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Jackson Lee and Hudson Introduce Legislation to Fight Illicit Tobacco Trade

Friday, March 08, 2019

WASHINGTON—Representatives Sheila Jackson Lee (TX-18) and Richard Hudson (NC-08) today introduced the Combating the Illicit Trade in Tobacco Products Act (CITTPA) in the House of Representatives. Both Rep. Jackson Lee and Rep. Hudson serve on ad hoc committees of the OSCE Parliamentary Assembly, which facilitates interparliamentary dialogue to advance human rights, military security, and economic cooperation in Europe, Central Asia, and North America.

“The illicit trade in tobacco underpins some of the gravest transnational threats to the United States and our allies. Illicit tobacco trafficking is not a victimless offense; it facilitates other, more heinous crimes including money laundering and trafficking in weapons, drugs, antiquities, diamonds, counterfeit goods, and—worst of all—human beings,” said Rep. Jackson Lee.

“Cigarette smuggling is not just an economic issue, it’s a public safety issue. Illegal cigarettes help finance organized crime and terrorism. Smuggled cigarettes are also more likely to end up in the hands of children and teens. The Combatting the Illicit Trade in Tobacco Products Act will give the United States better tools and more information to combat this dangerous activity,” said Rep. Hudson.

The Combatting the Illicit Trade in Tobacco Products Act (CITTPA) would improve the U.S. Government’s ability to identify and deter those engaging in the trade of illicit tobacco. The bill would:

  • Provide better information on countries involved with the illicit tobacco trade. The legislation requires the U.S. Secretary of State to report annually on which countries are determined to be a major source of illicit tobacco products or their components, and identify which foreign governments are actively engaged and knowingly profiting from this illicit trade.
  • Enable the United States to deter countries involved in the illicit trade in tobacco, and better assist its allies. The bill grants the U.S. Secretary of State the ability to withhold U.S. foreign assistance from those countries knowingly profiting from the illicit trade in tobacco or its activities. In countries where the government is working to stop these trafficking efforts, the Secretary of State would be able to provide assistance for law enforcement training and investigative capacity.
  • Help the United States target individuals assisting in the illicit tobacco trade. It authorizes the President of the United States to impose economic sanctions and travel restrictions on any foreign individual found to be engaged in the illicit tobacco trade, and requires the president to submit a list of those individuals to Congress.

The Helsinki Commission organizes U.S. delegations to OSCE PA annual sessions and other meetings, as well as official delegations to participating States and other OSCE meetings to address democratic, economic, security, and human rights developments. The commission also convenes public hearings and briefings with expert witnesses on OSCE-related issues. In July 2017, the Helsinki Commission held a hearing on illicit trade in tobacco products, which included testimony from the academic community, the public health advocacy community, and industry.

Media contact: 
Name: 
Stacy Hope
Email: 
csce[dot]press[at]mail[dot]house[dot]gov
Phone: 
202.225.1901
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  • Chairman Smith and Rep. McGovern Introduce “Global Magnitsky Human Rights Accountability Act”

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  • The Tyranny You Haven't Heard Of

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  • Combating Corruption in the OSCE Region: The Link between Security and Good Governance

    Combating corruption is increasingly recognized as the critical factor in ensuring long-term security, because corruption creates fertile ground for social upheaval and instability. The change in government in Ukraine in 2014 was a prime example of how corruption can fuel legitimate popular discontent. Although the Organization for Security and Cooperation in Europe (OSCE) has created new tools to address corruption, tackling the problem requires more than raising awareness and sharing best practices. In many OSCE participating States, systemic issues including lack of media freedom, lack of political will, and lack of an independent judiciary contribute substantially to persistent high-level and low-level corruption. The hearing drew attention to the work of the OSCE in combating corruption in all 57 participating States, with a particular emphasis on the need to build effective institutions and the important role played by civil society in combatting corruption.

  • U.S. Helsinki Commission Marks Five-Year Anniversary of Sergei Magnitsky’s Death

    WASHINGTON—Sunday, November 16 marked the five-year anniversary of the death of Sergei Magnitsky, who was arrested by the Russian government following his investigation into fraud involving Russian tax officials. He died in prison after being held for 11 months without trial.   U.S. Senator Ben Cardin (MD), Chairman of the Commission on Security and Cooperation in Europe, issued the following statement: “It is with sadness and respect that we mark the 5th anniversary of the death of Sergei Magnitsky at the hands of Russian government authorities. During the past five years, the crimes that Sergei first exposed have been further documented.  Despite credible evidence of criminal conduct resulting in Mr. Magnitsky’s death, Russian government officials have failed to bring those responsible to justice. “Perhaps worse, the facts of the case – including misappropriation of Russian tax resources and the ensuing cover-up by Russian government officials – have been distorted, to the extent that the Russian government has posthumously prosecuted the late Mr. Magnitsky for the financial crimes perpetrated by those answerable for his death. “After five years, my outrage at the continuing refusal of Russian leaders’ to confront their own transgressions in the death of Sergei Magnitsky has not abated. Instead, I continue to be amazed at how Russian authorities continue to concoct conspiracy theories attributing blame to others, with tragic consequences: they prohibit their young people from participating in U.S. high school exchange programs, strangle political activity and civic involvement of NGOs, and restrict the media.   “The Russian government has forsaken its obligation to ensure for citizens of the Russian Federation the freedoms of expression, assembly and the right to fair, impartial judicial processes. This rejection has consequences for Russia and its people; for its neighbors, especially Ukraine; and more broadly for us all.   “As we remember Sergei Magnitsky and his sacrifice for justice and transparency in Russia, we and our partners must reaffirm our unwavering support for the international commitments to basic freedoms. The Sergei Magnitsky Rule of Law Accountability Act, enacted in 2012, must continue to be used to demonstrate to the world that the voices of those who seek justice and who speak out about human rights violations are heard and valued by the United States of America.”

  • Helsinki Commission to Hold Hearing on Combating Corruption

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As the Assembly’s Special Representative on Human Trafficking, Smith’s initiative pressed for the formation of a notification system among countries regarding the travel of persons convicted of sex crimes against children, as well as increased cooperation between law enforcement agencies and with the travel industry to prevent child sex tourism. “This resolution provides a tool to mitigate the horrific abuse of children by sexual tourism,” said Smith. “These predators thrive on secrecy, and so the goal is advance notification of sex offender travel so that children can be protected.” In addition to Chairman Cardin and Co-Chairman Smith, the delegation included Commission Ranking Member Senator Roger Wicker (R-MS), Senator Tom Harkin (D-IA), Commissioner Representative Robert Aderholt(R-AL), Commissioner Representative Phil Gingrey (R-GA), Representative David Schweikert (R-AZ) and Representative Adam Schiff (D-CA). 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Commissioner Representative Robert Aderholt achieved passage of language supporting the integration of Western Balkan countries into the EU and NATO, and, in a separate initiative, highlighted the plight of “disappeared” political prisoners in Turkmenistan and called on that government to finally come clean on the fate of these individuals, one of whom was a former OSCE ambassador. An initiative by Rep. David Schweikert encouraged increased outreach by the OSCE to Mediterranean Partner countries, while Rep. Phil Gingrey brokered an agreement calling for concrete steps to promote clean and affordable energy. Finally, Rep. Smith and Senator Cardin joined an initiative with the Canadian delegation to respond more vigorously to acts of anti-Semitism throughout the participating States. 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  • Importance of Good Governance to Comprehensive Security

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One of the key priorities for our Commission is promoting good governance and combatting corruption, and we were pleased to see the tremendous progress achieved in this area in 2012 with the adoption of the Declaration on Strengthening Good Governance and Combatting Corruption, Money-Laundering and the Financing of Terrorism at the Dublin Ministerial. The Good Governance Declaration is comprehensive, laying out a strategy for the OSCE to combat corruption, strengthen civil society development and enforce accountability measures in the public and private sectors.  The declaration has given some new tools to the Economic and Environmental Coordinator’s office, which plays a critical role in strengthening stability and security in the OSCE region. And last year, the OSCE worked to promote sustainable energy solutions, advocate transparency and accountability, and to build capacity at all levels of society – government, private sector, and its citizens.  These achievements represent a foundation for further enhancing the 2nd Dimension. The U.S. and the EU have recently enacted laws that address the problem of transparency and accountability in the resource sector. In the United States, these laws were authored by the Chairman of the U.S. Helsinki Commission, Senator Ben Cardin. The laws require companies to publicly report payments they make to governments for oil, gas and mining extraction. The concept is that by injecting transparency into a traditionally opaque business environment, the ability of citizens to better understand the money flows allows them to then hold their governments accountable. The laws are meant to innovate the way business is done in this extremely important sector by breaking the cycle of instability and poverty in countries suffering from what is often called the “resource curse”. This innovation can help ensure that energy supplies are not disrupted, it gives citizens a tool to fight corruption, and it levels the playing field for companies. Now that the U.S. and the European Union are implementing these transparency rules, other markets with large resource extraction companies such as Australia and Canada are exploring similar requirements. And we expect that as these rules come online we will see other stock exchanges around the world follow suit. Corruption and lack of transparency in the extractive industries can fuel instability and even conflict, so it’s not hard to see why this type of transparency is catching on. The news is full of headlines on instability created by resource competition or corruption. And resource rich countries are consistently rated as some of the most difficult places to do business. In almost every case you can trace the root cause to the intractable corruption in that country. These transparency laws are the game changers that will help tilt the balance of power away from corrupt leaders. Transparency and accountability are going to make the job of extractive companies easier. They will work on a level playing field, they will work with more stable governments, and they will operate in more stable communities. And the OSCE has a role to play here as well. With the acknowledgment of the importance of combatting corruption in the Good Governance Declaration, the OSCE’s Economic and Environmental Dimension can serve as a valuable platform for increasing stability and security on energy related issues and, in particular, highlighting the link between security, energy, and the environment. As we look toward the Basel Ministerial and the Helsinki+40 process, we must build upon this work and examine how the 2nd Dimension can be further strengthened to advance solutions that build good governance. One of the ways that we can do this is to more actively engage civil society in the 2nd Dimension. We need to welcome multi-stakeholder groups, business groups and civil society leaders to the Economic and Environmental Forum and the Economic and Environmental Implementation meeting in order to generate greater awareness of good governance initiatives, develop new projects, and assess the effectiveness of participating States in implementing these commitments.    Let me close with a comment on Ukraine. I was there two weeks ago to observe the election. Despite the daily reports of violence, what we saw in the conduct of the election makes me hopeful that the newly elected government will be able to move the country forward. But what is painfully clear is that the corruption surrounding Ukraine’s energy sector was a key factor in fueling the protests that eventually led to the downfall of the government. Ukraine is not a big oil and gas producer itself, but it plays a major role as a transit country between Russia and Western Europe. Ukraine has started work on its candidacy for EITI but still has a long way to go so we are encouraging the new government to place a priority on getting that in place. The broader lesson from Ukraine is that secret deals lead to corruption. Corruption leads to economic stagnation.  Economic stagnation leads to political instability.  Political instability leads to violence and human rights abuses, and even opportunistic violations of sovereignty and territorial integrity. This is why we need to innovate the way we do business. This is why we need to focus on transparency and good governance. And this is why we need to empower civil society and media to hold their governments accountable. These are all areas where the OSCE has expertise and where the Asian Partners can provide assistance and experience. Thank you.

  • Senator Cardin’s Floor Statement on Ukraine

    Mr. President, tomorrow we are going to have an opportunity to vote on S. 2124, and I am pleased to learn that it looks as if there is going to be overwhelming support in the Senate for the passage of S. 2124. This is the legislation that helps Ukraine in dealing with the invasion by Russia. Russia's illegal actions of using its military to overtake Crimea, a part of Ukraine, violate numerous international obligations that Russia has committed to. I have the honor of chairing the U.S. Helsinki Commission. The Helsinki Accords were entered into in 1975. Russia was one of the leading forces for forming the OSCE. Russia's taking over of Crimea violates its commitments it made under the Helsinki Final Act. It violates the 1994 Budapest Memorandum, which was signed by the United States, the United Kingdom, Ukraine, and Russia, that guaranteed basically Ukraine's integrity of its land. It violates the 1997 Ukraine-Russia bilateral treaty. It violates the U.N. Charter. The list goes on and on and on. So I believe it is absolutely essential that we have a strong voice in standing with the people of Ukraine. There was absolutely no justification whatsoever for Russia's action. There was no threat to any of the ethnic communities in Ukraine. All the rights of the people were being protected. The country was in transition from a corrupt government to a government that respected the rights of its citizens. If there was any provocation whatsoever of any unrest, it was caused by Russia's presence in Ukraine. We got reports from the chief rabbi in Kyiv that Russia was staging anti-Semitic provocations in Crimea, and the list goes on and on as to what Russia was doing in order to try to give some justification for its actions. Russia's thinly veiled land grab, cloaked in the cloth of self-determination, must not go unchallenged. Here is what I think is critically important: This is a dangerous precedent. We saw Russia use a similar action in Georgia, and now in Crimea in Ukraine. There are other territorial issues involved around the world. If this goes unchecked, if we do not speak with a unified voice, it just encourages more irresponsible action by Russia in other countries. We know that we have concerns about the South China Sea. We know we have concerns about Moldova. There are many other areas where Russia could be involved in its border areas. So all of these issues are matters for us to speak with a strong unified voice. S. 2124 does that. It does it in two principal ways. First, it imposes the sanctions against those responsible for  Russia's invasion into Crimea, Ukraine. It provides sanctions so that these individuals are not permitted to come to the United States. There are economic sanctions in regard to the use of our banking system. These are similar sanctions to what are now being imposed by our European allies. We need to isolate Russia. As we all know, the G8, which included Russia, is now a G7 without Russia. Russia needs to know that there will be sanctions imposed, and they will be stronger sanctions unless they stop this aggressive action. In addition, the legislation provides economic assistance to the new Government of Ukraine. Just 2 weeks ago the Prime Minister of Ukraine was here and met with Members of the Senate. I tell you, it was inspirational to listen to his vision for Ukraine as a democratic, independent state, with full integration into Europe. That is important. He is preparing for a May 25 election for the Presidency of Ukraine. These are all very, very positive steps. But if Ukraine does not have the economic foothold to be able to develop the type of economy and strength in their country, it will be difficult for Ukraine to be maintained as a viable independent state. Here is where the United States and our European allies, and I hope the global community, come together, as we have in this legislation, to provide economic help on a restructured economic plan for Ukraine that will help them move forward in a very constructive way. Mr. President, I must tell you I am disappointed, though, that the reforms of the IMF will be eliminated from this legislation. I think that is regrettable. We are entering into a plan for Ukraine that very much depends upon the IMF's--the International Monetary Fund's--plan to make sure that the moneys we are spending, Europe is spending, and other countries are loaning and providing to Ukraine are based upon a sound economic plan that will work. That is why the IMF is there. And they will be there. But the United States needs to be a full participant in the IMF. We are out of compliance, and here is another opportunity lost for us to be in full compliance with the IMF. I am disappointed about that. But as I said as I took the floor, we must speak with one voice--the Obama administration; the House, the Senate; the Congress--as we stand with the people of Ukraine for their integrity, for their independence, and for the adherence to international principles, which Russia has clearly violated.

  • The New Silk Road Strategy: Implications for Economic Development in Central Asia

    This briefing proposed the question of what the impact will be in the Central Asian region as the United States prepares to leave Afghanistan. This strategy will particularly impact the economies of Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan and Turkmenistan, as the United States has accelerated efforts to integrate Afghanistan with the economies of these countries. Witnesses testifying at this briefing addressed the ability of these governments to create the necessary conditions for more trade and exchange, including infrastructure development, efficient customs regimes and reliable transportation networks. The deep political divisions in this region that prevent collaboration on basic necessities such as water and electricity were also identified as hindrances to building greater economic cooperation. These issues were analyzed in the context of the current situation and the future outlook for economic development along the New Silk Road.

  • Dispatches From Moscow: Luke Harding’s Chilling Tale of KGB Harassment

    This briefing, moderated by Kyle Parker, Policy Advisor at the Commission on Security and Cooperation in Europe, addressed issues of human rights abuses in Russia in the context of the then imminent elections and widespread protests. The witness – Luke Harding, a journalist with the Guardian – remarked on Russia’s human rights abuses which blatantly ignore their commitments to the Helsinki Accords, citing anecdotal evidence. Harding, who had been the only Guardian correspondent to have actually reported from Russia since the 1917 Bolshevik Revolution, had suffered more at the hands of the FSB than any other Western correspondent, due to the fact that, during his four year tenure in Moscow, he comprehensively and repetitively busted Russia’s taboos that make it the security state it is today.

  • Moldova: The Growing Pains of Democracy

    In this briefing, which Commission Staffer Kyle Parker chaired, the focus was on the progress on the implementation of democratic institutions in the former Soviet Republic of Moldova. The briefing took place on the heels of the December elections in the region of Transnistria and what such elections may have portended for the future in terms of normalization of the conflict in the region that had existed for twenty years at the time of the briefing. To be sure, at the time that the briefing was held, Moldova still had a lot of progress to make regarding human rights commitments, particularly as far as corruption and human trafficking were concerned, two intertwined issues that had been of particular interest to the Commission. However, as far as human rights commitments are concerned, Moldova has led the countries of the commonwealth of independent states.

  • Human Rights Play on Magnitsky Murder

    Kyle Parker introduced the briefing, which followed a performance of the play “One Hour Eighteen,” based on the final moments in the life of Russian whistleblower Sergei Magnitsky. After exposing the largest tax fraud in Russian history, Magnitsky was wrongly arrested and tortured in prison. Six months later he became seriously ill and was consistently denied medical attention despite 20 formal requests. On the night of November 16, 2009, he went into critical condition, but instead of being treated in a hospital he was put in an isolation cell, chained to a bed, and beaten by eight prison guards for one hour and eighteen minutes. Sergei Magnitsky was 37 years old and left behind a wife and two children. Those responsible for this crime have yet to be punished and his story has become a global human rights cause and is emblematic of corruption, violence, and impunity in Russia. Parker was joined by Ury Urnov, director of “One Hour Eighteen,”  in discussing the play as an emblematic example of the devastating human cost of corruption and the lack of rule of law in Russia. The play juxtaposed the moving and chilling testimony and documents from Magnitsky's diary; a radio interview with his mother; two judges; a prison doctor and paramedic; an investigator; and a young ambulance paramedic.  

  • Good Governance

    Economic and Environmental Dimension Implementation Meeting Session 3: Good Governance Before I begin, I’d like to thank the panelists today for their excellent and informative presentations. The United States has viewed with keen interest the evolving discussions in recent years on what the OSCE’s priorities should be in the Economic and Environmental Dimension. As our friend and colleague Mr. Svilanovic pointed out during last year’s Vienna Review Conference, we appear to have come to an appreciation that good governance is the key linking theme across the entire second dimension. The Maastricht Strategy is very clear on this point: “Good public and corporate governance and strong institutions are essential foundations for a sound economy, which can attract investments, and thereby enable States to reduce poverty and inequality, to increase social integration and opportunities for all, and to protect the environment. Good governance at all levels contributes to prosperity, stability and security.” As we consider the implementation of our second dimension commitments, however, we should keep in mind why it is important to implement those commitments. The global economic downturn continues to put extreme pressure on people and governments across the OSCE region. To be sure, some countries have weathered the storm better than others. Still, no country can be forever immune to market forces, and even within those that have done well, there are always citizens left behind. This is certainly the case in the United States, and for this reason President Obama is focused intently on how best to put those Americans without a job back to work. We all know that trade and investment are critical drivers of economic growth. Indeed, recognizing this important reality, the Obama Administration has launched the National Export Initiative, which seeks to deepen our strategic trade relationships around the world, recognizing that 85 percent of world GDP growth will occur outside the United States in the coming few years. As we encourage more American businesses – large and small – to embrace international trade, seek opportunities in new markets, and make strategic investments that will lead to increased global trade flows, we are keenly aware of the challenges and costs posed by official corruption, weak institutions, and lack of respect for property rights, including intellectual property. Weak governance and lack of transparency constitute non-tariff barriers to trade, which we have committed ourselves to eliminating. Furthermore, the same issues that deter trade and investment also work against comprehensive security: a lack of transparency in governance leads to diminished confidence that problems and disputes will be addressed in a fair and impartial manner. Without trust and confidence in public institutions, there is little incentive for investors and companies to pursue trade deals or direct investment in those economies. The effect is stagnating economic performance, which, as we have seen in the past several months and years, can lead to political upheaval. The United States Government is deeply committed to fostering good governance and transparency in its political and economic institutions. President Obama has made the global fight against corruption a top priority. As he has noted, “In too many places, the culture of the bribe is a brake on development and prosperity. It discourages entrepreneurship, destroys public trust, and undermines the rule of law while stifling economic growth.” The real world costs of corruption and weak institutions should not be underestimated. The World Bank estimates that more than one trillion dollars in bribes are paid each year out of a global economy of approximately 30 trillion dollars. That's an incredible three percent of the world’s economy. In 2009, companies lost nearly $25 billion to companies willing to pay bribes in deals for which the outcome is known. And bribery is especially costly for small and medium-size enterprises (SMEs): a separate study has shown that up to 25 percent of SME operating capital in companies operating internationally is diverted to corruption. That is a staggering figure that illustrates how corruption diverts scarce resources to thoroughly unproductive ends. Corruption is a global problem that knows no borders. And that’s why corruption demands a truly global response – one that knows no limits on collaboration. The Obama Administration is doing its part to implement its obligations under the OECD Anti-Bribery Convention by enforcing the U.S. Foreign Corrupt Practices Act (FCPA) strictly and fairly. We are determined to ensure that U.S. businesses do not contribute to corruption in foreign markets. At the same time, we are determined to do what we can to assist them in the fight against foreign corruption, and against the high risk and significant costs of corruption in such markets. Regrettably, at this stage, the lack of enforcement of domestic bribery laws, and of foreign bribery laws by many nations that are Parties to the OECD Anti-Bribery Convention is extremely troubling and raises concerns about a lack of political will. Governments can and should prosecute both those who give bribes and those who receive them, both at home and abroad. And the OSCE should continue to encourage participating States to adopt and enforce rigorous anti-bribery regimes. Of course, the fight against corruption is not simply a law enforcement matter; rather it can also be a significant – if not the most significant – non-tariff barrier all companies face. Accordingly, the U.S. Department of Commerce and the International Trade Administration (or ITA) are committed to working with our trading partners to level the playing field and to promote transparent and corruption-free markets globally. Our work to promote clean and ethical business environments occurs at both the multilateral and bilateral level. At the multilateral level, the ITA is pressing its counterparts to lead by example and to implement comprehensive anti-corruption measures. In addition to our work through the OECD, the United States has been working diligently to persuade the G20 countries to adopt a comprehensive anti-corruption action plan, which includes a commitment focused on adoption and robust enforcement of anti-bribery laws, implementation of the UN Convention Against Corruption, greater engagement with the private sector, and support for transparency mechanisms, to name a few. Many of these commitments require our G20 partners to enact and implement new laws and preventive measures. The United States, at ITA’s initiative, in particular, took the lead on proposals relating to the private sector and also on whistleblower protection, within the G20. In the United States, whistleblowers play a crucial role in helping to enforce anti-corruption law. This principle is also embodied in international conventions. Articles 12 and 13 of the UN Convention require States Parties to prevent corruption in the private sector and promote the fight against corruption with the business community and civil society. Unless governments can protect whistleblowers, it is unlikely that they can identify or address systemic causes of corruption. The United States believes robust whistleblower protection should be an essential part of any good governance initiative in the OSCE, and I was encouraged to hear Ambassador O’Leary indicate that this will be an area of focus under the Irish Chairmanship. The U.S. Department of Commerce has also been committed to fostering strong private sector integrity as an integral part of promoting good governance in markets worldwide. Companies are global corporate citizens, and as such, can work collectively and with governments to foster trust, and promote transparency. I hope that some our work may provide a useful model for the OSCE to consider as it looks to embrace good governance and anti-corruption as a priority for the second dimension, a goal we fully support, and which I am personally committed to supporting. For example, the ITA has championed business ethics and corporate governance reform since the early 1990s, following the fall of the Berlin Wall. Our Business Ethics Manual has been translated into Chinese, Spanish and Russian and is still one of the most widely used resources on this important topic. We have partnered with business associations and chambers of commerce to develop collective action and business ethics program in many markets. Our work on business ethics has grown. This past year, the ITA has focused on trying to heighten awareness of good governance, transparency and business ethics in sectors of vital importance to many economies – by taking a “sectoral” approach to combating corruption and promoting good business practice, the challenge of dealing with corruption becomes less daunting. The ethical issues specific to different industries vary greatly – and there is no one-size-fits-all approach to the problem. Within the G20, for example, the United States, at the initiative of the U.S. Department of Commerce, has taken the lead in calling for the G20 to endorse additional sectoral approaches to fighting corruption, beyond the Extractive Industries Transparency Initiative (EITI). We have asked G20 governments, for example, to consider supporting the Construction Sector Transparency Initiative (COST) – a new multistakeholder initiative, developed by the World Bank. COST uses similar approaches to EITI to promote greater transparency in public infrastructure projects and government procurement. I hope that the OSCE might similarly consider COST and other multistakeholder approaches to promoting transparency under the Irish chairmanship. Within APEC, the ITA has focused on developing new ethical principles for key sectors within the APEC region. I am pleased to report that under the APEC SME working group, we have coordinated a project with APEC countries and businesses to develop principles of business ethics in the construction, medical devices and biopharmaceutical sectors. These voluntary principles are meant to be used by businesses and trade associations – large andwithin the OSCE framework and the EEDIM, we might also consider focusing on business ethics in specific sectors of interest to all of our economies. I want to close by suggesting some activities to take the theme of good governance and transparency forward. In addition to encouraging the OSCE to formally endorse the Extractive Industries Transparency Initiative—a move that would send an important signal about this body’s commitment to the principles of good governance and transparency—the U.S. encourages us to explore whether there are additional sectoral initiatives that merit support from the OSCE, including the Construction Sector Transparency Initiative. The United States Government also strongly supports the Irish Chair’s goal to develop a Statement or Declaration of Transparency Principles to help guide our governments in their future activities. I want to encourage us to consider new models of bilateral cooperation to promote good governance such as the model Mr. Murray just discussed, leading to a public-private initiative in the Russian power generation sector. We at the U.S. Department of Commerce are working closely with the Center for Black Sea/Caspian Studies at American University to potentially convene a conference in May of next year that would seek to address the challenge of developing mechanisms to ensure good governance and transparency, while also balancing the goals of protecting national security and accelerating economic development faced by the countries of the Caucasus and Central Asia, as they seek to assert their role as a gateway between Europe and Asia. In addition, the conference will also focus on specific market access challenges to regional integration and economic development in the Caucasus and Central Asia such as transparency in Government procurement and privatization, and trade facilitation challenges, including customs and lack of regional harmonization. It is our hope that the OSCE will join us for this event – focused on critical areas such as transport and infrastructure – to work on tangible ideas for projects and collaborations in the OSCE region. We look forward with great interest to the 20th Economic and Environmental Forum, where we will delve deeper into all the facets of good governance. We also thank the Lithuanian Chairman-in-Office for  ensuring that their draft Ministerial Council decision on Energy Security incorporates transparency in the energy sector – in our view, considering the vital role that energy plays in modern economic life, there can be no confidence, and thus no security, without energy transparency. In the year ahead, we envision an even broader focus on transparency principles across the entire spectrum of economic and environmental activities, and will work with all of our colleagues in the OSCE to make that vision a reality. Thank you, Mr. Moderator.  

  • Commissioner Camuñez's Remarks on Good Governance

    Economic and Environmental Dimension Implementation Meeting Session 3: Good Governance Before I begin, I’d like to thank the panelists today for their excellent and informative presentations. The United States has viewed with keen interest the evolving discussions in recent years on what the OSCE’s priorities should be in the Economic and Environmental Dimension.  As our friend and colleague Mr. Svilanovic pointed out during last year’s Vienna Review Conference, we appear to have come to an appreciation that good governance is the key linking theme across the entire second dimension.  The Maastricht Strategy is very clear on this point: “Good public and corporate governance and strong institutions are essential foundations for a sound economy, which can attract investments, and thereby enable States to reduce poverty and inequality, to increase social integration and opportunities for all, and to protect the environment.  Good governance at all levels contributes to prosperity, stability and security.”  As we consider the implementation of our second dimension commitments, however, we should keep in mind why it is important to implement those commitments. The global economic downturn continues to put extreme pressure on people and governments across the OSCE region.  To be sure, some countries have weathered the storm better than others.  Still, no country can be forever immune to market forces, and even within those that have done well, there are always citizens left behind.  This is certainly the case in the United States, and for this reason President Obama is focused intently on how best to put those Americans without a job back to work.  We all know that trade and investment are critical drivers of economic growth.  Indeed, recognizing this important reality, the Obama Administration has launched the National Export Initiative, which seeks to deepen our strategic trade relationships around the world, recognizing that 85 percent of world GDP growth will occur outside the United States in the coming few years.  As we encourage more American businesses – large and small – to embrace international trade, seek opportunities in new markets, and make strategic investments that will lead to increased global trade flows, we are keenly aware of the challenges and costs posed by official corruption, weak institutions, and lack of respect for property rights, including intellectual property. Weak governance and lack of transparency constitute non-tariff barriers to trade, which we have committed ourselves to eliminating.  Furthermore, the same issues that deter trade and investment also work against comprehensive security: a lack of transparency in governance leads to diminished confidence that problems and disputes will be addressed in a fair and impartial manner.  Without trust and confidence in public institutions, there is little incentive for investors and companies to pursue trade deals or direct investment in those economies.  The effect is stagnating economic performance, which, as we have seen in the past several months and years, can lead to political upheaval.    The United States Government is deeply committed to fostering good governance and transparency in its political and economic institutions.  President Obama has made the global fight against corruption a top priority.  As he has noted, “In too many places, the culture of the bribe is a brake on development and prosperity.  It discourages entrepreneurship, destroys public trust, and undermines the rule of law while stifling economic growth.”    The real world costs of corruption and weak institutions should not be underestimated.  The World Bank estimates that more than one trillion dollars in bribes are paid each year out of a global economy of approximately 30 trillion dollars.  That's an incredible three percent of the world’s economy.   In 2009, companies lost nearly $25 billion to companies willing to pay bribes in deals for which the outcome is known.  And bribery is especially costly for small and medium-size enterprises (SMEs): a separate study has shown that up to 25 percent of SME operating capital in companies operating internationally is diverted to corruption.  That is a staggering figure that illustrates how corruption diverts scarce resources to thoroughly unproductive ends. Corruption is a global problem that knows no borders.  And that’s why corruption demands a truly global response – one that knows no limits on collaboration.  The Obama Administration is doing its part to implement its obligations under the OECD Anti-Bribery Convention by enforcing the U.S. Foreign Corrupt Practices Act (FCPA) strictly and fairly.  We are determined to ensure that U.S. businesses do not contribute to corruption in foreign markets.  At the same time, we are determined to do what we can to assist them in the fight against foreign corruption, and against the high risk and significant costs of corruption in such markets.   Regrettably, at this stage, the lack of enforcement of domestic bribery laws, and of foreign bribery laws by many nations that are Parties to the OECD Anti-Bribery Convention is extremely troubling and raises concerns about a lack of political will.  Governments can and should prosecute both those who give bribes and those who receive them, both at home and abroad.  And the OSCE should continue to encourage participating States to adopt and enforce rigorous anti-bribery regimes. Of course, the fight against corruption is not simply a law enforcement matter; rather it can also be a significant – if not the most significant – non-tariff barrier all companies face.  Accordingly, the U.S. Department of Commerce and the International Trade Administration (or ITA) are committed to working with our trading partners to level the playing field and to promote transparent and corruption-free markets globally.  Our work to promote clean and ethical business environments occurs at both the multilateral and bilateral level.  At the multilateral level, the ITA is pressing its counterparts to lead by example and to implement comprehensive anti-corruption measures.   In addition to our work through the OECD, the United States has been working diligently to persuade the G20 countries to adopt a comprehensive anti-corruption action plan, which includes a commitment focused on adoption and robust enforcement of anti-bribery laws, implementation of the UN Convention Against Corruption, greater engagement with the private sector, and support for transparency mechanisms, to name a few.  Many of these commitments require our G20 partners to enact and implement new laws and preventive measures.   The United States, at ITA’s initiative, in particular, took the lead on proposals relating to the private sector and also on whistleblower protection, within the G20.  In the United States, whistleblowers play a crucial role in helping to enforce anti-corruption law.  This principle is also embodied in international conventions.  Articles 12 and 13 of the UN Convention require States Parties to prevent corruption in the private sector and promote the fight against corruption with the business community and civil society.  Unless governments can protect whistleblowers, it is unlikely that they can identify or address systemic causes of corruption.  The United States believes robust whistleblower protection should be an essential part of any good governance initiative in the OSCE, and I was encouraged to hear Ambassador O’Leary indicate that this will be an area of focus under the Irish Chairmanship.   The U.S. Department of Commerce has also been committed to fostering strong private sector integrity as an integral part of promoting good governance in markets worldwide.  Companies are global corporate citizens, and as such, can work collectively and with governments to foster trust, and promote transparency.  I hope that some our work may provide a useful model for the OSCE to consider as it looks to embrace good governance and anti-corruption as a priority for the second dimension, a goal we fully support, and which I am personally committed to supporting. For example, the ITA has championed business ethics and corporate governance reform since the early 1990s, following the fall of the Berlin Wall.  Our Business Ethics Manual has been translated into Chinese, Spanish and Russian and is still one of the most widely used resources on this important topic.  We have partnered with business associations and chambers of commerce to develop collective action and business ethics program in many markets.   Our work on business ethics has grown.  This past year, the ITA has focused on trying to heighten awareness of good governance, transparency and business ethics in sectors of vital importance to many economies – by taking a “sectoral” approach to combating corruption and promoting good business practice, the challenge of dealing with corruption becomes less daunting.  The ethical issues specific to different industries vary greatly – and there is no one-size-fits-all approach to the problem.  Within the G20, for example, the United States, at the initiative of the U.S. Department of Commerce, has taken the lead in calling for the G20 to endorse additional sectoral approaches to fighting corruption, beyond the Extractive Industries Transparency Initiative (EITI).  We have asked G20 governments, for example, to consider supporting the Construction Sector Transparency Initiative (COST) – a new multistakeholder initiative, developed by the World Bank.  COST uses similar approaches to EITI to promote greater transparency in public infrastructure projects and government procurement.  I hope that the OSCE might similarly consider COST and other multistakeholder approaches to promoting transparency under the Irish chairmanship.     Within APEC, the ITA has focused on developing new ethical principles for key sectors within the APEC region.  I am pleased to report that under the APEC SME working group, we have coordinated a project with APEC countries and businesses to develop principles of business ethics in the construction, medical devices and biopharmaceutical sectors.  These voluntary principles are meant to be used by businesses and trade associations – large and small – to guide their ethical interactions with public officials and institutions.   I hope that within the OSCE framework and the EEDIM, we might also consider focusing on business ethics in specific sectors of interest to all of our economies.  I want to close by suggesting some activities to take the theme of good governance and transparency forward.  In addition to encouraging the OSCE to formally endorse the Extractive Industries Transparency Initiative—a move that would send an important signal about this body’s commitment to the principles of good governance and transparency—the U.S. encourages us to explore whether there are additional sectoral initiatives that merit support from the OSCE, including the Construction Sector Transparency Initiative.  The United States Government also strongly supports the Irish Chair’s goal to develop a Statement or Declaration of Transparency Principles to help guide our governments in their future activities. I want to encourage us to consider new models of bilateral cooperation to promote good governance such as the model Mr. Murray just discussed, leading to a public-private initiative in the Russian power generation sector.   We at the U.S. Department of Commerce are working closely with the Center for Black Sea/Caspian Studies at American University to potentially convene a conference in May of next year that would seek to address the challenge of developing mechanisms to ensure good governance and transparency, while also balancing the goals of protecting national security and accelerating economic development faced by the countries of the Caucasus and Central Asia, as they seek to assert their role as a gateway between Europe and Asia.  In addition, the conference will also focus on specific market access challenges to regional integration and economic development in the Caucasus and Central Asia such as transparency in Government procurement and privatization, and trade facilitation challenges, including customs and lack of regional harmonization.  It is our hope that the OSCE will join us for this event – focused on critical areas such as transport and infrastructure – to work on tangible ideas for projects and collaborations in the OSCE region. We look forward with great interest to the 20th Economic and Environmental Forum, where we will delve deeper into all the facets of good governance.  We also thank the Lithuanian Chairman-in-Office for ensuring that their draft Ministerial Council decision on Energy Security incorporates transparency in the energy sector – in our view, considering the vital role that energy plays in modern economic life, there can be no confidence, and thus no security, without energy transparency.  In the year ahead, we envision an even broader focus on transparency principles across the entire spectrum of economic and environmental activities, and will work with all of our colleagues in the OSCE to make that vision a reality. Thank you, Mr. Moderator.

  • Commissioner Camuñez's Opening Statement at the Economic and Environmental Dimension Implementation Meeting

    Economic and Environmental Dimension Implementation Meeting Opening Remarks On behalf of the United States, I would like to thank the Lithuanian Chairman-in-Office, Secretary General Zannier, Coordinator for Economic and Environmental Activities Svilanović, and of course our Austrian hosts for convening this inaugural Economic and Environmental Dimension Implementation Meeting and for providing a warm welcome to Vienna. It is an honor to be here today as head of the U.S. delegation to the OSCE, representing the U.S. Government in my capacity as an Assistant Secretary of Commerce for Market Access and Compliance (MAC) within the International Trade Administration, and as a Commissioner to the U.S. Helsinki Commission. As a Commerce Department Assistant Secretary for Market Access and Compliance, I am responsible for helping lead the effort to open new markets for U.S. companies, identifying and eliminating market access challenges such as non-tariff barriers to trade, and helping to monitor and enforce U.S. trade agreements and commitments. The work of the Environmental and Economic Dimension, especially that which focuses on transparency of markets and good governance, is closely aligned with the work we undertake in the International Trade Administration. I am here today to deliver the message that the U.S. Government is highly committed to making the second dimension even more effective and dynamic, and that we will do our part in ensuring that our economic and environmental commitments receive the same level of attention and scrutiny that those in the political-military and human dimensions currently enjoy. I will try to keep my remarks brief, but I think it is critical that we take a close look at the economic and environmental commitments as they were spelled out in the 2003 Maastricht Strategy. We still see Maastricht as the key blueprint for moving forward on all the  commitments that have come before, and in particular, note a number of areas where we could pursue significant, substantive action over the next few years to achieve measurable progress. Our commitments on economic cooperation have at their core the idea of connectedness to regional and global markets, to trade and investment networks, and to energy and transportation infrastructure, as a way to address emerging economic challenges and threats. In light of the global economic downturn, it is vital that we recommit ourselves to increasing cooperation through a variety of measures, including improving corporate governance and public management, eliminating unnecessary and discriminatory barriers to trade, continuing  to harmonize our regulations and standards where appropriate, taking further steps to combat financial crimes like bribery and money laundering, and increasing confidence through the incorporation of transparency principles in all of our public and private ventures. At the same time, in view of our progress made this year worldwide on  empowering women in the economy, first at the Invest for the Future Conference in Istanbul in January and most recently at the APEC Summit in San Francisco, we believe it is important to recognize the critical connection between women and strong economies, and to remove all barriers that prevent women from full and equal participation in the economy. I would like to focus my comments this morning on the subject of good governance, however. We have committed ourselves time and again to “good governance,” and while progress has been made, much work remains to be done. As stated in the 2003 Maastricht Strategy, achieving good governance will require a comprehensive, long-term strategic approach. In the view of the U.S. Government, good governance is the core theme within the economic and environmental dimension, and we are pleased that next year’s Forum will address the topic in a broad and detailed way. When we speak of good governance, we speak about governments having both the propensity and the competence to manage complex political and economic systems in a fair, fully inclusive, and transparent way. Anti-corruption is part of it, but not the whole picture. It’s about having transparent, clear and predictable legislative and regulatory frameworks that foster efficient and low-cost business formation and development, and most importantly allow and even encourage robust participation in the political and economic spheres by civil society. Let me say a few words about my agency’s past and current work in this area, reserving greater details and the highlights of a new proposal for Session III tomorrow. From 1998-2008, the U.S. Department of Commerce launched a Good Governance Program, focused on partnering with the public and private sectors in the countries of the former Soviet Union and Central-Eastern Europe. This work, focused on promoting sound corporate governance and business ethics, culminated in the publication of a Business Ethics Manual, a Commercial Dispute Resolution Handbook, and a Corporate Governance Manual translated into several languages and disseminated widely throughout the OSCE region. Today, we continue to work on numerous initiatives around the world, within multilateral fora such as APEC and the G20, which involve OSCE members, promoting consensus based principles focused on anticorruption. We have taken our business ethics work and branched out into new regions including Asia and Latin America. Despite a clear understanding of its importance, the lack of good governance and systemic corruption remain some of the single most important market access challenges for companies engaged in trade around the world. This is especially true for small and medium sized enterprises, which are the engine of economic growth and innovation throughout the world. The United States believes that addressing these issues can only lead to greater investment, economic prosperity and security. Over the next three days, we will discuss OSCE support for the Extractive Industries Transparency Initiative (EITI). I am pleased to report that the U.S. Department of Commerce played an important role in supporting the creation of the EITI in its initial phase. The OSCE now has a chance to follow in the steps of the G8 and G20, by endorsing the EITI, and I applaud the governments that have preceded the United States as implementers. The EITI is a great example of how shared commitments towards good governance and transparency in a vital sector to many countries can work and build sustained momentum and engagement between the private sector, governments and civil society. Tomorrow I will share more concrete information about the work that the U.S. Government and my Department have undertaken to promote good governance and to combat corruption. I am pleased to have an expert on business ethics and anti-corruption in the energy sector, as part of the U.S. delegation. Mr. Matthew Murray runs the Center for Business Ethics and Corporate Governance in St. Petersburg, Russia, and he’ll speak to you later about a good governance initiative involving public and private stakeholders in the power generation sector in Russia, which may serve as a model for similar programs in other OSCE countries. I am also pleased to have Kate Watters of Crude Accountability joining the U.S. delegation, who will provide some examples of how transparency is a critical component of enhancing security in the environmental sphere. A month ago, the Economic and Environmental Forum discussed the concept of sustainability and where efforts to promote sustainable practices stand in our region. Those discussions remind us that our commitments on sustainable development encompass a broad spectrum of activities related to efficiency, sound resource management, and the full involvement of all stakeholders in decision-making. Just to cite an example from the Prague Forum, we recognize that in order to further develop economies and markets in such varied areas as the Black Sea region and Central Asia we will need to address several problems: improving the efficiency of border crossings and building construction, tilting the energy mix towards cleaner fuels, harmonizing standards and practices across the region, and, just as critically, ensuring broad involvement of civil society in the decision-making on project proposal, design, and implementation. One thing that sets the OSCE apart from many other organizations addressing the environment is recognition of the clear connection between the environment and security. We recognize that many environmental disasters cannot be predicted or prevented. At the same time, greater transparency – through information sharing and civil society engagement – about possible security risks stemming from the environment will make it possible to prevent or mitigate more disasters, both natural and man-made. We also must recognize that failure to protect the environment is itself a security risk, putting increased pressure on populations facing dwindling resources of clean air and water, arable farmland, and adequate energy. Colleagues, The next three days provide a critical juncture and platform for finding consensus on measures that will improve our implementation of the OSCE commitments in the economic and environmental dimension. The Vilnius Ministerial is only a month and a half away; now is the time to summon the political will to find a way forward. We look forward to building consensus on decisions on energy security, to include good governance and transparency, and we welcome constructive dialogue on additional measures proposed on confidence-building initiatives and sustainable transport. We view these elements, along with sustainable development and protecting the environment, as the cornerstones of the Maastricht Strategy, and will be speaking about these over the next several days. Just a month ago, we found some convergence of opinion on discrete aspects of the second dimension. Let us expand that convergence to the entire dimension as we review our economic and environmental commitments over the next few days, with a view toward substantive deliverables for Vilnius. Thank you, Mr. Moderator.

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