Most fines for bribery don't end up in country where crime took place, report by UN and World Bank says

Report says corruption enforcement cases usually take place in wealthier nations

PUBLISHED : Thursday, 28 November, 2013, 3:05pm
UPDATED : Friday, 29 November, 2013, 4:23am


Penalties in international corruption cases are rarely paid to the country where the crimes took place, the World Bank and United Nations said on Wednesday.

A report found that while most corruption cases occur in developing countries, enforcement largely takes place in wealthier countries where “the corrupt companies (and related individual defendants) are headquartered or otherwise operate”.

The report reviewed 395 settlements between 1999 and last year that raised US$6.9 billion in monetary sanctions.

Nearly US$6 billion of this sum resulted from sanctions in a country other than the one that employed the bribed or allegedly bribed official.

And of this portion of the sanctions, only about US$197 million, or 3.3 per cent, was returned to where officials were bribed or allegedly bribed.

“The reality is that, in the majority of the settlements, the countries whose officials were allegedly bribed have not been involved in the settlements and have not found any other means to obtain redress,” the report said.

But it pointed to some exceptions. In one case, involving weapons and aerospace manufacturer BAE Systems, British and US regulators reached separate settlements following corruption probes.

The British settlement included a £29.5 million (HK$372 million) payment to Tanzania, while the US took fines and penalties totaling US$479 million.

Among the recommendations, the report said countries undertaking corruption investigations should inform affected countries of their legal avenues to recover assets.

The report was authored by a joint programme of the World Bank and the UN dedicated to preventing the laundering of the proceeds of corruption and to facilitate the return of stolen assets.