Reference Laws and Recommendations for the Fight against Corruption

This short article recommends laws and other references for law-makers who are drafting a law against corruption. It also lists elements to be considered for integration into anti-corruption laws.

If a comprehensive law is to be drafted from scratch, we recommend to take the law of Hong Kong as basis and to complement it with large parts of the law of South Korea. The law of Hong Kong focuses on penal provisions and powers for authorities to act, whereas the law of South Korea establishes structures and mechanisms for the effective prevention and investigation of corruption. The two laws complement each other.

We do not recommend a light law in fighting against corruption, because a light law is unlikely to fulfil its task. However, readers who aim nonetheless for a light law might consider taking the law of Cambodia as basis. It is balanced and covers many important aspects with relatively short provisions. Evidently, it is way weaker than a law which is based on the models of Hong Kong and South Korea.

We found interesting regulatory techniques and elements in the laws of:

  • Brazil (Chapter V on leniency in case of full cooperation and Chapter VI on the dissolving of legal persons as administrative sanction);
  • France (“Loi Sapin II”: mandatory compliance program for companies with >500 workers or turnover >100 million euros: code of conduct; internal reporting channel; risk mapping corruption by geographic area and business; third party integrity assessment (customers, suppliers, intermediaries); accounting controls; staff training; disciplinary action regime; and constant control and evaluation of measures);
  • Portugal (similar mandatory compliance measures for companies: person responsible for regulatory compliance, corruption prevention plan, code of conduct, internal reporting channel, training Program, internal control system; prior assessment of the risk of third parties);
  • Singapore (Part V on “Evidence”, including legal presumptions; partly identical to the law of Hong Kong);
  • South Africa (very detailed definitions and offenses, Chapter 4 on presumptions and defenses, Chapter 6 on Register of Tender Defaulters, Chapter 7 inter alia on duty to report and extra-territorial application); and
  • United States (pioneer for extreme extra-territorial application, sanctioning companies worldwide; also sending policing “commissioners” into companies worldwide to control the companies’ behaviour once substantial misbehavior has been detected.); the United States pushed successfully many jurisdictions toward stricter anti-corruption laws; its presidential office announced for 2024 a series of legislative proposals to further strengthen the already tight legal regime; after the last substantial structural regulatory progress due to the French “Loi Sapin II”, we expect the future U.S. legislation to again be at the forefront of the legislative fight against corruption; hence to be followed.

We found some useful model provisions at:

There are also some entire model laws on particular aspects relevant for the fight against corruption in the section “Rights and Justice” of our Model Law Library.

We recommend reading three comparison of laws: 1, 2, 3. Features referred to in these comparisons include: monitoring the implementation of anti-corruption legislation; regular review of legislation; the establishment of specialised anti-corruption agencies; power to investigate bank accounts, share accounts or purchase account of any suspect; power to investigate also the suspect’s family or agents and to examine their financial and other records; power to require lawyers to disclose information; power to intercept communications; surrender of travel documents; power to investigate any other offence which is disclosed in the course of a corruption investigation; recovery of the proceeds of corruption; sanctions for  ‘trading in influence’; sanctions for ‘negligent financing of bribery’ or ‘knowing’ about bribery, ‘knowing’ to include conscious disregard and willful blindness; bribe advantages to include in-kind contributions, investment opportunities, subcontracts, stock options, positions in joint ventures, favourable contracts and business opportunities; covering acts in furtherance of bribery; covering acts committed via intermediaries or third parties; liability of successor companies; punishing the mere offering or promising of a bribe; exemption for minimal gifts or ‘gratuities’ (free meal); covering of advantages to close persons; corporate offence of a commercial organisation’s failure to prevent bribery; sanction for ‘knowingly circumventing or knowingly failing to implement a system of internal accounting controls or knowingly falsifying any book, record, or account’; inverted burden of proof regarding lawfulness of income and assets; penalising the destruction of documents, data or other means of proof or evidence; ranges of collateral sanctions like disqualifying offenders from public tenders or holding office in the public service, professional or company activity prohibition, placement under judicial supervision for a certain period, closing of a certain establishment or subsidiary; penal or administrative credit for compliance programs, self-disclosure and cooperation; strict liability, also towards competitors; mandatory ethics codes for authorities and companies; mandatory ethics training for authorities and companies; prohibition for officials to be involved in commercial activities or to hold parts of enterprises that are in connection with their functions; transparency measures like obligations of all public officials to declare their family relationships, other close personal relationships, economic activities, income and assets; prohibition of employing persons with whom there is a family or other close personal relationship; impeachment procedures and removal from office of high ranking officials; protection of whistle-blowers and other informants and reduced sanctions for them; acts of corruption made to violate other laws such as the Marketing Act, the Competition Act, Act on Business Accounting, the Income Tax Act and the Public Procurement Act; non-deductability of bribes in taxation; and many more.

From our own oversight on regulation worldwide, we recommend adding the following features: provisions for transparency in government operations, including public access to information; detailed procedural obligations and transparency requirements like publication of key documents in corruption-prone sectors like taxation, customs, public tenders, mining and other licences; accountability mechanisms for public officials and entities; anonymous alert portals, permitting two-ways-communication, for reporting corruption in public and private sectors; mandatory publication of preventive measures; mandatory staff rotation in government teams to reduce the risk of collusion; designation of observers from another administration to oversee public tenders and other processes prone to corruption; officials/staff to sign codes of conduct; confiscation of assets not clearly disconnected from corruption; black-labeling of offending natural or legal persons; exclusion from grants as side sanction; use of domestic enforcement powers for partner states respecting the rule of law and human rights; mutual legal assistance and extradition provisions in cross-border cases; extension of state empowerments and sanctions to partner natural or legal persons and owners of legal persons; provisions for minimum human and financial resources for anti-corruption authorities; minimum control intensity requirements for enforcement; mandatory cooperation of the judiciary and other authorities with anti-corruption agencies; legal control mechanisms for measures taken by dedicated anti-corruption agencies; provisions on their cooperation with the judiciary; permission for private actors, including competitors and entrusted NGOs, to file enforcement lawsuits against corrupt natural or legal persons; mandatory auditing by specialised auditors or anti-corruption NGOs; voluntary auditing and controls by specialised auditors, NGOs, professional organisations, or insurers; linked thereto or based on authorities’ assessment: positive labels or ratings for compliant entities; comprehensive protection measures and reduced sanctions not only for whistleblowers, but also other witnesses and victims of corruption; provisions for public awareness and education campaigns promoting integrity and ethics; regular reporting and assessment mechanisms to evaluate anti-corruption efforts and the law itself; mechanisms for regular updates and revisions. If you still need more inspiration please check our Handbook “How to regulate?”.

Good policy guidance, also indicating important elements of legislation can be found:

Last but not least, any draft most likely merits being checked for completeness against at least one of our own model laws, namely for empowerments and other aspects of implementation, because no real law has ever come close to the comprehensive empowerments and other implementation provisions of our late model laws. We recommend in particular the model law on internet relationships and virtual worlds. This model law furthermore applies the principle of (enforcement by) mutual control of economic actors. This principle could be transposed to the fight against corruption by establishing an obligation to report to authorities any tentative corruption, and to sanction the non-fulfilment of the reporting obligation already. A more comprehensive completeness and quality check can be applied by using the Quality Control Chapter of our Handbook “How to regulate?” or simply by going through the Handbook.

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