Critique of the existing non-criminal countercorruption measures and suggested reforms

This section addresses two interrelated issues. First, it assesses, in general, the adequacy and effectiveness of the existing Kuwaiti non-criminal laws and regulations on corruption in dealing with the problem of grand corruption. The aim is to identify the points of weakness and strength in Kuwait’s non-criminal responses to corruption. Second, it examines how the non-criminal countercorruption measures can be changed to more effectively confront the problem of grand corruption. In examining these issues, this section explores innovative techniques and suggests how innovation could be incorporated into Kuwaiti laws. This task necessitates analysing how the international practice regarding corruption could be harnessed to rectify the existing deficiencies in the countercorruption responses.

Assessment of existing non-criminal counter-corruption measures

Building on the idea of the ‘enforcement pyramid’, the counter-corruption responses in Kuwait can be hierarchically classified into three levels. Perhaps this classification has not been systematically adopted by the Kuwaiti policymakers, but it is possible to perceive the current counter-corruption arrangements in this light, at least from theoretical and analytical perspectives. At the bottom of the pyramid lie the persuasive measures. The civil service codes comprise a number of integrity values and principles that govern public office.[1] However, given the focus of this book on grand corruption, codes may play different roles. The nature of grand corruption complicates the perception that officials may be unaware of the governing rules of public office. Grand corruption cases tend to be committed by senior officials, who occupy high levels in public organisations. Senior officials are supposed to be fully aware of the integrity principles, because they often form the tier of policymakers that enact such principles. As a result, the civil service codes that arc directed at senior officials should be different than those directed at junior officials in two respects.

First, while the former should remind high-level officials of the expected behaviours, the latter should raise the awareness of, and educate, low-level officials. Second, the civil service codes directed at senior officials may include more dedicated principles related to the integrity of decision making. Given the generality of the current codes, they may be insufficient to deal with the specificity of some state institutions, including the high-risk public bodies that are vulnerable to corruption, such as the Central Agency for Public Tenders (CAPT). The Strategy 2019-2024 sheds light on that issue and specifies a number of measures mainly directed at the tier of decision makers within the governmental bodies. The Strategy aims to promote more transparent and objective decision making at the level of governmental activities in general and the appointment of junior and senior officials in particular.

Next, self-regulation is another persuasive measure that has, arguably, not matured yet in Kuwait. The self-regulation of the private sector in the area of counter-corruption is limited to the AML regime. In other counter-corruption areas, the current contributions of the private sector are also fragmented and better described as voluntary, whereby individual firms opt to ‘do the right thing unilaterally without any basis in coercion’. The state-centred regulatory policy in Kuwait, based on the command and control approach, has contributed to the lack of interest among the private sector in combating corruption. Unless the government takes the initiative, it is ‘too much to expect that private sector organizations will feel morally obliged to act with integrity in business

dealings.’[2] However, with the advent of the Strategy 2019-2024, the private sector has been paid much attention.

Self-regulation is an appropriate device to integrate counter-corruption issues in the routines of businesses. It allows for the development of a new mode of controlling crime through the ‘responsibilisation’ of the private sector by devolving the responsibility for crime prevention to non-state organisations. It also allows for importing potential innovations from the private sector. However, the inclination towards self-regulation is expected to be fruitful if the emphasis is placed more on industry-wide organisations. Self-regulation by industry-wide organisations would be possible through, for example, bilateral cooperation between the statutory regulators and the professional associations. The list of those who participated in drafting the Strategy 2019-2024 includes a number of professional associations, which may reveal the preference of Kuwaiti policymakers for dealing with the representatives of private entities collectively rather than individually.

Nevertheless, the concept of self-regulation has some limitations. Its success depends on many factors, including the extent of adherence of the professions/ businesses to the regulations they have enacted. Regulation then is tied to the importance of the enforcement capacity. Compliance with counter-corruption laws and regulations is not voluntary and should not be left entirely to non-state actors. Therefore, self-regulation is not said to replace the role of the state and enforcement authorities, but to complement them. Because selfregulation is based on self-policing, there is a need for credible external oversight through enforcement that reasserts the significance of compliance. There is some evidence that regulatory requirements are often ignored in the absence of enforcement. In the United States, the self-regulatory model was incorporated into the Foreign Corrupt Practices Act (FCPA) 1977 as a means of self-restraint to secure the compliance of corporations in regard to not getting involved in bribery. Such a self-regulatory approach, however, has failed for several reasons, including the weak presence of regulatory enforcement, especially in foreign locales. In this sense, the responsive regulation captures the idea of the need for enforcement, because it ensures that punitive approaches follow when self-regulation fails.

Another indicator whereby self-regulation cannot be entirely relied upon to achieve the regulatory objectives comes from the United Kingdom. The

Office for Professional Body Anti-Money Laundering Supervision (OPBAS) was established in 2018 ‘to strengthen the UK’s anti-money laundering (AML) supervisory regime and ensure the professional body AML supervisors provide consistently high standards of AML supervision’.[3] In its report, OPBAS assessed the effectiveness of the professional body AML supervisors (PBSs) responsible for the accounting and legal sectors and found that the PBSs should be subject to ‘ongoing assessments’. Among the findings, the PBSs assessed were found to focus more on the interests of their members than on promoting AML standards. This finding goes hand-in-hand with the FATF’s Mutual Evaluation Report of the United Kingdom, which identified that ‘weaknesses in supervision and sanctions are a significant issue’, especially at the level of the legal and accountancy sectors. In sum, the adoption of a self-regulatory approach to deal with counter-corruption matters is necessary, but, at the same time, it must not be used without some interventionist policies by the state. There should always be other enforcement-oriented measures.

The upper tier in the enforcement pyramid is the civil and administrative measures against corruption. Civil proceedings enable the state to address the financial consequences of corruption, which can be effective in combating an economic crime like corruption. Civil law has its own advantages, such as the less-demanding requirements in terms of the standard of proof and the multiple options to sue based on proprietary or personal claims. However, there is still a gap that civil law may not bridge. Although civil law is helpful in the context of assets owned by the state, the options available in civil law do not always help recover the proceeds of crime, especially when the state does not have proprietary rights. The civil-based measures do not always empower the state to forfeit the criminal assets generated by the various forms of crimes. Therefore, there is a need for tools that go beyond proprietary claims. Civil forfeiture and unexplained wealth orders (UWOs) are suggested as two innovative tools.

The administrative measures are useful in implementing the ‘enforcement pyramid’. The disciplinary offence is a proportional option to cases where an official commits misconduct without serious consequences. The state can strike a balance between the seriousness of the official misconduct and the action to be taken. Yet in grand corruption cases that involve harmful consequences, administrative measures seem to do little. The effectiveness of these measures is also affected by the fact they are but public administration activities that are subject to judicial oversight, which may annul the decisions taken. Therefore, their effectiveness in grand corruption cases is largely linked to simultaneous criminal proceedings. Official-5 emphasised that when financial irregularities are detected, they have more of a deterrent effect when they are subject to administrative

investigation and, at the same time, referred to the public prosecution for criminal investigation. In such cases, the effectiveness of the administrative measures depends on whether they empower the governmental bodies to expeditiously intervene and suspend the suspect official from exercising his/her authorities, especially those bodies that may be the closest to the alleged crime.

  • [1] See section 2 Gunningham and Sinclair (2017, p. 140). See section
  • [2] Hatchard (2014, p. 236). 2 See section 3 See Garland (1996, p. 452). 4 Nazaha (2019, p. 55). 5 See OECD (2015). 6 Haines (2011). 7 See Weismann (2009). 8 See Haines (2011). 9 See Weismann (2009). 10 Haines (2011).
  • [3] See . 2 See
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