Information note mapping the UK’s approach to tackling corruption and illicit financial flows

The UK, through the Department for International Development (DFID), has long pursued a proactive approach to tackling corruption in developing countries. Since the appointment of Hilary Benn into the newly created role as the Prime Minister’s champion for anti-corruption in 2006, the UK has increasingly made a case for tackling it at the international level and in the UK. In May 2016, then Prime Minister David Cameron hosted a landmark international anti-corruption summit in London, intending to galvanise a global response to corruption. It brought together countries’ leaders, businesses and civil society organisations to agree a package of practical steps to expose corruption, punish perpetrators and tackle the culture of impunity. On the back of the summit, the UK launched its anti-corruption strategy 2017-2022, which set out a cross-government framework for tackling corruption both overseas and domestically for the period to 2022. It included six priorities:

  1. Reduce the insider* threat in high-risk domestic sectors such as UK borders and ports.
  2. Strengthen the integrity of the UK as an international financial centre.
  3. Promote integrity across the public and private sectors.
  4. Reduce corruption in public procurement and grants.
  5. Improve the business environment globally.
  6. Work with other countries to combat corruption.

While the strategy describes corruption as a threat to UK national security and prosperity, it also emphasises its impact on poverty and on conflict and fragility in developing countries. The strategy commits the UK to ensuring it is joined up across government and works in close collaboration with UK and overseas civil society, private sector, law enforcement and other partners.

This information note will focus on the period since the 2016 summit and aims to map the work that has been undertaken by the government to tackle corruption and illicit financial flows as they impact on developing countries.

Background

Corruption is a major obstacle to achieving the Sustainable Development Goals, hampering economic growth and exacerbating poverty by diverting scarce funds away from, or imposing unauthorised costs on people’s entitlement to basic services such as healthcare, education, and water and sanitation.

The UK aid programme works with developing countries to improve their anti-corruption laws and institutions, strengthen public financial management and empower civil society and local communities to hold government representatives to account. DFID and other donors recognise the need for politically-informed approaches to anti-corruption that tackle underlying incentives.

Donors also recognise that corruption in developing countries is enabled by weaknesses in financial regulation and transparency in OECD countries and tax havens. The UK and other developed countries are increasingly being called upon to take action at domestic and international levels on money laundering, corporate and individual tax evasion and other illicit financial flows. Several international actions are called for including reforming and adjusting the international financial systems and processes to make it harder to hide and move illicit funds, improving transparency within their national financial systems, and strengthening international law enforcement cooperation.

That corruption is a global problem requiring global solutions is reflected in Sustainable Development Goal 16, which commits all signatory governments to significantly reduce illicit financial flows, reduce bribery and corruption and develop accountable and transparent institutions.

Purpose and Scope

This information note has been commissioned by the International Development Committee to help inform its inquiry looking at UK government support for SDG 16. It will provide a concise description of the UK government’s Official Development Assistance (ODA) and ODA-related work on anti-corruption and related illicit financial flows for the benefit of developing countries. It will:

  • Map the UK government’s various national (in-country, bilateral), international and domestic efforts to tackle corruption and illicit financial flows as it pertains to developing countries.
  • Provide factual information on key trends and highlight risks that warrant future scrutiny.
  • Take the UK’s portfolio of bilateral anti-corruption activity in Ghana as a snapshot case study to give an example of UK government work at a national level.
  • Provide suggestions and recommended lines of inquiry for the International Development Committee on where there are areas of complexity in the field – whether they be technical, operational or otherwise – that warrant further consideration.
  • This note will provide factual information and analysis but will not reach evaluative judgments on any specific aid programmes, nor will it score the work of the government or provide recommendations.

Methodology

The information note will use a combination of research methods, providing a sufficient level of triangulation to ensure robust findings. These include:

  • A documentary review of UK government policy documents and guidance, as well as findings from previous ICAI reviews and cornerstone literature in the field.
  • Interviews with key UK government stakeholders, civil society, businesses and academia.
  • Focus group discussions with government counterparts, civil society and academia.
  • High-level strategy and programme mapping to generate a visual map of the ODA-funded and ODA-related work being undertaken by the UK government, and a light touch review of this work against the strategies underpinning it.

Timeline

Publication is expected in November 2019.

*An insider is defined within the UK’s anti-corruption strategy as a person who exploits their position, or access to an organisation’s assets, for unauthorised purposes.