Testimony of William A. Reinsch
President, National Foreign Trade Council
& Co-Chairman of
Before the Senate Foreign Relations Committee
UN Convention Against Corruption
Wednesday, June 21, 2006
Mr. Chairman and Members of the Committee, thank you for the opportunity to testify in support of Senate ratification of the UN Convention against Corruption. I am the President of the National Foreign Trade Council (NFTC), a trade association of more than 300 companies committed to an open, rules-based trading system. Along with our USA*Engage coalition, we support multilateral cooperation and economic, humanitarian and diplomatic engagement as the most effective means of advancing U.S. foreign policy interests and American values.
My testimony details the American business community’s support for swift ratification of the Convention in accordance with the statements received from the Administration in its transmittal package.
American business understands that corruption is highly detrimental to the global trading system. It impedes economic growth and development and siphons money from productive uses. In addition, it disadvantages
Ten organizations, including the NFTC, American Petroleum Institute, Business Roundtable, National Association of Manufacturers, U.S. Chamber of Commerce and U.S. Council for International Business, have written you, Mr. Chairman, indicating that “the Convention can be a critical tool in the global fight against corruption,” and that it “is non-controversial and has broad support.” The letter states that “timely Senate ratification is necessary for the
The business community has come to its support for the Convention after a long and fruitful dialogue with representatives of the Administration, including those who negotiated the document. I would like to thank these individuals for their hard work on this Convention and for their outreach to the business community. In particular, former Assistant Secretary of State for Economic and Business Affairs Tony Wayne and his staff should be commended for their efforts.
Our interaction with Ambassador Wayne and his staff is a fine example of how good government is supposed to work. During the negotiation of the Convention, some of my members raised concerns as to how this new instrument might affect
1) The Convention will level the playing field for
2) There are no domestic costs or obligations imposed on the
3) Effective and transparent implementation by foreign governments is imperative.
4) The Convention will benefit trade and improve investment climates worldwide.
I would like to discuss each of these in turn, as together they make clear why prompt ratification of this Convention by the United States is important to the American business community:
Leveling the playing field for
This Convention will level the playing field for American business by holding foreign companies around the world – in places including
It is the first truly global anticorruption effort. This Convention improves substantially upon other existing regional conventions that have attempted to address the issue of corruption. The broadest of the four, the Inter-American Convention Against Corruption, includes all thirty-five nations of the
Thus, by harmonizing anti-corruption obligations at a higher standard than any before, and globalizing that standard for the first time, the United Nations Convention raises the bar overall and has the potential to level the playing field to a greater degree than any treaty or convention currently in existence.
The Convention includes mandatory preventive measures including calls to establish anti-corruption policies and bodies, mechanisms to prevent public sector corruption and transparency in public procurement, and measures relating to the judiciary, the private sector and to civil society. The Convention also criminalizes corrupt practices including bribery and embezzlement of public funds and includes provisions to recover illegally-obtained assets and improve mutual legal assistance.
No domestic costs or obligations imposed on the United States
The reservations, declarations and understandings contained in the Administration’s transmittal package, which accompanies the Convention, ensure that this Convention does not impose any new costs or obligations under
Secretary of State Condoleezza Rice indicated in her September 23, 2005, Letter of Submittal to the Senate that, “if the United States makes the proposed reservations, the existing body of federal and state law and regulations will be adequate to satisfy the Convention’s requirements for legislation, and, thus, further legislation will not be required for the United States to implement the Convention.”
The Administration has concluded that this Convention does not require any changes to
From our perspective, it is important that the Senate include the reservations, declarations and understandings as part of its advice and consent, as the Administration recommends in its transmittal package. We particularly support the following declaration in its resolution, which is contained on page 21 of the Administration’s transmittal package:
With the necessary declarations, reservations and understandings in place, this Convention is costless from a domestic legal perspective, and squarely in the interests of the American business community.
Effective and transparent implementation is imperative
Since this treaty raises the bar for other countries without imposing new obligations on us, the
In order to speak with the strongest and most credible voice to shape implementation of the Convention with these objectives in mind, prompt ratification by the Senate of this Convention is imperative. The business community urges the Senate to ratify the Convention before December of this year, when the first Conference of State parties meets in
That meeting will be the first time the parties to the Convention will have an opportunity to discuss implementation, monitoring, and technical and capacity-building assistance.
As countries incorporate the requirements of the Convention into domestic law,
This Convention will only be truly effective if it is implemented properly and subject to adequate monitoring. By ratifying this Convention promptly and before the December Conference, the
Providing tools for reform-minded leaders
Finally, this Convention will benefit political systems and investment regimes worldwide by empowering reform elements with the tools they need to root out corruption and encourage transparent, stable investment climates.
Consultations and technical assistance from developed countries and institutions will benefit elements in developing countries interested in improving transparency and reducing corruption, thereby improving the climate for American and local businesses and aiding overall development.
For all of these reasons, the National Foreign Trade Council supports swift ratification by the Senate of this Convention subject to the declarations and understandings contained in the transmittal package as received from the Administration.