17 August 2022 –
While Yemen has made some progress by developing legislation and oversight bodies for the implementation of articles of Chapter II (Preventive Measures) and Chapter V (Asset Recovery) of the United Nations Convention against Corruption (UNCAC), many gaps persist, especially regarding their actual implementation. The country rattled by war and conflict still has a long way to go to develop an adequate framework to implement the articles of both chapters of the UNCAC. These are the main findings of a new civil society report authored by the AWTAD Anti-Corruption Organization. The CSO produced its report, which is intended as a contribution to the UNCAC implementation review process in its second cycle, with technical and financial support from the UNCAC Coalition.
Since 2006, Yemen has taken many steps to expand and develop its anti-corruption system by issuing a series of laws and regulations, establishing oversight bodies and encouraging society to participate in the fight against corruption. Yemen made tangible progress in anti-money laundering/combating the financing of terrorism (AML/CFT) and in 2014, FATF agreed that the review for Yemen should be every two years instead of six months.
Despite all this, Yemen is ranked among the top 10 most corrupt countries in the world by the Global Corruption Perceptions Index. Due to the war and conflict, Yemen has been placed on FATF’s grey list, has been sanctioned by the UN Security Council, and has been classified by the EU as a third-level high-risk country that suffers from strategic shortcomings in its AML/CFT system.
Anti-corruption efforts stagnated from 2014 to 2017, with not a single case being referred to the Public Fund Prosecutionin 2016, and judgments were made against the decision to form the Supreme National Authority for Combating Corruption (SNACC) Council, which negatively impacted its work. The political and administrative division in Yemen with two main ruling authorities in Sana’a and Aden has led to a significant decline in its compliance with the UNCAC and in the capacity of regulatory bodies and law enforcement authorities to address corruption.
The SNACC in Aden compiled a team to prepare Yemen’s country report for the second review cycle in July 2019. However, the country review has not been completed yet, and the executive summary has not been published on SNACC-Aden’s website, nor on UNODC’s. Issues with the governmental experts list has delayed the review process as only 10 experts were appointed instead of 15, and their qualifications and professional accreditations were not disclosed. Relevant anti-corruption bodies and government agencies have been excluded from the process such as Central Organization for Control and Accountability (COCA), The Supreme Authority for Tenders Control (HATC) and the Ministry of Justice. NGO participation has been limited to one human rights organization, which is not specialized in anti-corruption, while the private sector was not involved in the review. The review documents will be available on Yemen’s UNODC country profile page once they are finalized.
The following are some of the main findings according to topic:
Preventive anti-corruption policies and practices
Yemen was able to harmonize the majority of its legislation with the UNCAC through the issuance of new laws, taking measures to prevent corruption, joining regional and international agreements, initiatives and partnerships, and engaging civil society in developing legislation and anti-corruption strategies. There are still many shortcomings in Yemeni legislation though. Yemen has launched two national strategies to combat corruption, but the level of implementation of the first strategy was very weak.
Preventive anti-corruption body or bodies
Yemeni laws have granted financial, administrative and technical independence to anti-corruption bodies and agencies, including the Supreme National Anti-Corruption Commission (SNACC), the Central Organization for Control and Accountability (COCA), the Supreme Authority for Tenders Control (HATC), Prosecutions and Courts of Public Funds and Anti-Corruption. However, their independence is not adequate, they have many legal flaws and face major problems in implementation.
As a result of the current war in Yemen and the difficult economic and security conditions since 2015, all national agencies were divided between the authorities of Sana’a and Aden, which has adversely affected their capabilities in fighting corruption and in complying with the implementation of the UNCAC.
Yemeni legislation ignores all matters relating to the transparency of political funding, accountability for resources and expenditures for candidates for elections or political parties, and has not been amended to comply with the UNCAC’s provisions. The electoral system in Yemen is still traditional as the authorities have failed to establish an electronic electoral register, while the participation of civil society in monitoring of elections is very limited and they have no access to any information about political financing.
Codes of conduct, conflicts of interest and asset declarations
Yemen has issued laws and government decisions regarding job rotation, the appointment system in the public service, and financial disclosures. However, the biggest legal obstacle in Yemen is a controversial law regarding procedures for accusing and prosecuting the employees of the Supreme Executive Authority, and there are no special criteria in Yemeni legislation for appointments in public jobs that are most vulnerable to corruption. Therefore, the level of implementation of this policy area is very weak as some laws have never even been enforced.
Reporting mechanism and whistleblower protection
Reporting incidents of corruption is mandatory according to Yemeni law, but there is no explicit text to criminalize covering up corruption, or to encourage individuals and public officials to report on such cases. At the beginning of June 2022, the parliament in Sana’a refused to issue a law to protect witnesses and whistleblowers of corruption crimes, and it was referred to by only short texts in the anti-corruption law.
Yemen was able to achieve good compliance with regard to public procurement with a solid level of both legislative compliance and implementation. The Law of Tenders, Auctions and Government Stores and its executive regulations were issued in addition to texts in the Anti-Corruption Law and the Law of COCA, which achieved an acceptable degree of transparency and efficiency. HATC, High Tender Board (HTB) and specialized tender committees in government institutions, governorates and directorates were established, and the Government Procurement Information System (PMIS) was developed. Nevertheless, all of these achievements did not sufficiently limit the spread of corruption that is rampant in this sector.
Management of public finances
The financial law issued in 1990 is still the main legal framework for the management of public finances and has not been updated as required by the provisions of UNCAC. Legislative compliance with this article is not sufficient as the transparency of public finances is still absent from Yemeni laws. The Ministry of Finance is the governmental body authorized to prepare and implement the state’s general budget and its final accounts, while COCA is the authority in charge of financial and legal oversight and performance evaluation. The role of SNACC is limited to evaluating and developing resource management systems.
Until 2014, the Ministry of Finance has been preparing and publishing annual public budgets, but has stopped since 2015. In terms of its commitment to transparency and public participation in preparing the general budget and final accounts, it is weak, especially since 2016, while monitoring and evaluation levels have declined significantly since 2012, especially parliamentary oversight. Since 2020, there have been positive developments in the implementation of this article of the UNCAC, such as the issuance of the Aden government’s annual general budget and the modernization of the public financial systems by the Sana’a authorities.
Judiciary and prosecution services
According to the Yemeni constitution and legislation, the judiciary enjoys financial, administrative and technical independence. The Judicial Authority Law is the legal framework, which ensures the integrity of the judiciary and prosecution through the proper selection and appointment of staff, acceptable measures to prevent conflicts of interest and the disclosure of property, and the issuance of a code of judicial conduct. However, the implementation of this law was poor as the actual independence of the judiciary in Yemen has not been sufficiently achieved, and there are legislative and executive deficiencies in the judicial code of conduct, and a lack of commitment to competency standards in the selection of administrative staff.
Private sector transparency
There is a range of national legislation related to preventing the spread of corruption in the private sector and corporate transparency in Yemen, but it is outdated and has not been reviewed. Legislation has never addressed beneficial ownership transparency and there is no explicit legal provision prohibiting the deduction of bribes and expenses incurred in promoting corrupt conduct from the private sector tax base, and to ensuring corporate governance. Corruption and a lack of transparency in the private sector is still rampant, despite attempts of the Yemeni authorities to encourage corporate governance and the establishment of commercial courts, as well as the efforts of the General Organization for Standardization and Metrology and the Ministry of Industry and Trade in monitoring the private sector, granting and renewing permits to accountants, legal auditors, auditors and auditing companies, and launching an electronic service on its website to facilitate access to information about trade names.
Access to information and the participation of society
Yemen has made good progress in this policy area since 2012. Yemen passed the Law on the Right to Information and established an office of the Commissioner-General for Information. Moreover, provisions in the Anti-Corruption Act support the right of society to access information, and the second chapter was devoted to community participation in anti-corruption and awareness-raising of its risks. Civil society has made an acceptable contribution to anti-corruption since 2012, until its role was significantly reduced by the war, alongside the suspension of the Office of the Commissioner-General for Information.
Yemen managed to make significant progress in legislative compliance and implementation of these articles during the period 2007 to 2014, which enabled it to get taken off of FATF’s blacklist in 2014 before returning to the grey list due to the war. The Anti-Money Laundering Law has been updated more than once and the National Anti-Money Laundering Committee (NAML&CFT) and the Financial Information Collection Unit (FIU) have been established at the Central Bank of Yemen. Stakeholders have taken acceptable measures to detect and track suspicious financial operations, to verify customer identity, and to establish national banks or branches of foreign banks, exchange companies, enforce sanctions, and issue annual and periodic reports. However, the level of processing and following-up of suspicious transaction reports remains weak as a result of the current conflict.
Yemen has amended the Anti-Money Laundering Law to allow States Parties of the UNCAC to file a civil case before the Yemeni judiciary to claim their right to recover proceeds of corruption and demand compensation for the damages caused by these crimes. However, there is no explicit legal provision for dealing with foreign countries as a special category before the Yemeni public prosecutions and courts, and the anti-corruption law did not adequately cover international cooperation for direct recovery of property. The implementation of the law is much worse, as no other State Party has submitted official requests to Yemen in this regard, and Yemen has not yet joined any forum for exchanging financial information.
The Anti-Money Laundering Law was amended so that the proceeds of corruption can be confiscated without criminal conviction (NCB), and to allow national courts to confiscate or freeze any assets of foreign origin, expand the list of offences related to money laundering and double criminality. However, Yemen has not established a fund for expropriated assets and there have been no confiscations on the basis of foreign money laundering offences related to corruption in Yemen or NCB. Moreover, Yemen failed to pass a law on “recovering looted funds obtained from corruption crimes” and continues to rely on the law for the collection of public funds, and provisions in the laws of taxes, customs, endowments, land and state property. Yemen has not yet been able to recover any looted and smuggled public property or finances from outside Yemen and the authorities have not frozen or confiscated any foreign assets under rulings from courts in other States Parties.
In its report, AWTAD Anti-Corruption Organization makes several key recommendations for priority actions to be taken to ensure the full implementation of the UNCAC in Yemen, for example:
- Provide adequate funding for the operating expenses and establish sufficient guarantees to achieve the effective independence of anti-corruption bodies, oversight agencies and the judiciary in Yemen and ensuring their protection and non-interference in their functions;
- Ensure pay continuity to workers in oversight and anti-corruption bodies and agencies, the judiciary, and the payment of overdue salaries, with the need to reconsider salary ranges and compensation to ensure employees have a decent standard of living;
- Exclude the regulatory and judicial systems from the current conflict, and re-unify them;
- Re-establish the Boards of Directors of the SNACC, COCA, HTB, HATC, the Supreme Judiciary, and the Central Bank of Yemen, with greater transparency and efficiency;
- Set up a unified team of government experts from all authorities and all concerned parties to assess Yemen’s compliance with Chapters II and V and prepare a comprehensive country report;
- Operationalize the Office of the Commissioner-General of Information, prepare the executive regulations for the law, and open information units in all government institutions;
- Hold free and fair elections for parliament and local councils, and initiate their oversight role;
- Expand the participation of CSOs in reviewing and developing legislation and regulations related to anti-corruption and money laundering;
- Allocate part of the aid and grants provided by donors for the humanitarian response in Yemen for good governance programs, with the opening of a wide space for civil society to exercise oversight and accountability over grants and humanitarian assistance provided to Yemen;
- Issue a package of laws related to the fight against corruption and enforce them: the Law on the Prevention of Conflicts of Interest, the Law on the Protection of Witnesses and Whistleblowers of Corruption, the Law against Illicit Enrichment, the Law on The Governance of Private Sector Companies, the Community Responsibility Act, the Law on Administrative Disputes and the International Cooperation Act for confiscation, freezing and exchange of information on corruption crimes, the Law on the Recovery of Stolen Public Funds Proceeded from Corruption Crimes, and others;
- Provide a software system for analyzing the FIU’s financial data, monitor it and integrate FIU’s systems and programs in Sana’a and Aden;
- Join the Egmont Group or any global forum for the exchange of information and sign bilateral and multilateral agreements with States Parties to enhance the effectiveness of international cooperation on asset recovery.