Rudich: G20 New Delhi's Progress on Corruption and Illicit Financial Flows

India pulled off a diplomatic coup at this year's G20 summit in New Delhi on September 9–10, 2023, with agreement reached on the G20 New Delhi Leaders' Declaration, which placed countering corruption high on its agenda. Anti-corruption formed part of the section that focused on strong, sustainable, balanced and inclusive growth, highlighting the importance of tackling corruption for economic progress, peace and security. It also referred to the work of the global anti-money laundering standard setter, the Financial Action Task Force (FATF), anti-money laundering and countering financing of terrorist (AML/CFT), among other financial crimes. This article provides an overview of references and commitments made in the New Delhi declaration to fighting corruption, money laundering, terrorist financing and other activities that yield illicit finance.

Fighting Corruption

India's G20 presidency showed a clear commitment to addressing corruption. This was first year that an in-person meeting on the issue was held at the ministerial level on August 12, 2023, before the summit. Saudi Arabia hosted the first ever anti-corruption ministerial-level meeting, virtually, during its presidency on 22 October 2020. At New Delhi, leaders reaffirmed their "commitment to zero tolerance for corruption." They also endorsed the following three documents:

The G20 expressed renewed support to asset recovery and repatriation by enhancing efforts at the global level to "to seize, confiscate and return criminal proceeds to victims and states," specifically by working through the FATF and operationalizing the Global Operational Network of Anti-Corruption Law Enforcement Authorities (GlobE Network). The idea of this network emerged as part of the 2020 Riyadh Initiative under Saudi Arabia's G20 presidency to facilitate "peer-to-peer information exchange and informal cooperation to better identify, investigate and prosecute cross-border corruption offences and recover stolen assets." The network was established under the United Nations Office on Drugs and Crime in 2021, with the first meeting bringing together 130 experts from 53 countries and paving the way for the formal launch of the GlobE Network on the side of the UN General Assembly's anti-corruption meeting. It is an enhanced measure to support efforts to prevent and fight corruption under the United Nations Convention Against Corruption (UNCAC).

G20 leaders also reaffirmed their commitment to take steps and share information on efforts to criminalize foreign bribery and enforce foreign bribery to comply with article 16 of UNCAC. They welcomed the work on foreign bribery by the Anti-Corruption Working Group. In addition, the leaders indicated that they looked forward to encouraging broader participation to the Organisation for Economic Co-operation and Development's Anti-Bribery Convention.

Countering Terrorism, Money Laundering and Illicit Trafficking

Terrorism also emerged as a priority for G20 leaders alongside money laundering and predicate crimes linked to money laundering. Terrorism was flagged as "one of the most serious threats to international peace and security." G20 leaders condemned "terrorism in all its forms and manifestations, including those on the basis of xenophobia, racism and other forms of intolerance, or in the name of religion or belief," and emphasized the commitment of all religions to peace. They condemned terrorist attacks against critical energy infrastructure, and all critical infrastructure more generally, and stressed that a holistic approach based on international law can counter terrorism. They called on strengthening efforts to make international cooperation more effective in order to deny safe haven to terrorists, limit freedom of operations, movement and recruitment, and make it more challenging to obtain financial, political or material assistance.

To make the fight against money laundering more effective, G20 leaders committed to supporting higher demand for resources identified at the FATF and the FATF-style regional bodies. They encouraged other countries to follow suit before the next round of mutual evaluations of countries' compliance with the FATF standards and effectiveness of their national AML/CFT frameworks. G20 leaders remained committed to the speedy implementation of beneficial ownership transparency standards of legal persons and the arrangements recently revised by the FATF. They welcomed the FATF's continuing efforts to improve international efforts to recover proceeds of crime and its progress on revising FATF standards on asset recovery and reinforcing asset recovery networks at the global level. They also restated the importance of countries' development and implementation of regulatory and supervisory frameworks of virtual assets to manage terrorist financing, money laundering and proliferation financing risks. The New Delhi declaration specifically cited the FATF's work in accelerating national adoption of the "travel rule" and additional work on emerging technologies and innovation, such as peer-to-peer transactions and decentralized finance.

With regard to predicate crimes for money laundering, G20 leaders discussed trafficking of small arms and weapons, drugs and cultural property. As a nod to their ongoing focus to peace and security, they cited concerns about the "trafficking and diversion of small arms and light weapons." They highlighted the role of international cooperation between countries as key to fighting the trafficking of small arms and weapons, particularly on measures such as import and export controls and the tracing of arms, which can be done based on unique markings and/or physical characteristics. G20 leaders also highlighted the public health challenges of "the world drug problem." They called for stronger cooperation at the international level to counter narcotics to disrupt the manufacturing and proliferation of illegal (including synthetic) drugs and precursor chemicals throughout the supply chain, including source, transit and destination points. G20 leaders also restated their commitment to intensifying the fight against the trafficking of cultural property at the national, the regional and the international level, including by strengthening cultural diplomacy and intercultural exchanges. This includes making the return and restitution of cultural property to origin countries and communities possible and called for ongoing dialogue and action to that end in line with UNESCO Conventions and national law.

Denisse Rudich is CEO of Rudich Advisory and director of the London office of the G20 and G7 Research Groups. She is a global governance expert with nearly 20 years' experience working in anti-money laundering/counter financing of terrorism and sanctions with financial institutions, regulators, international organisations, crypto firms and start-ups. Denisse provides independent analysis at G20 and G7 summits, champions financial crime prevention initiatives globally and acts as a technical expert exploring the use of new technology for AML/CFT.

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