Global news

Report finds OECD countries still failing to comply with international anti-corruption standards

A report published by the Organisation for Economic Cooperation and Development (“OECD”) on 18 December 2013 has found that developed countries could do more to prevent their financial systems being used to launder the continuing flow of illicit funds from developing countries.

The report “Measuring OECD responses to illicit financial flows from developing countries” found that funds from bribery, corruption and tax evasion in developing states are finding their way into OECD countries which have still not compiled in full with Financial Action Task Force (“FATF”) recommendations on anti-money laundering and counter-terrorism financing. The report notes that despite OECD countries taking a tougher stance on foreign bribery, about half of them have yet to bring a single prosecution for a foreign bribery offence. In addition, the freezing, recovering and repatriation of stolen assets are limited and could be improved by increased mutual legal assistance between countries.

The report assesses each of the 34 OECD member states’ compliance with 49 FATF and other international recommendations, rating each as compliant, largely compliant, partly compliant and non-compliant. The UK emerged with the greatest number of compliant/largely compliant scores (43), while Luxembourg received the highest number of partly/non compliant ratings (39). Interestingly, with the possible exception of Norway, the Scandinavian countries, which usually fare so well in league tables such as Transparency International’s Corruption Perception Index, ranked in the lower half of compliant countries.

The report concludes that further action is needed on the part of developed countries to ensure implementation of the relevant global standards by justice ministries, tax authorities and central banks. Development agencies operating in emerging states should continue to build up specific technical expertise and capacity to tackle economic and financial crime and provide mutual assistance to local authorities, whose ability to investigate, prosecute and sanction economic crimes is often limited.