Corruption costs developing countries $1.26 tr each year: NAB chairman

ISLAMABAD: Chairman of National Accountability Bureau (NAB) Justice (retd) Javed Iqbal has said corruption is estimated to cost the world at least $2.6 trillion annually, approximately 5 percent of the global GDP.

It is estimated that $1.26 trillion are lost by the developing countries to corruption, bribery, theft and tax evasion each year. This is approximately nine times official development assistance funding.

He said Pakistan’s commitment to eradicate corruption remains clear and firm as it has established a comprehensive legal and institutional framework for combating corruption. “Over the years, we have taken steps to improve institutional capacity and align domestic laws with international norms and standards embodied in the UNCAC,” he said while addressing a virtual session of the UN General Assembly Special Session against Corruption on Friday.

He said the UN General Assembly may consider establishment of an open-ended intergovernmental working group to prepare concrete and technical proposals for supplementary frameworks, including the possibility of an additional protocol, to address gaps in the UNCAC, particularly related to the swift return of stolen assets. “The proposals of this working group should then be presented to the UNCAC Conference of State Parties for consideration,” he suggested.

He proposed seven priority areas to explore ideas including immediate return of stolen assets, penalties on the financial institutions, lawyers and accountants, and other “enablers” of corruption, crime and tax evasion, disclosure of the “beneficial ownership” of companies, a global minimum corporate tax, fair digital taxation, review and revision of unequal investment treaties and a coherent, transparent and inclusive mechanism for monitoring illicit financial flows set up under the United Nations.

He said the corruption continues to hold back development and deprive people of their rights in too many places around the world. A recent report of the High-Level Panel on Financial Accountability, Transparency and Integrity has revealed that due to political and official corruption as well as crime and tax evasion, trillions of dollars flow out of developing countries each year. Seven trillion dollars in stolen assets are parked in the financial “haven” countries and jurisdictions. The flight of these vast resources from the developing countries is a principal cause of their under-development, poverty, inequality and political instability.

The NAB chairman said that to reinforce the global fight against corruption, it is vital to strengthen international cooperation and efficiently prevent, detect, investigate and prosecute corruption, as well as to apply effective, proportionate and dissuasive penalties and recover criminal assets. Fighting corruption is a fundamental precondition for upholding the rule of law, peace and security, achieving sustainable development and respect for human rights and fundamental freedoms. “It is also an integral part of the international commitment to end poverty, curb illicit financial flows and ensure that all people enjoy peace and prosperity,” he said.

He said Pakistan is pleased to note the increasing significance of the United Nations Convention against Corruption in addressing the common challenge of corruption at the global level. “We continue to attach high priority to the fight against corruption. We believe that corruption should be prevented in all its forms and a culture of rejection of corrupt practices should be fostered at all levels.” He said the asset recovery is one of the fundamental principles of the UNCAC. It is a matter of high priority for Pakistan. “Despite explicit articles of the UNCAC, there seems to be an increase in the barriers and challenges in the process of asset recovery and return to the countries of origin.”

He said here is a growing concern that the lack of political will, unnecessary delays, procedural complexities, bureaucratic hurdles and legal barriers in requested states as well as high cost of asset recovery continue to impede effective international cooperation in the area of asset recovery. Importantly, he said, the management, administration and utilization of the returned assets is the right and responsibility of the requesting state and that the recovered assets should be returned without conditions and in full respect of the sovereign rights of the states of origin.