The UK government should back the establishment of an international anti-corruption court to prosecute corrupt leaders of countries unwilling or unable to enforce their own anti-kleptocracy laws, according to Lord Hain, the former Foreign Office minister.
With cross-party support, Hain will propose that the time has come for Britain to throw its weight behind the growing global momentum for an international court, analogous to the international criminal court in The Hague.
Hain, who has been at the forefront of exposing the alleged corruption of the Gupta brothers in South Africa, is proposing amendments on Tuesday to the economic crime bill currently in the Lords, requiring the UK government to back the court’s establishment.
Hain told the Guardian that international corruption was estimated to cost $2tn (£1.58tn) a year, or 5% of global GDP, with the impact felt worst in developing countries. The Washington-based organisation Global Financial Integrity found that from 2004 to 2013, developing and emerging economies lost $7.8tn in illicit financial flows. Such outflows had increased at an average rate of 6.5% a year – nearly twice as fast as global GDP.
Hain argues that kleptocracy – corruption among world leaders – thrives not due to a lack of solid domestic laws, but due to states lacking the institutional strength, including independent judiciaries, to prosecute offenders.
He points out that 181 UN member states are signatories to the UN convention against corruption, but too few are doing anything to enforce the convention domestically.
Citing the examples of the Russian president, Vladimir Putin, and the former South African president Jacob Zuma, he says too many countries have had their criminal justice systems gutted.
Zuma and the Guptas deny wrongdoing and have said the allegations against them are politically motivated.
Hain says an international anti-corruption court (IACC) could act as a mechanism to require funds to be returned to countries of origin. It would have jurisdiction over crimes committed by nationals of any IACC member state, and crimes committed in the territory of an IACC member state. It would enforce existing national anti-corruption legislation, including by accessing money that has been sent abroad to a country that was a signatory to an IACC treaty.
Hain insists the idea is not a pipe dream and has already been advocated by leading judges in the US and Europe, and by members of the European parliament.
The shadow foreign secretary, David Lammy, has promised to fight the UK’s dirty money problem by creating a transatlantic anti-corruption council alongside the US, EU and other allies. Little detail has been provided about how it would operate, and some in Labour would like the party to back the idea of an international court.
The case for an IACC was made in 2014 by the US anti-corruption judge Mark Wolf and has won the support of Richard Goldstone, the first chief prosecutor of the UN international criminal tribunals for the former Yugoslavia and Rwanda.
Four nation states – Canada, Nigeria, Ecuador and the Netherlands – have backed the idea, but the support of the UK, an important global legal centre with a long history of turning a blind eye to money laundering, would be seen as a step-change.
The IACC could be established by treaty quickly and become most effective “if it consisted initially of even a relatively small number of representative states, as long as they include some financial centres and other attractive destinations where kleptocrats frequently launder, hide and spend their stolen assets”, Hain said. The support of the UK then becomes central to the global project.
Hain argues that the IACC “would have the potential to prosecute, punish and recover illicit assets from kleptocrats who rule countries that might not initially join the court. Most importantly, the threat of criminal prosecution at the IACC would deter other potential crimes of grand corruption by leaders who may otherwise be tempted to emulate the example of rapacious kleptocrats.”
In the debate on Tuesday, the issue will not be put to a vote, but Hain can return in the bill’s later stages to force the government in a vote to back the measure.