Regional Data Exchange on Asset Disclosure and Conflict of Interest

Background

Many corrupt public officials spend their actual wealth abroad: they buy real estate, own businesses, or deposit money on foreign bank accounts. Hiding this wealth is relatively easy. Therefore, some public officials may simply omit declaring these foreign assets. Similar is true for the disclosure of private interests.

Integrity bodies in charge for verifying the veracity of asset declarations can only access domestic databases. Unless the foreign data is an open source, integrity bodies cannot access it. At the same time, verifying asset declarations is a purely preventive task. Thus, integrity bodies cannot make use of mutual legal assistance mechanisms that are otherwise available in criminal proceedings.

In the area of taxation, the same challenge exists: dishonest taxpayers hide their true wealth abroad. However, in order to verify the veracity of tax declarations, countries have for many years exchanged data among each other. To this end, more than 100 states have used the OECD Model “Agreement on Exchange of Information on Tax Matters” in order to formally exchange data “relevant to the determination, assessment and collection of such taxes”. Given the stark similarities between verifying tax declarations and verifying asset declarations, a similar mechanism is needed to facilitate international exchange of data.

In the area of financial disclosure for integrity purposes, such an international exchange of data in civil and administrative matters does not take place yet. Reflections on possible model agreements have begun to emerge with the study ReSPA, Feasibility Study on Data Exchange for Income and Asset Declarations (2014) which looks at possible options for collecting data from foreign states and facilitating international data exchange for the purpose of verifying asset declarations and out of several options proposed a memorandum of understanding.

RAI supports the jurisdictions in the SEE in implementation of the UNCAC tools, one of them being the “asset declarations” that serve to: fundamentally prevent and detect the abuse of public office for private gain, help to build a climate of integrity. Going further towards developing a new legal instrument for setting up a mechanism for regional and international data exchange in the region and beyond, RAI cooperated inter alia with ReSPA and the World Bank.

International Treaty

Determined to strengthen the integrity of the public sector in a more effective manner and by means of international cooperation among the governments on the disclosure of finances and personal interests, (as stipulated in the Treaty Preamble), the Regional Anti-Corruption Initiative, in cooperation with its member states and partners, has facilitated the development of the International Treaty on Exchange of Data for the Verification of Asset Declarations under the following legal grounds:

  • UNCAC (Article 43, para 1: “Parties shall consider assisting each other in investigations of and proceedings in civil and administrative matters relating to corruption and developing an effective financial disclosure systems for appropriate public officials”
  • Resolution 6/4 of the sixth Conference of the States Parties to the UNCAC from 2015, which urges: “providing widest possible assistance, concluding multilateral, regional or bilateral treaties, international cooperation, in order to promote the legal basis for granting mutual legal assistance requests concerning natural or legal persons in a timely and effective manner”.

Why is it important?

The purpose of the International Treaty on Exchange of Data for the Verification of Asset Declarations is to prevent corruption by providing for direct administrative exchange of information concerning asset declarations between the Parties of the Treaty (Article 1). Respective anti-corruption bodies from the region and beyond will be able to communicate formally to each other in an effective and efficient manner compared to the current state of affairs.

The implementation of the Treaty in the signatory parties and its transposition into the national legal order will enable establishing the regional and international mechanism which will streamline communication and simplify the present time-consuming processes in verification of public officials’ asset declarations through the exchange of data, knowledge and experiences among the designated focal points. Establishing and regularly updating of a central record of freely available online databases by Parties will be further encouraged and facilitated. This will further strengthen the efficiency and the reliability of the domestic asset disclosure systems for in-depth scrutiny of the financial interests of the public officials. The Treaty is open for accession by any State or any territory able autonomously to accomplish the purpose of the Treaty as stated in Article 1. European Union may accede to this Treaty.

How was the Treaty developed?

RAI facilitated the process of technical and political negotiations and on reaching the agreement among the states on the International Treaty on Exchange of Data for the Verification of Asset Declarations with Serbia as a depository state. The finalization of the text of the Treaty was reached as a result of a series of three workshops held in 2015 and 2016 with representatives of integrity bodies in South-Eastern Europe and of international stakeholders (Basel Institute of Governance, UNODC, UNDP and World Bank).

Detailed information about the workshops are available here:

Regional Meeting of the Oversight Bodies for Conflict of Interest and Asset Disclosure in Zagreb, Croatia 15-16 December 2015

Regional Meeting of the Oversight Bodies for Asset Disclosure & Conflict of Interest in Tirana, Albania 23 May 2016

Third Regional Meeting of Oversight Bodies for Asset Disclosure and Conflict of Interest in Sofia, Bulgaria 20-21 October 2016

In relation to the international support, the European Commission also provided written input to the Draft Treaty. Western Balkan governments committed to the International Treaty on Exchange of Data in Asset Disclosure and Conflict of Interest at the Western Balkans Summit held in Trieste on 12 July 2017. This marks the commencement of the political negotiations through holding two workshops in Laxenburg and Podgorica in 2018 and 2019 where the jurisdictions present agreed upon the final text of the Treaty and their readiness to support the signing procedure.

The 1st Negotiation Meeting on Draft Treaty on Exchange of Data for the Verification of Asset Declarations took place on October 3-4, 2018 in IACA Laxenburg. It was hosted by the Ministry for Europe, Integration, and Foreign Affairs of Austria and organized by RAI Secretariat.

Please see the Conclusions of the Meetingas well as the final List of Participants. For more information about the event please go following news item link.

The 2nd Negotiation Meeting on Draft Treaty on Exchange of Data for the Verification of Asset Declaration was held in Podgorica, Montenegro on March 23, 2019 organized by RAI Secretariat and hosted by the Ministry of Justice of Montenegro. Participating delegations agreed upon a final draft of the International Treaty, accompanied by the comprehensive Explanatory Note.

Please see the Agenda of the MeetingConclusions of the Meeting, as well as the final List of Participants

The Treaty development and technical negotiations were financially supported by the Austrian Development Cooperation through the Southeast Europe Regional Programme on Strengthening the Capacity of Anti-corruption Authorities and Civil Society to Combat Corruption and Contribute to the UNCAC Review Process.

Treaty signing

Reaching the agreement among the states on the Treaty was strongly supported by the Austrian Federal Ministry of European and International Affairs which offered to host the Signing Ceremony for first group of pledged signatories (Montenegro, North Macedonia and Serbia), as well as the additional countries that have previously expressed readiness to accede to the treaty.

Initially, the Signing Ceremony was scheduled for March, 24th in Vienna, in the organization of the RAI Secretariat and the Austrian Federal Ministry of European and International Affairs with the participation of the number of participants and guests, but due to the COVID-19 health crisis it has been postponed. After considering alternative signing options, such as remote signing with Montenegro, North Macedonia and Serbia, the Government of the Republic of Serbia came forward, as a designated depositary of the Treaty and offered to host the Signing Ceremony in 2021. The Treaty Signing Ceremony was organized in Belgrade, on March 19, 2021, under the auspices of the Regional Project Southeast Europe – Together Against Corruption (SEE-TAC), funded by Austrian Development Cooperation and jointly implemented by new RAI and UNODC. For more details on the signing ceremony, please visit this page.

 A sustained advocacy campaign within and beyond the SEE region will also be particularly important for the Treaty to reach its full potential as an international anticorruption tool.

Texts of the Treaty subject to signing

The Treaty has been developed under the Southeast Europe Regional Programme on Strengthening the Capacity of Anti-corruption Authorities and Civil Society to Combat Corruption and Contribute to the UNCAC Review Process, which is being implemented by the Regional Anti-Corruption Initiative (RAI) in partnership with the United Nations Office on Drugs and Crime (UNODC), and with financial support by the Austrian Development Agency.

Text subject to signing
Treaty on Exchange of Data-FINAL ENG VERSION
Explanatory Notes FINAL: ENGLISH

Albanian
International Treaty – unofficial translation
Explanatory Notes – unofficial translation

Bosnian, Croatian, Serbian, Montenegrin
International Treaty – unofficial translation
Explanatory Notes – unofficial translation

Bulgarian
International Treaty – unofficial translation
Explanatory Notes – unofficial translation

Macedonian
International Treaty – unofficial translation
Explanatory Notes – unofficial translation

Romania
International Treaty – unofficial translation
Explanatory note – unofficial translation