Disclosure of information on assets and interest of officials (anti-corruption declaration) is one of the “traditional” instruments targeted at preventing corruption and enhancing the principles of integrity in public administration that is already in place in one form or another in 160 countries.
The StAR Initiative considers approaches to the implementation of one of the elements of anti-corruption declaration, namely the form of submission of information. The StAR experts believe that the content of declarations is key to successful employment of this instrument and defines the role that declarations will have in countering corruption.
The Guide outlines general principles that should be taken into consideration in developing a declaration form, as well as provides a recommended form.
In order to ensure that disclosure duly meets its objectives, the paper recommends taking the decision on the declaration form in line with the following principles:
- Relevant information: the disclosure procedure should allow gathering the information that will subsequently constitute the basis for analysis of compliance with anti-corruption restrictions, prohibitions and obligations. For example, if a country’s laws restrict outside positions of public officials when in office, the disclosure form should capture information about outside activities and positions held. In order to identify which information is relevant, the authors of the Guide suggest reversing engineer any known corruption offences;
- User-friendly: the declaration form should be clear and user-friendly, the process should not be cumbersome, minimize inadvertent mistakes and ensure that the asset and interest disclosure agency has enough pertinent data;
- Comprehensive but balanced: there may be an inclination to extend the form’s reach to capture as much information as possible to cover as many indicators of potential violations as possible, but it should be balanced by the proportionality requirement. In particular, requiring information that is excessive and unnecessary can be counterproductive, encouraging declarants to withhold information or misrepresent it;
- Tailored to country context: the disclosure form should be based on national specificities, including legal practices (for example, how ownership structures are regulated), on family relationships and traditions (for example, how to regulate the scope of disclosure regarding family members and others close to the declarant), and on an analysis of corruption and asset concealment patterns;
- Living document: declaration forms should be amended and based on needs and lessons learned from experience; it is recommended involving different stakeholders - declarants, practitioners of the agencies/units that verify declarations, non-governmental organisations, investigative journalists etc.;
- Easily adjustable: it is recommended that disclosure forms are regulated through bylaws, which will allow amending the form quickly and easily enough, if necessary;
- Supported by guidelines: in order to ensure that the tool functions efficiently, it is necessary to support it by guidelines, including hints built into the form, tutorials, FAQs, and so on, and training activities.
A model asset and interest disclosure form recommended by the Guide includes the following sections:
General information about the declarant
The general information about the declarant includes:
- Personal and contact information: first, middle and last names, information on the change of the first, middle and last names, nationality, date of birth, place of birth, national ID number, tax ID, primary residence, address where the person is registered, phone number, email etc.;
- Information on the office held: name of the entity, structural unit, official address of the entity, position, category of public service, note on whether the declarant is a politically exposed person, appointment date, activities performed.
Information on family members
It is suggested to also include in the declaration information on family members of the declarant, in particular: relationship with the declarant, personal data, place of birth, contact phone, email, main place of work, position, start date of employment/self-employment status, management and supervisory positions in commercial and non-commercial entities, representation of the interests of any legal and/or natural person.
The StAR experts recommend that the family members of the declarant include not only his/her spouse and children, but also his/her partner, parents, people living in the same household and those who do not co-habit with the declarant but are financially dependent on him/her (as well as vice versa, those on whom the declarant is financially dependent).
The StAR experts stress that to get an accurate description of the wealth of the declarant, the form should require officials to declare all movable and immovable property as well as all tangible and intangible assets, and preferably those of their close relatives, including:
- Buildings, apartments and other real estate;
- Unfinished construction, in particular, real estate under construction and real estate that was constructed but not formally certified for residence;
- Vehicles, boats, aircraft, machinery and so forth;
- Other movable assets the value of which exceed the established threshold, including: art, jewelry, precious stones, antiques, cultural and religious artifacts, livestock, pets, electronic devices and the like;
- Securities and stocks;
- Ownership interest in commercial entities other than stocks;
- Beneficial ownership or control in legal entities, trusts, and similar legal arrangements;
- Intangible assets, including intellectual property rights, patents, trademarks, know-how, other similar rights, licenses to extract or use natural resources, and so on;
- Accounts in banks and other financial institutions, safe-deposit boxes;
- Monetary assets above the established threshold: cash, precious metals;
- Virtual assets, including cryptocurrencies, NFT;
- Money owed to the declarant or family member, legal claims to future payments: money provided as a private loan to another person or a legal entity; rights to claim monetary assets that the declarant or family member acquired but has not yet realized (for example, the right to claim debt from another person that was transferred to the declarant or family member); options or other contracts under which the declarant or family member has the right to claim transfer (including for payment) of a financial asset, and insurance contracts under which the declarant or family member are mentioned as a beneficiary.
For each asset, it is recommended to indicate the information that allows:
- Identifying the asset: its location (address, country), registry number, type and size of the asset, registration number, place and date of registration, body of registration, other descriptive characteristics;
- Estimate the value of the asset: market value (when the asset was acquired or when the declaration was submitted), purchase value, cadastral value, appraisal value, fiscal value, or insured value;
- Identifying when and how the asset was acquired: the exact date of acquisition (the month and the year or at least the year, if the exact date is hard to establish), and how the asset was acquired (whether it was purchased, inherited, or received as a gift);
- Defining the nature of the ownership or control by the declarant and/or his/her family members: formal ownership, co-ownership, legal or de facto use, beneficial ownership/control, trust or similar legal arrangement, of which the official or family member is a beneficiary, settlor, or trustee.
Income, gifts and other incoming financial flows
The collection of information on any financial flows increasing the amount of money at the disposal of the declarant is equally important for the achievement of the objectives of asset and interest disclosure. These financial flows include:
- Employment income at the main place of work;
- Employment income at the secondary place of work;
- Bonuses, incentives in addition to employment income;
- Income from self-employed business;
- Income from professional activity, for instance, as attorney, notary, appraiser, bankruptcy manager;
- Income from the sale of assets such as real estate, vehicles, shares etc.;
- Income from rent/lease of real estate or another asset;
- Income from interest paid on deposits in financial institutions;
- Income from interest paid on private loans;
- Income from securities;
- Insurance payment;
- Pension, state allowance;
- Tax refund;
- Lottery and gambling win;
- Monetary prize;
- Compensation for damages;
- Income/distribution from a trust or assets held in trust etc.
In addition to the information on income and other financial flows, it is recommended to incorporate information on gifts, including donations, financial assistance, vouchers, pre-paid cards, hospitality, payment for travel, education, entertainment etc. in the relevant section.
This section should cover information on financial liabilities of the declarant and his/her family members above certain threshold, including:
- Bank loans;
- Loan from nonbanking financial institutions;
- Overdraft/credit card debt;
- Consumer credit;
- Leasing/hire purchase;
- Tax debt;
- Life insurance;
- Other type of insurance;
- Private loan;
- Financial obligation in which the declarant or a family member is a guarantor etc.
Expenditures and other transactions
The disclosure of expenditures and other transactions above the established value threshold is important for getting the full picture of the declarant’s financial situation, tracking variations in wealth, and detecting conflicts of interest.
These transactions may include: payment for services (travel, medical, education, and so forth), rent, mortgage payment, insurance payment, tax payment, expenses for construction (renovation), charity or other donations, gifts, investments etc., acquisition of property if it was disposed of during the reporting period and sale of property if it was acquired during the reporting period.
At the same time information on property that was acquired in the reporting period and was not disposed of by the end of the reporting period is not reflected in this section, as this information is disclosed in the section on the declarant’s assets.
Activities outside the public service and other interests
This section covers information on:
- Concurrent paid or unpaid activities of the declarant, including charity organisations, civic and professional associations, academic institutions;
- Membership in executive, supervisory, control and other bodies of commercial and non-commercial organisations (for example, executive or supervisory boards, audit committees);
- Previous employment (to prevent it from becoming a burdensome requirement for the declarant, it could limit the scope of time to the previous three years or the last three positions, whichever option covers a longer period);
- Rights of representation (agency) for the declarant, as well as natural or legal persons who represent (are agents of) the declarant;
- Government contracts entered into by the official, family members, or associated legal entities with public sector entities, also as subcontractors.
Deadline for submission and reporting period
Declarations can be filed: before taking office/immediately after taking office; every year/six months; in case of considerable change in assets and interest; before/immediately after/one or two years after termination. The law can also provide for the possibility to file amended declarations.
Additionally, the submission of declarations at the request of the agencies responsible for verifying declarations can be envisaged for the cases where the indicators of potential violations are detected and further information is required.
Information incorporated in the sections on assets, financial liabilities, activities outside the public service and other interests is submitted as of the last day of the reporting period (for example, in the case of the annual declaration, as of 31 December of the current year) or as of the date of submission of the declaration. The section on income, gifts and incoming financial flows and on expenditures and other transactions contains respective income/expenditures that took place in the reporting period covered by the declaration (for instance, the previous calendar year, i.e. from 1 January to 31 December) or throughout the previous financial year.
By default, the Guide suggests using electronic declaration forms. The authors believe that they ensure the maximum efficiency of anti-corruption disclosure, because:
- A form will suggest filling out a certain space only if declarants indicate that the situation is relevant for them (for example, if the declarant indicates that he/she changed his/her family name last year, the electronic form will invite him/her to indicate his/her previous name);
- An electronic form allows using drop-down menus (lists of options from which declarants may chose) in as many fields as possible thereby minimizing errors and the need to manually input information;
- An electronic form can also allow for the use of previous data, which were submitted by the declarant in the previous declaration campaign or are available from other sources such as state databases. This allows, in the first place, minimizing the burden on declarants, and in the second place, minimizing the number of errors;
- An important element of the form is the disclaimer that the declarant must sign when starting to fill out the form, after filling it out but before submitting it. The declarant thereby acknowledges that he or she is aware of the liability for providing false or incomplete information;
- Electronic forms may allow for automatic validation of information (for example, what letters and/or digits are allowed in a given field, which sections/fields must be filled out etc.), which facilitates its subsequent verification.
The StAR experts, however, do not deny the possibility to use paper-based declaration forms. The Guide can be adjusted accordingly to allow for their development: for example, drop-down lists used in electronic declaration forms can be substituted by a list of possible options referring to a given field in a note.