On January 22, 2021, French-Israeli billionaire Beny Steinmetz was sentenced to a five-year jail term by a Swiss court. The court convicted him of bribing the former wife of the ex-president of Guinea to secure the mining rights in Simandou, home of the most valuable untapped iron ore deposits in the world. The trial was the mining sector’s biggest-ever corruption case. Steinmetz and his two co-defendants were found to have paid $8.5 million for the mining rights in 2006. However, Steinmetz and his company never developed the area. The mining rights were sold to Brazilian multinational Vale for $2.5 billion. In the intervening 15 years, as Simandou changed hands, the people of Guinea themselves have got precisely nothing.

The Swiss NGO Public Eye views this case as historic. It is the first time that Switzerland has prosecuted a foreign resident who bribed a foreign official. It is surprising, but understandable, that even regulation-heavy countries are not so proactive as to punish overseas corruption in practice. Prosecuting overseas corruption is a more difficult and sensitive issue than punishing domestic crimes. Why would states care about corruption happening in another country when that wrongdoing might potentially bring profit back to themselves? Two months before the Swiss court sentenced Steinmetz, Swiss canons vetoed a proposal to make multinational companies liable for their wrong doings abroad. The business and government sectors believe that such legislation will “hurt Swiss companies amid an economic slowdown linked to the coronavirus pandemic”.

What happened in Switzerland is emblematic of many countries’ attitude towards anti-corruption overseas. The national leaders who support the effort of combating corruption in principle lack sufficient will to take action in practice. As of February 2020, 187 United Nations Member States are parties to the United Nation Convention against Corruption (“Convention” or “UNCAC”). They agree that fighting against corruption, both domestic and foreign, is a prominent and urgent issue. Under the supervision of the UNCAC, the state parties have installed anti-corruption legislation from forty to 200 laws. However, the enforcement of the legislation is challenged by the lack of sufficient local capacities, including funds, human capital, and basic know-how, in addition to the short of incentives. Especially when the corruption has happened cross-border, it poses significant difficulties for authorities in terms of investigation and evidence collection.

Successful anti-corruption practices require mutual legal assistance among states. In Steinmetz, we see a close cooperation among the authorities in Guinea, Switzerland, and the U.S. The Swiss authorities raided Steinmetz’s home on a request from the Guinean government, then transmitted documents seized to the U.S. The voice recording obtained by the FBI was the key evidence to convict Steinmetz and his co-defendants. This seven-year collaborative effort made it possible for the Swiss court to judge Steinmetz’s case.

The world should continue to knit a tight treaty web to catch wrongdoers. Multiple treaties regarding law enforcement entered by Guinea, Switzerland, and the U.S. form the legal basis for cooperation. Treaties on extradition and legal assistance streamline the arduous process of coordinating authorities. However, this web is not yet comprehensive. Existing holes have been taken advantage of by economic criminals to escape punishment. Some big economies, like China and the U.S., do not have sufficient treaties regarding criminal matters. Forty percent of China’s 100 most-wanted corrupt officials have fled to the U.S. due to the absence of an extradition treaty.[1]

Without treaties, countries tend to be less obligated to answer other authorities’ requests. But they can still work together under the umbrella of the Convention, a legally binding universal anti-corruption instrument. Article 43 sets out the principle that state parties should consider assisting each other to the extent that they find appropriate.[2] Chapter IV of the Convention provides the foundations for possible assistance, such as cooperation on extradition, mutual legal assistance for evidence transmitting, joint investigations, and special investigative techniques.

However, the Convention has been criticized for leaving broad exceptions that allow countries to refuse assistance.[3] In addition to the prudent language of Article 43, Article 46 also grants states wide discretion to refuse assistance requests. If the requested state party considers that execution of the request is likely to prejudice its sovereignty, security, order public, or other essential interests, it can refuse to provide assistance.

This is where political, cultural, and historical factors come into play. For example, the U.S. turned down China’s request to hand over economic fugitives based on concern regarding the treatment of prisoners. This refusal may in turn lead to China’s refusal of the U.S.’s request for extradition or joint investigation based on the “reciprocal” principle. In contrast to the global trend of lightening the sentences of economic criminals, China’s corruption laws can lead to severe punishments, like heavy jail time, confiscation of property, and even the death penalty. Such legislation reflects the long-lasting public resentment of high-level corrupt officials. With the exception of the rule of reciprocal treatment, sovereign integrity provides a very broad base for China to decline the law enforcement of another government. After suffering the abuse of extraterritoriality in colonial times, China holds a very cautious, if not defensive, attitude regarding the involvement of another authority in law enforcement.[4]

The obstacles are not just between the U.S. and China. Each country has its own legal characteristics resulting from its unique history, culture, and policies. The current international cooperation regime is not strong enough for global collaboration on corruption. The Steinmetz case is a victory for anti-corruption efforts, but it reveals that these efforts have never been easy. There’s more to be done to strengthen states’ motivations, narrow down exceptions, and make mutual legal assistance more concrete. For example, new treaties can embed distribution methods for recovered assets, list specific scenarios that allow for exceptions to cooperation, and set up shared databases among signatories. More importantly, states should realize that corruption depletes the public wealth of all, even when it happens on foreign lands. States should set aside their political and cultural differences for now, striking a common ground for a more efficient anti-corruption practice.

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[1] Eleanor Ross, Increasing United States-China Cooperation on Anti-Corruption: Reforming Mutual Legal Assistance, 86 GEO. Wash. L. REV. 839 (2018).

[2] Article 43 of the United Nations Convention Against Corruption: “Where appropriate and consistent with their domestic legal system, States Parties shall consider assisting each other in investigations of and proceedings in civil and administrative matters relating to corruption.”

[3] Ross, supra note 1.

[4] The purpose of Article 4 of China’s International Criminal Judicial Assistance Law is considered to counter extraterritorial jurisdiction. The concern is that it might be abused for turning down foreign legal assistance requests without sufficient reasons.

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Tianyubo Bai is a LL.M. Digital Advisor for the Georgetown Journal of International Law. Her study interests are anti-corruption in overseas investment, project finance, and investment arbitration. Tianyubo is also competing in the Willem C. Vis International Commercial Arbitration Competition. Meanwhile, she works full-time as a legal specialist in China Export and Credit Insurance Cooperation, responsible for project due diligence, expropriation claim investigation, and political risk analysis. Prior to this experience, she worked for two years as a litigator at Wei Heng LLP.