coins, money, ruble-990693.jpg

FINANCIAL CORRUPTION IN INTERNATIONAL COMMERCIAL LAW

INTRODUCTION

Corruption is dishonest behavior and misusing of their authority with the motive of earning private gain. Corruption can be a hurdle in the development of our nation once it enters into the system it’s then become impossible to remove it from its roots. It hampers our economic growth, brings inequality, a great economic divide between the poor and the rich, and can even cause environmental issues. Corruption is not just a problem for our country but a major concern recognized globally. Corruption can occur anywhere whether it is police stations, courts, businesses, media, or even in civil society. It can be done by anyone like politicians, government officials, lawyers, doctors, or the general public. The corruption perception index shows what is the country’s position or state concerning corruption among 180 countries. The score varies between 0 to 100 which means highly corrupt and very clean respectively. Among 180 countries there are 131 countries in which no significant improvement can be seen against corruption in the last decade, two-thirds of the countries score even less than 50 and 27 countries incurs the lowest score ever. This shows what is the condition in the world concerning corruption.

Financial corruption is the type of corruption in which the financial rules of companies and financial institutions violated and it is being commonly seen in the institution nowadays.

CAUSES OF FINANCIAL CORRUPTION

There are numerous reasons why financial corruption takes place and some of them are

POLITICAL AND ECONOMIC ENVIRONMENT
Politics and economic development is one of the major cause of corruption. In a country where the economy and politics are strictly regulated, authorities and officials have higher discretion in decisions making in that scenario there is a greater chance of corruption.

Was founded by Goel and Nelson in their research that there is a strong link between monetary policies and corruptive activity in the states. It was seen that the country with fewer restrictions on economy and politics are those with low corruption cases.

The low wages of government officials instigate them to take bribery to improve their financial conditions this problem is commonly prevailing in developing countries where they do not have enough revenue to increase the income of government officials. Along with the low wages of the government officials, the poor political administration system and overcrowding of political officials in politics lead to an increase in corruption.

When the person is highly dissatisfied with the work in which he or she is involved then the rate of corruption is way much higher. This shows that satisfaction also plays a leading role in the factors influencing corruption.

PROFESSIONAL ETHICS AND LEGISLATIONS
Corruption can also be influenced by the lack of professional ethics and deficiency in the laws related to corruption in our criminal legal system can also lead to an increase in corruption cases. If a person is once involved in corruption, there are high chances of continuing corruption cases by an individual due to the lack of laws and regulations in our criminal system. Lack of transparency and the lack of control by the supervisory institution is another cause of corruption. Lack of accountability and lack of transparency will only lead to an increase in the number of corruption cases.

HABITS, CUSTOMS, TRADITIONS, AND DEMOGRAPHY
Different countries have different perspectives towards corruption for example in Europe, on the northern side, there are strict laws against corruption whereas in the southern part of Europe there are merely any laws against corruption. In the terms of thankyou concern, some people believe that saying thank you means it is like showing gratitude towards someone. While on the other side some people think that the word thankyou is promoting and is an act of corruption.

FORMS OF FINANCIAL CORRUPTION

Some of the forms of financial corruption are

EMBEZZLEMENT
An embezzlement is a form of theft only but in embezzlement, there is a breach of trust involved. Embezzlers in this don’t need to rush or trespass into the homes of strangers by breaking their windows and putting a gun at their head and asking for their property they just use their position to commit an act.

THEFT AND IRREGULARITY
Theft or other sorts of corruption are used to attack the money of other people.

BRIBERY
Taking or giving bribery is very common all over the world. Bribery simply means giving or taking from someone in order to change or influence the actions of the other person.

FRAUD
Fraud is the act of cheating or deceiving someone in order to secure some unlawful gain.

EARN PROFIT FROM A JOB
In which a person is using his or her authority or power to get some undue advantage in a job.

FINANCIAL CORRUPTION LAWS UNDER THE AMBIT OF INTERNATIONAL LAWS

OAS CONVENTION
The OAS [ Organization of American States] convention is the interstate convention between 34 states. The main objective of this convention is to fight against corruption and to punish and detect the corrupters. This was the first international legal convention and the focus was on the foreign government official. This convention deals with both illicit enrichment and transnational bribery. An illicit enrichment basically means a sudden increase or excrement in the value of the assets of the government official and he or she is unable to give a reasonable source of this income. According to this convention, both illicit enrichment and transnational bribery come under the purview of the act of corruption. This convention also provides suggestions related to reforms under specific laws in order to combat corruption.1

OCED CONVENTION
The OECD Convention basically focuses on combatting bribery in international business transactions. It was adopted in 1994 and it came into effect in 1999. There are some guidelines which are mentioned under this convention to fight against corruption and some of these guidelines are criminalizing bribery, if any property is acquired by means of corruption then the property has to be seized, jurisdiction to govern an offense of bribery should be available throughout the nation or the country and the penalties should be strict and effective to combat the bribery and corruption.2

INITIATIVES BY THE COUNCIL OF EUROPE
The disciplinary committee was set up by the European ministers to fight against corruption. The Multi-Disciplinary Group on Corruption, or GMC, attempted to look into some feasible solutions for a worldwide anti-corruption campaign. The GMC proposed a draft of the anti-corruption program in 2000, which was approved by the Council of Europe. There were some effective instruments were developed by the council of Europe and these are the criminal law convention which this convention aimed to criminalize both types of bribery such as active and passive bribery and for the officials in both the private and public sectors. The civil law convention aimed to ask the state to provide compensation to those who suffered damage because of bribery and established a proper code of conduct for public officials which is related to dealing with the situations when the officials receive gifts from the people.

INITIATIVES BY THE UN
The anti-corruption declaration and resolution were adopted by the united nations general assembly3 in the year 1996 to fight against passive bribery. This declaration has the objective to take action against bribery, illicit enrichments in the internal commercial transaction, etc. it also has a code of conduct for public officials which provides a certain guideline to combat corruption and they are not allowed to have an improper advantage for or her family.

CONCLUSION

Corruption was referred to as a great sin already in the bible.” do not accept a bribe, for a bribe blinds those who see and twist the words of an innocent”. Corruption is a hurdle in the process of development of the nation. Once it enters the system it goes on increasing and it is difficult to remove it from the roots. Despite the fact that we are having numerous numbers of legislation domestic and even globally but still we are not effectively fighting against corruption. There are some officers who take bribery to improve their financial standing because their salaries are too low but due to some officers,’ the whole system is known for corruption. It is important to have strict legislation not just in the civil domain but also in the criminal domain against corruption. The laws need to be effectively followed by the people strictly. Some of the effective measures to fight against corruption are there should be a corruption cell in every state to fight against corruption, awareness regarding corruption or taking or giving bribery should be given through videos, workshops, etc, to increase the salaries of the government official so that they do not compel by the financial positions to take bribery, the cameras should be installed at the workplaces of a government official and they need to be fully functional. With the help of consistent political and social efforts, we can reduce the influence of corruption in the minds of the people.

References:

  1. OAS Convention, 30 April 1948.
  2. OCED Convention, 14 December 1960.
  3. United Nations General Assembly.

This article is written by Prerna Pahwa, a student at Vivekananda Institute of Professional Studies, New Delhi.

Leave a Reply

Your email address will not be published. Required fields are marked *