The idea of establishing an International Anti-Corruption Court (IACC) has increased in appeal over the past few years. In 2022, the Netherlands, Canada, and Ecuador all signed a memorandum calling for the establishment of an IACC. Last year, the IACC Treaty Committee, composed of international judges, prosecutors and other experts in the field, began drafting a treaty to establish this kind of court.

While the IACC could act as a powerful deterrent against corruption, current proposals do not yet include ways to help deliver justice to those that are ultimately most affected by corruption – the residents of corrupt states. Even when perpetrators are convicted, funds lost to corruption are often never retrieved. Grand corruption harms a state’s residents through the loss of government assets intended for the development and preservation of public goods. This concerns the international community because these assets are all too often obtained through loans and grants from multilateral development banks such as the World Bank. An Anti-Corruption Fund therefore needs to be established in order to overcome the inefficiencies of asset recovery and mitigate the harmful effects of corruption on a state’s population.

How the IACC would work

The IACC is envisioned to have jurisdiction in cases of grand corruption, i.e., the abuse of public power by a country’s officials for personal gain. Its jurisdiction would cover cases where corruption is linked to States Parties’ territories, for example when assets are transferred through their banking systems and cases involving nationals of its States Parties. Importantly, as an international court, it would also be able to try high-level government officials who fall under the Court’s jurisdiction and would otherwise enjoy immunity from prosecution in foreign jurisdictions.

How the Anti-Corruption Fund would work

Working alongside the IACC and multilateral development banks, the Anti-Corruption Fund would operate similarly to an insurance fund. Multilateral development banks would withhold a small percentage of the grants and loans they allocate to the Anti-Corruption Fund; the exact amount should be assessed in light of the IACC’s efficiency, as well as the frequency and scale of corruption cases it hears. The IACC would retain discretion in deciding in which cases and how much it awards in damages, while the Anti-Corruption Fund would be responsible for distributing the Court-ordered damages and monitoring the implementation of anti-corruption reforms in the affected states.

The work of an Anti-Corruption Fund can be considered similar to the ICC’s Trust Fund for Victims (TFV), which provides reparations and support to the victims of criminals convicted by the ICC. The TFV has assisted over 100,000 direct beneficiaries in the form of physical, psychological and material support, but has also been heavily criticised for its inability to fulfil its mandate. An Anti-Corruption Fund that learns from these past experiences can avoid the same pitfalls as the TFV, while the insurance-like set-up means it is not reliant on voluntary contributions or convicted criminals’ financial capacity to compensate those affected. As such, the Anti-Corruption Fund can be effective and sustainable in delivering tangible justice, while increasing the legitimacy and public perception of the IACC and helping development banks realise their mandates.

Preventing misuse of the Anti-Corruption Fund

There are two notable concerns regarding potential abuse of the Fund. Firstly, one drawback of any form of insurance is the potential for risk-tolerating behaviour, known as ‘moral hazard’. If corrupt officials believe they’re able to embezzle loans and grants as their losses will be compensated by the Anti-Corruption Fund, they may be more likely to do so (or at least not be incentivised to combat it). However, as access to the Fund would be limited to pending court cases, moral hazard would be unlikely due to the risk of imprisonment that a conviction would carry.

This leads onto a second concern: whether corrupt, powerful officials may be tempted to falsely accuse others of committing their own crimes in order to gain access to the Anti-Corruption Fund, without risking a conviction themselves. Given the need for proof beyond a reasonable doubt and the high quality of international court proceedings, this kind of construct is effectively rendered unworkable. Furthermore, as access to the Anti-Corruption Fund requires demonstrable efforts in implementing anti-corruption reforms, it’s an unlikely – and ultimately counterproductive – pathway to potentially abusing the Fund.

No justice without an effective remedy

Recent developments surrounding the IACC have focused on fighting impunity and reinforcing the accountability of corrupt leaders. However, they have not yet explored remedies for the ultimate victims of corruption: the state’s residents. The ICC’s Trust Fund for Victims is a concrete example of how courts and countries can work together in order to address the harmful implications of corruption-related crimes. However, justice cannot be achieved without an effective remedy for the victims. The Anti-Corruption Fund, through its similar but enhanced construct, would ensure an effective remedy for the victims of grand corruption and therefore contribute to achieving justice.