This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.
Query
Which countries have restrictions on public officials, politicians or any nationals from holding overseas bank accounts or property. Which countries require officials and politicians to declare their financial and property interests (particularly their overseas interests); and in both areas, which countries enforce these restrictions?
Purpose
The background to the question is how intelligence and tracking of suspicious activity and money laundering can be improved. Knowing which countries have legal restrictions, would be very useful. Although my primary interest is developing countries, it would also be of interest to know which developed countries have these systems in place.
Content
1. Example of countries who restrict their citizens and politicians from holding overseas bank accounts or property
2. International experience of assets declaration regimes
3. References
Caveat
There is no publicly accessible exhaustive list of countries who have restrictions on public officials, politicians or any nationals from holding overseas bank accounts or property. In agreement with the enquirer, this answer provides (non exhaustive) examples of countries that have such provisions.
Summary
A few countries such as Venezuela, Nigeria, Kenya and Bangladesh restrict or prohibit politicians or public officials from establishing and holding overseas bank accounts as a way to prevent corruption and money laundering. Typically, such restrictions are not specific to politicians, but imposed on citizens as part of a country’s foreign exchange control regime. Restrictions can include disclosure requirements, strict prohibition or the written authorisation of the central bank or the taxing authority to open and maintain overseas accounts. As the number of countries where strict exchange controls are in force is constantly changing, there is no up-to-date, publicly available and exhaustive list of countries enforcing strict exchange control regimes. Countries such as Argentina, Brazil, China, India, Malaysia, Morocco, Nigeria, and Venezuela still exercise some kind of foreign exchange controls.
There is no publicly accessible documented account of how these various countries enforce these restrictions and more research/resources would need to be allocated to find out how these regulations are being implemented in practice.
Many countries across the world also require public officials to declare their wealth either upon entry into the public service or for a promotion into a position with potential for illicit enrichment. Disclosure requirements typically cover real estate, movable assets, and cash as well as earned and unearned (investment) income, without explicitly distinguishing between assets hold within the country or abroad. Level of enforcement greatly varies from country to country, depending on the quality of the regulatory framework, the enforcement structure and level of resources (manpower, technical and financial) allocated to implement such schemes.
In addition to foreign ownership restrictions and asset disclosure systems, some countries such as the U.S., Korea, and Thailand have instituted blind trust systems as a preventive measure for conflict of interest of politicians or high ranking civil servants, whereby the executors of such trusts have full discretion over the assets, and the trust beneficiaries have no knowledge of the holdings of the trust.
Authors
Marie Chêne, Transparency International, [email protected]Reviewers
Robin Hodess, Ph.D., Transparency International, [email protected]Date
28/06/2011
