The presentation plan discusses integrity, corruption, types of corruption, causes and consequences of corruption, and remedial measures. It will define integrity, corruption and discuss types of corruption like systematic, individual, grand and petty. It will also discuss causes like bureaucracy, lack of transparency, and consequences like lower investment and economic growth. Finally, it will discuss remedial measures like anti-corruption laws and policies to address corruption.

2. Presentation Plan
Today we will discuss:
◦ What is Integrity
◦ What is corruption
◦ Types of corruption
◦ Causes of Corruption
◦ Consequences of Corruption
◦ Remedial measures for corruption
After the class we will be able to understand
 How a corrupt practice can be checked
 What we really need to do
January 4, 2018 2Iqbal Mahmood

3. Definition of IntegrityDefinition of Integrity
Integrity is the qualifications of being honest
and having strong moral principles or moral
uprightness.
It is generally a personal choice to hold oneself
to consistent moral and ethical standards.
In ethics, integrity is regarded by many people
as the honesty and truthfulness or accuracy of
one's actions.
January 4, 2018 3Iqbal Mahmood

4. Anti-Corruption ActorsAnti-Corruption Actors
 Suggested by Ibrahim Seushi (President ofTransparency International-
Tanzania 2009)
 Refers to Eight Pillars including:
◦ PoliticalWill
◦ Administrative reforms
◦ Watch Dogs-Like Anti-Corruption Agency, Information Commission,
Auditors General office,Attorney General office, Ombudsman etc.
◦ Parliament
◦ Public Awareness and Involvement
◦ The Judiciary
◦ The Media
◦ The Private Sector and Civil Society
January 4, 2018 Iqbal Mahmood 4

5. The stakes of Integrity blockThe stakes of Integrity block
Integrity
Promote a culture of collaboration
 Foster and protect whistleblowers
Transparency
 Publicise information
 Is the information accessible?
Accountability
 More effective and efficient controls
 Social Accountability tools
Participation
 Involve Civil Society and others (e.g.
Report Cards, Integrity Pacts) CP
Effective
Ethics
Compliance
Unit
Implement
code of
conduct
January 4, 2018 5Iqbal Mahmood

6. January 4, 2018
Defining CorruptionDefining Corruption
 World Bank: Misuse of public power for private benefit;
 UNDP: Misuse of public power, office or authority for private benefit –
through bribery, extortion, undue influence, nepotism, fraud, speed money
or embezzlement;
 Transparency International(TI) define corruption as “ The misuse of
entrusted power for private gain”
 Robert Klitgaard’s: C (Corruption) = M (Monopoly) + D
(Discretion) – A (Accountability), or
 Corruption = (Monopoly + Discretion) – (Accountability +
Integrity + Transparency)
 Behaviour that deviates from the formal rule - regarding motives
such as wealth, power, or status.
 ACC’s Definition:The offence mentioned in the schedule of the law
2004.
6Iqbal Mahmood

7. Why Fighting Corruption is necessary ?Why Fighting Corruption is necessary ?
Corruption
 undermines good governance
 distorts the potential benefits of services
 implies a loss of tax and revenues
 fundamentally distorts public policy
 involves a misallocation of resources
 harms private and public sector development
 hurts particularly the poor.
 January 4, 2018 7Iqbal Mahmood

8. Types Of CorruptionTypes Of Corruption
SYSTEMATIC: Entire ministry or Public offices is involved.
INDIVIDUAL: Isolated and sporadic.
e.g.Traffic constable & sanitation inspector
or
GRAND: Senior officials, major decisions or contracts, and the
exchange of large sums of money and involves
transnational. Huge foreign procurement, sanction
of
bank loan
PETTY: Low level officials, the provision of routine services
and goods, and small sums of money.
e.g. licensing & enforcementJanuary 4, 2018 8Iqbal Mahmood

9. The following factors have been attributed as causes of
corruption.
 Higher level of bureaucracy and inefficient administrative structures.
 Weak civil participation and lower level of transparency and accountability
 Low press freedom
 Low level of government decentralization
 Low level of market and political competition
 Poverty and Political instability
 Weak property rights and Ineffective and overburdened legal system
 Absolute authority
 Ineffective anti-corruption mechanisms and inadequate enforcement
 Discretion
 Conflict of Interest
Causes Of CorruptionCauses Of Corruption
January 4, 2018 9Iqbal Mahmood

10. We can summarize the consequences of corruption as follows:
1. Lower investment, including foreign direct investment.
2. Reduced Economic growth.
3.A shift in the composition of government spending from more productive to less productive
activities.
4. Greater inequality and high incidence of poverty.
5. Reducing the efficiency of loan, aid and grant.
In-addition to that-
 Bribery raises transaction costs and uncertainty in an economy
 Diverts talent to rent-seeking activities and distorts sectoral priorities and technological choices.
 The corruption distorts incentives which operates the private sector by reducing economic
efficiency.
 It is appreciated that a network of kickbacks in public works, or the execution of construction
projects.
Consequences Of CorruptionConsequences Of Corruption
January 4, 2018 10Iqbal Mahmood

11. January 4, 2018
Consequences Of CorruptionConsequences Of Corruption
CorruptionCorruption –– A Global ThreatA Global Threat
 World Bank Report– More than 1 trillion US$ is paid in
bribes a year and the harm exceeds the proceeds – US$
1 bribes = US$ 1.7 damage
 Asian Development Bank – Cost of corruption = up to
17% of GDP
 IMF- Corruption impacts disproportionately the poor
and other disadvantaged groups
11Iqbal Mahmood

12. Corruption- Money Laundering:
Money Laundering generally refers to ‘washing’
of the proceeds or profits generated from:
Corruption
Kidnapping
Extortion
Bribery
& Corruption
Gambling,
Robbery,
Cheating
Counterfeiting
& ForgeryTerrorist act
Prostitution
Smuggling
(arms, people,
goods)
Drug
Trafficking
January 4, 2018 12Iqbal Mahmood

13. Financing of Terrorism
o Money to fund terrorist activities moves through the global financial
system via wire transfers and in and out of personal and business accounts.
o It can sit in the accounts of illegitimate charities and be laundered through
buying and selling securities and other commodities, or purchasing and
cashing out insurance policies.
o Although terrorist financing is a form of money laundering, it doesn’t work
the way conventional money laundering works.
o The money frequently starts out clean i.e. as a ‘charitable donation’ before
moving to terrorist accounts.
January 4, 2018 13Iqbal Mahmood

14. Suspicious TransactionSuspicious Transaction
 Suspicious transaction means a transaction whether or not
made in cash which, to a person acting in good faith –
• Providing misleading information / information not easily verifiable
while opening an Account.
• Large cash withdrawals from: a dormant or inactive account or
account with unexpected large credit from abroad.
• Sudden increase in cash deposits of an individual with no
justification.
• Customers leading lavish lifestyles that do not match their known
income sources.
 Reluctance to provide normal information when opening an Account
or providing minimal or fictitious information.
January 4, 2018 14Iqbal Mahmood

15. High risk areas of AMLHigh risk areas of AML
High risk countries:
Drug producing countries
Countries with high levels of corruption
Countries linked to terrorist financing
High risk customers:
Private money transmitters
Money changers
Real estate dealers
Casinos, gambling outfits
Non profit organizations –charities
High risk services:
Wire transfers
Correspondent banking
Electronic banking services-internet, debit/credit cards
January 4, 2018 15Iqbal Mahmood

16. Risk FactorsRisk Factors
Vulnerabilities:
Customer anonymity(Secrecy)
No face to face relationship
Anonymous funding(Promissory notes)
Cross border transfers
Access to cash globally through ATMs
Possible risk mitigates:
Verification of customer identity
Limit funding options
Limit card value
Monitor transactions
Reporting of suspicious activity
January 4, 2018 16Iqbal Mahmood

17. ACC’s Initiatives:
Relevant Acts and Policies
1.Anti corruption Act 2004
2.Prevention of Corruption Act, 1947
3.Money Laundering Prevention Act 2012
4.Penal Code 1860
5.Criminal Procedure Code 1898
6.Whistle Blower Protection act 2011
Policies
1.UNCAC
2.NIS
January 4, 2018 17Iqbal Mahmood

18. ACC’s Initiative
to Stop Corruption
Declaration of Properties
If the ACC-
Is satisfied on the basis of its own information and after
necessary investigation that any person or any other person on
his behalf is in possession or
Has obtained ownership of property not consistent with his
legal sources of income then the ACC through an order in
writing shall ask that person to submit a statement of assets
and liabilities.

19. ACC’s Initiative to Stop Corruption
Section 27 of Anti-Corruption Commission Act, 2004
Possession of Property in Excess of Known Sources of Income
(i)If there are sufficient and reasonable grounds to believe that a
person in his/her own name or any other person on his/her behalf is
in possession and has obtained ownership of moveable or
(ii) Immovable property through dishonest means and the property
is
not consistent with the known sources of his/her income and if
he/she fails to submit to the court during trial a satisfactory
explanation for possessing that property,
Then that person shall be sentenced to a prison term ranging
from
a minimum of three years to a maximum of ten years
imprisonment, and these properties shall be confiscated.January 4, 2018 19Iqbal Mahmood

20. January 4, 2018 Iqbal Mahmood 20
Case Starting Procedure in the ACC
Sources:
1.Own Motion
2.Newspaper cutting, Electronic media reports
3.Complaint received from individual or institutions
4.Email or online reports, from Call centre 106
Actions:
1.Selection of Complaint by a dedicated Team
2.Engaging E/O or I/O
3.Enquiry (primary stage)
4.Investigation ( Final Stage)
5.Submitting Charge Sheet or Final Report to Courts
6.Engaging Lawyers to fight corruption cases in the courts
7.Initiatives for arrest, making seizure list, recovery of stolen assets
8. For the AML cases, MLAR to the Attorney General office.

21. January 4, 2018 21Iqbal Mahmood

22. Looking Forward
The ACC intends to adopt the demand side approach to citizen’s centric
governance reform empowering citizens to monitor, audit and report on
the performance of public agencies.
Stimulate society to move from a culture of acceptance of corruption to
rejection of corruption.
Minimize Conflict of Interests.
The motivation to earn easy way income is still extremely strong. Thus
a Role Model is required in each office who will act as a living legend of
Ethics.
Show zero tolerance to rent seeking behavior.
Comprehensive regulation is needed because the discretion of many
public or Bank officials is unrestricted and this systemic weakness is
intensified by poorly defined, ever changing, and poorly disseminated
rules and regulations.
January 4, 2018 22Iqbal Mahmood

23. Iqbal MahmoodJanuary 4, 2018
23