The G20 Anti-Corruption Working Group’s 2015-2016 Anti-Corruption Action Plan (Action Plan) has been endorsed by the Leaders at this year’s Summit. The Action Plan aims to shed light on corruption through increased transparency and international cooperation.
Since its establishment in 2010 in Toronto, the G20 Anti-Corruption Working Group (ACWG) has worked towards developing effective best practice procedures to combat corruption. The ACWG has focused its work through 2-year action plans, each of which aims to create practical, achievable goals.
The Action Plan was formulated at the 16-17 October meeting of the ACWG. This is supplemented by the 2015-2016 Anti-Corruption Implementation Plan (Implementation Plan), which details how the Action Plan will take effect. Both Plans were endorsed by the G20 leaders who met in Brisbane this November. The ACWG has focused on improving transparency, in both the public and private sectors, and enhancing international cooperation and collaboration.
One of the key priorities included in the Action Plan is improving transparency around corporate and legal structures. The rationale behind this measure is to make information about the beneficial owners of companies publically available, in order to identify who may be receiving a bribe or authorising corrupt dealings. The use of “shell companies” is one frequently used way entities can obscure the actual recipient of a bribe. The ACWG has noted that enforcing anti-bribery and anti-corruption methods is significantly impeded by legal vehicles that are set up to purposely obfuscate criminal and corrupt dealings.
The Implementation Plan commits the ACWG to completing a study on the current practices and standards for the registration of legal persons and arrangements in the G20 nations. A better understanding of what legal devices are used to facilitate corruption and which of those are missed by domestic regulators could significantly improve G20 nations’ ability to prevent corruption. For example, it may reveal how entities use corporate structures to cloak the improper benefits they give or receive. Shining a light on the beneficial owner of an entity allows other entities to better understand who they are transacting with and further enables both domestic and international bodies to better identify which entities may have infringed the law. This is particularly important for entities doing business in high risk jurisdictions where parties have been known to adopt business and legal structures to obscure corrupt behaviours.
The ACWG has emphasised the importance of turning the camera on, and having a thorough look at what each nation is doing in order to better combat corruption. A number of deliverables included in the Implementation Plan require the G20 countries to conduct self-assessments. This allows the ACWG to better understand patterns and common difficulties faced by nations in this area.
The continued cooperation between G20 countries, the ACWG and various international organisations is a key feature of the Action Plan. For example, the ACWG regard strengthening whistle blower protections as an important method for enforcement. Following this year’s Summit, each G20 nation is to review their domestic whistle blower protections, with reference to the OECD’s guiding principles on this topic. Considering the globalised nature of corporations and the impact that technology has had on financial crime, it is unsurprising that the ACWG has adopted an approach that asks nations to look both domestically and internationally for an effective way for whistle blowers to inform on corrupt transactions.
Similarly, there is increasing cooperation between national regulators globally. Most recently, the Australian Federal Police is reported to be assisting the PRC Government with tracing proceeds of corruption.
As co-chair of the ACWG, the G20 will be looking to Australia to take action following the endorsement of the Action Plan. Interestingly, the concepts and deliverables put forward by the ACWG in 2014 are not new to Australia. In February Attorney General George Brandis listed tackling the secrecy that surrounds company ownership as a priority. Similarly, improved whistle blower protections were the subject of federal legislation introduced this year. In light of the G20’s focus on anti-bribery and the ACWG’s emphasis on domestic review, Australian companies, more than ever, should protect themselves by implementing effective and transparent internal anti-corruption procedures and practices, including due diligence to understand the true nature of their business transactions.