GOI REFUSES TO ACT AGAINST SCAMS, FAILS TO RATIFY U.N. CONVENTION AGAINST CORRUPTION

November 28, 2010

If the Monsoon Session of the Indian Parliament was focused principally on Inflation and the anguish sky-rocketing prices of essential commodities were causing the common man, the current Winter Session has highlighted the issue of Corruption and how a string of scandals have besmirched the country’s fair name. Not many may be aware that way back in 2004, the United Nations Office on Drugs and Crime formally adopted a comprehensive Convention against Corruption.

 

This 56-page document carries a powerful Foreword by Kofi Annan, U.N. Secretary General who says :

 

Corruption is an insidious plague that has a wide range of corrosive effects on societies.

         It undermines democracy and the rule of law,

         leads to violation of human rights,

         distorts markets,

         erodes the quality of life, and

         allows organized crime, terrorism and other threats to human security to flourish.

 

Article 67 of this Convention against Corruption requires all member countries of the U.N. to sign the Convention by December 2005, have it ratified by the respective countries shortly thereafter and deposit its instrument of ratification with the Secretary General of the United Nations.

 

Every year a group of M.Ps goes to the United Nations to participate in its proceedings  This year one of our BJP MPs Shri Shanta Kumar, ex. C.M., Himachal Pradesh, who was there, reported to the BJP Parliamentary Party at our Tuesday meeting last week that while 140 countries are signatories to the Convention, 14 have not yet ratified it.  And I feel sorry to note that India is one of these fourteen.

 

During the 2009 Lok Sabha election campaign BJP raised the issue of India’s illicit assets stashed away abroad in tax havens like Ivory Coast, Liechtenstein etc. In this context, the country most mentioned is Switzerland.

 

I was therefore pleasantly surprised to note that the Swiss representative at the U.N. when he spoke at the world body on the issue of corruption, and more specifically on the issue of illicit assets, he was the most forthright.  His statement merits being quoted extensively.

 

Mr. Mathias Bachmann, representing the Permanent Mission of Switzerland to the United Nations spoke on October 20, 2010 at the 65th session of the General Assembly and said :

 

“Corruption poses a serious threat to economic growth and to development.  While corruption enriches a limited number of persons, it weakens the fabric of society, the economy and state institutions as a whole.

 

Deeply worried by this problem, Switzerland has taken determined action at the national and international levels in the fight against corruption. This activity goes hand in hand with its fight against money laundering and organised crime. There is often a direct link between corruption, organized crime and money laundering, notably with regard to the mechanisms established by the authorities to combat these phenomena.  The same applied to the flight of assets of politically exposed persons, which often correlates with the lack of good governance. 

 

The United Nations Convention against Corruption (UNCAC) is one of the main international instruments regulating the return of illicit assets. Switzerland has participated actively in the drafting and the strengthening of this convention, which it ratified in 2009. 

 

Moreover, on the basis of more than 20 years of experience, Switzerland chaired the UNCAC working group which led to the adoption of a mechanism for recovering assets. Switzerland has acted with great determination in the field of asset recovery and it is now the state that has returned the greatest number of assets stolen by politically exposed persons.  In practice, the return of assets involves a considerable amount of preventive activity in order to identify and to freeze illicit assets in a timely manner.

 

The ultimate utility of preventive measures in turn depends on close international cooperation.  In particular the implementation of due diligence by financial institutions and of regulations through international legal assistance are key elements for guaranteeing the effectiveness of the fight against money laundering as a whole.

 

The effectiveness of international cooperation depends ultimately on the political will and on the determination with which national authorities take action.

 

With regard to illicit assets, in September 2010 Swiss parliament approved a law further facilitating the return of assets to the people of the country from which assets have been Siphoned off. As this example tends to show, the effectiveness of the fight against the misappropriation of assets depends on the specific measures envisaged by national parliaments”.

 

According to the Swiss Bank Association, Indians have topped the list of black money depositors at the famous Union Bank of Switzerland (UBS). 

 

BJP has been campaigning against illicit funds for a long time.  In the 2009 Lok Sabha polls it made this an election issue. At the outset, Congress leaders ridiculed the BJP for raising this matter. But with the passage of time the BJP’s became a popular demand. Then the Prime Minister also spoke in its support.

 

That year we set up a four member Task Force to study and pursue this matter on a continuing basis. The four distinguished members of this team are: (1) Shri S. Gurumurthy, Chartered Accountant and investigative writer, Chennai; (2) Shri Ajit Doval – Security expert, New Delhi; (3) Dr. R. Vaidyanathan, Professor of Finance, Indian Institute of Management, Bangalore.

 

A recent publication put out by this Task Force says that estimates of Indian wealth stashed in tax-havens overseas vary from $ 500 billions (Rs. 25 lakh crores) to $ 1.4 trillion (Rs.70 lakh crores). The publication adds: The maths of the loot may be disputed, but the fact of loot cannot be. 

 

25000-croreAs the Swiss representative has very rightly said at the U.N. the effectiveness of international cooperation with regard to asset recovery “depends on the political will and on the determination with which national authorities take action.” During his poll campaign the Prime Minister had promised to take action with regard to Indian wealth in foreign banks in the first 100 days of his tenure.  More than 500 days have elapsed, and yet there has been no movement in this regard.  The reason is utter lack of political will.

 

No wonder even the U.N. Convention against Corruption has not been ratified. Parliament has remained dysfunctional for two weeks, but Government refuses to accept the unanimous demand of the entire opposition that a J.P.C. probe be ordered into the stinking scandals that have recently been exposed.

 

 

The country expects the GOI

 

          to ratify the U.N. Convention against Corruption

          to set up a Joint Parliamentary Committee to investigate the string of scandals that have surfaced lately

          to punish all found guilty

          and lastly to fulfill the promise made by Dr. Manmohan Singh during the Lok Sabha poll campaign to bring back to India the enormous wealth stolen from our country and deposited in tax havens abroad.

  

 

L.K. Advani

New Delhi

28th Nov, 2010

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