Democratic Republic of Congo
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Southern Africa’s fight against corruption needs Collective Action
A high-level meeting of heads of anti-corruption agencies in the Southern African Development Community SADC last month was a chance to take stock of member countries’ efforts to tackle corruption. The meeting allowed for a reflection on many ongoing activities and discussions around Collective Action in the region this year. It was the perfect opportunity to reflect on how to galvanise joint efforts against the region’s biggest scourge. Speaking to delegates, Scarlet Wannenwetsch, Collective Action Specialist, highlighted the underused capacity of the private sector. Businesses are full of dynamism and talent, both of which are critical in fighting corruption and other transnational crimes. To harness the private sector’s potential, she emphasised the importance of building trust by fostering regional multi-stakeholder networks. Bringing together anti-corruption champions from the public sector, private sector and civil society helps to create “good” networks – ones powerful enough to fight the corrupt networks that are holding back development in the region. Appetite for engagement The Basel Institute has been a long-standing partner of the SADC Secretariat through the work of the Private Sector team. Our team has been impressed by the level of innovation in the region. Some feature in a publication capturing good practices that was created by, with and for anti-corruption agencies in Africa. We have also been training SADC corruption prevention officers on how to engage with the private sector through Collective Action approaches. Our partners consistently express a desire for more opportunities to engage and exchange with other stakeholders. They realise that no one group can tackle corruption alone. Working towards building a community of practice To sow the seeds for such a regional multi-stakeholder network, we launched the first Southern African Anti-Corruption Collective Action Forum earlier this year in collaboration with the Southern African Anti-Corruption Network SAACoN and The Ethics Institute. The event brought together participants from the private sector, civil society and government institutions to discuss concrete opportunities for learning and collaboration. For many, it was the first time they had met at the regional level. The event was also a chance to celebrate progress. CoST Uganda won our Southern Africa Anti-Corruption Collective Action Award for its outstanding achievements in tackling corruption and raising business integrity in the region. What’s next? In order to build on the momentum of the Forum and on the energy of the SADC region’s anti-corruption leaders, it is crucial that member states continue to prioritise collaboration and Collective Action. Government anti-corruption agencies needs close, sustained collaboration with the private sector and civil society if they want to develop a more inclusive strategy to prevent corruption – and if they want that strategy to actually work in practice. That applies not only at the country and sector level, but at the regional level too. And that’s what Collective Action can bring. We look forward to continuing our fruitful collaboration with the SADC Secretariat and wider partners to support anti-corruption Collective Action in the region. Learn more about our work on the B20 Collective Action Hub and find inspiration in its global database of initiatives.
Grey-listing for anti-money laundering failings: focus on Sub-Saharan Africa
A new special short report for the Basel AML Index analyses why so many Sub-Saharan African countries are on the so-called grey list of the Financial Action Task Force FATF . It covers the impacts on their economic development, the process of grey-listing and what governments need to do to be removed from the list. It also touches on specific areas of concern for anti-money laundering and counter-terrorist financing AML/CFT in Sub-Saharan Africa. Eight countries in Sub-Saharan Africa now grey-listed In October 2022, the Democratic Republic of the Congo, Mozambique and Tanzania were added to the so-called FATF grey list. Officially known as the “list of jurisdictions under increased monitoring”, the FATF grey list includes countries that are assessed to have strategic deficiencies in their national regimes to counter money laundering, terrorist financing and proliferation financing. Sub-Saharan Africa now accounts for a third of countries on the grey list. This aligns with findings of the Basel AML Index, the Basel Institute’s ranking and risk assessment tool for money laundering and terrorist financing ML/TF . In the 2022 Public Edition of the Basel AML Index, the Sub-Saharan Africa region scored poorly for resilience to ML/TF and more than 60 percent of countries fell into the high-risk category. Although grey-listed countries are not subject to sanctions, being placed on the list does have severe implications for their economies. These include a substantial decline in capital inflows and foreign direct investment. Entering and leaving the grey list The short report looks at the FATF’s process for grey-listing, which starts with being referred to the special International Co-operation Review Group for one year. It then looks at what countries need to do to be removed from the list. A high-level political commitment is essential, as is completing an action plan developed to address each’s country’s specific gaps. Our analysis shows specific areas where Sub-Saharan African countries display particular weaknesses, and where regional support initiatives may be helpful. Cross-cutting weaknesses at the government level include the fundamental steps of accurately assessing ML/TF risks and developing a risk-based approach to supervision. Enhancing the capacities of law enforcement agencies and financial intelligence units is also a key need. It takes effort to complete the action plan, but progress is always welcomed. When an on-site visit confirms that all items are satisfactorily achieved, the FATF announces the country’s removal from the grey list at its next plenary meeting. Learn more Download the special report on FATF grey-listing in Sub-Saharan Africa. The report complements a new series of short reports on jurisdictions that have been delisted from the FATF grey list. These will publicly available on the Basel AML Index website Downloads page . Remember: the Basel AML Index Expert Edition offers a sophisticated tool for analysing geographic ML/TF risk. Subscriptions are free to most organisations outside the private sector, as well as journalists.
Publications
Engaging the private sector in Collective Action against corruption: A practical guide for anti-corruption agencies in Africa
This guidance seeks to capture and explore the innovative approaches that African governments have developed to address the demand and supply sides of corruption more effectively and sustainably. It is designed to help government institutions, in particular national anti-corruption agencies, engage with the private sector more effectively to prevent corruption.
The document highlights good practices identified through interviews, desk research and a 2021 Southern African Development Community (SADC) training on “Emerging anti-corruption issues and private-sector engagement for SADC anti-corruption agencies”.
Africa offers many examples of innovative, unique and context-sensitive approaches to engage the private sector in anti-corruption efforts. Ghana’s National Anti-Corruption Action Plan, for instance, offers an award scheme and is looking into providing tax benefits to companies that enforce anti-corruption measures and demonstrate leadership in the fight against corruption. Other agencies and governments in the region, such as Morocco, are currently discussing implementing a reward system for compliant companies that can be considered when companies bid for public tenders.
These examples demonstrate how African governments proactively seek to tackle corruption and collaborate with the private sector.
From the initiatives captured, three common strategic approaches can be identified to underpin effective and impactful engagement:
- Raising awareness, guiding and working with the private sector to more effectively address corruption risks.
- Identifying and providing incentives to companies investing in their compliance programmes.
- Demonstrating leadership by actively participating in Collective Action and public-private partnerships.
This document is a follow-up of a practical global guide published in July 2022 and was produced with the support of the Siemens Integrity Initiative.
It is freely shareable under a Creative Commons CC BY-NC-ND 4.0 licence. Please credit the Basel Institute on Governance.
Basel AML Index briefing: FATF grey-listing in Sub-Saharan Africa
This is a Basel AML Index briefing on countries in Sub-Saharan Africa subject to grey-listing by the Financial Action Task Force (FATF) .
The briefing covers the impacts on their economic development, the process of grey-listing and what governments need to do to be removed from the list. It also touches on specific areas of concern for anti-money laundering and counter-terrorist financing (AML/CFT) in Sub-Saharan Africa.
About jurisdiction briefings
As part of the FATF assessment process, a jurisdiction may be placed on a “grey list” (subject to increased monitoring) or “black list” (a high-risk jurisdiction subject to a call for action). This follows identified failings in how the jurisdiction addresses its money laundering and terrorist financing risks. Being placed on the FATF’s grey or black lists has a negative impact on a jurisdiction’s investment climate, trade and capital flows.
The Basel AML Index Expert Edition dashboard highlights a jurisdiction’s placement on the FATF grey or black lists for informational purposes, but these lists are not used when calculating its overall risk score.
As an additional service, from June 2022 the Basel AML Index therefore started to publish special briefings on jurisdictions delisted from the grey or black lists. This report on Sub-Saharan Africa complements the jurisdiction-specific briefings.
Learn more about the Basel AML Index at: index.baselgovernance.org
Collective Action Against Corruption in the Criminal Justice System
The criminal justice system (CJS) is the ballast to a nation’s stability. By enforcing the rule of law, the police, courts and corrections provide citizens with security. However, when the system becomes so riddled with corruption, what was meant to be a protector becomes a predator. In many fragile states, the CJS is just that – another threat to the average citizen and a resource that the wealthy and powerful use to maintain their position. This distortion of the CJS’s purpose occurs through the systematic use of extortion/bribery, sexual favors, political interference and favoritism or, typically, some combination of all four.
This innovative practice brief describes an experimental effort to combat these forces within the CJS of Lubumbashi, Democratic Republic of the Congo. It describes the two-year effort, explains the processes used for learning, highlights key results and offers lessons learned, as well as ongoing challenges.