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We need an international corruption court

22/11/2022

[UK TIMES ARTICLE]

Only a new cross-border body can turn the tide of dirty money that swills through our economies

Imagine a bribe.

Not a brown envelope crossing a table, but a bank transfer between two anonymously owned shell companies, one registered in the British Virgin Islands and the other in Cyprus.

The money comes ultimately from a Chinese construction contractor and is destined for an official in Bosnia who has signed off on a dodgy infrastructure deal.

The pay-off is brokered by a Vienna-based lawyer, and will end up paying for a mansion in Surrey.

Who should be prosecuted, under what laws and by whom?

National jurisdictions struggle in such cases, but an international anti-corruption court might have the reach and clout to take them on.

A campaign to set up such a body, launched by a retired American judge, Mark Wolf, in June 2021, is now backed by Canada, Colombia and the Netherlands, and scores of (mainly former) politicians, including Gordon Brown, and humbler campaigners (including me). The supporting governments are hosting a round table next week in the Hague.

The drawbacks, such as cost, delay and the risk of politicisation are obvious.

Russian oligarchs are easy targets these days; murderous but useful Saudi princelings less so. In 20 years’ work, the International Criminal Court has spent more than a billion pounds and secured only ten convictions.

The proposed anti-corruption court could start small, however. With the backing of even a handful of countries it could open cases, collect documents and interview witnesses.

Such evidence could then be quoted elsewhere without fear of the libel suits that daunt journalists, academics and campaigners. I suggest the court starts by targeting not the hard-to-reach Kleptocrats but their easy-to-find bankers, lawyers, accountants, fixers and grifters. This would help broaden political support for the project. Poorer countries would be pleased if an international tribunal showed any readiness to inconvenience members of the rich world’s social and economic elite.

The campaign to set up the court already highlights the failure to deal properly with high-level corruption. Russia’s war in Ukraine did briefly focus political attention on the dangers of dirty money but momentum is flagging.

In the US Congress, the proposed Establishing New Authorities for Businesses Laundering and Enabling Risks to Security (Enablers) Act would have required anyone dealing with foreign cash to check their customers’ identity. But it has fallen foul of lobbying by the American Bar Association and others.

In Britain, the government is tightening up rules on foreign influence. But it is still failing to deal with the lucrative tide of dirty money that swills through the upper reaches of our economy, via estate agents, the art market and complex ownership structures.

The much awaited Economic Crime Bill, for example, is being filleted as it passes through parliament. Liz Truss, for all her other faults, seemed genuinely keen to hunt down Russian and Chinese dirty money, something Boris Johnson was notoriously untroubled by.

But Rishi Sunak appears less interested.

Margaret Hodge, the Labour MP who has spearheaded parliamentary scrutiny of the issue, is sounding the alarm, saying Britain risks remaining the “jurisdiction of choice” for dirty money.

At stake are vital reforms such as making trusts declare their beneficiaries, and tightening the shambolically lax rules for registering companies and partnerships.

Nor is there much sign of a proper clean-up in the overseas territories and crown dependencies that enjoy privileged access to our financial and legal systems, while escaping our regulatory oversight. Britain is merely sloppy when it comes to corporate ownership; these places overtly base their business models on secrecy.

The financier Bill Browder has single-handedly pioneered the use of “Magnitsky” sanctions, named after his murdered Russian lawyer, against human rights abusers. However, these visa bans and asset freezes are mostly applied piecemeal, and overwhelmingly by the US.

Other big countries, especially Britain, could do more and co-ordinate their efforts in freezing assets and withholding visas from all those involved.

We could be a lot tougher with the proceeds, too.

Tens of thousands of properties in Britain worth billions are owned by anonymous shell companies. We never voted to allow shareholders to disguise their identity. It just happened, thanks to a quirk in the law.

It should end.

We could start by insisting that annual council tax and business rates payments must be accompanied by sworn evidence of the beneficial owner’s identity. Failure to do so would mean the property was confiscated and auctioned. That would produce some handy cash for the Treasury and useful information about who really owns what.

Western countries could also apply to corruption the arsenal they already apply to the threat from terrorism.

If that hypothetical bribe in Bosnia involved not a dodgy construction contract but, for example, the Iranian authorities’ financing hit squads, it would instantly attract the attention of western governments.

We could task our intelligence agencies with infiltrating and investigating corrupt networks and use our regulatory powers to impose career-blighting sanctions on their accomplices. We could offer proper protection to campaigners who face legal and physical intimidation, or worse.

The abuse of political power for private gain blights lives, strangles democracy and wrecks the planet. It defrauds poor countries of £1 trillion a year, nearly ten times total global foreign aid. Nobody is stopping us from dealing with this menace. We just have to mind enough to do something

Edward Lucas

Monday November 21 2022, 12.01am, The Times
https://www.thetimes.co.uk/article/8bb4a5d6-6909-11ed-85fc-6c020d5ba0b7?shareToken=400efdbe187c8ac5f42b909b3b658bcf

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