The G7 summit presents an opportune moment to address the crime and corruption associated with the pandemic, from misused state aid to conflicts of interest
The United Kingdom, which has frequently prioritised illicit finance and corruption at G7 summits, has tasked the G7 interior ministers to address corruption when they meet after the Cornwall Summit on 11–13 June. Illicit finance and environmental crime will also likely be addressed by the finance ministers, who will meet in May. These issues will also be addressed as part of the open societies agenda, referring to the UK’s vision of a Global Britain navigating a just and fair world built on the principles of transparency and linked to democratic values, which are threatened by crime and corruption.
G7 summits have dedicated on average 5% of their outcome documents to crime and corruption since 1975. Only two summits referenced crime and corruption before 1987. The number of words more than doubled in 1989 when the G7 created the Financial Action Task Force. The number then grew before it plummeted to zero in 1993. It increased again to 1,912 words in 1998, which was also the highest percentage of words at 31%. The number of words fluctuated from 1999 to 2004, peaking at 5,827 or 18% in 2004, then continuing to vary. In 2009, the number of words leaped to 3,175 (19%). At the emergency summit responding to the COVID-19 pandemic on 16 March 2020, the G7 did not refer to crime or corruption.
The G7 made 297 (6%) of its commitments on crime and corruption since 1994, averaging 11 per summit. Between 1975 and 1993, there were none. The 2016 summit had the highest number with 33 commitments (11%). Of all the summits between 1975 and 2019, 48% produced fewer than 10 commitments on crime and corruption; 30% made between 10 and 20 commitments; and 7% made between 20 and 30 commitments.
Since 1996, G7 members’ compliance with their crime and corruption commitments averaged 73%, based on the 45 commitments assessed by the G7 Research Group. This is below the 76% average compliance across all subjects. Compliance with the crime and corruption commitments fluctuated widely over the years, peaking at 100% with commitments made in 2000 and bottoming out at 25% for commitments made in 2003. Compliance with commitments made in 2019 was 82%. The United States had the highest compliance at 86%, followed by the United Kingdom with 80%.
CAUSES AND CORRECTIONS
Commitments that produce higher than 75% compliance tend to reference the major international organisations, such as the United Nations, the World Bank, the Organisation for Economic Co-operation and Development and the FATF, or a process calling for international cooperation.
The 24 commitments that use highly binding language, such as ‘will’ and ‘commit’, earned average compliance of 76%; the 21 commitments that use low binding language, such as ‘agree’ and ‘reaffirm’ averaged 70% compliance.
Compliance is higher with commitments that reference international law, notably an international convention, such as the UN Convention against Corruption. Compliance is lower with commitments requiring new national legal instruments. Commitments that link many issues average 81% compared with 66% for non-synergistic commitments. Holding ministerial meetings on crime and corruption prior to the summit also tends to increase compliance. Highly binding language combined with support for the work of international organisations also increases compliance.
To improve compliance with its crime and corruption commitments, the G7 should make commitments referring to the major relevant international organisations, international law, link to other subjects, use high binding language, or use both highly binding language and a reference to international organisations.
More broadly, the G7 should address conflicts of interests and misappropriation of state funds and aid, rampant during the COVID-19 pandemic. It should commit to transparency in beneficial ownership in state-owned enterprises; define corruption and recognise it as a threat to democracy, peace and stability; commit to due diligence on human rights; and explore the links between corruption, sustainability and money laundering/illicit financial flows to develop a multi-faceted, intelligence-led, systems-wide approach that includes community engagement.
The G7 should also commit to supporting source countries of corruption-related money laundering and revive the G7 Africa Public-Private Sector Dialogue on Anti-Money Laundering and Counter Terrorist Financing.
It should task the FATF with exploring the use of unconventional data points available to the unbanked and secure methods for verifying identity, including the use of blockchain.
On environmental crime, the G7 should explore the misuse of green bonds, green washing and fraudulent misreporting of sustainability measures.
Given the global nature of crime and corruption, there should be continued focus through an official body responsible for measuring accountability with crime and corruption commitments beginning at the G7 level.