Report
Bureau of International Narcotics and Law Enforcement Affairs
April 1, 2002


TABLE OF CONTENTS

  1. Introduction
  2. Background
    1. The Convention: Background and History
    2. How the Convention Supports Other International Anticorruption Efforts
  3. United States Efforts to Encourage Ratification and Implementation by Other Signatories
  4. Domestic Legislation Implementing the Convention and Actions to Advance its Object and Purpose
  5. Progress at the Organization of American States on a Monitoring Process
  6. Future Negotiations
  7. Conclusion

APPENDICES

  1. Senate Report: Section on Provisos
  2. Inter-American Convention Against Corruption
  3. Chart on Status of Ratifications and Mechanism Adoption
  4. The Report of Buenos Aires: Follow-Up Mechanism
  5. Rules of Procedure and Other Provisions of the Committee of Experts of the Follow-Up Mechanism for the Implementation of the Inter-American Convention Against Corruption
  6. Website Listing: Convention-Related Documents

"Our first commitment is to democracy and political freedom... Citizens and businesses must know that the City Hall -- the alcaldia -- is free from bribery and cronyism and all forms of corruption... For freedom and prosperity to come, corruption must go..."

President George W. Bush
Remarks to the World Affairs
Council National Conference
January 16, 2002

"In implementing the President’s vision for a robust and responsible foreign policy grounded in democratic values of freedom and market economics, all forms of corruption must be addressed. Corruption results from a variety of economic, institutional, political, social and historical factors. It flourishes when democratic institutions are weak, laws are not enforced, political will is lacking, and when citizens and the media are not allowed to be partners in democracy. Corruption and unethical behavior by public officials are serious threats to basic principles of democratic government, undermine public confidence in democracy and threaten the rule of law."

Secretary Colin L. Powell
Remarks on "Fighting Global
Corruption: Business Risk Management"
May 2001


I. Introduction

The Senate of the United States adopted the Resolution of Advice and Consent to Ratification of the Inter-American Convention Against Corruption (hereinafter referred to as the "Convention" or "Inter-American Convention") on July 27, 2000. That Resolution requires that the President submit a report to Congress not later than April 1, 2001, and annually thereafter for five years. The topics required to be addressed in the report are listed in Appendix A.

President George W. Bush submitted the First Report to Congress in April 2001. Since the preparation of the First Annual Report, a number of significant steps have been taken toward implementation of the Convention. This Second Annual Report discusses efforts taken by the United States, the Organization of American States (OAS), the States Parties to the Convention, and civil society to strengthen the legal and societal infrastructures necessary to implement the Convention and fight corruption.

Considerable progress has been made in the past year to develop a formal mechanism to monitor and encourage implementation of the Convention. By the end of 2001, twenty-two States Parties had adopted the Report of Buenos Aires, which created this evaluation mechanism. In January 2002, representatives of these States Parties attended a Committee of Experts meeting in Washington and designed rules and procedures for the new mechanism, including a first round assessment program. Section V of this report details the events and significance of the mechanism and the January 2002 meeting.

The OAS Secretariat, in particular the Department of Legal Cooperation and Information, has undertaken a number of activities to promote the ratification and implementation of the Convention. Sections IV and V of this report detail the contributions of the OAS and other donor entities.

The United States has been, and will continue to be, an active participant in the process to promote implementation of the Convention. In fact, recently the United States and Peru successfully invoked Article XIII of the Convention, in conjunction with the U.S.-Peru Extradition Treaty, to extradite two fugitives charged with conspiracy and concealment in the Montesinos corruption scandal. One person has already been extradited and the other has filed a petition for habeas corpus and the outcome will depend on those proceedings.

The Inter-American Convention is firmly established as an important regional effort amongst the growing range of international initiatives against corruption. The negotiation and implementation of this regional agreement has provided valuable experience for developing other regional anticorruption agreements. In particular, the process assists the ongoing work to develop an effective global convention against corruption by the United Nations.

II. Background

A. The Convention: Background and History

The Summit of the Americas in 1994 broached the subject of widespread hemispheric corruption at a political level for the first time, raising it to an unprecedented level of public visibility and attention. On March 29, 1996, the Convention, attached as Appendix B, was adopted and signed by twenty-one OAS member governments at a Specialized Inter-American Conference in Caracas, Venezuela.

As of April 1, 2002 twenty-eight of the thirty-four OAS active governments had signed the Convention, and twenty-five had deposited their instruments of ratification. Appendix C provides a list of States Parties that have ratified the Convention and deposited their instrument of Ratification.

The Convention identifies acts of corruption to which the instrument will apply. It also contains articles that create binding obligations under international law and establish hortatory principles to fight corruption. The Convention provides for institutional development and enforcement of anticorruption measures, requires criminalization of specified acts of corruption, and contains articles on extradition, seizure of assets, mutual legal assistance and technical assistance where acts of corruption occur or have effect in another State Party.

As a basic obligation of the Convention, States Parties must make it a criminal offense for any public official to solicit or receive, and for any person to offer, promise or give, directly or indirectly, a bribe or other benefit, in exchange for any act or omission in the performance of the public official's duties. This obligation relates to government officials of the States Parties, or to persons who perform public functions, that are defined in Article I of the Convention. States Parties must also criminalize the fraudulent use or concealment of property derived from acts of bribery, or participation in the commission of these offenses, or conspiracy to commit them. Article VIII of the Convention requires that States Parties adopt laws that are similar to the Foreign Corrupt Practices Act of the United States, making it a crime to bribe officials of foreign governments in connection with an economic or commercial transaction in exchange for an act or omission in performance of the official's public duties.

The Convention provides procedures for cooperation by Parties in mutual legal assistance and extradition, as described in Articles XIII and XIV, with respect to corruption offenses. Article XV provides procedures for cooperation to effect seizure and forfeiture of assets that are the proceeds of corruption, where acts of corruption occur or have effect in the territory of a States Party. Article XVI also prohibits the use of bank secrecy as the basis for denial of international cooperation among States Parties involving corruption offenses.

Finally, Article III of the Convention emphasizes the importance of preventive measures, and calls upon Parties to consider implementing such measures. These include the following:

Systems of government hiring and procurement that assure openness, equity and efficiency of such systems; standards of conduct for public employees; financial disclosure requirements for public employees; laws that deny favorable tax treatment for any individual or corporation for payments that violate laws against corruption; whistleblower protections; oversight bodies with authority to develop new anticorruption mechanisms; accounting systems and internal accounting controls; addressing the relationship between equitable compensation and probity in public service; and mechanisms to encourage participation by civil society and non-governmental organizations in efforts to prevent corruption.

B. How the Convention Supports Other International Anticorruption Efforts

The United States is concerned about the bribery of, and corruption among, government officials throughout the world. As early as 1977, Congress enacted the Foreign Corrupt Practices Act ("FCPA"), which makes it a criminal offense for a United States citizen or firm to give, promise or offer bribes to officials of foreign governments in order to obtain or retain business. The Convention, however, represents the first attempt to criminalize international bribery through commitments embodied in a formal multilateral and legally binding agreement. It was also path breaking in its effort to punish forms of public corruption that go beyond bribery and focus on the importance of preventive measures in the fight against corruption.

Article VIII of the Convention, as noted above, establishes a specific requirement that Parties adopt laws to address transnational bribery, similar in content to the FCPA and the OECD Anti-Bribery Convention that followed it. However, the Convention goes further by recognizing that public corruption extends beyond the act of bribery in business transactions. It, thus, for example, also calls for criminalizing the fraudulent use or concealment of property derived from acts of bribery, or participation in the commission of these offenses, or conspiracy to commit them. It calls for criminalizing the improper use of classified or confidential information; the unauthorized use of State property for the benefit of the public official or a third party; the seeking of a decision from a public official that illicitly results in a benefit or gain for himself or another person whether or not such decision results in harm to state property; and the improper diversion by a public official of any movable or immovable property, monies or securities regardless of who owns them, which the official has received by virtue of his public position.

Arguably the most promising contribution of the Convention to the international fight against corruption involves its novel attempt to promote preventive measures necessary to address corruption. The Convention recognizes that while the criminalization and prosecution of acts of corruption are indispensable, they are insufficient to prevent corruption effectively in governmental institutions. Therefore, additional measures must be taken that operate specifically to prevent corruption before an offense actually occurs. Thus, Article III contains a series of preventive measures that Parties agreed to consider establishing to prevent corruption. Coupled with the criminalization measures, the goal of the Convention, unique at the time it was being prepared, was to create a comprehensive system that will effectively deter and control corruption in institutions of government by preventing, disclosing, and punishing acts of corruption by public officials.

The United States continues to participate in and encourage bilateral, regional, and multilateral initiatives to promote public integrity and control official corruption in practically all regions of the world. All of these efforts have benefited considerably from the Convention’s groundbreaking attention to corruption. Whereas many governments were loath to discuss corruption at the time the Convention was being developed, governments now meet regularly in various multilateral fora to denounce corruption and share their experiences in implementing preventive measures. The most visible of these intergovernmental fora is undoubtedly the Global Forum Against Corruption, which convened for the second time in The Hague in May 2001 and was attended by representatives of 143 countries. The Third Global Forum will be held in Seoul, Republic of Korea, in May 2003.

Several regional intergovernmental anticorruption agreements have followed the Convention’s path. Almost all include preventive measures and most recognize the need to address forms of corruption beyond bribery. These agreements include the OECD International Bribery Convention, the Council of Europe Criminal Law and Civil Law Conventions Against Corruption, the Stability Pact Anticorruption Initiative for Southeast Europe, the Global Coalition for Africa Principles Against Corruption, the draft Organization of Africa Unity (OAU) Protocol Against Corruption, the Southern African Development Community Protocol Against Corruption, and, most recently, the ADB/OECD Anticorruption Action Plan and Initiative for Asia-Pacific (ADB). In fact, in January 2002, under the auspices of the United Nations, governments commenced negotiations to develop a global Anticorruption Convention by the end of 2003. Like the Inter-American Convention, the future United Nations instrument will likely encourage criminalization of a range of corrupt activities and adoption of a wide-range of preventive measures by governments.

Lastly, it should be noted that the Convention recognizes that the problem of corruption is a major obstacle to development in the Americas. As such, it has energized the work of United States and its hemispheric partners to find common solutions to common challenges in this area. The Assistant Secretary of State for Western Hemisphere Affairs Otto Reich has pointed out:

"Corruption is the single largest obstacle to development in the developing world. Those who steal from the public purse are doing as much harm to their country as a foreign invader would. Whether it is the policeman who takes a $2 bribe to tear up a traffic ticket of the Cabinet official who takes millions to rig a government contract, they are doing untold damage to their countries."

Otto Reich, Assistant Secretary of State for Western Hemisphere Affairs Remarks at his swearing in ceremony, March 11, 2002.

III. United States Efforts to Encourage Ratification and Implementation by Other Signatories

The Inter-American Convention Against Corruption entered into force on March 6, 1997. As of April 1, 2002, twenty-eight countries had signed the Convention, twenty-six countries had ratified the treaty, and twenty-five had deposited their instruments of ratification with the OAS. Appendix C sets forth the dates of the ratifications and the deposits of the instruments of ratification. While official notice has been received of Haiti’s ratification, the OAS had not received a deposit of its ratification document at the time this report was submitted.

Brazil and Suriname are the only two countries that have signed, but not yet ratified, the Convention as of the time this report was submitted. Officials from the United States Embassies in those two countries have made direct calls upon government officials to urge prompt ratification of the Convention. The legislature in Brazil is currently considering the Convention and recently enacted new anticorruption legislation. Brazil participated actively in the meetings of the OAS Working Group on Probity and Public Ethics to develop the Convention evaluation mechanism described in Section V below and took part in the first meeting of the mechanism in January 2002 as an observer. In Suriname, the Convention is still under consideration in the Executive Branch. Separately, the OAS and the Department of State have initiated a project to encourage ratification by six Caribbean countries that have not yet signed the Convention.

The concern with corruption and the need for prompt action on a follow-up mechanism for the Convention were amply evident at the Third Summit of the Americas, which took place in Quebec City, Canada on April 20-22, 2001. In the Declaration of the Summit, the 34 heads of the American states declared:

"Acknowledging that corruption undermines core democratic values, challenges political stability and economic growth and thus threatens vital interests in our Hemisphere, we pledge to reinvigorate our fight against corruption."

They went further in the Third Summit of the Americas Plan of Action to call upon all countries to sign and ratify the Convention and to promote its effective implementation.

IV. Domestic Legislation Implementing the Convention and Actions to Advance its Object and Purpose

The OAS has made it a political priority to help strengthen commitments and obligations of the States Parties to fight corruption, and to facilitate cooperation among States Parties in this area. This priority was clearly evident at the Third Summit of the Americas in 2002. As mentioned above, the resulting Declaration focuses specifically on the need for governments in the region to fight corruption, calling on them to sign and ratify the Convention. In addition, the Third Summit of the Americas Plan of Action cites the need to:

"Support the establishment as soon as possible, taking into consideration the recommendation of the OAS, of a follow-up mechanism for the implementation of the Inter-American Convention against Corruption by States Parties to this instrument."

On a technical assistance level, the OAS, through its Department of Legal Cooperation and Information, continues to develop projects to assist State Parties to implement the Convention. It has conducted workshops on a variety of topics under the Convention, including one which assessed the individual needs for various countries in Central and South America to adjust their criminal legislation in order to comply with the Convention. This particular project culminated in ten useful publications on this subject. With the financial support of the Bureau of International Narcotics and Law Enforcement Affairs of the Department of State (INL), the OAS will extend this project to five Caribbean countries that have not yet ratified the Convention. Finally, the OAS and Organization for Economic Cooperation and Development (OECD) have collaborated to design a strategic plan of action aimed at obtaining the adoption of portions of their conventions, within the framework of their jurisdictions, among all OAS members. As such, both organizations held a conference in Brasilia, Brazil in December of 2001 entitled "Forum on Ensuring Accountability and Transparency in the Public Sector." The conference was designed to assist OAS countries to implement public sector reform measures, including preventive measures outlined by the Convention.

The OAS has conducted workshops on a variety of topics under the Convention, including development of model criminal and preventive legislation. It has established an Internet website that provides access to more than 9,000 files on anticorruption topics (Appendix F). It has collaborated with the World Bank, the Inter-American Development Bank, and the U.S. Agency for International Development (USAID) in conferences, workshops and publications aimed at implementation of the Convention.

The Plan of Action from the third Summit of the Americas calls for the creation of the Inter-American Network of Institutions and Experts in the Fight Against Corruption ("Network") and of the participation of civil society in the fight against corruption. With the statements and activities of the Third Summit of the Americas in mind, a number of ethics officials from throughout the Americas met recently to discuss the creation of the Network. The ethics officials have taken preliminary steps toward the fulfillment of this initiative. The United States Office of Government Ethics (OGE) is actively involved in ongoing discussions regarding U.S. participation in the Network and the parameters and formality of the Network. The Network would have its own distinct mandate, separate from those of established multilateral organizations. Membership of the Network, which would initially be limited to a small number of States, would grow as other States developed their ethics programs and as the Network became better able to accommodate a larger membership.

Information currently available on what legislation has been enacted and actions taken in the various countries to fight corruption reflects different patterns from region to region and from country to country. As reported last year, the responses to a June 2000 OAS questionnaire showed that 82% of the reporting countries had legislation designed to prevent conflicts of interest by government officials, but only 55% reported a requirement that government personnel be instructed to ensure proper understanding of their responsibilities and ethical rules governing their activities. Only 18% reported having a national law to protect public servants and private citizens who, in good faith, report acts of corruption. Over half (55%) of the States Parties responding indicated that they have adopted a comprehensive program to fight corruption, in addition to those mechanisms discussed in the questionnaire. Appendix F provides the website link containing the specific OAS country responses to the questionnaire.

For this report, the U.S. Department of State, through its Embassies, undertook an informal survey in the twenty countries in Latin America and the Caribbean that have adopted the Document of Buenos Aires. (See Section V for a description of that document and its relationship to the Convention.) The goal of the survey was to obtain basic data about certain legislation and actions being taken by ratifying States Parties to implement the Convention and actions to advance its object and purposes. This survey collected information about the status of national anticorruption plans and other indications of the seriousness with respect to which States Parties were taking their obligations under the Convention.

The survey indicated that of these twenty States Parties, ten have adopted national anticorruption plans and two are in the development process. Thirteen have designated Convention oversight offices. Six have issued national codes of conduct, while four others are in the process. Four have enacted transparency in government statutes, while nine others are still in the drafting and legislative stages. Two countries have enacted whistleblower protection statutes, while four others are in the legislative process. Only four have designated an office to process technical assistance requests under Title XVIII of the Convention.

The results indicate that while some States Parties had made progress in implementing certain provisions of the Convention, others had not. The subject areas covered in this informal survey are among the first to be assessed in depth by the new follow-up mechanism during the coming months. The new questionnaire being drafted for the use by the mechanism will cover topics contained in the OAS questionnaire but in considerably greater depth. Section V of this report for more detail on the new follow-up mechanism.

The Department of State's U.S. Mission to the OAS has been working extensively within the OAS in cooperative efforts to foster the implementation of the Convention. (See Section V for details of the OAS efforts.) These have included diplomatic efforts to maintain momentum in developing the follow-up mechanism and funding OAS technical assistance programs, as well as active participation in the OAS Working Group on Probity and Public Ethics.

In addition, other State Department offices and other U.S. agencies continue to engage in activities that directly and indirectly support implementation. The U.S Department of State/INL has provided financial support for technical and advisory assistance to five Caribbean countries that have ratified the Convention, as well as, training of law enforcement officials throughout the Hemisphere. Agencies such as USAID, OGE, and the Department of Justice have assisted countries directly with implementation of the Article III prevention measures by helping develop codes of ethics, establish methods of financial disclosure, and enhance civil society's role in the struggle against corruption.

USAID’s anticorruption efforts in the region utilize Respondanet, the most visited anti-corruption website on the Internet, and video conferencing to provide technical assistance and disseminate information and best practices in a cost effective manner to local government, professional associations and NGO’s. Responding to the demand among mayors for better communications with citizens, the USAID Latin American Countries Regional program helped develop electronic training tools on participatory financial management practices. Under its regional local government activities, USAID supported the development of electronic modules to communicate with citizens on municipal financial management practices and shared them through networks of national municipal associations.

The USAID-funded Inter-American Democracy Network (IADN), which now includes over 206 civil society organizations from 22 countries, had significant impact fostering transparency and accountability practices across the hemisphere. They collaborate with government institutions to develop and improve local initiatives, engage in citizen oversight activities, and lead advocacy efforts to build public awareness and participation. The IADN signed 21 "international partnerships" in 13 countries, adapting proven methodologies in local government decision-making and oversight that should lead to better government service delivery and stronger civil society oversight. One such partnership, Poder Ciudadano from Argentina formed alliances with community service organizations in Mexico, Peru, and Bolivia and adopted best practices to influence decision-makers and solve local problems. The IADN also developed platforms and opportunities for its member organizations to influence decision-makers and present civil society views in the international arena. Examples include the development of a consultative process for the Convention, the Inter-American Democracy Charter, which was adopted in Lima, Peru on September 11, 2001, and a Free Trade Agreement of the Americas. It is worth noting in this respect that Article IV of the Democratic Charter includes, among the essential elements of the exercise of democracy: "[t]ransparency in government activities, probity, [and] responsible public administration on the part of governments."

USAID also continued to support the Americas Accountability Anticorruption Project (AAA), which provided a forum, the "Donor Consultative Group," for exchange of information on Latin American anticorruption programs of national and international public and private donors. The USAID Mission in Mexico is preparing an anticorruption program that responds directly to the priorities of President Vicente Fox’s administration, and the U.S. government has assured the government of Mexico that its agencies are prepared to consult and assist as Mexico attempts to invigorate its anticorruption efforts.

In addition to the work being done by the U.S. Government and the governments of other States Parties, and the OAS, a number of non-governmental organizations are playing an important role by conducting activities aimed directly and indirectly at implementing the Convention. For example, Transparency International (TI), through its chapters throughout the Americas, has been working to ensure effective implementation of the Convention and the development of a strong follow-up mechanism. In addition to TI’s work, other non-governmental organizations continue to utilize the Internet to distribute information about the Convention and to report on corruption and anti-corruption events nationally and throughout the Hemisphere. These include the Foundation for Public Ethics in Argentina (www.worldpolicies.com), the Latin American Center for Development Administration in Venezuela (http://www.clad.org.ve/homei.html) and Probity in El Salvador (http://www.probidad.org.sv/english/index.html).

The Convention was on the agenda of a number of major conferences in 2001. These included the Second Global Forum on Fighting Corruption and Safeguarding Integrity (Second Global Forum), held in The Hague in May 2001, the 10th Annual Anti-Corruption Conference (10th IACC) in Prague in October 2001, and the Trust of the Americas/Andean Development Corporation-sponsored conference on the role of the press in anticorruption efforts, held in Cartegna, Colombia in 2002.

President Vicente Fox delivered the closing speech at the Second Global Forum, in which he mentioned the Convention and its importance to Mexico. A number of sessions at the Second Global Forum invited attention to the Convention and the efforts of the OAS toward its implementation. Many States Parties to the Convention sent delegates to the 10th IACC in Prague, which included a session featuring anti-corruption programs organized by the World Bank Institute in Bolivia, Colombia, Ecuador, Honduras, Mexico, Paraguay and Peru, all of whom are States Parties to the Convention.

V. Progress at the Organization of American States on a Monitoring Process

The Inter-American Convention, unlike the later OECD Anti-Bribery Convention and Council of Europe Criminal Law Convention, does not obligate States Parties to establish a mutual evaluation mechanism. The negotiations leading to the adoption of the Convention did not include any discussion of such a mechanism and accordingly no such provision was added to the text of the Convention. However, comparisons between the Convention and subsequent international anticorruption instruments, and other observations about the implementation of the Inter-American Convention, prompted considerable discussion about the need for such a mechanism.

The United States initially proposed in June 1999 that the OAS General Assembly agree to establish a follow-up mechanism for monitoring implementation of the Inter-American Convention. The General Assembly approved a resolution requesting the OAS Permanent Council's Working Group on Probity and Public Ethics to examine the subject. The Working Group met several times, and a number of its members also participated in a non-governmental international workshop organized to discuss this issue by Transparency International, the Inter-American Bar Association and the American University Washington College of Law in Washington, D.C. in November 1999. Subsequently the Working Group and the Permanent Council proposed, and the OAS General Assembly in June 2000 approved, Resolution AG/RES. 1723 which instructed the Permanent Council:

"To analyze existing regional and international follow-up mechanisms with a view to recommending, by the end of 2000, the most appropriate model that State Parties could use, if they think fit to monitor implementation of the Convention. That recommendation will be transmitted to the State Parties to the Convention for them to choose the course of action they deem most appropriate."

The OAS Committee on Juridical and Political Affairs referred this mandate to the Working Group on Probity and Public Ethics, which convened on September 7, 2000 under the chairmanship of Argentina. The Working Group met on numerous occasions at the OAS Headquarters. Participation in the Working Group was open to all OAS Member States. The principal contributors to the negotiations were Argentina, Canada, Jamaica, the United States, and Mexico, with additional input from Uruguay, Peru, Brazil, and El Salvador. By late 2000, the Working Group produced a recommendation that called for the creation of a "Committee of Experts", and presented a set of guidelines for an evaluation of the implementation of the Convention. Only countries that have ratified the Convention would participate in the evaluation process. The purposes of the follow-up mechanism would be to promote implementation of the Convention and "to facilitate technical cooperation activities, the exchange of information, experience and best practices, and the harmonization of the anticorruption legislation of the States Parties."

Regarding civil society participation in the review process, the Working Group recommended that while the mechanism would be intergovernmental in nature, the Committee of Experts may receive written comments from non-governmental bodies, "taking into account the Guidelines for the Participation of Civil Society Organizations in OAS activities, as well as the definition of civil society in AG/RES. 1661(XXIX-0/99)."

On January 18, 2001, the Permanent Council accepted the Working Group's recommendations and transmitted them to the States Parties to the Convention in Resolution CP/RES.783. The Republic of Argentina invited the States Parties to meet in Buenos Aires on May 2-4, 2001, following a preparatory session in Washington on March 21-23, 2001. The May meeting produced the Document of Buenos Aires, which was adopted in the form of a political commitment by the Foreign Ministers of twenty countries during the OAS General Assembly in June 2001 and subsequently adopted by two additional States Parties (Appendix D). The Document of Buenos Aires assigns to a Committee of Experts a number of specific duties relating to the mechanism, including the selection of topics under the Convention to be reviewed and countries to be evaluated, and the issuance of a report that will be forwarded first to the States Parties and then made public.

The first meeting of the Committee of Experts took place in Washington from January 14-18, 2002. The attending States Parties representatives reflected a diversity of professional backgrounds, including prosecutors, anti-corruption officers, diplomats, and auditors. Several had helped to develop the Document of Buenos Aires.

The Committee produced consensus on significant matters, including a set of operating rules and procedures, referred to in detail below. The first day was devoted to briefings by representatives of four other mutual evaluation mechanisms specifically, the Organization for Economic Cooperation and Development (OECD), Council of Europe (GRECO), Financial Action Task Force (FATF) and the Mutual Evaluation Mechanism of Inter-American Drug Abuse Control Commission (MEM of CICAD). The remainder of the week was devoted primarily to Committee deliberations that resulted in a document entitled "Draft Rules of Procedure and Other Provisions," which was finalized after style changes and other minor corrections were incorporated in late February (Appendix E). On the last day of the January 2002 meeting, Dr. Carlos Balsa, President of the Anti-Corruption Commission of Uruguay was selected as the Chair for the first year of the mechanism’s operation.

While the draft rules track the Document of Buenos Aires quite closely, they also reflect key new decisions of the Committee of Experts in several important areas. First, the legal rules limit the term of the Chair and Vice-Chair to one year, with re-election limited to an additional year. The need for flexibility in dealing with the leadership was considered more important than continuity. Second, the Secretariat of the OAS was given major responsibility for initiating documents, including the questionnaire and draft country reports. This reflected confidence in the Secretariat based upon its previous well-received work promoting implementation of the Convention and the professional manner in which the Secretariat had developed the first drafts of the rules of procedure and work plans. Third, it was decided that the working languages of the Committee would be the languages of the States Parties, which currently are Spanish and English. Fourth, within the parameters set by the Document of Buenos Aires for Civil Society Organizations’ (CSO) participation (only such entities that have formally registered with the OAS under its procedures for such participation), the Committee of Experts recognized the importance of such involvement and established procedures for early CSO access to Committee documents and opportunity to comment. In addition, it was the Committee of Expert’s intent that there be ample dissemination of final documents above and beyond the CSO community. Fifth, site visits were deemed appropriate only when necessary and in the interests of equality. Such visits would occur only if they were going to be made to all State Parties in the same round. However, any single State Party could still invite a site visit at any time. Sixth, the Committee selected the following as the provisions in the Convention that will be the subject of the first round evaluation: Sections 1(Standards of Conduct); 2(Mechanisms to implement the Standards); 4 (Financial disclosure reports); 9(Supervisory anticorruption offices); and 11(Enhancing civil society role in corruption prevention) of Title III, as well as Titles XIV (Assistance and Cooperation) and XVIII (Central Authorities for Assistance and Cooperation). This selection reflected the consensus that the first round should be productive without being overloaded, and that cooperation and technical assistance are absolutely essential aspects of the Convention.

The topic of financing was raised several times but was purposely omitted from the rules. It was felt that specifical discussion and agreement on the question of financing of the Mechanism was a matter for the Conference of the States Parties, and that the Chairman and the Secretariat would make the necessary overtures to the Conference. As of today, only the United States ($50,000), Canada (CAN$50,000), and Mexico ($25,000) have made financial contributions to the Committee of Expert’s operations. A budget will be prepared for the second meeting based upon how many countries will be included in the first round. It is highly unlikely that the Committee of Experts will be able to meet its first year goals unless additional funds are made available.

The second meeting of the Committee is being scheduled for May or June 2002. It is anticipated that this meeting of the Committee will accomplish four things: develop its work plan for 2002; develop the methodology for the first round; develop the questionnaire for the first round; and determine which States Parties would the first to be reviewed.

VI. Future Negotiations

As stated in the First Annual Report, there are still no formal proposals or even informal discussions taking place among the States Parties to the Convention to expand its scope or to assess areas where it might need amending. However, the Committee of Experts has the authority to propose to the Conference of States Parties any recommendations it considers pertinent regarding the Convention and the Report of Buenos Aires.

VII. Conclusion

Although six years have passed since it was enacted, the Inter-American Convention Against Corruption is still in the early stages of implementation. However, as stated in last year’s report, it is already clear that its adoption by the States Parties has served a number of useful purposes. First, it has helped bring the problem of corruption to an unprecedented degree of discussion at the international level, in the domestic media, and in the political processes of all countries in the Hemisphere. Second, it has caused governments throughout the Hemisphere to make commitments to take concrete actions, such as the enactment of new legislation that will be effective to prevent, disclose, and punish corruption. These commitments have helped transform the attitudes of voting publics in the Americas toward corruption. With the public speaking out, and even acting against corruption, leaders and governments are compelled to take action and accept responsibility. Third, the Inter-American Convention has served as an example to other regions in the world that corruption is a regional problem, not just a national one, and the efforts to combat it can benefit from international cooperation. Fourth, with its focus on preventive measures, it has set the example that law enforcement and criminal prosecutions by themselves cannot solve the problem of corruption. It has, thus, helped focus international and domestic discussion on the causes and impact of corruption, and effective measures to address corruption problems. Finally, with the development of an effective evaluation mechanism, the Convention will help establish a new level of transparency and accountability of the States Parties in meeting their anticorruption commitments.

This Second Annual Report indicates that more States Parties have increased their efforts to implement the Convention, although palpable progress in the struggle against corruption is and will continue to be difficult to assess. Obviously, the activation of the Committee of Experts will result in some measurement of that progress, but such results in the form of final country reports cannot be reasonably expected for several years. The experiences of other international anticorruption mutual evaluation mechanisms affirm the long-term nature of this process. However, the fact that States Parties will for the first time subject themselves to scrutiny by their peers on how they are dealing with a wide variety of corruption issues will undoubtedly result in additional attention to the problem of corruption. In the interim, the continued efforts of the United States, international financial institutions, civil society organizations, and the other State Parties can be expected to brighten the spotlight on the problems of corruption and lead to more resources to combat them effectively.

In order to properly commence and sustain the follow-up mechanism, the Committee of Experts faces a number of challenges. States Parties must make experts available to participate fully in the mechanism, and they must provide for adequate funding of the Committee’s activities. The OAS Secretariat must secure adequate resources to complete the formidable responsibilities assigned to it. States Parties must respond in a timely and thorough manner to the questionnaire and draft country reports. Continuity of experts and expertise among the membership of the Committee of Experts will be essential to ensure the consistency and equity of treatment contemplated in the rules of the new mechanism. The Committee of Experts will need to resist rushing to conclusions to please an expectant audience of civil society and other observers, but, at the same time, complete the first round of assessments while the data it relies upon remains reasonably current. In this regard, it is hoped that States Parties will voluntarily make final country reports available to the public as promptly as possible.

The United States will participate fully with the other States Parties to achieve the goals and purposes of the Convention. Whether through assisting development of the new monitoring mechanism, providing technical assistance to States Parties, or other avenues of support, the United States will continue to help translate governmental commitments under the Inter-American Convention into effective actions against corruption.

[See Appendices.]

[This is a mobile copy of Second Annual Report to Congress]