4 December 2024 –
Convinced of the crucial role that transparency and the fight against corruption play in securing funding for sustainable development, the civil society anti-corruption community is engaging in the Fourth Conference on Financing for Development (FfD4).
On 29 October, the UNCAC Coalition, along with Open Contracting Partnership, Open Ownership, the FACT Coalition, and the Stolen Asset Recovery Initiative (StAR), held a side event at the UN Headquarters in New York titled “Transparency, Anticorruption and Asset Recovery to Mobilize and Safeguard Financing for Development”. Moderated by Corinna Gilfillan, Senior Analyst at the UNCAC Coalition, the event convened over 50 participants in-person and online from the UN, Member States and civil society and set the scene on why anti-corruption should be a key topic of the agenda of the Conference.
The Co-Chair of UNCAC Coalition and Executive Director of ANEEJ (Nigeria), David Ugolor, presented five areas for action to mainstream transparency and anti-corruption into the 2030 Agenda, by fully implementing the UN Convention against corruption (UNCAC). He particularly focused on civil society participation in anti-corruption efforts and the protection of whistleblowers, as well as on the need to boost the recovery and return of stolen assets.
“States should implement Article 13 of the UNCAC on civil society participation and respect human rights principles of participation and accountability.”
Kristen Robinson, Head of Advocacy at Open Contracting Partnership reminded the global value of public procurement is estimated at US$13 trillion and, therefore, ensuring it is done with transparency and integrity is key to meeting the sustainable development goals. Kristen gave concrete examples in the health and infrastructure sectors: how improved procurement reduced the price of medicines and how using procurement data enabled addressing corruption risks in infrastructure projects, improving efficiency and effectiveness of investments to build citizens’ trust through transparency.
“When school meals and roads are lacking due to corruption and mismanagement, all the public money that isn’t funding real-life impact risks funding the ´democratic deficit´ instead”.
Thom Townsend, Executive Director of Open Ownership explained how beneficial ownership narrows the possibilities for corruption to happen. Transparency over the real persons behind companies and legal entities is important to tackle transnational corruption and illicit financial flows. With information, citizens and investigative media can attempt to track funds and investments with potential unlawful origin across borders. Even more, beneficial ownership and corporate transparency are key to healthy international trade and financial systems.
“Businesses are involved in everything and we need to know who owns and controls them so they can contribute to the sustainable development goals. We don’t want to be having the same conversation in 10 years from now – we need progress now.”
Ian Gary, Executive Director of the FACT Coalition reflected on the role of the United States as one of the main destination countries of dirty money and thus with a special responsibility to tackle illicit financial flows including corruption, environmental crime and tax evasion. The Corporate Transparency Act in 2021 marked a turning point in how the US combats money-laundering, establishing a registry of the beneficial owners of corporate entities in the US, and with further anti-money laundering regulations being passed in 2024 on real estate transactions and private financial investment vehicles. However, important weaknesses remain, among them increased regulation of professional enablers of corruption.
“Changing the reputation of the US as the best place to hide ill-gotten gains would greatly benefit the financing for development agenda. Ending anonymous shell companies and financial secrecy in the US would be a major contribution.”
Elsa Gopala Krishnan, Crime Prevention and Criminal Justice Officer at StAR Initiative exposed how this World Bank and UNODC-led partnership supports international recoveries and returns of stolen assets. StAR operates under the framework set forth by the UNCAC for tracing, freezing, confiscating, and returning funds proceeding from crime and engages with domestic authorities to provide technical assistance and build national capacity. A major contribution is the Asset Recovery Watch Database, a public database tracking global progress in international recoveries and returns of stolen assets and following the UN Member States’ commitment to strengthen good practices on assets’ return to foster sustainable development.
“We should not only look at law enforcement but expand the focus, work with other actors in each country and ensure asset recovery efforts are also supported by other on-going processes such as the UNCAC reviews”
A discussion followed on challenges and actionable priorities to integrate anti-corruption into the financing for development agenda. The FfD4 could send a powerful message by agreeing on the need to:
1.Improve international cooperation and coordination:
- Some powerful countries exacerbate the problems and facilitate vast quantities of assets being lost to corruption and related criminal activities, and their collaboration is essential. In particular, countries identified as destination countries should work together to address money laundering and asset recovery.
- States Parties to the UNCAC should implement its provisions and the resolutions adopted by the UNCAC Conference of the States Parties (on transparency and integrity in public procurement, beneficial ownership information, the protection of whistleblowers and other matters).
- Donors should commit to better coordination of technical assistance efforts in public procurement and beneficial ownership.
2. Ensure ownership of reforms:
- Open procurement reforms should be adapted to each reality. IFIs and donors should make sure that local implementers and operators are part of the change and they have the capacity to use new systems and tools.
- Coalitions that support reforms can be built by relating the consequences of transnational corruption with local-level demands -for instance, little availability of housing and increased control of real estate actors.
- Civil society must be given the space and means to play a bigger role in creating political will and contributing to reforms.
3. Act faster, build on best practices and innovate:
- Information exchange across jurisdictions in a timely manner is vital to any efforts to detect and combat transnational corruption.
- All countries must improve the speed in identifying potential corruption cases and acting on them. Destination countries have to act more quickly to detect, freeze and seize stolen assets.
- Concerning asset return, following the Principles of the Global Forum on Asset Recovery (GFAR Principles) and involving civil society in the process of transferring them to the countries of origin helps safeguard these funds.
- Public procurement practices with transparency and integrity should be established for the good use of returned funds.
- Countries should work towards building consensus around the need to recover and return assets for the benefit of the populations most harmed by corruption.
- New mechanisms should be envisaged to recover and use global stranded assets, with transparency and civil society participation.
4. Monitor commitments:
- Decisive transparency and anti-corruption action can have a transformative impact in financing for development. For this, international anti-corruption commitments have to be implemented and monitored.
- There is momentum for strengthening the UNCAC monitoring mechanism, to which 191 States Parties are bound. More transparency, civil society inclusion and effectiveness in this review mechanism would help address the lack of funding and reverse worrying trends affecting global security, economic stability, or climate change mitigation efforts, overall impeding the realization of the SDGs.
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