NGO Documents for the Earth Summit, 1992

Non-Governmental Organization Alternative Treaties
at the '92 Global Forum

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Treaty 15. Capital Flight and Corruption Treaty

Preamble

1. Capital flight and corruption are some of the main causes of the poverty in the South. Without capital flight and corruption the debt crisis would not exist in its current form.

2. More than half of the Southern countries' debts are in the form of private capital deposited in the tax havens controlled by the banks of the North. The five leading countries that host this type of capital are Panama, Cayman Islands, Switzerland, Luxembourg and the United States.

3. The many different forms of corruption include bribery, fraudulent enrichment of public authorities and tax evasion.

4. The financial centers and the tax havens play a crucial role in international financial relations. In order to effectively combat these procedures, investigators must find a national, regional and international legal base. Many countries, among them the tax havens, do not provide international juridical assistance. The Marcos and Duvalier affairs and other financial scandals indicate that the existing juridical procedures are inoperative.

5. It is not possible to continue tolerating the role played by the Northern and Southern elites. A new legal base aimed at addressing the deviation of public funds is needed.

Pledges

6. There is a need to introduce legislation to act against passive and active capital flight and tax evasion.

7. There is a need for the creation of a mechanism which will force the banks to become transparent. Transparent statistics on the transfer of capital by banks must be sent to the country of origin.

8. In order to combat corruption we need an International Legal Assistance System. Legal procedures for any act of corruption should not exceed 6 months.

Action

9. We will put pressure on governments to adopt new regulations and laws in order to combat corrupt practices. This can only be achieved with non-governmental organization (NGO) collaboration.

10. We need to create a specialized 'Economic Interpol' in order to investigate capital flight and corrupt practices. Several proposals, such as anti-corruption groups and appropriate juridical and monitoring system, have to be studied and implemented.

11. We will send letters to dictators and top authorities warning them about the action we are launching and the insecurity of deposing funds in the tax havens. The Swiss Bern Declaration Group is launching a public campaign next October, with the purpose of fighting corrupt practices within the Swiss Banking System.

12. We feel that such public campaigns are essential to fight capital flight. We invite interested NGOs to support these campaigns using information at their disposal in order to reinforce this initiative.

13. We believe it is necessary to undertake legal action against the public authorities which have committed criminal capital evasion. In this sense, it is useful to set up a coalition of NGOs interested in undertaking such legal action.

14. In order to avoid the transfer of capital from one financial center to another, we will demand that the United Nations, through its Vienna-based institution specialized in criminal prevention, undertakes to harmonize all the existing laws regarding the subject.

15. We encourage interested NGOs to put pressure on governments and banking enterprises toward the introduction of appropriate legislative changes, taking as reference those countries or regions that already have this kind of legislation.

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