Sports, hidden assets challenge corruption fight

In the wake of revelations of a huge offshore account network via the Panama Papers, world leaders met in London to discuss combating corruption Keystone

At a summit where he signed an international agreement to fight corruption, Swiss Foreign Minister Didier Burkhalter highlighted progress by Switzerland but said there is still work to be done with regard to asset recovery, transparency and sports organisations.

Switzerland was among 50 countries that signed an agreementExternal link in London on Thursday reinforcing their commitment to fighting corruption.

In the wake of revelations about vast offshore accounts in the Panama Papers data leak, Britain took steps to combat dirty money in the real estate industry by requiring that “foreign companies who own or want to buy property in the UK will now reveal the name of the true owner”.

And France went a step further by requiring the owners of offshore companies to be identified.

Work to be done

When it comes to recovering hidden assets from corrupt leaders of developing countries, Burkhalter said in a speech to the gathered delegates that “procedures are lasting too long, often many years, and produce too little results”.

He pointed to Switzerland’s creation of the so-called Lausanne Guidelines, a handbook for best practices in returning stolen assets to their countries of origin, as a sign of progress.

However, the foreign minister emphasised that asset recovery “is only a means of last resort. Preventing corruption should have the absolute priority”.

On the issue of identifying the owners of hidden assets, Burkhalter acknowledged widespread international failings and said law enforcement needed to have access to key information on companies and shareholders that would allow them to make progress in finding tax cheats.

“Despite all of our calls, it is still possible today in some of our countries to establish companies or other legal persons or arrangements, without providing information on the ultimate beneficial owner,” he said. “Our efforts will not be taken seriously by our people if we leave such loopholes open.”

Sports loophole

Finally, Burkhalter singled out international sports organisations as an area of focus for Switzerland in fighting corruption.

“I find it highly ironic and sad that the area of sports – which is based on the principle of fairness and should provide role models for our young – has seen a series of corruption cases in recent years on the highest levels,” he said, referring partially to the uncovering of a massive bribery scandal at the heart of the Zurich-based world football governing body, FIFA.

As a sign of progress, he pointed to a law enacted at the end of 2014 that considers the heads of sports organisations in Switzerland to be so-called Politically Exposed Persons subject to increased financial scrutiny.

Talk or action?

Maggie Murphy of the anti-corruption organisation Transparency International told the Swiss News Agency that the terms of the agreement reached in London on Thursday are “surprisingly strong” given the number of signatories. However, she continues to question the concrete measures that will result from it.

Switzerland-based anti-corruption NGOs Berne Declaration and Swissaid were not impressed by Burkhalter’s words. 

“Far from being positioned at the forefront of the struggle, the Swiss authorities…are essentially saying that Switzerland has already done its homework,” the groups said in a joint statement. 

They highlighted the lack of transparency in dealings between Swiss-based commodity traders and governments in African countries concerning transactions involving oil and minerals.