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Global crackdown on corruption?

The powerful banking network, real estate market and businesses of the flourishing economies of the west have long been criticized for providing safe havens to ease into their system ill-gotten money amassed out of corruption by public office-bearers and businesses from the emerging countries, with weak regulatory and accountability systems and processes. So are many governments of the west criticized for providing legitimacy to safe havens to park ill-gotten money. WikiLeaks exposed it all.

The western governments keep on unveiling laws and proposals to address the issue. But what tangible benefits all these laws have provided to the deprived country and its people to retrieve its stolen wealth remains questionable and shrouded in silence.

The European Union this week unveiled proposals to crack down on corruption in the bloc, including a plan for a “blacklist” to punish non-EU individuals accused of corruption worldwide. The European Commission proposed that individuals and entities who committed “serious acts of corruption” would see their assets frozen in the EU and be banned from the bloc. These proposals are similar to the US Magnitsky Act, a law under which Washington punishes foreign government officials found involved in corruption or human rights abuses.

The European Union’s new system would allow the EU to impose sanctions “when acts of corruption seriously affect or risk affecting the objectives of the (EU’s) common foreign and security policy,” the commission said in a statement. “We are sending a clear message: the EU is not open for business to those who engage in corruption, wherever that occurs,” EU foreign policy Chief Josep Borrell said.

Serious acts of corruption included in the commission’s definition are bribery of a public official, and embezzlement of public funds, especially in a country that is deemed to be non-cooperative in tax matters or failing to fight money laundering and terrorism financing.

“Insidious acts of corruption can also threaten peace and international security, enabling terrorism, organised crime and other crimes. So that’s why we have to enlarge our scope and tackle corruption worldwide,” Borrell said.

The United States under the Global Magnitsky Human Rights Accountability Act targets those connected to serious human rights abuse, corrupt actors, and their enablers, represents the best of the United States’ values and enduring commitment to promote respect for human rights and combat corruption around the world and has sought to disrupt and deter serious human rights abuse and corruption abroad; promote accountability for those who act with impunity; and maintain US global leadership on anticorruption and human rights promotion in coordination with US partners, allies, and civil society where appropriate. Following in the footstep of the United States, Magnitsky-like legislations have been enacted in a number of territories, including Canada, Australia, the United Kingdom and some other European countries.

Although the banking laws and transparency in deposits and transactions have been much strengthened in recent years, but ill-gotten money siphoned off from emerging and weaker markets still continues to be injected into their systems. Also, their systems provide no viable mechanisms for the deprived governments to retrieve the ill-gotten money sucked out from their respective countries through corruption and conveniently parked overseas. Freezing of such accounts and sanctions is of no benefit to them. The money stays in their banking system and to their advantage.

There is a widespread criticism that the crackdown against corruption is often selective and politically driven and so are the punitive actions taken on human rights violations. Politics overrides merit.

To make the global system of crackdown on individuals accused of corruption worldwide equitable, the other party, namely, the country from which the money has been siphoned out, must be a party to the drive against corruption and ill-gotten money transferred back into the country of origin. Sanctions and an account freeze of an individual do not complete the circle.

Farhat Ali, "Global crackdown on corruption?," Business recorder. 2023-05-06.
Keywords: Economics , Banking system , Global system , Money transferred , Politically driven , Canada , Australia , United Kingdom , United States , EU , US

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