It held its first conference in September 2001 in Croatia. This is already the practice in some jurisdictions such as the US, Ireland, the UK, Italy, Colombia, Slovenia, and South Africa, as well as some Australian and Canadian States.”
Yet, no one seems to agree on a universal definition of corruption. (T)he individual may hoard the stolen objects …”. This demonstrates that no one is above the law and that crime does not pay.
The G-8 asked its Lyon Group of senior experts on transnational crime to recommend ways to fight corruption related to large money flows and money laundering. It skews the level playing-field; it imposes onerous and unpredictable transaction costs; it guarantees extra returns where none should have been had; it encourages the misallocation of economic resources; and it subverts the proper functioning of institutions. In many developing countries and countries in transition, assets confiscated from real and alleged criminals and tax evaders are sold in fake auctions to party hacks, cronies, police officers, tax inspectors, and relatives of prominent politicians at bargain basement prices.
Kleptomaniacs fail to resist or control the impulse to steal, even if they have no use for the booty. They could no more stop thieving than Hitler could stop murdering. Corruption, like other crimes, is probably seriously under-reported and under-penalized.
While Momoh relished things with shiny buttons, people like Sese Seko, Hussein, and Marcos drooled over money. The Slovak daily “Sme” described in scathing detail the newly acquired wealth and lavish lifestyles of formerly impoverished HZDS politicians.
The presumption of innocence must fully apply and due process upheld to prevent self-enrichment and corrupt dealings with confiscated property, including the unethical and unseemly use of the proceeds from the sale of forfeited assets to close gaping holes in strained state and municipal budgets.
At the request of member-governments (such as Bosnia-Herzegovina and Romania) it has prepared detailed country corruption surveys covering both the public and the private sectors. The balances in their bulging bank accounts were of no practical import or intent. Corruption is discussed freely and forgivingly in one place – but concealed shamefully in another. These politicians and bureaucrats “let off steam” by looting.
Moreover, bribing officials is often the unstated policy of multinationals, foreign investors, and expatriates. Information Altering Fees – Backhanders and bribes that subvert the flow of true and complete information within a society or an economic unit (for instance, by selling professional diplomas, certificates, or permits). The provision of a service, information, or goods that, by law, and by right, should not have been provided or divulged. Both institutions are increasingly concerned with poverty reduction through economic growth and development. It outlaws the payment of bribes to foreign officials, political parties, party officials, and political candidates in foreign countries. The ever-heightening mountains of greenbacks in their vaults soothed them, filled them with confidence, regulated their sense of self-worth, and served as a love substitute. In the absence of these, the fight against official avarice and criminality is doomed to failure.
5.. Corruption can be defeated only from the inside, though with plenty of outside help.
5.. Strengthening of institutions: the police, the customs, the courts, the government, its agencies, the tax authorities – under time limited foreign management and supervision.
A few years ago, I proposed a taxonomy of corruption, venality, and graft. This is the case in many countries, including United Kingdom, United States, Germany, France, Hong Kong, Italy, Denmark, Belgium, Austria, Greece, Ireland, New Zealand, Singapore and Switzerland.
Technically and theoretically, assets can be impounded or forfeited and disposed of even in hitherto minor Federal civil offenses (mistakes in fulfilling Medicare or tax return forms)
The most potent remedy against corruption is sunshine – free, accessible, and available information disseminated and probed by an active opposition, uncompromised press, and assertive civic organizations and NGO’s. Since 1997, it has introduced policies regarding misreporting, abuse of IMF funds, monitoring the use of debt relief for poverty reduction, data dissemination, legal and judicial reform, fiscal and monetary transparency, and even internal governance (e.g., financial disclosure by staff members).
By: Sam Vaknin
Even worse, unlike in other criminal proceedings, the burden of proof is on the defendant who has to demonstrate that the source of the funds used to purchase the confiscated or forfeited assets is legal. In Alabama, police seized the home of a senior citizen because her yard was used, without her consent, for drug dealing. But there is no justification for the seizure and sale of property otherwise.
I. It is a process of self-redemption and self-transformation. Macedonia has belatedly passed an anti-money laundering law recently, but failed, yet again, to adopt strict anti-corruption legislation.
The south-eastern Europe Stability Pact sports its own Stability Pact Anti-corruption Initiative (SPAI). Luckily, in countries like Macedonia, it is confined to its rapacious elites: its politicians, managers, university professors, medical doctors, judges, journalists, and top bureaucrats. The police and customs are hopelessly compromised. It is the real transition.
4.. The figure may be 5 to 10 times higher in the tax havens of the United Kingdom.
Yet, “The Economist” reports that the American SEC has brought only three cases against listed companies until 1997. Rich world governments turn a blind eye, even where laws against such practices are extant and strict.
“The actions of individuals, groups, or firms, both in the public and private sectors, to influence the formation of laws, regulations, decrees, and other government policies to their own advantage as a result of the illicit and non-transparent provision of private benefits to public officials.”
These politicos were not only crooks but also kleptomaniacs. The donors ignored this and other recommendations. This often leads to the inclusion of sums from legitimate sources and double counting both of which need to be eliminated.”
The Act applies to all American firms, to all firms – including foreign ones – traded in an American stock exchange, and to bribery on American territory by foreign and American firms alike. According to the Diagnostic and Statistical Manual IV-TR (2000), the bible of psychiatry, kleptomaniacs feel “pleasure, gratification, or relief when committing the theft.” The good book proceeds to say that ” … This often gives rise to cases of double jeopardy.
The IMF made corruption an integral part of its country evaluation process. It is, in other words, without a single redeeming feature, a scourge.
Strangely, this is not how it is perceived by its perpetrators: both the givers and the recipients. Transparency International now publishes a name and shame Bribery Payers Index to complement its 91-country strong Corruption Perceptions Index.
These inconceivable dollops of hard cash and valuables often remain stashed and untouched, moldering in bank accounts and safes in Western banks. He used to sit among these relics of his cupidity, fondling and counting them insatiably.
This abrogation of the principle of dual criminality sometimes leads to serious violations of human and civil rights. The convention has been in force since February 1999 and is only one of many OECD anti-corruption drives, among which are SIGMA (Support for Improvement in Governance and Management in Central and Eastern European countries), ACN (Anti-Corruption Network for Transition Economies in Europe), and FATF (the Financial Action Task Force on Money Laundering).
In his address to the Inter-American Development Bank on March 14, 2002 President Bush promised to “reward nations that root out corruption” within the framework of the Millennium Challenge Account initiative. These hoards are not the megalomaniacal equivalents of savings accounts. The conference was attended by the Czech prime minister, the Mexican president, and the head of the Interpol.
The British firm Bentley-Jennison, who provide Forensic Accounting Services, add:
In Albania, the Chairman of the Albanian Socialist Party, Fatos Nano, was accused by Albanian media of laundering $1 billion through the Albanian government. During closure of premises, the employer must continue to pay workers, thereby avoiding an appeal for constitutional protection.”
The World Bank has appointed in 2001 a Director of Institutional Integrity – a new department that combines the Anti-Corruption and Fraud Investigations Unit and the Office of Business Ethics and Integrity. It casts civil and government institutions in doubt, tarnishes the entire political class, and, thus, endangers the democratic system and the rule of law, property rights included.
Typically, the defendant is notified of the impending forfeiture or confiscation of his or her assets and has recourse to a hearing within the relevant law enforcement agency and also to the courts. The Bank also supports international efforts to reduce corruption by sponsoring conferences and the exchange of information.
6.. Politics is a drab, uninspiring, unintelligent, and, often humiliating business. In France, the Financial Intelligence Unit can freeze funds involved in a reported suspicious transaction by administrative fiat. He was the editor of mental health and Central East Europe categories in The Open Directory and Suite101.
Visit Sam’s Web site at samvak.tripod.com
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Venezuela has recently reformed its Organic Tax Code to allow for:
Many rich world corporations and wealthy individuals make use of off-shore havens or “special purpose entities” to launder money, make illicit payments, avoid or evade taxes, and conceal assets or liabilities. In many cases the authorities will assume that all of the assets held by the defendant are illegally obtained as he has a “criminal lifestyle”. With them, it stands a chance.
Kleptomania is about acting out. It suspended arrangements with endemically corrupt recipients of IMF financing. Property is confiscated even when the tax assessment is disputed in the courts. Graft amounts to an increase in the marginal tax rate and has pernicious effects on inward investment as well.
In Bulgaria, the assets of tax evaders have recently begun to be confiscated and turned over to the National Revenue Agency and the State Receivables Collection Agency. Venality was an integral part of their psychological makeup.
III. The World Bank estimates that corruption reduces the growth rate of an affected country by 0.5 to 1 percent annually. Britain has persecuted successfully only one of its officials for overseas bribery since 1889. Yet, one rarely comes across graft and venality in daily life. The same requirements of monitoring of clients’ activities and reporting to the authorities apply to credit and financial institutions, venture capital firms, tax advisers, accountants, and notaries.
Erstwhile president of Sierra Leone, Momoh, amassed hundreds of video players and other consumer goods in vast rooms in his mansion. Rather they are of the nature of compulsive collections. Decision Altering (State Capture) Fees – Bribes and promises of bribes which alter decisions or affect them, or which affect the formation of policies, laws, regulations, or decrees beneficial to the bribing entity or person. All rationales crumble in the face of a Mobutu Sese Seko or a Saddam Hussein or a Ferdinand Marcos who absconded with billions of US dollars from the coffers of Zaire, Iraq, and the Philippines, respectively.
2.. It is then down to the defendant to prove otherwise. That the service, information, or goods that are provided or divulged are provided or divulged against a benefit or the promise of a benefit from the recipient and as a result of the receipt of this specific benefit or the promise to receive such benefit. According to Transparency International’s “Global Corruption Report 2001″, corruption has been successfully contained in private banking and the diamond trade, for instance.
Awareness to corruption and graft is growing – though it mostly results in lip service. The proceeds from such sales accrue to the local municipality. The USA has had a comprehensive “Foreign Corrupt Practices Act” since 1977.
5.. Others have swimming pools replete with wine bars.
3.. The OSCE has responded with its own initiative, in collaboration with the US Congressional Helsinki Commission.
It is widely accepted that corruption retards growth by deterring foreign investment and encouraging brain drain. Others do it in order to reward their nearest and dearest or to maintain a lavish lifestyle when their political lives are over.
In most countries, including the United Kingdom, the United States, Austria, Germany, Indonesia, Macedonia, and Ireland, assets can be impounded, confiscated, frozen, forfeited, and even sold prior to and without any criminal conviction. Concessions, licenses, permits, assets privatized, tenders awarded are all subject to reallocation fees. If the defendant is judged to have a criminal lifestyle then it will be assumed that physical assets, such as properties and motor vehicles, have been acquired through the use of criminal funds and it will be necessary to present evidence to contradict this.
But these mundane reasons fail to explain why some officeholders go on a rampage and binge on endless quantities of lucre.
2.. A similar law has now been adopted by Britain.
International treaties (for instance, the 1959 European Convention on Mutual Legal Assistance in Criminal Matters, the 1990 Convention of the Council of Europe on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (ETS 141), and The U.N.
4.. They believe that corruption helps facilitate the flow and exchange of goods and services in hopelessly clogged and dysfunctional systems and markets (corruption and the informal economy “get things done” and “keep people employed”); that it serves as an organizing principle where chaos reins and institutions are in their early formative stages; that it supplements income and thus helps the state employ qualified and skilled personnel; and that it preserves peace and harmony by financing networks of cronyism, nepotism, and patronage.
” (P)re-judgment enforcement measures (to) include closure of premises for up to ten days and confiscation of merchandise. What to Do? What is Being Done?
The abuse of asset confiscation and forfeiture statutes by governments, law enforcement agencies, and political appointees and cronies throughout the world is well-documented.
To eradicate corruption, one must tackle both giver and taker.
In New-York City, the police confiscated a restaurant because one of its regular patrons was an alleged drug dealer. I suggested this cumulative definition:
The UNDP estimated, in 1997, that, even in rich, industrialized, countries, 15% of all firms had to pay bribes. In the Netherlands bribery is tax deductible. The otherwise opaque Asia Pacific Economic Cooperation (APEC) forum is now championing transparency and good governance. Many of them believe that it is inevitable if one is to expedite matters or secure a beneficial outcome. It demolishes the tenuous trust between citizen and state. It is a compensatory act. The cooperation of good people with trustworthy institutions is indispensable. His defense team accuses the US authorities of “selective prosecution”.
In the United States, according to The Civil Asset Forfeiture Reform Act of 2000 (HR 1658), the assets of suspects under investigation and of criminals convicted of a variety of more than 400 minor and major offenses (from soliciting a prostitute to gambling and from narcotics charges to corruption and tax evasion) are often confiscated and forfeited (“in personam, or value-based confiscation”).
Finally, in many states in the United States, “community responsibility” statutes require of owners of legal businesses to “abate crime” by openly fighting it themselves. The Bank helps countries to fight corruption by providing them with technical assistance, educational programs, and lending.
“We are pursuing the assets of those involved in a wide range of crime including drug dealing, people trafficking, fraud, extortion, smuggling, control of prostitution, counterfeiting, benefit fraud, tax evasion and environmental crimes such as illegal dumping of waste and illegal fishing.” (!)
Drug dealing and illegal fishing in the same sentence. Massive investments in education of the public and of state officials are required.
We can classify corrupt and venal behaviors according to their outcomes:
The UK’s Assets Recovery Agency (ARA) that is in charge of enforcing the Proceeds of Crime Act 2002, had this chilling statement to make on May 24, 2007:
That the assets of suspects in grave crimes and corruption should be frozen or “disrupted” until they are convicted or exonerated by the courts – having exhausted their appeals – is understandable and in accordance with the Vienna Convention. Hitler could have used it to ask the United Kingdom’s Assets Recovery Agency (ARA) to confiscate the property of refugee Jews who committed “crimes” by infringing on the infamous Nuremberg race laws.
Note – The Psychology of Corruption
“In some cases the defendants will even have their assets seized at the start of an investigation, before any charges have been considered. It depletes the affected country’s endowments – both natural and acquired. They rob the state and coerce businessmen to grease their palms because it makes them feel better, it helps them to repress their mounting fears and frustrations, and to restore their psychodynamic equilibrium.
History shows that all effective programs shared these common elements:
Corruption is rife and all pervasive, though many allegations are nothing but political mud-slinging. But they do fulfill a psychological need.
There is also what the World Bank calls “State Capture” defined thus:
4.. Pavel Borodin, the former chief of Kremlin Property, decided not appeal his money laundering conviction in a Swiss court.
Elsewhere, there are some other worrying developments:
When the process of asset confiscation or asset forfeiture is initiated, banking secrecy is automatically lifted and the government indemnifies the banks for any damage they may suffer for disclosing confidential information about their clients’ accounts.
In a survey it conducted in February 2002 of 82 companies in which it invests, “Friends, Ivory, and Sime” found that only a quarter had clear anti-corruption management and accountability systems in place.
“The impetus for this prosecution comes from allegations made by the Kuchma regime, which itself is corrupt and dedicated to using undemocratic and repressive methods to stifle political opposition … It has even set up a multilingual hotline for whistleblowers.
Under the influence of the post-September 11 United States and the FATF (Financial Action Task Force on Money Laundering), Canada, Australia, the United Kingdom, Greece, South Korea, and Russia have similar asset recovery and money laundering laws in place. In both jurisdictions, the fast track freezing of assets has proven to be a more than adequate measure to cope with organized crime and venality.
Only offshore tax havens, such as Andorra, Antigua, Aruba, the British Virgin Islands, Guernsey, Monaco, the Netherlands Antilles, Samoa, St. Vincent, the US Virgin Islands, and Vanuatu still resist the pressure to join in the efforts to trace and seize suspects’ assets and bank accounts in the absence of a conviction or even charges.
1.. These measures will be applied in addition to the attachment or sequestration of personal property and the prohibition against alienation or encumbrance of realty. That the withholding or the provision of said service, information, or goods are in the power of the withholder or the provider to withhold or to provide AND That the withholding or the provision of said service, information, or goods constitute an integral and substantial part of the authority or the function of the withholder or the provider. As electricity supply was intermittent at best, his was a curious choice. It involves enormous stress and unceasing conflict. It leads to the misallocation of economic resources and distorts competition. In many new countries (in Asia, Africa, and Eastern Europe) the very concepts of “private” versus “public” property are fuzzy and impermissible behaviors are not clearly demarcated. It is also risky and rather arbitrary. Politicians with mental health disorders (for instance, narcissists or psychopaths) react by decompensation. More than 1200 delegates participated in the 10th International Anti-Corruption Conference in Prague last year.
3.. That the service, information, or goods that are withheld are withheld because no benefit was provided or promised by the recipient. According to Swiss authorities, more than $40 billion are held by Russians in its banking system alone.
3.. Some of them now reside in refurbished castles. When the defendant fails to furnish such evidence conclusively and convincingly, or if he has left the United States or had died, the assets are sold at an auction and the proceeds usually revert to various law enforcement agencies, to the government’s budget, or to good social causes and programs. The conditioning of international aid, credits, and investments on a monitored reduction in corruption levels. In Maryland, the police confiscated a family’s home and converted it into a retreat for its officers, having mailed one of the occupants a package of marijuana.
Moreover, The moral authority of those who preach against corruption in poor countries – the officials of the IMF, the World Bank, the EU, the OECD – is strained by their ostentatious lifestyle, conspicuous consumption, and “pragmatic” morality.
According to a brief written by Jack Smith, Mark Pieth, and Guillermo Jorge at the Basel Institute on Governance, International Centre for Asset Recovery:
Sam Vaknin ( samvak.tripod.com ) is the author of Malignant Self Love – Narcissism Revisited and After the Rain – How the West Lost the East as well as many other books and ebooks about topics in psychology, relationships, philosophy, economics, and international affairs.
He served as a columnist for Central Europe Review, Global Politician, PopMatters, eBookWeb , and Bellaonline, and as a United Press International (UPI) Senior Business Correspondent.
They are quoted by Radio Free Europe as saying:
In Australia, Austria, Ireland, Hong-Kong, New Zealand, Singapore, United Kingdom, South Africa, United States and the Netherlands alleged and suspected criminals, their family members, friends, employees, and partners can be stripped of their assets even for crimes they have committed in other countries and even if they have merely made use of revenues obtained from illicit activities (this is called “in rem, or property-based confiscation”). There are no false detentions (as in Russia), spurious traffic tickets (as in Latin America), or widespread stealthy payments for public goods and services (as in Africa).. Income Supplement – Corrupt actions whose sole outcome is the supplementing of the income of the provider without affecting the “real world” in any manner. Together with the EBRD, it publishes a corruption survey of 3000 firms in 22 transition countries (BEEPS – Business Environment and Enterprise Performance Survey). The US Department of Justice brought another 30 cases. The figure rises to 40% in Asia and 60% in Russia.
1.. Convention against Corruption 2003- UNCAC) and European Union Directives (e.g., 2001/97/EC) allow the seizure and confiscation of the assets and “unexplained wealth” of criminals and suspects globally, even if their alleged or proven crime does not constitute an offense where they own property or have bank accounts. Liberalization and deregulation of the economy. They serve no purpose, either political or economic. The Agency cannot, however, confiscate single-dwelling houses, bank accounts up to 250 leva of one member of the family, salary or pension up to 250 leva a month, social care, and alimony, support money or allowances. Abolition of red tape, licensing, protectionism, capital controls, monopolies, discretionary, non-public, procurement. But this only makes them more culpable and dangerous.
“Article 54(1)(c) of the UNCAC recommends that states parties establish non-criminal systems of confiscation, which have several advantages for recovery actions: the standard of evidence is lower (“preponderance of the evidence” rather than “beyond a reasonable doubt”); they are not subject to some of the more restrictive traditional safeguards of international cooperation such as the offense for which the defendant is accused has to be a crime in the receiving state (dual criminality); and it opens more formal avenues for negotiation and settlements. They merely catered to their psychopathology.
The defendant’s bank accounts will also be scanned for evidence of spending and any expenditure on unidentified assets (and in some cases identified assets) is also likely to be included as alleged criminal benefit. The Facts
Anti-corruption projects are an integral part of every Country Assistance Strategy (CAS). government”.
Hence also the involvement of the World Bank and the IMF in fighting corruption. The withholding of a service, information, or goods that, by law, and by right, should have been provided or divulged. The structural roots of corruption should be tackled rather than merely its symptoms.
Most politicians bend the laws of the land and steal money or solicit bribes because they need the funds to support networks of patronage. The persecution of corrupt, high-profile, public figures, multinationals, and institutions (domestic and foreign).
In many countries from South Korea to Greece, lawyer-client privilege is largely waived. The Global Coalition for Africa adopted anti-corruption guidelines in 1999. (other Ukrainian officials) including Kuchma himself and his closest associates, have committed conduct similar to that with which Lazarenko is charged but have not been prosecuted by the U.S. It collaborates closely with Transparency International, for instance.
Corruption runs against the grain of meritocratic capitalism. What amounts to venality in one culture (Sweden) is considered no more than hospitality, or an expression of gratitude, in another (France, or Italy). To appease the critics, the affable Attorney General of Macedonia charged a former Minister of Defense with abuse of duty for allegedly having channeled millions of DM to his relatives during the recent civil war.
This is why both governments and business show a growing commitment to tackling it. The institution of incentives to avoid corruption, such as a higher pay, the fostering of civic pride, “good behavior” bonuses, alternative income and pension plans, and so on.
Corruption can never be entirely eliminated – but it can be restrained and its effects confined. Greater access to information and a public debate intended to foster a “stakeholder society”.
Pavlo Lazarenko, a former Ukrainian prime minister, is detained in San Francisco on money laundering charges. The USA has pioneered global anti-corruption campaigns and is a signatory to the 1996 IAS Inter-American Convention against Corruption, the Council of Europe’s Criminal Law Convention on Corruption, and the OECD’s 1997 anti-bribery convention. The USA and the Netherlands hosted global forums on corruption – as did South Korea in 2003. Acceleration or Facilitation Fees – Corrupt practices whose sole outcome is to accelerate or facilitate decision making, the provision of goods and services or the divulging of information. Reallocation Fees – Benefits paid (mainly to politicians and political decision makers) in order to affect the allocation of economic resources and material wealth or the rights thereto. If he or she can prove “substantial harm” to life and business, the property may be released to be used, though ownership is rarely restored.
Tellingly only 35 countries signed the 1997 OECD “Convention on Combating Bribery of Foreign Public Officials in International Business Transactions” – including four non-OECD members: Chile, Argentina, Bulgaria, and Brazil. In Switzerland, financial institutions are obliged to automatically freeze suspect transactions for a period of five days, subject to the review of an investigative judge. Asset Confiscation and Asset Forfeiture
In 2002, just days before a much-awaited donor conference, the influential International Crisis Group (ICG) recommended to place all funds pledged to Macedonia under the oversight of a “corruption advisor” appointed by the European Commission. The UN is promoting its pet convention against corruption.
As most kleptomaniac politicians are also psychopaths, they rarely feel remorse or fear the consequences of their misdeeds. If they fail to tackle the criminals in their neighborhood, the police can seize and sell their property, including their apartments and cars
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