The paper states that grand corruption cases involving senior officials and/or considerable illegal remuneration/benefit go often unpunished. In this case the main means to counter corruption, i.e. criminal prosecution within the jurisdiction of the country where the crime occurred, is ineffective due to a number of obstacles: lack of resources, weak legal framework, constrained independence of control, oversight, law enforcement and judicial authorities, which does not always allow them to properly investigate cross boarder crimes and detect complex money laundering schemes.
As a result, alternative methods and instruments can be used to counter grand corruption.
1. International criminal courts
One of these alternative methods to hold perpetrators liable for grand corruption are international courts (for example, the International Criminal Court) or internationalized (hybrid) criminal courts that combine the elements of organisation, structure, positioning in the judicial system, law enforcement and criminal prosecution of both national and international courts (for instance, in Sierra Leone, Cambodia, Lebanon, Timor-Leste and Kosovo). They enjoy parallel jurisdiction in the event that national courts are unable to provide sufficient safeguards of independence and impartiality or conduct efficient investigations and hold perpetrators liable.
Today the jurisdiction of these courts does not cover corruption crimes. However, the paper highlights that the situation can eventually change: some experts (see, for example, here and here) believe it is necessary to consider corruption as a crime against humanity and/or a violation of human rights, which will allow international courts examine relevant cases.
Additionally, a number of researchers, policymakers and leaders of countries (see, for instance, here, here and here) advocate for the establishment of a dedicated International Anti-Corruption Court (IACC) with jurisdiction covering corruption crimes as listed in the United Nations Convention against Corruption committed by senior officials. Following the principle of complementarity, it will investigate only the cases where national governments do not want or cannot hold the corrupt of that level liable.
The apologists of the establishment of this structure highlight that it will have such benefits as independence from any direct political interference, convenient mechanisms for recovering and returning stolen assets, as well as provision of advice by IACC expert investigators, prosecutors and judges to their counterparts in domestic bodies. However, there are serious concerns about the viability, creation and operation costs of this institution as well.
2. Extraterritorial criminal prosecution
Liability for grand corruption can be exercised in the framework of extraterritorial law enforcement recognised by international law. It allows countries to prosecute perpetrators for crimes, including corruption-related ones, even if they are committed outside their territory.
The U4 paper underlines that following this mechanism countries can conclude an agreement on universal criminal jurisdiction that would allow holding perpetrators liable only due to the character of the crime without taking account of where it was committed, citizenship of the alleged or convicted criminal, citizenship of the victim or any other linkages to a specific country.
Criminal prosecution for transnational crimes in any jurisdiction will make it possible to eliminate other obstacles for enforcement proceedings. However, these mechanisms can be hampered by other challenges related, in particular, to obtaining evidence about a crime committed in another country, enforcing convictions depending on the availability of extradition procedures in a specific jurisdiction etc.
3. Private prosecution
Another instrument to counter grand corruption can be private prosecution where prosecution is initiated by a private individual or his/her associates rather than by a prosecutor or an investigator.
However, in spite of the fact that this mechanism exists in a number of countries courts generally consider lawsuits concerning illicit activities only if they are filed by individuals or organisations entitled to do so under the domestic law. Furthermore, many jurisdictions require that complainants have a direct and concrete interest in the subject of the lawsuit, which can be difficult to prove. In the United States, would-be plaintiffs must establish that they have suffered a concrete and particular injury caused by a fact that can be traced to the defendant’s alleged conduct. In Germany, complainants have to demonstrate that they have suffered a direct injury to a personal legal interest. At the same time, in Spain, Colombia and South Africa, citizens can bring a suit if the issue involves the public interest.
4. International enforcement and investigative agencies
Finally, investigation of and prosecution for large-scale corruption crimes can involve international anti-corruption agencies implementing law enforcement and investigative functions, for instance:
- International Commission against Impunity in Guatemala that was entitled to conduct investigations against criminal organisations file administrative complaints against public officials, participate in disciplinary proceedings as an interested third party, receive and process reports of corruption;
- Mission to Support the Fight against Corruption and Impunity in Honduras mandated to investigate large networks of corruption, receive and process whistleblowers’ tips, select and certify the law enforcement officials responsible for countering corruption, advise, oversee and evaluate local law enforcement officials as they investigated, prosecuted and pursued corruption cases, criminally and/or administratively, as well as in recovering proceeds of corruption cases;
- European Union Rule of Law Mission in Kosovo entitled to consider cases of corruption and overrule local courts and authorities;
- European Public Prosecutor’s Office mandated to investigate and prosecute crimes, including corruption, concerning the EU budget.
5. Civil litigation by law enforcement authorities
The paper stresses that civil litigation initiated by law enforcement is equally important to counter grand corruption: on the one hand, it can be simpler than criminal prosecution as regards liability of perpetrators, on the other hand, it can provide for equally considerable sanctions.
In the United States, civil prosecution may be brought against natural and legal persons in cases of violations of the Foreign Corrupt Practices Act (FCPA), in Brazil, civil liability regime is applicable to public officials who have violated provisions of the Administrative Improbity Law of 2 June 1992 No. 8.429 (Lei nº 8.429, de 2º de Junho de 1992 Dispõe sobre as sanções aplicáveis em virtude da prática de atos de improbidade administrativa, de que trata o § 4º do art. 37 da Constituição Federal; e dá outras providências).
The sanctions applicable in this kind of proceedings are generally targeted at recovering assets, in particular, at compensating the victims of corruption and other crimes, rather than at punishing the perpetrator. These sanctions include:
- non-conviction-based confiscation;
- unexplained wealth orders;
- property claims;
- personal claims;
- private lawsuits, where states initiate civil action in the courts of another jurisdiction to recover property that was acquired through the commission of an offence.
This mechanism, however, has a number of limitations: the law of most countries does not provide for non-conviction-based confiscation, legal costs associated with court proceedings are high, and it is difficult to determine the location of stolen assets due to complex schemes of movement and laundering of ill-gotten gains, especially in cases of grand corruption.
6. Civil litigation led by victims
According to the U4 report, civil litigation led by victims is an equally important possibility that implies, in particular:
- compensation of economically accessible damage;
- medical and psychological care, legal and social services;
- satisfaction, i.e. cessation of continuing violations, investigation, public apology, and sanctions against persons liable for the violations;
- guarantees of non-repetition.
Victims of corruption shall be entitled to a fair and public hearing in a reasonable time by a competent, independent and impartial tribunal established by law, while the state should enable them to enjoy due process of law and obtain compensation.
However, despite the fact that many countries have legal frameworks that allow for the participation of victims in proceedings to recover damages and to obtain reparation/aid, this rarely happens in practice.
7. Administrative proceedings
Apart from civil and criminal litigation, administrative proceedings also provide an avenue to address impunity for grand corruption. This additional form of liability is generally applicable to legal persons involved in corrupt practices, which can be particularly relevant to the countries whose legislation does not provide for the possibility to hold legal persons criminally liable. In particular, administrative liability can be imposed on companies in 11 countries, including Brazil, Colombia, Germany, Mexico and Russia, and applicable sanctions can include:
- fines and monetary penalties;
- asset confiscation and restitution;
- revocation or suspension of licences, permits and warnings;
- prohibition from advertising;
- inability to access government benefits such as fiscal incentives, subsidised credit or export promotion benefits;
- dissolution of the company and others.
8. Disciplinary measures
Yet another additional mechanism for holding perpetrators liable consists in disciplinary sanctions imposed primarily on officials. Disciplinary liability is normally applicable in the case of violation of restrictions and prohibitions, including corruption ones, or codes of conduct in line with the dedicated legislation. The sanctions can include:
- warnings of incomplete service (official) compliance;
9. Sanctions by international organisations
International organisations can impose sanctions as well.
The United Nations Security Council (UNSC) is authorised to enact sanctions and other measures when it determines the existence of a threat to the peace and security of the international community. Thus far, grand corruption has not been considered by the UNSC; the issue of corruption, however, has come up as an element of concern in relation to Libya (Resolution 2570) and Liberia (Resolution 2308).
Within the European Union, sanctions have been used on the grounds of gross human rights violations and actions undermining democracy and the rule of law. More recently, sanctions were used to target the assets of officials of Egypt, Tunisia, Ukraine and Lebanon accused of grand corruption located in the EU.
Finally, sanctions related to corruption can be imposed by multilateral development banks to deal with the improper use of the funds provided by them to borrowers. These institutions often use different forms of debarment with each bank having its own system of sanctions. The World Bank Group, for example, applies five different types of sanctions: fixed-term debarment, debarment with conditional release, conditional non-debarment, letter of reprimand and restitution (financial or other). The type of sanctions is defined by a dedicated Council in line with the Sanctioning Guidelines.
10. Targeted sanctions
Over the recent time, countries have developed targeted sanctions regimes designed to hold liable certain natural and/or legal persons involved in corruption schemes. Unlike general economic or trade sanctions, they affect the general public to a much lesser extent and are usually geographically or thematically focused.
The United States has adopted the Global Magnitsky Human Rights Accountability Act initially targeted at the persons involved in the arrest, torture and death of whistleblower Sergey Magnitsky. It was subsequently extended to all individuals if they are considered responsible for human rights abuses or for “acts of significant corruption, including the expropriation of private or public assets for personal gain, corruption related to government contracts or the extraction of natural resources, bribery, or the facilitation or transfer of the proceeds of corruption to foreign jurisdictions”. The Act provides for such sanctions as inadmissibility to the United States (revocation of visas) and blocking of property (bans on transactions, payments and exports).
Similar legal acts were adopted later by other countries (at least 12, as of 2022), including Canada’s Justice for Victims of Corrupt Foreign Officials Act and UK’s Global Anti-Corruption Sanctions Regulations 2021.
11. Sanctions for failure to comply with the OECD principles
National contact points (NCPs) monitoring compliance with the OECD Guidelines for Multinational Enterprises are located in 51 jurisdictions. Some of them are empowered to issue determinations on whether companies’ conduct is adherent to the Guidelines or not with the law enforcement authorities imposing penalties such as limited access to export promotion or other economic benefits.
While the number of complaints received by NCPs on corruption related issues remains small when compared to complaints on environmental and human rights violations, in theory, these proceedings provide an avenue to hold companies accountable for violations of the anti-corruption standards found in the Guidelines.
International human rights procedures
Besides liability mechanisms for corruption, a number of international organisations (the Inter-American Court on Human Rights, the European Court of Human Rights, the Economic Community of Western African States Court of Justice) responsible for considering cases of human rights violation, depending on circumstances, can adopt measures to compensate damage to victims of grand corruption. In particular, these organisations can make the argument that grand corruption cases are violations of human rights and reaffirm rights which are essential to detecting corruption, such as the right to access information. They can also be a forum to highlight the impact of corruption and seek different forms of reparation, even if they are not necessarily empowered to investigate its origins.
Additionally, some other organisations, such as the United Nations Human Rights Council can adopt other measures aimed at countering grand corruption, for instance, forward whistleblowers’ reports to the competent authorities of the countries where they occurred, or establish investigative bodies, which may take the form of fact-finding missions or commissions of inquiry, into situations of severe human rights violations.
Some human rights treaties also instituted treaty bodies, which are committees of independent experts responsible for monitoring the implementation of the treaties and for deciding on complaints brought against states parties.