Guest Post: The IOC Is Lagging Behind In Fighting Corruption in Sports Mega Events

Professor Thomas Kruessman, of the Johan Skytte Institute of Political Studies at the University of Tartu in Estonia, contributes today’s guest post:

Recently Jimmy McEntee criticized the anticorruption provisions that the International Olympic Committee (IOC) had added into its standard Host Country Contract (HCC), arguing that the revised HCC language fails to represent genuine progress in fighting Olympic corruption. I might quibble with a few of his arguments, but McEntee’s larger point is essentially correct. For example, while I think McEntee erred as a technical legal matter in asserting that the HCC contains no legal enforcement mechanism, he’s right that as a practical matter, the IOC may not be able to credibly threaten to enforce the anticorruption provisions against a host city, or host National Olympic Committee (NOC) that violates them. Although the IOC is entitled to terminate the HCC and to withdraw the Games from the Host City if there is a violation of or failure to perform “any material obligation pursuant to the HCC or under any applicable law,” this threat is not very credible, given the high stakes involved for the IOC, the demanding timeline on which Olympic Games are prepared, and the fact that termination may invite burdensome and uncertain litigation over what counts as a “material obligation.” For similar reasons, the less extreme remedy of retaining or withholding funds from the host city or NOC or Host National Olympic Committee (NOC) is also not very appealing, and therefore not very credible, in light of the IOC’s strong interest in making the Olympic Games a success and the fact that withholding funds which would weaken the local hosts.

But perhaps McEntee’s most important point—and the one I want to explore further here—is his argument that the HCC’s anticorruption languate is excessively vague. He argues that “a meaningful anticorruption provision – one consistent with best practices for such provisions – would need to include language that requires the host city to ensure that its agents, contractors, suppliers, and consultants do not participate in any corrupt practice” (emphasis in the original). It is here, especially with respect to the failure to deal clearly and adequately with third-party corruption, where the revised HCC lags behind most, and where comparison with another international sporting association’s approach to the same issue—the Union of European Football Associations (UEFA) Tournament Requirements for the EURO 2024 tournament—is most enlightening. Continue reading

Post-TPP Withdrawal: Loss of a Trade-Corruption Milestone?

As promised, President Trump removed the United States from the Trans-Pacific Partnership (TPP) trade agreement soon after he took office in January. The move withdrew the world’s leading economy from the largest regional trade deal ever proposed. It also represented a major step back from what looked like a breakthrough in linking anticorruption and trade. As I discussed in a previous post, the TPP’s anticorruption chapter was an important step towards inclusion of anticorruption commitments in trade deals, making the U.S. withdrawal from the TPP a step backwards for the decades-old movement to incorporate anticorruption provisions in trade agreements.

Yet Trump’s move was not the end of the TPP negotiations. Nor should it be the end of championing an increased role for anticorruption and transparency in trade deals. With the TPP having reached the final stages of negotiation, its Transparency and Anticorruption Chapter can provide an outline for future trade deals that might provide further opportunities for trade-corruption linkage. As outlined in a previous post, the TPP’s chapter on anticorruption made several strides forward, including obligations to join UNCAC and respect other anticorruption instruments. What’s more, the anticorruption provisions were to be made enforceable in trade dispute resolution tribunals (though, as Danielle has previously written, corruption can already support certain actions in trade dispute arbitration). Looking at the strides forward in the draft TPP, there are three key avenues through which the Transparency and Anticorruption Chapter can continue to strengthen international trade deals.

Continue reading

Guest Post: Rolling Back Anticorruption

Laurence Cockcroft, a founding board member of, and current advisor to, Transparency International, contributes today’s guest post:

The global campaign against corruption has become a cornerstone of Western foreign and development policy for the last 25 years. This campaign built on a number of earlier measures, most notably the 1977 enactment of the US Foreign Corrupt Practices Act (FCPA), which criminalized foreign bribery by companies under US jurisdiction, but the campaign really accelerated beginning in the late 1990s. For example, while European countries had resisted adopting legislation similar to the FCPA for 20 years, this changed with the adoption of the OECD Anti-Bribery Convention in 1997, which was followed a few years later by the 2002 UN Convention Against Corruption. International financial institutions like the World Bank have become more aggressive about debarment of contractors found to have behaved corruptly, and we have also seen the proliferation of corporate-level ethical codes, promoted by organizations like the World Economic Forum and UN Global Compact, designed to prevent corrupt behavior.

More recent initiatives have pushed for greater corporate transparency. For example, in the United States, the Dodd-Frank Act ended the aggregation of corporate income across countries; an EU Directive promulgated shortly afterwards imposed similar requirements. More recently, an initiative to disclose the true beneficial owners of corporations and other legal entities, pushed by former British Prime Minister David Cameron, has already taken legislative form in the United Kingdom; beneficial ownership transparency is also the subject of an EU Directive, and was being promoted by the Obama administration. And although the so-called “offshore centers” have yet to embrace similar transparency of beneficial ownership, regulatory systems in these centers have been significantly improved. There have also been a number of important sector-level initiatives, particularly in the resources sector. These include the Extractive Industries Transparency Initiative (EITI)—which requires participating governments of mineral and energy exporting countries, as well as companies in the extractive sector, to commit to a process of revenue transparency—as well as national-level laws, such as Section 1504 of the Dodd-Frank Act, which impose so-called “publish what you pay” obligations on extractive firms.

Even more encouragingly, this gradually improving regulatory environment has been accompanied by growing public opposition to corruption, as reflected in large-scale demonstrations around the world. Crowds on the streets, for example, have recently supported the proposed prosecutions of the current and past Presidents of Brazil, and opposed weakening of anticorruption laws in Romania.

But in spite of public opinion, the forces opposed to anticorruption initiatives have never gone away. The arrival of President Trump has let many of them loose both inside and outside the United States: Continue reading

A Different Kind of Quid Pro Quo: Conditional Asset Return and Sharing Anti-Bribery Settlement Proceeds

In my last couple of posts, I’ve returned to a theme I’ve written about before: My skepticism about claims that the U.S. government either should (as a matter of policy) or must (under UNCAC or other legal obligations) share settlement proceeds in FCPA cases with the governments of the countries where the bribery took place. I’m also skeptical that there’s any obligation on the part of U.S. or other supply-side enforcers to use any of this settlement money to fund NGO-sponsored projects in (or for the benefit of) those countries.

Asset recovery, however, is different. When the U.S. (or some other country) identifies – at its own initiative or pursuant to the request of another government – assets held in the U.S. that have been stolen from a foreign government, my reading of the law (both conventional domestic legal principles and Chapter V of UNCAC) is that the U.S. has an unconditional legal obligation to return those assets to their rightful owner. At times, the U.S. has indicated that, although it has a general policy of returning stolen assets to the governments from which they were stolen, it does not view this as a legal obligation. Rather, the U.S. seems to want to leave open the option, in some cases, of attaching conditions to the return of the assets, or funneling them through NGOs or other bodies, rather than simply turning them over to the claimant government. I understand why the U.S. has taken this position: Returning assets stolen assets to a claimant government with a reputation for pervasive corruption—where it seems highly likely much of the money will be stolen again—seems awfully unappealing, and doubly so in those cases where the government officials who stole the money in the first place, or their family members and cronies, retain their power and influence in the claimant country. Hence the instinct to attach conditions to the return of the assets, or to use the money to fund NGOs rather than simply turn it over to the claimant government. The problem, though, is that I’m hard-pressed to come up with a legal basis (notwithstanding some valiant attempts) for doing anything other than handing over the money.

So, the situation as it stands looks something like this (and I acknowledge simplifying quite a bit to make things a tad neater than they actually are): On the one hand, many developing countries want wealthy countries like the U.S. to share foreign bribery settlement proceeds with the countries where the bribery took place, but for the most part the wealthy countries do not want to do this, and assert—correctly—that they are under no obligation to do this under UNCAC or any other legal instrument. On the other hand, many wealthy countries would like to retain the flexibility to attach conditions to asset return (or to use seized assets to fund NGO programs rather than turning the money over to the governments), but the claimant countries in the developing world assert—correctly—that there is a legal obligation (enshrined in UNCAC) to return stolen assets, without strings attached.

Framing the issue this way suggests a possible compromise. (In the interests of disclosure, I should say that this is not my original idea: It came up in a conversation I had recently with an analyst at an anticorruption NGO, but since I haven’t had the chance to clear it with him, I won’t name the person or organization here.) The trade would go like this: Continue reading

Guest Post: Is It Lawful Under UNCAC to Attach Conditions to Asset Returns?

GAB is pleased to welcome back Robert Packer, from the University of Nanterre, who contributes the following guest post:

Article 57 of the United Nations Convention Against Corruption (UNCAC), which outlines provisions concerning the return of stolen assets, was the most contentious piece of the entire convention. A straightforward reading of Article 57 appears to require state parties to return assets “on the basis of a final judgement in the requesting State Party” (emphasis added). Often, however, a final judgement is not forthcoming. Article 57 addresses that contingency in its final paragraph, which provides for “agreements or mutually acceptable arrangements, on a case-by-case basis, for the final disposal of confiscated property.” That gives rise to another extremely contentious question, discussed previously on this blog (see here, here, and here): Is it legally permissible for states that confiscate the assets to attach conditions on their return? Continue reading

Some Worrisome Russian Rhetoric at the UNCAC Conference of States Parties

My post a couple days ago expressed some discomfort with the decision to hold the Conference of States Parties to the UN Convention Against Corruption in Russia, given Russia’s track record on this issue, and my concern that the Russian government hopes to use this event more as a PR exercise than anything else. Apropos of these concerns, I finally had a chance to watch some of the video from the event, and one particular passage in the opening remarks of Sergei Ivanov (Chief of Staff of the Presidential Executive Office and a Putin crony) caught my attention. Sandwiched in between claims that recent surveys show corruption in Russia is decreasing and descriptions of all the measures Russia is supposedly taking to combat corruption, Mr. Ivanov said (and here I’m transcribing the English simultaneous translation, since I can’t speak Russian):

We firmly believe that anticorruption activities at the international level require clear rules and agreed efforts between countries. Imposing standards, however, which certain countries are not willing to accept, is not acceptable—all the more so, given that we have seen on more than one occasion that when one country establishes standards of behavior, it tends to be that this is unacceptable to other countries, and it can indeed be harmful. In this connection, we believe that when implementing international anticorruption standards, we need at all times to take on board the specificities of each individual state. I would note also that in the Russian Federation the system of anticorruption measures is based on our national legal culture, which takes on board our historical and economic and social development trends, and the general interests of our society.

Maybe I’m just being paranoid, but to me this sounds an awful lot like a veiled warning that the international community, both within and outside the UNCAC review process, should refrain from criticizing Russia (or other countries) for failure to live up to international standards, on the grounds that each state – and Russia in particular – has its own unique circumstances. Of course, at a high level of generality, Mr. Ivanov’s remark is unexceptionable, and UNCAC already makes plenty of allowances for differences in national legal traditions and political systems. But the spirit of UNCAC is very much to hold every signatory country to a higher standard. Insofar as Mr. Ivanov’s statement is meant to suggest that other countries should not be subject to criticism for failure to live up to international anticorruption standards—particularly in the context of the second cycle country reviews, beginning this year—this seems to me contrary to the point of UNCAC and the associated review process.

(For those who are interested, the video of the full opening ceremony, including Mr. Ivanov’s address, is here, and the portion of the speech I quoted above can be found at 2:37:18-2:38:26.)

The UNCAC States Parties Meeting, and the Political Symbolism of Venue Choice

The Sixth Conference of States Parties (CoSP) to the United Nations Convention against Corruption (UNCAC) is being held this week, in St. Petersburg, Russia. From a quick glance at the provisional agenda, it looks like some of the topics that delegates will focus on include prevention, asset recovery, and international cooperation, as well as broader issues related to UNCAC implementation. (For more information, see here.) I don’t really have much to say about the substance of the meetings, not least because they’re still in progress, and much of the actual discussion is taking place behind closed doors. Rather, I wanted to take this opportunity to say in public what I know a lot of people have been mumbling and/or grumbling about in private: There’s something a bit ironic, maybe even perverse, about holding the UNCAC CoSP meeting in Russia, of all places. It seems about as appropriate is it might be to hold a CoSP for the Convention on the Elimination of All Forms of Discrimination against Women in Saudi Arabia. Continue reading