History, experience and workings of the Basel Institute on Governance

Initially devoted to developing and promoting compliance industry standards, the Basel Institute on Governance then expanded its activities into anti-money laundering, compliance systems for the private sector, policy advice in the area of anti-corruption and good governance for the public sector and international regulation mechanisms.

In 2006, it launched the “International Centre for Asset Recovery” dedicated to building capacities in developing and transition countries, in order to foster asset recovery processes internationally. This centre was launched with grants coming from governments of three European countries. It further attracted support from a variety of international organisations and other bilateral donors.

The Centre for Governance and Anti-corruption provides assistance in the assessment and implementation of public sector reforms, in particular anti-corruption legal provisions, systems and institutions in developing and transition countries.

So far, a variety of projects have been undertaken in many countries: analysis of corruption risks in the health, education and tax ministries in Azerbaijan; an anti-corruption strategy for Afghanistan; an anti-corruption training for prevention and law enforcement authorities in Haiti; an accountability channels analysis in Malawi, to name just a few. Moreover, the Institute has built key expertise in the UN Convention against Corruption compliance reviews. It has undertaken the compliance reviews (or ‘gap analysis’) or accompanied the process of doing so in the case of Bangladesh, Indonesia and Kenya.

These compliance reviews have allowed those countries to not only analyse how far their existing laws comply with the Convention, but also to engage in an action plan process, whereby for each gap identified, specific action points for relevant authorities shall be undertaken. Those compliance reviews have been very valuable tools to assess the progress made in the anti-corruption legislation.

All these projects have demonstrated that while there is still a huge need of anti-corruption expertise in many countries, time has come to move away from the awareness-raising efforts dedicated to showing how detrimental corruption is and make progress in advancing implementation measures and criminalisation of corruption. In fact, the anti-corruption battle is on the international agenda since fifteen years, but little as been done so far with regard to overseeing to what extent the anti-corruption legislation is respected and enforced.

After fifteen years of awareness-building efforts by both government entities and the civil society, everybody is now waiting for more concrete results on the side of criminalisation and enforcement.

This is probably why initiatives enabling law enforcement authorities of developing countries to acquire financial investigation skills techniques and asset tracing mechanisms have recently taken shape, as a means of fostering the criminalisation of corruption acts and the fight against impunity, which entail huge economic and societal costs to developing and transition countries. This is one of the main reasons why the International Centre for Asset Recovery (ICAR) has been created at the Basel Institute on Governance.

After over two years of operational activities, the ICAR is proud to have trained more than 1000 law enforcement public officials (prosecutors, Financial Intelligence Unit staff, investigative judges, investigators etc) in over 30 countries.

ICAR provides capacity building and training methodologies on-site in developing and transition countries, in the areas of financial investigations, asset tracing and mutual legal assistance requests. It accompanies, to the extent possible, law enforcement authorities and anti-corruption agencies in specific cases management. The ICAR training program is designed as a country-specific programme or regional programme for a set of countries. The ultimate reasoning behind this is that each country is operating on the basis of its own laws, regulations and procedures; it works in a distinct institutional setting and has particular legal, political and social realities to take into account.

The large majority of the programme’s curriculum is based on a practical exercise, based on a fictive case scenario that takes into account the specificities of each country. The training is largely paperless and participants are asked to actively contribute both in the practical exercise as well as by preparing presentations and summary reports to the rest of the group, so as to foster their ability to discuss complex technical investigation and prosecution matters and to present the case and investigation outcomes before an audience at the end of the training. If appropriate electronic equipment is not available on site, ICAR loans each participant a notebook computer with pre-installed training materials and exercises.

In order to design such training programmes, ICAR experts undertake a scoping mission a couple of months prior to running the training in order to meet with all relevant stakeholders active in asset recovery processes on the ground, understand the overall system and collect all relevant legal material necessary to develop a sound and tailor-made practical case study and learning modules.

ICAR supplements this on-site work with some IT tools which are of great help for countries that aim to recover stolen funds. For example, the on-line Asset Recovery Knowledge Centre, which is accessible on-line for free (www.assetrecovery.org), provides a comprehensive database of information on various asset recovery cases, jurisdictions, legislations and contact points in law enforcement agencies dealing with asset recovery. The website is constantly updated. ICAR has also set up an Asset Recovery Expert Network, called AREN, which is a internet-based social network allowing asset recovery specialists to exchange information, get in contact with their peers and get up-to-date information on specific issues (http://aren.assetrecovery.org). Another project assists financial intelligence units in analysing open source information.

Laundering the proceeds of crime and concealing funds used by terrorists has become a lucrative global professional activity. Money launderers and terrorist financiers exploit existing legal and institutional loopholes and move their funds through jurisdictions and financial institutions with weak frameworks. The Anti Money-Laundering/Combating the Financing of Terrorism (AML/CFT) Unit of the Basel Institute on Governance helps countries and financial institutions address such shortcomings and strengthen their preventive and repressive systems. The AML/CFT unit works with public institutions (namely FIUs and supervisors), financial institutions and designated non-financial businesses and professions.

The Basel Institute on Governance also provides academic research on global governance issues, such as the role of the civil society in promoting regulations or global health regulations, and convenes expert meetings to contribute to policy dialogue on key anti-corruption and anti-money laundering issues. Furthermore, it offers short-term and long-term consultancies and expertise in business ethics and strives to promote and develop sector specific integrity standards and initiatives.

It has been instrumental in the launch and the success of the Wolfsberg principles, a set of rules and guidelines that are valid for the banking sector. It has also done similar endeavour for the defence industry, which resulted in the Clovis principles. Recently, the Basel Institute on Governance has re-launched the so-called Power System Integrity Initiative and initiated a Transport and Logistics initiative. These initiatives aim at bringing together competitors representing a vast portion of the market share of an economic sector in order to level the playing field.

They do so by addressing specific corruption risks and by agreeing on common solutions in a coordinated manner. The role of the Basel Institute on Governance is mainly to bring competitors together, help find common grounds and facilitate discussions and processes.

Fighting against corruption, money-laundering and asset stripping is not an easy mission.  Across the globe, vested interests, weak political will, absence of oversight mechanisms and political capture are often underlying causes explaining why corruption is so widespread internationally and not easily tackled. Within the many actors that play a role in this battle, the Basel Institute on Governance sees itself as an expert group, which aims at creating added-value by bringing practical expertise together with academic knowledge in focused areas, providing capacity building in developing and transition countries willing to improve their anti-corruption system, trying to recover ill-gotten funds sent abroad, helping the private sector find responses to corruption risks and contributing to enhancing policy dialogue on key governance issues nationally and internationally.The Basel Institute on Governance is a practice-oriented research institute in various governance domains, but with a clear focus on anti-corruption. Founded by Prof Dr Mark Pieth in 2003 as an independent and non-profit institution, it is associated with the University of Basel and is composed of internationally recognised practitioners, experts and academics with long-standing experience.