance on data or claims of compliance based on misrepresentations of facts, whether made by the party claiming compliance or by any other person. Verification agencies, and /or procurement officers and relevant decision-makers may come across fronting indicators through their interactions with measured entities. The B-BBEE Commission may also approach a court of law to restrain any breach or for any appropriate remedial relief, which may include setting aside the transaction or initiative. The B-BBEE Commission will not discuss the merit or the details of its investigative process, but the findings will be published as required in the B-BBEE Act.
Romanian Prime Minister and Presidential Candidate Victor Ponta. Ponta is poised to get 43 percent of the vote to Johannis’s 30 percent, an Oct. 23 survey of 1,124 people by the IRES polling company showed. Photographer: Daniel Mihailescu/AFP via Getty Images Don't Miss Out — Follow Bloomberg On
Romanian Prime Minister Victor Ponta came under pressure to resign after he became the latest target in the country’s anti-corruption drive.
President Klaus Iohannis urged Ponta to quit after prosecutors on Friday said the premier is being investigated for forgery, money laundering and complicity in tax fraud. The premier said he would remain in office and fight the charges. The country’s currency fell the most in a month as stocks and government bonds also retreated.
The investigation “creates an impossible situation for Romania,” Iohannis told reporters. “A political crisis is the worst thing that could happen in Romania. Considering all of the above, I demand Premier Ponta’s resignation.”
Romania has stepped up efforts to curb its more than $40 billion shadow economy, the European Union’s second largest, with a crackdown that’s resulted in the arrest of top-level politicians including former Finance Minister Darius Valcov. Ponta, who weathered plagiarism accusations and a presidential election defeat, will also face a no-confidence vote in parliament, sought by the opposition to halt changes to an electoral law, according to lawmaker Ludovic Orban.
“Ponta already has a cloud over his image after losing the presidential elections last year,” Otilia Dhand, senior vice president at Teneo Intelligence in London said by phone. “I think Ponta will try to weather this storm too like he’s done in the past and the most likely scenario is that he survives the current no-confidence motion.” Leu Drops
The escalating political tension was also reflected in Romanian assets. The leu weakened 0.6 percent to 4.4610 per euro as of 3:39 p.m. in Bucharest, its biggest drop among 24 emerging-market currencies tracked by Bloomberg. The yield on the government’s 2020 euro-denominated bonds rose to 1.757 percent from 1.749 percent, headed for the highest close since January.
“The political situation could have a stronger impact on the leu than on bonds,” Dan Bucsa, a London-based economist at UniCredit Bank AG, said by e-mail. “The leu could move temporarily above 4.50 per euro if political uncertainty persists for a longer time.”
The benchmark BET stock index fell 0.5 percent to 7,445.06, its third consecutive daily slide led by Transelectrica SA, which dropped 8.5 percent, and BRD-Group Societe Generale SA, which declined 1.5 percent. Ponta’s Charges
Ponta is being accused of forging documents to justify income while he had a private legal practice, with the help of a law firm owned by former Transport Minister Dan Sova, the prosecutors said in a statement on their website on Friday.
“I was appointed by parliament and only parliament can remove me,” Ponta said on Facebook. “I believe respecting constitutional principles is essential for our society and I can’t accept that an anti-corruption prosecutor is above parliament, the government or the citizens. This would mean dictatorship.”
The premier can lean on his ruling coalition, which controls 315 of the 555 seats in parliament. Several members from both Ponta’s Social Democratic Party and its smaller allies affirmed their support.
“Ponta must continue his mandate,” Labor Minister Rovana Plumb, the ruling party’s deputy leader, said in an e-mailed statement. Car, Cash
Prosecutors asked parliament to approve an investigation against Ponta for conflict of interest, as the premier has immunity from such probes as a lawmaker. Should they receive clearance, Iohannis can suspend Ponta, according to the Constitution.
Ponta allegedly received a total of about 181,000 lei ($46,000) between Oct. 2007 and Dec. 2008 and a Mitsubishi Lancer Evo 10 car, from Sova’s law firm, prosecutors said in the statement.
The premier will “follow every legal method to prove there is no evidence incriminating him in this case,” Corneliu Calota, a government spokesman, said in a statement.
By Joshua Robinson Updated May 29, 2015 11:27 a.m. ET 18 COMMENTS
ZURICH—FIFA’s member associations started voting in a closely watched presidential election Friday, a ballot that could secure its divisive president, Joseph “Sepp” Blatter, a fifth consecutive term.
Mr. Blatter went into the race the odds-on favorite, enjoying considerable support from many FIFA members, just two days after soccer’s top governing body convulsed under U.S. and Swiss investigations into alleged long-running corruption at the organization.
Mr. Blatter, 79 years old, has been at the head of FIFA since 1998 and remains hugely popular in most of the body’s 209 member associations. He wasn’t named in either probe.
He opened the congress with a 22-minute speech, comprising his most extensive public comments since the probes were launched Wednesday.
Activists from advocacy group Avaaz demonstrate near the Hallenstadion, where the 65th FIFA Congress will take place, in Zurich, Switzerland, May 28, 2015. REUTERS/Arnd Wiegmann Tweet Recommend Google + LinkedIn Email Print Leave us a comment
Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.
Transparency International is calling for Sepp Blatter to step down as FIFA president and to postpone the election for leadership of world football’s governing body after the U.S. Justice Department on May 27 indicted 14 people either working for or linked to FIFA, world football’s governing body. The charges include wire-fraud, bribery money-laundering and racketeering. It said corruption at FIFA is “rampant, systemic, and deep-rooted” and that these investigations were only the start.
On Friday, May 29, the 209 representatives from football federations around the globe will vote for the next president of FIFA. There are only two candidates Blatter, 79, and Prince Ali Bin al Hussein of Jordan, a member of the Executive Committee.
In light of the arrests and an ongoing investigation by Swiss authorities into allegations of corruption during the awarding of the 2018 and 2022 World Cups to Russia and Qatar, Transparency International Transparency International calls for a postponement of the election.
More people are beginning to speak out. Today FIFA sponsors – including VISA, Coca-Cola, Hyundai and McDonalds – are making statements calling for FIFA to address the situation. Coca-Cola said “the lengthy controversy has tarnished the mission and ideals of the FIFA World Cup.” UEFA, Europe’s football governing body, have also called for Blatter’s resignation and requested its members to vote against him.
Under Blatter’s 17-year presidency FIFA’s revenues have quadrupled to $5.7 billion in 2014, a World Cup year, and the organisation has more than $1.5 billion in reserves. But Transparency International does not believe commercial success makes Blatter the right person to lead FIFA. His promise to reform FIFA has clearly failed to stamp out corruption.
FIFA needs a president that can inspire trust and commit to transparency and accountability.
Here are 10 things that members of the football federations have to consider when they vote:
For more than a decade FIFA used a Swiss court investigation into corruption allegations at former marketing company ISL to refuse to answer questions about bribery and corruption. In 2013, FIFA finally published a report confirming former president João Havelange and former executive committee member Ricardo Texeira had taken bribes.
FIFA ran two World Cup hosting bids simultaneously (2018 and 2022) which allowed for collusion among bidders; then it misrepresented the investigation into the process, according to the report’s author.
FIFA refused at first to publish the investigation into the awarding of the 2018 and 2022 World Cup hosting rights. FIFA ran two World Cup hosting bids simultaneously for 2018 and 2022 which allowed for collusion among bidders; then it misrepresented the investigation into the process, according to the report's author. FIFA refused at first to publish the investigation into tyhe awarding of the 2018 and 2022 World Cup hosting rights. FIFA has only published a summary version after pressure from the author (who subsequently quit) and from public opinion. The full report into the awarding of the 2018 and 2022 hosting rights has yet to be published. FIFA does not publish the pay for its senior executives or members of the executive committee. In 2014 it paid $88.6 million to 474 employees – an average of $186,900 per employee but no word on how much the top brass get. FIFA’s financial statements provide lump sums for its revenues, which hit $5.7 billion in 2014, a World Cup year, and expenditures, but little detail. It put aside reserves of $1.5 billion. FIFA insists host countries hand over a high proportion of revenues from the World Cup, tax-free. This is estimated to have cost Brazil $250 million. There are no term limits on any of the members of its key committees, including the executive committee, the presidency and the finance committee, making cronyism a real risk. FIFA has no independent external non-executive directors on the executive committee, finance committee and major bodies. As many as 10 FIFA executive committee members and continental federation heads have been forced out because of corruption.
Last week Transparency International joined forces with Sports Addicts which developed the Forza Football app to poll fans on what they think of FIFA. A total of 35,000 people in 30 countries responded and only 2.2 percent said they would support Blatter, while 69 percent said they had no confidence in the organisation. That is a message the delegates voting should listen to.
Blatter’s reign should come to an end. It’s time for someone else to start afresh.
Gareth Sweeney is the editor of Transparency International’s Corruption in Sport Initiative.
Transparency International, the global anti-corruption movement, has not commented on the merits or otherwise of individuals who may or may not be candidates for the presidency of FIFA, world football’s governing body.
We expect full disclosure from all candidates, and the detail of their programmes to address corruption and governance issues at FIFA.
Our focus is on the nature of the election process and the reforms needed to ensure that corruption and bribery are rooted out of FIFA.
These reforms include the swift introduction of strong anti-corruption programmes at both the international, regional and national levels, greater transparency in the financial relationships between FIFA and its members, and strong independent oversight at the executive committee level.
Transparency International supports the work on whistleblower protection in its chapter TI Macedonia. As the global movement against corruption we expose corruption wherever we find it. We campaign to bring those responsible to justice.
Whistleblower protection is essential to expose wrong-doing and should be protected by the law. Currently FYR Macedonia does not have whistleblower protection laws and TI Macedonia has been contributing to the debate to introduce such laws.
Such changes would protect all whistleblowers and support a free press and civil society.
Elena Panfilova, Vice Chair of Transparency International said: “Corruption rots everything it touches. It takes away human rights and makes the people pay. Whistleblowers who act in good faith to bring cases of corruption to justice should be protected regardless of their political views.
“We do not take sides in politics. As a movement in more than 100 countries we support our colleagues in FYR Macedonia in fighting corruption.”
In 2013 Transparency International published its International Principles for Whistleblower Legislation.
A poll of more than 35,000 football fans in 30 countries released before the election to pick the next president of FIFA, world football’s governing body, showed that four out of five fans do not think Sepp Blatter should stand for the post and 69.2 per cent said they had no confidence in FIFA.
The poll was to assess how the effects of corruption and poor governance at FIFA is perceived by fans who will have no say in the vote. Only the representatives of the 209 football federations that make up FIFA are eligible to vote on 29 May in Zurich.
When the poll was launched last week there were four candidates in the race for president, including Luis Figo, the former Portuguese international, who was the fan favourite winning 59.1 per cent of the votes. Figo has since dropped out of the race along with Michael van Praag, the head of Dutch football, leaving Blatter facing Prince Ali bin al-Hussein. A quarter of the voters picked none of the above as their choice. Elections infographic
The questions in the poll were prepared by Transparency International, the global anti-corruption movement and Football Addicts, the Swedish developer behind the popular Forza Football app, which allows fans’ voices to be heard collectively through real-time, in-app questions on key issues.
In 2010 FIFA controversially chose Qatar to host the 2022 World Cup. In this poll, fans picked Australia (39.1 per cent) over the USA (37.8 per cent), Japan (10.8 per cent), South Korea 10.1 per cent) and Qatar (2.2 per cent). These countries vied for hosting rights in the original bidding process.
There were regional differences in the vote. Not surprisingly, Qataris were most favourable to FIFA and its president with a third supporting Blatter for a fifth term and 60 per cent saying they had confidence in FIFA. Chileans were 100 per cent against Blatter and 88 per cent against FIFA.
Deborah Unger, of Transparency International said: “The corruption and scandals associated with FIFA have so damaged its reputation that fans have no confidence in the organisation. That is sending a strong message to the small elite controlling FIFA that it must clean up its act. It is the fans who pay for and support football and make FIFA one of the most powerful organisations on the planet. They deserve better.”
Patrik Arnesson, the 29 year old co-founder of Gothenburg-based Football Addicts, adds: “It is precisely for moments in history like this that we need a collective voice for international football fans. By conducting this poll, we have highlighted the stark difference between how the football community around the world feels and the decisions that are being made by FIFA. This contrast highlights a huge democratic flaw in footballing society, and we sincerely hope that it is an issue next President will address.”
Following FIFA World Cup corruption scandals, should Sepp Blatter be standing again for President of FIFA?
Graphic of poll result
Do you have confidence in FIFA?
Graphic of poll result
Who would you pick to run FIFA? Sepp Blatter 2.2 per cent Luis Figo 59.1 per cent Prince Ali Bin al-Hussein 5.3 per cent Michael van Praag 8.7 per cent None of the above 24.6 per cent
Which country should host the 2022 World Cup? Australia 39.1 per cent USA 37.8 per cent Japan 10.8 per cent South Korea 10.1 per cent Qatar 2.2 per cent
Based on votes from 35,000 fans in 30 countries, polled on the Football Forza app from May 20-24, 2015.
Forza Football, an app from Football Addicts, gives fans a free, influential platform for their opinions and ideas, alongside updates, live scores and statistics for the 560 most popular leagues and cups around the world. It is a fully international platform, with over 2.7 million monthly users worldwide.
Transparency International is the global movement fighting corruption with more than 100 chapters around the world. The secretariat is based in Berlin.
Editor's note: For more information on how each country voted please contact Football Addicts or Transparency International.
El Ministerio Público debe investigar rigurosamente el origen de fondos que financiaron campañas de los partidos políticos en pasadas elecciones generales y todas las fuerzas políticas representadas en el Congreso Nacional deben demostrar su voluntad para evitar el uso de fondos públicos e ilegítimos en el financiamiento del proselitismo electoral.
La Asociación para una Sociedad más Justa (ASJ), organización de la sociedad civil conformada por cristianos valientes que trabajan para una sociedad donde prevalezca la justicia, enfocándose en lograr que el sistema gubernamental funcione y sea justo especialmente para los más vulnerables, ante las nuevas denuncias de participación de funcionarios y hasta partidos políticos en el escándalo de corrupción acaecido en el Instituto Hondureño de Seguridad Social (IHSS), se pronuncia en los siguientes términos:
Hay nuevas denuncias, que el dinero robado del IHSS, fue a dar a políticos, funcionarios y hasta un partido político. Información suministrada por el Ministerio Público (MP), el Consejo Nacional Anticorrupción (CNA) y los medios de comunicación, señalan que recursos provenientes de actividades ilícitas generadas en el marco del escándalo de corrupción del IHSS, fueron transferidos desde entidades estatales a sociedades mercantiles, y desde estas a servidores públicos, políticos y partidos, lo que vendría a constatar, lo que muchos sectores de la sociedad hondureña han denunciado, en el sentido que burócratas, políticos y empresarios, conforman un consorcio nefasto que –mediante operaciones deshonestas y fraudulentas- sangra las instituciones del Estado para su favor particular, en menoscabo del bienestar colectivo. MUCHAS personas han sufrido y hasta muerto por este asqueroso acto de corrupción. Los que ejecutaron el latrocinio cometido en el IHSS, merecen ser castigados con todo el peso de la Ley, “caiga quien caiga”, ya que no solamente causaron un perjuicio al erario nacional, sino que –también- negaron el acceso a los servicios de salud a cientos de miles de derechohabientes que, aun y cuando pagaron sus cotizaciones, no recibieron atención oportuna, generándoles un detrimento en sus condiciones de salud, que –en muchos casos- tuvo un desenlace fatal. Un asqueroso acto de corrupción como el del IHSS, no puede quedar en impunidad, ya que si no se castiga a los culpables, se dará un mensaje claro que en Honduras, se puede estafar al Estado, robar a la población y enriquecerse ilícitamente, sin problema alguno, ya que el manto de impunidad cubre a delincuentes y criminales. Exigimos que el MP, con apoyo de expertos internacionales, investigue, CAIGA QUIEN CAIGA:
a) Quienes dieron y quienes recibieron fondos corruptos y sucios para financiar sus campañas. Resulta impostergable que, de forma expedita, sin retardo alguno, las fiscalías especiales del MP, con apoyo de expertos internacionales e independientes, procedan a investigar con seriedad y rigor, en primera instancia, sobre la existencia de financiamiento irregular a algún dirigente político o partido en particular, a través de operaciones financieras realizadas por funcionarios estatales, empresarios particulares o personas jurídicas dedicadas al comercio o la prestación de servicios al IHSS, otros actos corruptos o ilegales como el narcotráfico; de comprobarse algún hecho delictivo y/o criminal, debe informarse al pueblo hondureño, y ejecutarse la acción penal correspondiente para juzgar rápidamente y sancionar, de forma ejemplar a los que se enriquecieron ilícitamente o lavaron activos provenientes de transacciones ilegales en el IHSS, y a quienes violaron la Ley Electoral y de las Organizaciones Políticas, en torno al financiamiento de campañas proselitistas.
b) Quienes dieron y quienes recibieron fondos corruptos y sucios para su enriquecimiento personal. La investigación antes solicitada, debe esclarecer si hubo o no uso de recursos del gobierno central, Congreso Nacional y municipalidades, en claro perjuicio de las finanzas públicas; del mismo modo, debe indagarse si el crimen organizado, el narcotráfico o la delincuencia común, financió a algún partido político o a algún candidato a cargo de elección popular—ya sea para su campaña o para su enriquecimiento personal. Dicha averiguación no debe obviar identificar apoyo monetario, logístico o mediático de empresas privadas con intereses específicos y/o contratos-licencias vigentes o futuros (minería, térmicas, constructoras, farmacéuticas, etc.), a algún partido político en la pasada contienda de enero de 2013
4. También, la ASJ, exige al Poder Ejecutivo, el Congreso Nacional y todos los partidos políticos muestren su compromiso con la transparencia:
a) Que todos los partidos y políticos publiquen en sus respectivos portales en el internet, TODA su inversión en la campaña pasada y sus fuentes de financiamiento. Los partidos políticos y los candidatos a cargos de elección popular que participaron en los pasados comicios generales, deben prestar toda la colaboración del caso, publicando en el internet TODA la información que desglose los gastos e inversiones, y financiamiento oficial y donaciones privadas recibidas—cumpliendo y superando lo que la legislación electoral exige.
b) Aprobar una nueva ley de financiamiento de campañas que cumpla con mejores prácticas internacionales. En respuesta a una terrible falencia jurídica e institucional, el Congreso Nacional de la República, debe aprobar, lo antes posible, con la participación incluyente y respaldo decidido de todas las fuerzas políticas y organizaciones de sociedad civil, una Ley que cumpla las mejores prácticas internacionales relativas a transparencia, acceso a información pública y rendición de cuentas del financiamiento de las campañas electorales y el funcionamiento de los partidos políticos. La ASJ, desde el año 2010, ha venido demandando este tipo de reformas legales a fin de contar con procesos electorales honestos y legítimos.
La ASJ, ratifica su compromiso de promover la transparencia y trabajar valientemente en el combate a la corrupción y vigilar el desempeño de las autoridades llamadas a representar los intereses de la sociedad; asimismo, motiva a la ciudadanía a ser intolerante ante los actos ilícitos y hostil ante los abusos de quienes detentan el poder político o económico, y viven en la más repugnante impunidad.
There has been recent media attention in the U.S. regarding transparency and donation practices at The Clinton Foundation, including references to Transparency International. Transparency International-USA and the Transparency International secretariat based in Berlin, Germany conduct research and make recommendations on best practices in various substantive areas where corruption is a significant problem. Neither TI-USA nor the TI Secretariat has focused on the transparency of non-profit charitable foundations, including by any ranking. TI-USA presented its 2012 TI-USA Integrity Award to then Secretary of State Hillary Clinton for her emphasis on the importance of increasing transparency and countering corruption as part of U.S. foreign policy, with the award addressed solely to those contributions. Other previous recipients of TI-USA's annual non-partisan Integrity Award are Sir James D. Wolfensohn, former U.S. Senator Richard Lugar (Retired - R-Indiana) and Paul Volcker.
Different numbers have been floated around for what it would cost globally to end poverty, stop climate change and make sure no one goes hungry. These numbers add up into trillions of dollars. How are we going to keep track of the money to make sure it is not wasted, lost to corruption or mismanaged? The answer lies in open data.
Information that is proactively disclosed, shareable, understandable and comparable allows for a complete picture of what money is being spent and on what – and how much more is still needed. This picture must be comprehensive, particularly when it comes to public finance and spending on government procurement.
Public contracting can take up the bulk of a government’s budget outlays and figures show that corruption can cost on average 20-25 percent of a contact’s value.
No time has been more critical then now to have easy access to usable information about development spending. The world is about to decide on its new development goals – the sustainable development goals – and the financing commitments to deliver on these promises.
As governments gear up for two major meetings – one on how to finance the goals in July in Addis Ababa and one on finalising the goals themselves in September in New York – there are some key actions that they must take:
Provide information on financing flows that is timely, comprehensive and forward-looking
This information must be provided using a common reporting standard. There are existing transparency initiatives that could be used. The open data standard for reporting on aid flows, IATI, offers a good starting point and could act as an umbrella for tracking other development finance – from governments, companies, foundations, NGOs or other providers. Currently only eight percent of 86 countries surveyed publish government spending data in an open format.
Give data users tools to use the information
Getting the information out there is the first step but for the data to be powerful, it needs to be used. Data users include ordinary citizens trying to find out how much money has been given to their schools as well as parliamentarians trying to keep track of where their budgets are being spent.
Ensure the space for civil society to get engaged
Having the ability to follow the money is only useful if citizens are afforded a safe space for speaking up against irregularities that are found or when money goes missing.
Keeping financial flows transparent and accountable is one part of fulfilling the development and climate financing agendas. Related transparency and accountability initiatives are needed to also close the gap in state budgets that has been created from illicit financial flows. In the European Union alone, the estimate is that up to 1 trillion Euros is lost annually to tax evasion and avoidance.
It is for this reason that Transparency International has joined forces through the TAP Network to work with more than 20 organisations, including Publish What You Pay, Oxfam America, and the International Budget Partnership in calling for open and accountable financing of new development commitments.
Click here to read the paper we’ve put together and here to see the letter we have sent to more than 90 governments who will be making the decisions about the development goals.
Join Transparency International in calling on your governments to follow the money. The time is now. Contact me, Craig Fagan at cfagan@transparency.org to find out how you can get involved.
By Andy Spalding on 9 April 2015 in Americas, Anti-corruption movement, Sport
Two nations now have the uncommon fortune of consecutively hosting the FIFA World Cup and the Olympic Games: Russia, and Brazil. This article will focus on Brazil, which saw the Brazilian people taking to the streets, exercising their right to protest corruption; in response, the Brazilian legislature has enacted substantial new anti-corruption laws; and enforcement agencies have mounted credible enforcement actions against both the government and business sectors.
Image: Creative Commons, Flickr / sama093In this, the window between these mega events, eight hand-picked students and I formed a team to research the application of Brazil’s new anti-corruption regime to the Rio 2016 Olympics. We’d spent the better part of a year conducting academic research and otherwise studying the issue from afar. Then in March, we traveled to Brazil, interviewing lawyers, businesspeople, government officials, NGOs, and academics. We found an anti-corruption story far more nuanced, complex, and compelling than the outside world may now understand. So too did we find critical unanswered questions that go to the very heart of Brazil’s anti-corruption movement. This blog post is part of a series drawing on articles from the Global Corruption Report: Sport.
We knew, for example, that Brazil had modified its procurement regime to meet the demands of World Cup and Olympics preparation. It streamlined the bidding process, seemingly raising a red flag. What we did not know is that prior to and independent of these sporting events, Brazil had encountered significant problems with its procurement process that resulted in the misalignment of interests among contractors, delays and cost overruns, and endless litigation. The streamlined procurement regime, then, was not (or at least, not purely) a deliberate bypass of corruption prevention measures. Rather, the World Cup and Olympics became a catalyst to experiment with an alternative procurement regime. Is the new regime working? Has it addressed the inefficiencies of the prior system without creating undue corruption risk? We continue to seek answers.
We also knew that the Brazilian enforcement authorities had prosecuted and sanctioned very little corruption in relation to the World Cup. Again, this would seem a red flag. But what we discovered in our interviews is that Brazil has designed a corruption prevention strategy that does not rely on criminal prosecution. Rather, Brazil is focusing principally on preventative auditing by its Tribunal de Contas da União (TCU), a federal body with authority to audit federal contracts. And we know that the TCU is reviewing Olympic contracts with a newfound rigor. Will this system work? Can Brazil effectively reduce corruption through preventative auditing, without relying on aggressive criminal or civil prosecution? We are evaluating these and many other anti-corruption issues.
In one of our final interviews, the acting president of the Public Olympic Authority, Marcelo Pedroso, made a plea. He said too much of the world knows Brazil only for its futbol, samba, and Carnival, but the country is so much more. Brazil is a young democracy, with an emerging economy, and a robust, though nascent, anti-corruption regime. He said that the Olympics, even more so than the World Cup, are Brazil’s chance to showcase to the world its commitment to good governance. Our team will be writing a longer article for this blog, also to be published in Transparency International’s upcoming anthology, and then a major law review article next year. We’ll document how far Brazilian anti-corruption reforms have come, and how far they may have yet to go.
Former South African president Thabo Mbeki took aim at various multinationals stealing billions of dollars out of Africa through illicit financial flows.
Mbeki said there was need for African governments to increase efforts in closing loopholes used by multinationals and local authorities in facilitating financial flows.
The Mbeki-led report of the High Level Panel on Illicit Financial Flows has carried out investigations across the regions since it was established in February 2012.
“Our continent is annually losing more than 50 billion US dollars through illicit financial outflows,” remarked Mbeki reporting to the Pan African Parliament yesterday.
“Our panel is convinced that Africa’s retention of the capital that is generated on the continent and should legitimately be retained in Africa, must be an important part of the resources to finance the Post-2015 Development Agenda.”
According to the report, the flows relate principally to commercial transactions, tax evasion, criminal activities such as money laundering, and drugs, arms and human trafficking, bribery, corruption and abuse of office.
“Countries that are rich in natural resources and countries with inadequate or non-existent institutional architecture are the most at risk of falling victim to illicit financial flows,” said the report.
The report also claims that over the last 50 years, Africa is estimated to have lost in excess of one trillion US dollars in illicit financial flows added this amount was roughly equivalent to all of the official development assistance received by Africa during the same timeframe.
Mbeki’s High Level Panel report also claimed that, these outflows were of serious concern, given inadequate growth, high levels of poverty, resource needs and the changing global landscape of official development assistance.
The Economic Freedom Fighters’ Member of Parliament and part of the South African delegation to the Pan African Parliament, Floyd Shivambu said his country had lost over 120 billion US dollars in ten years through illicit financial flows.
The head of South Africa’s delegation to the Pan African Parliament, Hunadi Mateme welcomed the report and called for greater action from the region.
Mateme's call was supported by Edward Mulebwe, a Member of Parliament from Mozambique who said Africa needed to extract from President Mbeki's report and ensure regional wealth stays in the continent.
Mozambique's Mulembwe is running for the Pan African Parliament presidency currently held by a Nigerian national. If Mulembwe wins he becomes the first in Southern Africa to hold such a position.
The key note speech by Prof. PLO Lumumba at the 3rd Anti-Corruption Convention that took place on 2nd December 2013 at Hotel Africana, Kampala, Uganda.
The penalty is the biggest ever imposed by the Geneva authorities. Photograph: Harold Cunningham/Getty
HSBC has been ordered to pay a record 40m Swiss francs (£28m) and been given a final warning by the Geneva authorities for “organisational deficiencies” which allowed money laundering to take place in the bank’s Swiss subsidiary. Analysis HSBC's Swiss compensation – not much for the bank but a big deal for Geneva Chief prosecutor for canton’s decision to investigate despite inaction by other Swiss regulators shows power struggle within establishment Read more
The settlement means the Swiss will not prosecute HSBC or publish the findings of their investigation into alleged aggravated money laundering. But Geneva’s chief prosecutor, Olivier Jornot, cautioned that the bank was on notice, saying: “This is an excuse which will only apply once.”
Announcing the biggest financial penalty ever imposed by the Geneva authorities, Jornot launched a stinging attack on his own country’s financial laws, adding his voice to a growing a number of Swiss politicians and campaigners calling for reform of the country’s secretive banking system. 0:00 / 3:35 Embed Facebook Twitter Pinterest How the story came to light – video.
“This matter shows the weakness of Swiss law in the matter of entry of criminal funds into the financial system,” said Jornot. Advertisement
“When we have a law that doesn’t punish financial intermediaries accepting doubtful funds then we have a problem. This problem dates from long before the HSBC affair.”
HSBC agreed to the settlement after being notified of the charges being prepared against it at a private meeting on 10 April following which, prosecutors claimed, the bank rapidly agreed to begin negotiations over financial damages for past “illegal acts”.
The Geneva authorities said the payment, which is being described as “compensation” rather than a fine, reflected the harm done to the city and the profits obtained by HSBC from processing illicit funds.
The investigation was prompted, Jornot said, by revelations in the Guardian, the BBC, Le Monde and other media coordinated by the International Consortium of Investigative Journalists. This showed that HSBC’s Swiss arm banked the proceeds of political corruption and accepted deposits from arms dealers while helping wealthy people evade taxes. HSBC: Swiss bank searched as officials launch money-laundering inquiry Investigation into suspected ‘aggravated money laundering’ comes after Belgium and France begin scrutinising tax affairs of Europe’s biggest bank Read more
On 18 February, Jornot ordered a raid on HSBC’s Geneva offices, a day after Switzerland’s federal prosecutor, Michael Lauber, had told the press there was no call for an inquiry into wrongdoing at the bank. Lauber had argued it was not appropriate for the state to launch an investigation into HSBC based on stolen information.
Wrongdoing at HSBC was exposed after an IT worker at the bank, Hervé Falciani, leaked details about its Swiss accounts. The documents ended up in the hands of the French government in December 2008 and were distributed to the tax authorities of other nations, including the UK, before being leaked to Le Monde.
HSBC’s Swiss arm is still facing investigations by US, French and Belgian authorities. Belgium said on Tuesday it was hoping to recover £390m in unpaid taxes from citizens who had hidden funds in undeclared Swiss accounts.
Meanwhile, Switzerland is pursuing Falciani. It has issued an international arrest warrant, but the French authorities have refused to extradite him. A Swiss court is preparing to try the Falciani in absentia.
Jornot’s investigators focused on HSBC’s compliance team, which was responsible for ensuring its bankers followed the law. They seized files and emails on some 20 customers and internal audits from 2004 to 2014.
The research focused on four money laundering cases: one involving sales of cannabis, another concerning merchandise from Chinese triad counterfeiters in Spain, and a third involving an unnamed Mexican “well known to certain cartels”. The fourth case had been exposed by the Swissleaks investigation, coordinated by the International Consortium of Investigative Journalists.
The evidence was enough for the Swiss authorities to conclude that “organisational failings” at the bank were to blame for money-laundering violations.
The settlement does not cover employees. At the press conference, prosecutors referenced a former HSBC manager, Judah el-Maleh, who is believed to have fled to Israel. He ran HSBC Suisse’s Mediterranean, Europe and Israel desk, which was shut down after claims it had been involved in a cash pipeline in which money from the sale of marijuana in the Paris suburbs was couriered to HSBC’s respectable clients in the French capital. Bank accounts back in Switzerland were manipulated to reimburse the drug dealers.
In a statement, HSBC said: “The investigation conducted by the public prosecutor of the canton of Geneva into HSBC Private Bank (Suisse) has been formally closed today. The investigation found that neither the bank nor its employees are suspected of any current criminal offences. Hervé Falciani Facebook Twitter Pinterest Hervé Falciani leaked details about Swiss accounts that ended up in the hands of the French government. Photograph: Gerard Julien/AFP/Getty Images
“The Geneva prosecutor acknowledges the progress the bank has made in recent years, including the improvements in its compliance function, internal processes and technology.”
HSBC claims to have undergone a radical transformation, with initiatives designed to prevent its banking services being used to evade taxes or launder money. The repositioning has reduced its client base by almost 70%, from about 30,000 accounts in 2007 to some 10,000 in 2014.
Explaining the decision not to bring HSBC to court, Jornot said Swiss law demanded a high standard of proof. Those laundering money had to be shown to be doing so deliberately, not accidentally, and the money had to be demonstrably obtained from criminal acts, not simply deposited by a known criminal. To fine the bank, prosecutors would also have needed to show organisational failure caused the money to be laundered.
In addition, many of the revelations in Falciani’s data, which gave a detailed picture of events at the bank between 2005 and 2007, concerned older accounts or people who were no longer clients of the bank.
Nonetheless, Jornot stressed that the evidence showed “HSBC has suffered from organisational failings which were to blame for the money laundering which occurred”.
Successor will be chosen at extraordinary general meeting of Fifa • Blatter to stay until next president is elected between December and March • Reports in US say Blatter being investigated as part of corruption probe 0:00 / 2:47 Embed Sepp Blatter announces he will resign as the president of Fifa after 17 years in the role.
Owen Gibson Chief sports correspondent @owen_g
Tuesday 2 June 2015 20.28 BST Last modified on Wednesday 3 June 2015 07.58 BST
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Sepp Blatter has dramatically quit as Fifa president, days after he was defiant in re-election for a fifth term and sparking a flurry of speculation over the future of world football and the fate of the next two World Cups in Russia and Qatar. The Guardian view on Sepp Blatter: at last, it’s time to start rebuilding Fifa Editorial: Blatter’s resignation as Fifa president means world football is suddenly in a better place. But there is much work to be done Read more
Under intense pressure from ongoing investigations by the FBI and Swiss prosecutors that have already led to 18 senior football executives being charged in the US on charges of money laundering, tax evasion and racketeering, Blatter said he had decided to step down.
But the 79-year-old Swiss, who defeated his Jordanian challenger Prince Ali bin Al-Hussein on Friday despite the mounting crisis, said he would stay on for at least six months to allow time for a proper election to replace him between December 2015 and March next year.
Hours after Blatter stepped down there were reports in US media that he was being investigated by US authorities as part of their corruption inquiries.
Blatter, who has previously pressed on through an endless series of corruption allegations, told the press conference: “While I have a mandate from the membership of Fifa, I do not feel that I have a mandate from the entire world of football – the fans, the players, the clubs, the people who live, breathe and love football as much as we all do at Fifa.
“Therefore I have decided to lay down my mandate at an extraordinary elective Congress. I will continue to exercise my functions as Fifa president until that election.”
In the same press conference room where he had on Saturday faced down questions over Fifa’s culture of corruption and his knowledge of a $10m bribe alleged by US prosecutors to have been routed to the former Concacaf president Jack Warner, Blatter cut a depleted figure.
“Since I shall not be a candidate, and am therefore now free from the constraints that elections inevitably impose, I shall be able to focus on driving far-reaching, fundamental reforms that transcend our previous efforts,” he claimed, complaining that he did not have enough control over those that sit around his executive committee table.
Blatter was said to have spent the weekend since his election victory, following which he blamed attempts to oust him on bitterness from the Americans and English for losing their World Cup bids, listening to pleas to stand down from those closest to him. Sepp Blatter resigns as Fifa president – full statement Read more
Blatter aide Walter Gagg told AP that Blatter’s mood had shifted over the 24 hours before his announcement. “We know that the in the last 48 hours he was thinking of the future and perhaps what happened in the last hours, this gave him the conviction,” said Gagg, a long-time confidant of Blatter “We had lunch with him yesterday [Monday]. He was relaxed, he was fine,” he said. “I had a very good meeting with him early in the morning [Tuesday]. Then came the different information from the US with this and that.” Advertisement
Meanwhile the net continued to close in on some of those senior Fifa executives with whom he had been inextricably linked down 40 years at Fifa, 17 of them as president.
They included not only those arrested last week but the Brazilian Ricardo Teixeira, now the subject of a new Brazilian probe over $150m in missing money from last summer’s World Cup, and his long time general secretary Jérôme Valcke.
The day had begun with Valcke facing questions over a letter that proved he had knowledge of a $10m payment to Warner which US investigators allege was a bribe.
Those who had in recent days called on Blatter to stand down in light of the damning evidence outlined by the US attorney general Loretta Lynch and warnings from investigators that further indictments would follow were jubilant.
“I think it is long overdue but it is good news for world football,” said the FA chairman, Greg Dyke, who has been among the most vocal of those calling on Blatter to go. Fifa payment to FAI over Henry handball was 'loan to build stadium' – as it happened FAI chief executive John Delaney claims Fifa paid €5m to avoid legal action after France’s World Cup 2010 play-off win over the Republic of Ireland Read more
“It now means that we can get someone in to run Fifa, we can get in there and find out where all the money has gone over all these years and sort it out for the future.”
Uefa’s president, Michel Platini, a one time ally of the Fifa president who declined to stand against him but made a personal plea to him to stand down before the election, said: “It was a difficult decision, a brave decision and the right decision”.
Platini is among those who will now be touted as potential replacements for Blatter, along with others inside Fifa such as the increasingly influential Kuwaiti Sheikh Ahmad Al-Fahad Al-Sabah. Prince Ali, defeated by a margin of 60 votes on Friday, refused to rule out standing again.
The Uefa president, who was recently re-elected for another four-year term, will meet others in Berlin this weekend before the Champions League final to start to plot his next move.
But many will call for a new broom untainted by Fifa’s many scandals. And beyond Europe and America there will be disdain for the way in which they perceive the US and the British media pushed Blatter from office.
The Russian president, Vladimir Putin, a big supporter, has already railed against what he sees as a US plot and Blatter retains widespread support in Africa and parts of Asia.
The British Conservative MP Damian Collins, a key mover in the NewFifaNow pressure group, said Blatter might yet have to stand down before next year if more serious allegations emerged.
“What we have to make sure is that this isn’t some sort of palace coup whereby powerbrokers of Fifa are hoping to usher Sepp Blatter out but retain power and control for themselves,” he said. “What we wouldn’t want to see is a group of Sepp Blatter’s cronies leading the power for reform in order to protect themselves.”
The US Justice Department would not comment on Blatter’s announcement, while the Swiss attorney general said Blatter was not under investigation in Switzerland despite an ongoing probe into the 2018 and 2022 World Cups.
Attention will also immediately turn to the already endlessly controversial question of whether the World Cup should take place in Qatar in November 2022. With stadiums already under construction in Russia for the 2018 tournament, it would pose a huge logistical challenge to throw that tournament into doubt.
Construction of stadiums has also begun in Qatar, amid pressing human rights issues and unanswered questions over how it won the bid. But a new president could yet decide to re-run the vote if an ongoing Swiss criminal investigation, conducted in parallel to the FBI probe, finds new evidence of bribery.
Visitors walk at the France pavilion at Expo 2015 in Milan, May 6, 2015. Reuters/Stefano Rellandini
Italy made a fresh attempt at tackling rampant corruption on Thursday when the Chamber of Deputies approved a strongly contested law stiffening penalties for various types of graft and balance sheet fraud.
Corruption has long undermined Italy's chronically stagnant economy by deterring foreign investors and pushing up costs. A previous "anti-corruption" package in 2012 proved to have little impact.
The last year has seen high-profile arrests of politicians and businessmen over graft allegations connected with the 2015 Expo in Milan, a 5 billion euro (£3.5 billion) Venice flood barrier, and public contracts awarded by the city of Rome.
Italy ranked 69th in Transparency International's 2014 Corruption Perceptions Index, joint last in the European Union with Bulgaria, Greece and Romania.
After a long parliamentary passage, the latest anti-corruption bill was approved by the lower house in a watered-down version more than two years after it was presented by Senate speaker Piero Grasso, a former anti-mafia prosecutor.
The legislation increases prison sentences for corruption by an average of two years up to a maximum of around 10 years for the most common varieties, involving bribery or offering or demanding favours to obtain public contracts.
The bill raises jail sentences for balance sheet fraud by two or three years to a maximum of eight years for listed companies, and six years for unlisted firms. It also makes all balance sheet fraud a criminal offence, unlike before, although if a judge decides the fraud is "mild", the sentence can be as low as six months.
Critics say the higher sanctions will be useless because the many loopholes of Italy's snail-paced justice system ensure that hardly anyone actually goes to prison for white-collar crimes, even if they are eventually found guilty.
The bill also precludes plea bargaining unless perpetrators pay back the money gained from their corrupt activity.
It passed by 280 votes to 53 in the 630-seat Chamber of Deputies, with the backing of Prime Minister Matteo Renzi's centre-left Democratic Party and its small centrist allies.
Most opposition lawmakers did not take part in the vote. The anti-establishment 5-Star Movement said the bill did not go far enough, and Silvio Berlusconi's centre-right Forza Italia party said it would hinder business.
Justice Minister Andrea Orlando told reporters the law "makes Italy stronger" and was "hugely important."
Renzi, in his customary tweet to celebrate the passage of government legislation, said: "We will change this country, whatever it costs."
Sepp Blatter announced today he is stepping down as President of FIFA.
Transparency International Managing Director Cobus de Swardt said:
“FIFA has overseen a sordid empire of corruption. Now is the time for reform, there should be no turning back, no obstacles, nothing that should any longer hang over this beautiful game.”
Seven steps FIFA must take now
1.Independent Reform Committee
FIFA needs a truly independent reform committee composed of people appointed independently and not paid for by FIFA, with the power to investigate, publish reports, and make public their recommendations to the executive committee. Reform cannot come from within FIFA, nor from those who are no longer credible.
2.A new attitude and greater transparency
FIFA, and its continental and national federations, must accept that there is no public trust in FIFA. It should disclose the pay of officials, their expenses and more detail on how FIFA spends its money in line with internationally accepted standards. The national federations should also publish how much money they get from FIFA and how it is spent.
3.IOC Agenda 2020 and urgent actions
FIFA can learn from the IOC and adapt the recommendations of its Agenda 2020 to football. It should adopt urgent actions that signal independent oversight and put in monitoring systems to ensure they are followed. These include:
independent due diligence for every individual appointed/elected to a senior FIFA function, including delegates to the congress independent non-executive directors on the Executive Committee; term limits for Executive Committee members transparent compliance procedures for any FIFA member requiring financial support from FIFA
4.Urgent measures on Qatar and Russia
If corruption is found in these bids then the bids must be re-run. FIFA must address the fundamental human rights and anti-corruption measures for the 2018 and 2022 World Cups in Russia and Qatar. No one should lose their life for sport. Civil society organisations in both countries and on the international level should be systematically involved in its implementation and monitoring, particular as regards working conditions.
5.Politics
Politicians can help FIFA reform by agreeing on the international political stage to adhere to a sport “Code of Conduct” to put an end to the cosy relationship that currently exists. This would apply to relationships with FIFA and all sports organisations.
This should include provisions on conflicts of interest and revolving doors (for example, sports ministers taking over national federations); compliance/transparency/accountability requirements attached to public funding; keeping professional distance from sport officials and sport stars; and rules that govern VIP invitations.
6.Sponsors
Sponsors should take collective action to pressure FIFA, its confederations and national federations to meet the highest standards of compliance and ethics. This includes having greater transparency on contracts and VIP invitations, for example.
An international initiative by the sport, human rights, labor standards and anti-corruption organisations should initiate future steps at the international and national level to establish globally accepted standards that sponsors adhere to. If sponsors don’t act, fans may force their hands.
7.Media
The corruption scandals at FIFA indicate that there needs to be tougher and more transparent compliance standards in TV-rights companies. This includes the companies that buy rights and sell them on in different geographical markets.
Following the announcement by Swiss and US investigators of criminal proceedings against FIFA for alleged money laundering in connection with the 2018 and 2022 World Cups and allegations of “systematic” corruption in the United States and Latin America, Transparency International has said Sepp Blatter must now stand down and upcoming presidential elections suspended.
In a statement, Cobus de Swardt, Managing Director of Transparency International said:
“The warning signs for FIFA have been there for a long time. FIFA has refused to abide by many basic standards of good governance that would reduce the risk of corruption.
“These scandals have taken place under Sepp Blatter’s watch of FIFA, which spans almost two decades. For the sake of the fans, and good governance of football, it is time for him to step down. The elections for president are not credible if they are tainted with these allegations by the highest prosecuting authorities.
“Blatter must stand down and new elections called to mark a new era of FIFA leadership. At the same time there must be full disclosure of all potential conflicts of interest and the pay of the executive committee members. Their hands need to be clean and seen to be clean.”
In 2011, Transparency International published “Safe Hands” on the measures that FIFA should take including dealing with historic issues. These measures included enhanced anti-bribery measures on areas of high risk such as:
Awarding World Cup Hosting Rights Financial support for member federations Payments to officials TV and sponsorship contracts Ticket sales and distribution Intermediaries acting on FIFA’s behalf
In the past month leading up to the FIFA Presidential Elections, Transparency International conducted a poll with Football Addicts on its Forza Football app to find out what fans thought about FIFA. 35,000 in 30 countries responded: Four out of five said Sepp Blatter should not stand in the presidential elections and 69 per cent said they did not have confidence in FIFA.
According to new data released today by Transparency International (TI), four out of five EU citizens are in favour of companies being required to reveal who the real owners are and only one in four believe their government is effective in preventing dirty money being spent in their country.
This data is released on the day the EU agrees new rules aimed at preventing money laundering in the European Union.
Carl Dolan, TI-EU Director said: “Shell companies can be used hide the proceeds of corruption, criminal activity and to evade tax. They have also been used to cover the trail of those behind the horsemeat scandal. There is a clear public interest in stopping the flows of illegal money that is put at $70 billion in the EU alone. The EU, and European Parliament in particular, should be congratulated on passing new legislation that is a welcome first step in unmasking the corrupt in Europe.
“A number of EU governments say they will establish a publicly accessible register for company ownership. That is what the public want. Making this information fully public would provide instant access for those investigating corrupt money trails in and outside the EU.”
Full access to the information will be granted to law enforcement and relevant government bodies. Members of the public, such as investigative journalists and NGOs, can be granted access to company ownership data if they can prove a legitimate interest. Transparency International calls on all Member States to make such information freely available to all citizens.
The identities of many individuals involved in grand corruption have been concealed through the use of anonymous shell companies, trusts and other entities. According to an analysis by the World Bank and UN of over 200 grand corruption cases, 70 per cent involved corrupt politicians using anonymous companies and trusts to obscure their identity. Money is being stolen from the public on a huge scale, and hidden, depriving people of health, education and other vital services.
The new framework potentially leaves open significant money laundering loopholes, especially with regard to trusts. Information on trusts will not be made publicly available and the types of trusts covered will be limited in scope. This too needs to change.
EU governments will have two years to implement the new standards at national level. The UK, France, Denmark, Czech Republic and the Netherlands have said they will establish a public register for companies.
The EU rules also go beyond what was agreed by the G20 as part of the beneficial ownership principles, which require relevant government authorities to have “timely” access to the data. Transparency International is working with its national chapters to monitor the implementation of the principles in G20 countries this year.
Editors Notes:
According to research by Global Financial Integrity, nearly $70 billion flowed illegally into or out of emerging EU economies in 2011. At the same time global detection rates for illicit funds by law enforcement are estimated to be as low as 1% for criminal proceeds and the seizure rate at 0.2% (UNODC). Today’s plenary vote by the European Parliament confirms the agreement reached in December on the 4th EU Anti-Money Laundering Directive, which requires the creation of centralised registers of beneficial owners - the real persons who have ultimate control - of a company or trust.
Results from the Transparency International survey
To what extent do you agree or disagree with the following statement “The Government should require companies to publish the real names of all their shareholders and owners”
In response to a survey from a coalition of leading NGOs, sports organisations and trade unions, only one of the four candidates for the FIFA presidency has set out a plan to address human rights, labour rights and corruption issues if successful in their bid for the top job at world football’s governing body.
The Sport and Rights Alliance (SRA) sent a questionnaire to the candidates - Sepp Blatter, Luis Figo, Prince Ali bin Al Hussein and Michael van Praag - last month. It asked specific questions about abuses linked to the 2018 World Cup in Russia and the 2022 World Cup in Qatar, and about the FIFA reform process. The FIFA presidential election takes place on 29 May in Zurich.
All four candidates responded to the survey, the first time they have been asked to answer for human rights and transparency crises around World Cups and in FIFA’s wider work. Only Michael van Praag made a detailed, personal pledge to address the issues raised by the SRA.
Luis Figo issued a brief statement expressing the need for a zero tolerance approach to human rights abuses, corruption and labour issues, but gave few details of how he would address these problems.
Despite numerous allegations of corruption and controversies over human rights concerns during his 17 years at the helm, current FIFA President Sepp Blatter made no personal commitment to addressing the issues. Instead, his office issued a statement outlining the work FIFA has done to tackle corruption, and pointed to a revision of the bidding process relating to human rights, labour standards, sustainability and anti-corruption measures.
The office of current FIFA Vice President Prince Ali bin Al Hussein replied saying he was too busy to respond, and referred the Alliance to his manifesto and previous statements.
Meanwhile in a separate development, FIFA says it is working on new bidding criteria for the FIFA World Cup 2026, although no details are publicly available yet.
Eduard Nazarski, director of Amnesty International Netherlands which is a member of the SRA, said:
“Despite the varying degrees of engagement with the need to address human rights, labour issues and corruption we’ve seen from the candidates, the fact they have all responded shows they acknowledge that it is no longer possible for FIFA to ignore the human rights impact of the World Cup and lack of transparency at the heart of world association football.
“We’ve seen time and again the human cost of major sports events, whether it’s abuses of migrant workers’ rights, forced evictions or police violence against peaceful protestors.
“The key test now is whether - whoever wins the election - they will deliver on these crucial issues. It´s easy to talk the talk and make broad commitments, but any claims that they will respect human rights and transparency will be meaningless if they don’t also walk the walk.
“If the candidates are serious about this agenda there is finally a chance that FIFA could change for the better. The next president must ensure that respect for human rights and a commitment to transparency are at the core of their mission.”
Responses
Sepp Blatter
The statement from Sepp Blatter’s office said that as part of the reform process that began in 2011, the decision on the awarding of the FIFA World Cup will be taken by the congress now, while age and term limits have been discussed but not approved by the congress.
Luis Figo
Luis Figo said his manifesto contains several proposals to “reform FIFA, including term limits, independent directors, integrity checks and transparency not only with regard to the remuneration of officials but also on several other aspects of FIFA governance”.
He said:
“Corruption, labour issues and other human rights are matters with which we should have zero tolerance to infringements. Human rights are not negotiable and they should be respected not only in sports but in all organisations and sectors of our society.
I'll ask for detailed reports on the current FIFA events and will act accordingly.We’ll prepare bidding processes also having in consideration civil society stakeholders.”
Prince Ali bin Al Hussein
Prince Ali bin Al Hussein’s office directed the SRA to answers he gave to the Associated Press recently on labour rights in Qatar, as part of their recent questionnaire to candidates.
He told the AP that football's governing body should introduce new safety standards to prevent "tragic incidents occurring during stadium construction and ensuring labour rights and fair working conditions." He also committed to propose "clear guidelines that all host nations of FIFA events must adopt - ensuring the safety and security of every worker employed to deliver FIFA's football projects." He told the AP that there was evidence that progress was being made in Qatar on workers’ rights.
Michael van Praag
Michael van Praag said if elected he would only serve one term, he would publish his remuneration and all of FIFA’s spending, publish and explain decisions after every Executive Committee meeting and make public the Garcia report into corruption in world association football, which FIFA refused to publish last year.
On human rights, he said future World Cup bid regulations should include a specific human rights section.
He said:
“In general there should be more attention to human rights in FIFA’s statutes. I stand for a world football association that applies the highest ethical and moral standards. This means that FIFA itself must set a good example and ensure that these standards play a key role in awarding large tournaments. It should be clear that violation of human rights - whether it concerns labour rights or any other type of violation - will not be tolerated. All World Cup related contracts should include a clause that allows for FIFA to pull out of an agreement with a country (or other organisation) that doesn’t apply the same high standards, thus sending a strong message that such things can’t be tolerated.”
On labour rights in Qatar, he said:
“As for the Qatar situation, it is my understanding that certain measures have been taken to ensure uniformly fair working conditions. As a candidate I cannot fully assess the workings of these measures. Being FIFA president would open doors to follow and judge what happens in every country hosting a large tournament very closely and act accordingly. The fact of the matter is, that the choice for Qatar has been a democratic decision, and is therefore definite. We'll have to prepare ourselves to play in this World Cup. The best we can do, is to make sure this World Cup is organised well and, together with the Local Organisation Committee, do what we can to make sure the conditions are as good as possible.”
Background
The SRA questionnaire was sent to the four candidates on 16 April 2015.
They were asked specifically whether in the first 100 days of their presidency they would address corruption, labour issues and other human rights concerns around the Russia 2018 and Qatar 2022 World Cups.
They were also asked if they would use their influence as president to exert pressure on the Qatari authorities to bring the country’s labour laws into line with international standards and reform the kafala sponsorship system, which effectively ties migrant workers to their company and prevents them from leaving the country without express permission from their employer.
The questionnaire pressed them on whether they would continue with the much-needed FIFA reform process, including the implementation of term limits, independent directors, integrity checks and transparency regarding remuneration of officials and decisions of the Ethics Commission.
FIFA has come under fire in the last few years over human rights abuses linked to the World Cup.
The run up to Brazil 2014 was marred by police violence against anti-World Cup protestors and forced evictions to make way for infrastructure for the event.
Russia’s appalling record on lesbian, gay, bisexual and transgender (LGBT) rights, environmental protection and freedom of expression, exposed during the Sochi Winter Olympics last year, remains a serious concern ahead of the 2018 World Cup.
Meanwhile, stadiums and infrastructure for the staging of the Qatar 2022 World Cup are being built in a context where serious abuses of migrant workers’ rights are routine and widespread, including deaths at work, non-payment of wages, harsh and dangerous working conditions and shocking standards of accommodation.
Furthermore, the awarding of the World Cups 2018 and 2022 and other decisions have raised serious corruption allegations and further damaged FIFA’s reputation.
The SRA is calling on whoever becomes the next FIFA president to urgently introduce measures to ensure the World Cup is always organised in a way that respects human rights, the environment and anti-corruption requirements at all stages of the process - from bidding, through to the development and delivery phase to final reporting.
The SRA includes Amnesty International, Football Supporters Europe, Human Rights Watch, International Trade Union Confederation, Terre des Hommes, Transparency International Germany
In another move that places Europe at the forefront of the financial transparency wave, the Legal Affairs (JURI) Committee of the European Parliament voted in favor of a Shareholders Rights Directive that includes a requirement for multinational corporations (MNCs) to publicly report financial information on a country by country level.
“Up until now, we’ve had to rely on leaks, whistleblowers, and secret documents to learn if a multinational is engaging in aggressive tax planning and profit shifting,” said Koen Roovers, Lead EU Advocate for the Financial Transparency Coalition. “But today’s vote brings the transparency Europe needs closer to reality.”
In the wake of the LuxLeaks scandal, which exposed hundreds of MNCs that had entered into secret tax deals with the government of Luxembourg, there has been a renewed public focus on corporate transparency and tax dodging.
Public country by country reporting (CBCR) would require MNCs to disclose things like the amount of profit made, taxes paid, revenue generated and number of employees for each country where a subsidiary operates. Right now, MNCs report on their operations in one consolidated global report, without any way of discerning country specific operations.
“This kind of detailed corporate reporting can help to flag up possible corruption by shedding a light on special arrangements between companies and governments.” said Nienke Palstra, Senior Policy Officer with Transparency International EU. “It will also improve the accountability of companies to the citizens of the countries where they make their profits.”
The vote comes as the European Commission begins an assessment of the benefits of CBCR as part of the EC’s tax transparency package. The package also called for the exchange of tax rulings between European countries, something that’s currently kept secret. Some sectors of the economy already have to report this information.
“Large European banks are already making this information available to the public and this is not having any negative impact on their competitiveness”, says Catherine Olier, Oxfam’s EU policy advisor. “If banks are opening their own books, why shouldn’t other big companies do the same at a time when European citizens are fed up with unfair corporate tax dodging?”
“Companies that are operating in one jurisdiction already report this type of information, so it’s not only a question of transparency,” said Tove Ryding, Eurodad’s tax justice advocacy manager. “It’s about creating a level playing field between small and medium enterprises and their transnational competitors,” added Ryding.
Tax authorities aren’t the only ones that want this information, either. Investors need the very same knowledge; knowing if a corporation is operating in unstable areas, using tax havens, or engaging in the type of aggressive tax planning that can ruin a reputation are vital to making sound business investments.
Notes to the Editor:
The vote comes as the European Commission begins an assessment of the benefits of CBCR and in the wake of the EC’s tax transparency package, which called for the exchange of tax rulings between European countries, something that’s currently kept secret. Some sectors of the economy already have to report this information. The ALDE group invoked a rule of procedure at the end of the vote, requesting to send the report to plenary. The European Parliament’s leadership, the Conference of Presidents, will decide whether or not to put it on the agenda. The European Parliament has repeatedly called for greater transparency around the activities of multinational corporations, for instance in the 2014 Tax Report (rapporteur Kaili) that was adopted in March this year and the report on the Fight against Tax Fraud, Tax Evasion and Tax Havens (rapporteur Kleva-Kekuš) of May 2013.
By Gareth Sweeney on 9 April 2015 in Accountability, Sport
There are few people on earth that are unaware of the magnitude of sport as a global industry, with revenues larger than China’s military budget or the nominal GDP of more than two-thirds of the world’s countries. Almost all of us play a part in it as participants, spectators or tax-payers. And yet, despite its rude financial health, sport’s relevance as a symbol of fair play today hangs in the balance.
Image: Copyright, Istock / nanoqfuIn short, the management culture of sport has failed to keep pace with its growth, moving from the back to the front pages for all the wrong reasons: cash-for-votes, botched investigations into bribery allegations for major events, omertà in the face of systemic doping, spiralling costs for white elephant stadia, and the infiltration of organised crime into low-risk, high-reward match-fixing. This blog post is part of a series drawing on articles from the Global Corruption Report: Sport.
The scale of these scandals, and the often dismissive responses of sports organisations, has shaken people’s trust. When the chief of world football is met by a crescendo of jeers from supporters from the Olympics to the World Cup to the Asian Cup, and he believes it is because he is a ‘star’, it is clear that there is a serious problem.
Transparency International (TI) is committed to fair play and protecting sport’s positive role, and has recently engaged on governance reform processes in FIFA and the International Cricket Council (ICC), and on match-fixing prevention programmes with European professional sports leagues. However, to date there has been little comprehensive, centralised research on the root causes of corruption across sport, from governance to major events to match-fixing and beyond, and what is to be done. Nor have the voices of key participants, from athletes to supporters to governments to sponsors, been presented side-by-side.
We are therefore very happy today to launch the Transparency International Corruption in Sport Initiative. The Initiative provides a space for new analysis, commentary and recommendations by leading voices in the field of sports governance to strengthen transparency, accountability and participation, and showcase the work of TI national chapters and the wider anti-corruption movement in tackling corruption in sport.
We begin today with a number of key framing articles that set the scene for understanding corruption in sport. These include Jean-Loup Chappelet’s (Swiss Graduate School of Public Administration) contribution on the autonomy of sport and government oversight as “necessary bedfellows in the fight against corruption”, Roger Pielke’s (University of Colorado) introduction to understanding sports governance and Martin Müller’s (University of Zurich) introduction to the role of major events (usually built on mega-promises with mini-outcomes). Kevin Carpenter (Hill Dickinson LLP) asks why countries have taken so long to act on match-fixing, while Sylvia Schenk (TI Germany) then sets out how the anti-corruption movement can effectively lend its expertise to the traditionally inward-looking ‘sports family’ by mapping the experience of TI Germany as a leading TI chapter on sports corruption.
The Initiative is also supported by a high-level Expert Advisory Panel, and contributors from a range of organisations and institutions. In an interview, Advisory Panel member and International Director of Play the Game Jens Sejer Andersen discusses how corruption in sport and sports governance became a hot topic.
We hope that you enjoy this first iteration of the Corruption in Sport Initiative. We will be regularly rolling out new content linked to sporting events, and we would encourage you to join our mailing list for updates and new additions. As this is a work in progress, comments and suggestions for improvements are also warmly welcomed!
The final content of the Initiative will be compiled and updated as part of TI’s next Global Corruption Report: Sport.
Jens Sejer Andersen is on the Global Corruption Report Expert Advisory Panel. He is the international director of Play the Game, an international communications organisation that has held international conferences on sport, transparency and ethics since 1997, long before the topic became vogue. Play the Game has been at the vanguard explaining the links between poor governance and some of sport’s biggest challenges: corruption, match-fixing and illegal doping.
Here Andersen explains to Transparency International what made governance in sports organisation a hot topic, why the IOC might face a threat to its preeminent position in sports and why Transparency International, Play the Game and others should join forces to help protect brave whistleblowers who shine the light on corruption in sport.
TI: What was it like discussing corruption in sport when you started Play the Game?
JSA: There was an omerta in sport, not only of the cycling peloton; there was a tacit understanding among sport, sports media, the athletes, the sponsors that you didn’t want to rock the boat, so no one was interested in raising the debates we pursued. In 2005, for example, our conference focused on match-fixing. This was never raised at an international conference before. We talked about the illegal doping trade, also never mentioned. We covered corruption in world volleyball and at FIFA; we talked about sexual or violent abuse of athletes.
Now, ten years later, you find these issues in the draft charter for physical education and sport made by UNESCO which UNESCO’s general conference is going to adopt in November. This is a big step forward. This blog post is part of a series drawing on articles from the Global Corruption Report: Sport.
TI: What was the turning point?
JSA: Things had been building little by little towards a landslide and in my view the landslide was unleashed on 17 October 2010. The Sunday Times of London started publishing videos and articles about how FIFA Executive Committee members were ready to sell their votes for money the 2018 and 2022 World Cups. Very often in the past a great piece of journalism like this would have a short-term impact and then things would go on as usual. But things turned out differently this time. A few weeks later on 10 December FIFA actually chose the most opaque countries among all the bidders, Russia and Qatar. By doing so FIFA alienated three very big bidding countries with huge international clout and a critical press: the US, Australia and the UK. This ensured that the landslide was moving. The story did not die, on the contrary, it renewed public awareness of older stories about FIFA’s corrupt past done by investigative journalists like Andrew Jennings, Jens Weinreich and Thomas Kistner
TI: Now governance in sport is a hot topic. Where do we go from here and who has the power to bring about change?
JSA: Now the agenda has changed, now it is no trick to say we have a problem. Now it is about solutions, alliances and partnerships. Generally speaking there is a great awareness that cooperation is necessary. But if anyone can do something decisive about it, it is the International Olympic Committee (IOC) because the IOC has the key to the Olympic Games where most sports get a percentage of their financing.
After the Salt Lake City scandal the IOC reformed itself in order to survive, and when the Belgian Jacques Rogge became IOC president in 2001 there were expectations that the reforms would be extended to cover international sports federations. However, the IOC has again and again waived off calls for action by saying that the federations are autonomous and outside the reach of the IOC.
However, the IOC showed on two occasions that they could act if they wished: in boxing 10 years ago, the IOC simply said to the Amateur International Boxing Association that we are going to put your money in an escrow bank account until you reform and they were threatening to exclude them from the Olympic Games. And that worked. And when wrestling was threatened with being taken off the Olympic programme, the sport made governance reforms and changed its president in a very few weeks in 2013. But unfortunately there are numerous examples where the IOC has not reacted sufficiently: volleyball, weightlifting, football, handball….
TI: What do you think of the new reform Agenda 2020 announced by the International Olympic Committee and adopted in 2014 on big events and governance?
We now have another kind of political temper at the IOC represented in the new president Thomas Bach. He has added much more dynamics to the IOC and sports politics. But the jury is still out about whether he is willing and able to carry through reforms.
Agenda 2020 sends a pretty strong message, especially with regard to the big events. The IOC will be benchmarked by it. The most important aspect, to my mind, is that Agenda 2020 has concrete messages that the public is actually able to hold the IOC accountable.
I am less impressed by the approach to improving governance in the international sports organisations. Agenda 2020 is simply asking the international federations to send in self-evaluation letters once a year. It is too soft when you compare it to the situation in some organisations. But Bach’s supporters will say this is just a start and that it is too risky to lead a harder line.
It is true that there is a latent threat that some federations could break with the IOC. But only FIFA and football is financially strong enough to live happily outside the Olympic family. So the continued reference to the autonomy of the federations may end up as another bad excuse.
(The history of autonomy of sport and its relevance today is the subject of an article in the forthcoming Global Corruption Report: Sport by leading expert Prof. Jean-Loup Chappelet.)
This lack of action is causing widespread concern outside sport. I see now that the Council of Europe, the European Union, UNESCO are all increasingly aware and concerned that sport seems unable to reform itself.
So if Bach has the genuine intention of tightening his grip on governance in the federations, he can find leverage in the governmental concerns and he can live up to his own catchphrase: change or be changed.
TI: Supporters are generally more interested in what happens on the field of play. Do you think that supporters can play a role in pressing for reforms?
This is difficult to see because fans are organised in different ways. You have some very democratic organisations such as Football Supporters Europe and Supporters Direct. But you have other fan groups that are close to fascist, violent and with a criminal element too. To the extent that fan groups have a democratic basis, they can influence the debate very much. Not directly, but via public bodies: governments, municipalities, transnational governmental organisations. This is a movement that may play an even more important role for improving the governance of sport, and the best among them should be co-opted as stakeholders in to the governing bodies of their sport
TI: What is the role of civil society?
JSA: I can’t speak for all of civil society because it is too diverse. But the various groups in civil society at least have room to react now that sport and corruption has reached the public agenda. As for Play the Game, we must play a more solution-oriented role, but we will continue to highlight the many individual case stories and show that corruption is not a victim-less crime. We can help whistleblowers get worldwide attention and recognition and we also have a role in trying to increase our own understanding of what mechanisms make sport dysfunctional and how we can remedy the situation. This can only happen through broad alliances and debates with like-minded people.
TI: What affect can the new draft revised UNESCO International Charter on Physical Education and Sport and other political conventions have?
There is a growing understanding among governments that sport is an important area where politicians should invest commitment and resources. You could sense that energy when sports ministers from around 125 met for the big UNESCO conference in in Berlin in 2013. This can go away but right now there is a momentum and a real chance that this charter will not be as forgotten as the charter from 1978 that nobody has heard of (not even me!). And you have the Council of Europe convention. That is not to say that the governments are acting convincingly yet, but there is a window open for action now like never before.
TI: Is there anything else you would like to highlight in the fight against corruption in sport?
I believe it is extremely important that we support the whistleblowers and the investigative journalists who work to expose the corruption in sport.
In many cases they do not know what they are getting into, and how their lives can be changed. Too many end up in desperate situations after they expose wrong-doing. They are victims of costly lawsuits, they cannot work. They face harassment.
This is where organisations like Transparency International and Play the Game should really go together and convince people in the sports movement, including sponsors, to start a fund or give other support system for whistleblowers. Officially, all sports organisations are against corruption. In reality, they typically sack, marginalise, slander and pursue those few courageous people who dare confront the powerful system with its own flaws.
Sports organisations run a de facto monopoly business on the privileged basis of association freedom, and this endows them with huge political and economic powers. This power should be generous enough to embrace and protect individuals who help them live up to their declared ideals of transparency of fair play. As of today, too many are all but generous.
Hindsight is always 20/20. Being able to reflect on what happened in the past and how it effects today is vital for anything in the world. Ethics that were violated 10 -12 years ago still impact today.
The discussions at a policy dialogue organised by the All Progressives Congress (APC) on the implementation of the political party’s agenda for change focused on how best to tackle corruption in Nigeria.
Experts at the second day of the event suggested the strengthening of the country’s criminal justice system, appointment of people of integrity to head the anti-graft agencies and whistle blowing as some of the measures to fight corruption.
Nigerians from all walks of life were present at the dialogue venue to set an agenda for the incoming administration on corruption.
The gathering discussed the cost of corruption to Nigeria, which they said had led to under-development, poor social infrastructure and weak systems, but also believed that change would come when Nigerians report those involved in questionable financial dealings to anti-graft agencies for prosecution.
The Co-founder of the Convention on Business Integrity, Soji Apampa, and the former Director, Financial Intelligence Unit, Juliet Ibeakaku, suggested on how to strengthen the existing criminal justice system.
This, according to them, should be backed by independence of the anti-graft agencies.
From their discussion, it appeared the first step the incoming administration of the APC would have to take is to tackle corruption, as over $12.8 billion dollars is the amount of annually capital flight from Nigeria to other parts of the world.
The consensus at the dialogue was that focus should be on prevention, detection and prosecution of corrupt persons, which they agreed were key to ending corruption.
Nigeria's Corruption needs a State of Emergency - Edwin Clark on Straight Talk with Kadaria 1a Nigeria's Corruption needs a State of Emergency - Edwin Clark ...
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