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Diplomacy in Action

Seventh Report To Congress Pursuant To The International Anticorruption And Good Governance Act (Public Law 106-309)


December 6, 2012

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Bureau of International Narcotics and Law Enforcement Affairs
December 2012

I. THE IAGGA

The International Anticorruption and Good Governance Act of 2000 requires the Secretary of State, in consultation with the Secretary of Commerce and the Administrator of the U.S. Agency for International Development (USAID), to submit a report to Congress regarding U.S. anticorruption efforts and counterpart efforts, in priority countries. In Fiscal Year 2010, the U.S. provided more than $1.5 billion in assistance related to good governance and anti-corruption. This report covers activities in 2010-2011.

I. U.S. INTERNATIONAL ANTICORRUPTION INITIATIVES

The U.S. promotes the adoption of shared legal and political commitments against corruption. To promote implementation and enforcement, the U.S. funds capacity building and law reform programs and supports regional initiatives that foster good practices. Diplomatic efforts also seek high-level attention and promote political will for advancing the anticorruption agenda. Key emphases include:

The U.N. Convention against Corruption (UNCAC): The UNCAC entered into force in 2005 and has globalized the fight against corruption. All countries covered in this report have ratified the UNCAC. In 2010, the Parties began conducting peer reviews for monitoring and implementation. The first round examines commitments related to criminalization and international cooperation. Experts meet separately on a regular basis to share practices related to implementing asset recovery and prevention commitments from the convention.

OECD Anti-Bribery Convention (ABC): The Parties to the ABC have committed to enact and enforce laws to criminalize bribery of foreign officials, establish the liability of legal persons (corporations) for such offenses, and provide mutual legal assistance for investigations. The 1977 Foreign Corrupt Practices Act (FCPA) implements U.S. commitments under the ABC and the U.S. has the largest number of enforcement actions. In 2011 Colombia and Russia joined the OECD Working Group on Bribery in International Business Transactions and Russia began the process of ratifying the ABC.

Regional and Special Initiatives and High-Level Commitments: U.S. support led the G20 to adopt a broad Anti-Corruption Action Plan in Seoul in 2010 and helped promote follow-up, such as the monitoring report adopted in 2011 at the Cannes Summit. A U.S.-supported anticorruption initiative in the Middle East/North Africa region has undertaken new work in response to post-Arab Spring demand; the U.S. also supported networks in Europe and Eurasia. In the 2011 U.S. host year, the Asia-Pacific Economic Cooperation forum elevated anticorruption and held a High-Level Dialogue on Open Governance and Economic Growth led by Secretary Clinton. U.S. leadership contributed to strengthening the review mechanism of the Inter-American Convention against Corruption. The U.S. supports and participates in the Extractive Industries Transparency Initiative and in 2011 launched the Open Government Partnership Initiative to promote transparency, accountability, and citizen participation.

Other U.S. reports: The following U.S. reports contain additional anticorruption information, including efforts taken by host governments: the Annual Country Reports on Human Rights Practices and the International Narcotics Control Strategy Reports. Information about U.S. foreign assistance levels can be found at the Foreign Assistance Dashboard. Information about trade volume can be found in various Department of Commerce reports.

No Safe Haven: The U.S. uses the authorities of Presidential Proclamation 7750 and Section 7031(c) of P.L. 112-74 to deny entry into the U.S. of qualifying corrupt officials and bribe payers, including those involved in corruption related to the extraction of natural resources, as well as benefitting family members. The U.S. Department of Justice (DOJ) launched the Kleptocracy Asset Recovery Initiative and the U.S. supported development of a global network of asset recovery practitioners.

II. SELECT U.S. GOVERNMENT ASSISTANCE PROGRAMS

Afghanistan – Despite the progress made on anticorruption laws, the Afghan Government took little action against corrupt high level officials. The U.S. supported the Ministry of Interior’s Major Crimes Task Force, the establishment of an Anti-Corruption Unit within the Attorney General’s Office, and the creation of an Anti-Corruption Tribunal by the Supreme Court. Many U.S. governance and/or rule of law programs include anticorruption components (e.g., a service delivery program that included anticorruption training to municipal employees as one of the deliverables).

Colombia – Authorities have investigated, and when appropriate, prosecuted corrupt officials: four former Cabinet Ministers, three former Directors of the now dismantled Administrative Department of Security, and many lower ranking officials have been dismissed, taken to court, or jailed. Fifteen Departmental governors were investigated; eight convicted, with the remaining seven either acquitted or still being tried. Drug trafficking revenues exacerbate corruption. Efforts under the Justice and Peace Law exposed corruption and paramilitary ties within the government and security forces. The government removed eight officers and 19 noncommissioned officers in the armed forces in 2011. The primary body to design and enforce anticorruption policies is the Presidential Program for Modernization, Efficiency, Transparency, and Combating Corruption. Public officials must file annual financial disclosure forms with the tax authority. While there were no prohibitive fees to access government information, there were reports that some low-level officials insisted on bribes to expedite access. The U.S. assisted the Comptroller and Anti-Corruption Secretary and provided anti-money laundering and asset seizure and forfeiture assistance.

Egypt – The main institutions include: the Audit Agency, Administrative Control Authority, the Administrative Prosecution Authority and the new National Coordination Committee to Combat Corruption. The perception of corruption was a driver of the revolution that ousted long-term president Hosni Mubarak from power. In the transition period, the U.S. supported NGOs to raise public awareness of the negative impact of corruption on government, the private sector, and society at large, and to mitigate corrupt practices in the business and government sector. The U.S. facilitated the opening of new citizen service centers to improve public services by making local administration more accountable, contributing to improved local revenue collection and fighting petty corruption.

Ethiopia – The Federal Ethics and Anti-Corruption Commission (FEACC) and its regional commissions arrested dozens of officials on corruption charges in 2010 and 2011. Several businessmen were charged for alleged tax evasion. Convictions in 2011 included five managers of the state-owned telecommunications corporation for violating government bid regulations. Eight individuals in the Department of Trade, Industry, and Transport regional offices, along with 26 additional accomplices, were convicted of misusing their offices. The President, Prime Minister, and all the cabinet-level ministers registered their assets by the end of 2010 as required by law. By September 2011, the FEACC reported that a total of 9,102 elected officials, political appointees, and public servants had registered their assets.

Indonesia – The Attorney General’s Office prosecuted 556 corruption cases in 2010, 346 cases in 2011, and recovered significant corrupt proceeds in 2011. The U.S. assisted the Anticorruption Task Force and the Anticorruption Commission (KPK) both of which actively prosecuted cases. The U.S. extensively supported the KPK on public outreach, strategic planning and capacity building as well as study tours on witness protection and internal investigation techniques. U.S. assistance was provide to the Supreme Court, the Financial Intelligence Unit, investigators and prosecutors, for training on asset forfeiture, financial investigations and anticorruption measures. The U.S. supported NGOs to evaluate and monitor corruption and investigate electoral financing. The government disbanded the Judicial Mafia Eradication Task Force at the end of 2011.

Iraq – Iraq participates in both EITI and the Stolen Asset Recovery Initiative. The U.S. provided assistance to the principal anticorruption institutions: the Commission of Integrity (COI), Board of Supreme Audit, and Corps of Inspectors General. The U.S. deployed technical advisors at the COI and other agencies that focus on many aspects of financial investigations, anti-money laundering, tracing assets, asset forfeiture, international cooperation, the use of multi-agency taskforces and train-the-trainer programs. The U.S. assistance helped to educate the civic leaders on the legal framework to combat corruption and on codes of conduct and compliance laws. U.S. engagement played a role in the development and amendment of key anticorruption legislation.

Kenya – Pursuant to the new constitution, Parliament disbanded the Kenya Anti-Corruption Commission (KACC) and created the Ethics and Anti-Corruption Commission (EACC) in August 2011. Many KACC staff members were retained in the EACC. The U.S. had engaged extensively with the KACC with long-term mentors on investigative and prosecutorial issues. The U.S. also taught a KACC-sponsored seminar on procurement fraud in 2011, and provided training for prosecutors and judges on improving the quality of criminal practice for corruption and organized crime cases. The U.S. funded a multi-year project to strengthen parliamentary committees focused on investigations and accounts; trained business and NGOs on public procurement; and coordinated a public transport anticorruption campaign with labor organizations. Embassy Nairobi carried out an anti-counterfeit public awareness campaign in multiple cities.

Mexico – Mexico has aggressively advanced its anticorruption efforts in 2010 and 2011, and overhauled its law enforcement and judicial systems to combat corruption and promote good governance. New laws preclude judges from reinstating officers dismissed for corruption allegations, and require applicants for law enforcement and other positions to pass a vetting process. The government, with U.S. support, maintained a database on officials terminated for corruption. Mexico has dismissed more than 30,000 employees at all levels for corruption, criminal activity, administrative issues, or other misconduct. Under the Merida Initiative, the United States provided significant assistance for law enforcement internal affairs offices and certified vetting centers for current and prospective employees.

Nigeria – The Central Bank improved controls in the banking sector. In 2011, the President appointed a Finance Minister widely seen as champion of government accountability reforms. The President also replaced staff at the Economic and Financial Crimes Commission with advocates for reform. In 2011, the EITI Board found the country compliant with EITI standards. The United States provided training to financial investigators and prosecutors who handle corruption and money laundering cases. U.S. funding helped train thousands of election monitors during the 2011 elections. In 2011, the United Kingdom extradited former governor of Delta State for large-scale theft and fraud.

Pakistan – The National Accountability Bureau (NAB) is the main anti-corruption organization. The NAB investigated and prosecuted cases; recovered funds; and implemented policies and procedures for awareness, prevention, and monitoring of corruption. The U.S. has supported the IMF’s Fiscal Transparency program, provided technical assistance and training, and supported the re-drafting and passage of an anti-money laundering law that adheres to international standards. The U.S. supports reforms at the federal, provincial and local levels.

South Africa – While the country has challenges with official corruption, the problem does not appear pervasive or endemic. The legislative framework is sound and judicial institutions combat corruption. The Office of the Public Protector and the Independent Complaints Directorate investigated and prosecuted police personnel. Cases investigated by special investigative units have ensnared high ranking officials. The U.S. assisted in training and capacity-building programs such as supervisor, mid-level and executive-level management training and Internal Affairs investigative training.

Russia - Corruption was pervasive at all levels of government. The Duma took small steps to address it by criminalizing transnational bribery, expanding penalties for domestic bribery, requiring financial disclosure by officials, expanding public access to court documents, restricting “regulatory inspections” of small and medium sized business, and limiting pre-trial detention in white collar cases. The U.S. trained prosecutors, worked with the Anti-Monopoly Service on the prosecution of criminal cartels and unfair business practices, and conducted programs on the FCPA for government officials and the private sector. The U.S. also funded training for regional judicial ethics enforcement bodies, advised those rewriting the Code of Judicial Ethics and helped NGOs conduct anticorruption advocacy.



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