Negotiating without the victim state: the exclusiveness of anticorruption settlements
| DOI | https://doi.org/10.1108/JFC-11-2021-0247 |
| Published date | 27 December 2021 |
| Date | 27 December 2021 |
| Pages | 1249-1268 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Nadja Capus,Kei Hannah Brodersen |
Negotiating without the victim
state: the exclusiveness of
anticorruption settlements
Nadja Capus and Kei Hannah Brodersen
Faculty of Law, Université de Neuchâtel, Neuchâtel, Switzerland
Abstract
Purpose –Corporate foreign briberycan have devastating consequences on communities andstates. Over
the past decade, therehave been several promising developments, both nationaland international, that might
increase the chancesof victim states to receive remediation for the harm they suffered from foreign bribery. In
particular, awareness has risenthat victim states must be considered and new innovative items have been
added to the toolbox of prosecutors in the fight against corruption that is assumed toalso improve victim
states’standing in these procedures. This study aims to assess whether indeed victim states receive
compensationthrough these novel procedures.
Design/methodology/approach –This study uses the three case studies of Switzerland, France and
England and Wales for a comprehensiveempirical and normative analysis of settlement agreementsbetween
defendantsand prosecution authorities and of courtjurisprudence.
Findings –This study shows thatalthough de jure, it seems warranted to order the payment of remedies to
victim states within domestic criminalproceedings, in practice, this rarely happens. A number of legal and
practical obstacles account for thissituation. This study, therefore, calls for the formulation of international
guidelines containing the obligation to inform victim states of ongoing criminal proceedings on corporate
foreignbribery, and guidance on how to identify the victim of this crime, as well as the damage caused.
Originality/value –This is the first contribution to verify whether claims that settlement agreements,
recently introduced in Englandand Wales and France (and similar procedures are available in Switzerland),
are beneficial for victim statesin their quest to receive compensation. As this study showsthat this is –not
yet –the case in practice, thisstudy proposes solutions that could lead the way for remediationof the harm
caused by corporatecorruption –and thereby, ultimately, to a morejust outcome.
Keywords Criminal law, Negotiated settlements, Transnational corporate corruption, Victim states
Paper type Research paper
1. Introduction
This article focusses the question of whether countries that have lost assets because of
foreign bribery by corporations are de jure and de facto able to participate in settlement
procedures –which have become the main way to enforce anticorruption laws in many
countries (OECD, 2019,p.3)–to get some kind of remediationfor the harm they suffered [1].
Fighting corporate foreign bribery is a global task today (Gantz, 1997/1998, p. 469 ff.; Delmas-
Marty and Manacorda, 2000, pp. 401–405; Webb, 2005,pp.191–229; Garzon and Hafsi, 2007,
pp. 61–80; Manacorda, 2014,pp.3–30), involving high sums of money in terms of penalties and
confiscated assets. There is even talk of the emerged marketfor anticorruption enforcement that is
itself globalizing (Brewster and Buell, 2017, p. 195). States, non-state actors and international
The authors thank Stefan Mbiyavanga, Melody Bozinova and Basilio Nunnari for their research
assistance and two anonymous reviewers for their constructive critical reading.
Funding: This research is financed by the European Research Council (ERC) under the European
Union’s Horizon 2020 research and innovation programme (grant agreement No 864498).
Negotiating
without the
victim state
1249
Journalof Financial Crime
Vol.29 No. 4, 2022
pp. 1249-1268
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-11-2021-0247
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
organisations such as the Organization for Economic Cooperation and Development (OECD), the
United Nations (UN), the Council of Europe and the European Union have s ought to increase the
criminalisation of corruption, especially with regard to companies’large-scale global business
corruption. In addition, as awareness has risen that international corruption demands a n
international reaction, co-ordination and co-operation initiatives have proliferated. International
conventions recommend the sharing of assets confiscated in domestic criminal proceedings with
those states who have provided support (for example, UN Model Agreement Asset Sharing, the
Economic and Social Council by means of joint and parallel inv estigations and coordinated
conclusions of settlements). Adopted in 2003, the United Nations Convention against Corruption
(UNCC) already contained the fundamental principle that seeds of corruption should be returned to
the legitimate initial owner and that state parties should “affordoneanotherthewidestmeasureof
cooperation and assistance in this regard”(Article 51; see generally Chapter V of the UNCC).
Nevertheless, according to the World Bank and the United Nati ons Office on Drugs and Crime,
a“huge gap remains between the results achieved and the billions of dollars that are estimated
stolen from developing countries”(Gray et al., 2014, p. 2). Therefore, the two international
organisations have jointly started the Stolen-Asset Recovery (StAR) initiative (see point 2 of the
Draft OHCHR Guidelines on a Human Rights Framework for Asset Recovery) [2]. Also in the
context of the 2030 Agenda for Sustainable Development, UN Member States committed to recover
and return missing money by 2030 (ibid, point 3). These initiatives exemplify how recovery and
return of assets have become a priority on the political agenda of concerned countries.
One of the problems about returning stolen assets is that there is no consensus on the
definition of victims of foreign bribery, their rights or the extent of their compensation in
either international conventions or national legislation (Rahman, 2020, p. 4). This is insofar
important as criminal procedures tackling corruption would normally allow for recovering
and returning the proceeds of corruption to the owner. Therefore,we analyse this possibility
and do not deal with reparations that victims can ask for in civil proceedings, nor with
restitution of assetsthrough mutual legal assistance.
Moreover, we focus on victim states, i.e. those states whose communities and citizens are
affected by the devastating consequences ensuing from transnational corporate corrup tion of
foreign officials [3] (as an example for such consequences see the RAID, 2020;FCPABlog-
Theriault-Lachance, 2020). The Global Forum for Asset Recovery (GFAR), an intergovernmental
initiative organized by the World Bank, postulates in the 2017 “GFAR Principles for Disposition
and Transfer of ConfiscatedStolenAssetsinCorruptionCases”that “stolen assets recovered from
corrupt officials should benefit the people of the nations harmed by the underlying corrupt
conduct”(principle 5). As it is the state with its sovereign power who is the legal representative of
the people (Peters, 2009, p. 272), we define ‘victim states’as those states that are legally legitimated
to represent the damaged nation in settlement procedures regarding corporat efo reign bribery.
Of course, victim states might be suffering from corrupt structures, at times even to an extent
that it becomes unlikely that the people of that state would actually benefit from returned money.
With its “Guidelines on a Human Rights Framework for Asset Recovery”,theOffice of the United
Nations High Commissioner for Human Rights (OHCHR) attempts to formulate appropriate
measures in this regard. They state, for instance, that requested states have an obligation to return
embezzled public funds to requesting states (principle 9) and receiving states have “adutytouse
recovered assets in a manner that contributes to the realization of human rights”(principle 8).
We do not ignore the problem that state officials might be the principal actors in grand-
scale foreign bribery cases (Makinwa, 2018, p. 24) and that anticorruption prosecutions
might be politically tainted (Mész
aros, 2020, pp. 54–73). However, arguments against
restitution to these kinds of statesassume that all public officials at all levels of these states
are corrupt; they do not take into account possible regime changes and the role of
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