Prevention – a new strategy to combat corruption and shadow economy

Feb 19. Kazpravda

By Olga Semenova

Prevention - a new strategy to combat corruption and shadow economyLast year saw a milestone in the Agency for Combating Economic Crimes and Corruption- an extraordinary performance evaluation, followed by considerable reshuffles and upgrades in the financial police. On it is our talk with the head of the department Rashid Tusupbekov.

– A year ago, just after the appointment as chairman of the Agency, you told in an interview to our newspaper of its strategic objectives. Did the Agency succeed in meeting them all?

– Last year was intense and stressful for the financial police. We had to change years-long repressive mentality and pursuit of figures inherent to all the law enforcement agencies, the Financial Police including. So, first of all, strategic objectives were defined to the department – strengthening of corruption prevention measures, increasing the focus on curbing its systemic and organized forms. We also worked to combat the underground economy, while avoiding undue interference in business activity.

Accents were shifted from rampant filing of criminal cases to prevention of crimes and offenses, in other words, have moved from quantitative to qualitative characteristics.

The work of an operating officer is now gauged not so much by initiation of a criminal suit, as by crime suppression at an early stage, or its prevention, particularly organized and systematic crimes that cause significant harm to the interests of citizens and the state, i.e. grave crimes.

– Can we talk of a sweeping reform in the financial police?

With the law on enforcement service in effect, the law enforcement system was reset. Conductive to it was also an extraordinary attestation.

In the first place accounting and registration discipline has improved, which helped in fighting the hidden and not recorded crimes. The legal proceedings were taken on criminal cases of the past years, which long lay unattended to, and it helped reinstate hundreds of citizens in their rights. Electronic registration of complaints and applications was adopted, which also told favorably on statistics’ objectivity.

In order to respect the constitutional rights of citizens and prevent their unnecessary involvement in prosecution, in all territorial divisions duty investigation group were established. Among them is the investigator who makes a legal assessment of the applications and reports and of the presence of criminal evidence. As a result the criminalization of applications decreased by 10% on average, which helped reduce the number of wrongly assigned pre-investigation checks.

Terms of applications’ consideration have shortened too. More of them are now handled in three days, 23% up, and 40% are considered in 10 days. It no longer takes months as before.

Decision-making quality has improved, “policeman” investigation was launched into practice to improve the quality of investigative work and speed up the inquest.

The analysis shows that the undertaken measures have already given some positive results.

– The fight against corruption must begin with cleansing of police their ranks. What about it?

– Indeed, anti-corruption behavior of the enforcement officers was the main criterion in the extraordinary performance evaluation, and I want to note that the Agency’s work to rid its ranks of unscrupulous employees and detect their committed crimes took on a systematic and persistent character. In 2012 the Agency exposed 21 corruption offenses committed by our employees, 17 were prosecuted and 38 were brought to disciplinary liability.

– So we can state the growth of corruption among financial officers?

– These figures do not point to the level of corruption in the financial police, but to the growth of the detection of such crimes, which, in turn, shows our principal position on the purity of police ranks, our fighting for “esprit de corps”.

All the breaches of law committed by the financial police must be in the public eye to minimize the risks of corruption in our department.

In June 2012, I signed an order on the responsibility of senior financial police officers for committing corruption crimes and offenses. Already there are some examples in the South Kazakhstan and Aktobe regions when they were fired for unlawful actions of their subordinates.

In accordance with the President’s instructions at a meeting with the heads of law enforcement agencies this January, a new concept was developed for HR policies of law enforcements. A Polygraph is to be applied in the admission to service and performance evaluation that is going to be annual. All these measures are purposed to nurturing a law enforcement officer of a “new generation.”

– The financial police have been often criticized for pressure on the business. What do you make of the current relations between your department and businessmen?

– Initially we set the goal to defend and support law-abiding businesses. I ordered a moratorium on inspections into business, except for the shadow economy subjects, and those implementing budget projects. It is forbidden to suspend production activities of businessmen and to carry out checks on anonymous complaints.

That resulted in twice fewer complaints about unlawful actions of the financial police coming to the site “President’s protection of business” and more confidence of the businessmen in us. Letters of thanks from them point to it.

– President N. Nazarbayev in his Address instructed to step up dramatically the fight against corruption. What tasks have you set in accordance with the given instruction?

– The state is taking steps to create “e-government”, optimize the permit system, reduce the deadlines for public services and pressure on the business. All these factors create conditions for reducing corruption rates in the society.

The agency has established a special Situation center to monitor crime situation in the country. Taking into account the information in the databases of the government agencies and other public sources, the center detects the structures and schemes of criminal contacts, relationship characteristics, affiliations and other parameters.

At present, with the help of the Situation Centre, we monitor the progress of large budget projects in order to detect the theft of government funds. Thus, the center allows to detect crimes and prevent them at early stages.

For example, in West Kazakhstan, East Kazakhstan and Pavlodar regions, at the request of the financial police, the state institutions of the regions reduced the prices for purchase of gasoline and other products. In Almaty region, over-pricing of the Regional Department of Education for procurement of food was revealed. After our interference 3.5 million tenge was saved. These are the first results of the Situation Center’s work.

Besides, we have developed a “passport of corruption risks” for each region, defining the most corrupt sectors and departments. As a result, our specialists are working directly with the most corrupted areas and departments.

– What is the statistics of anti-corruption fight?

– In 2012, the financial police detected more than 1,800 corruption crimes, that is 2.2% more than in 2011. About 1,650 officials were brought to criminal responsibility, including 450 at the national and regional levels, and 1 200 – district.

We are to detect organized and systemic corruption crimes, brining multibillion damage to the state. For example, ex-governor of Atyrau region, together with his officials loyal to him personally, organized a large-scale budget embezzlement scheme. The damage is more than 42 billion tenge. In the result of our work, more than 26 billion has been returned to the state.

In 2012, the budget means allocated to the SBCs for formation of regional food stabilization funds, were embezzled in 10 regions of the country. 15 criminal cases were initiated on theft of 2 billion 187 million tenge, allocated from the budget for establishment of stabilization funds in Almaty, Aktobe, West Kazakhstan, Karaganda, East Kazakhstan, Kyzylorda, Akmola, North Kazakhstan and Mangistau oblasts and Almaty. After the investigations more than one billion tenge was returned to the state.

We are to monitor the targeted use of budgetary funds, allocated for implementation of government programs. Over the last year, 106 corruption crimes were revealed in such programs as “Akbulak”, “Road map”, “Employment”, “Housing” and “Agribusiness.”

– The President instructed to improve anti-corruption legislation. What legislative changes would you suggest?

– At present a new version of the Penal Code and Criminal Procedures Code is under development and the agency is actively involved in the work.

In order to further improve the anti-corruption legislation, we have developed new legislative initiatives. We offer, in addition to imprisonment for bribery, to establish a new penalty in the form of a fine, depending on the size of bribes.

If a person, within a certain deadline, does not pay the fine, the amount of which will be ten times more than the bribe itself, the imprisonment with confiscation of property will be applied. This is a new institution for our country, but in foreign countries, including Russia, it has already been introduced.

The next issue to be addressed is encashment. In 2012, Kazakhstan legal entities cashed 1 trillion 680 billion tenge for payment of goods, works and services, and this figure tends to annual growth. Uncontrolled cash creates favorable conditions for shadow economy, corruption and financing of extremism and terrorism.

To change the situation radically, we offer to limit the amount of cash funds for legal entities, defining the threshold sufficient for economic activities. Appropriate infrastructure has been created for that: we have a modern banking system, the developed electronic payments and money transfers. It will help increase tax revenues, eliminate the ground for bribery and embezzlement of public funds, complicate financing of terrorist and extremist groups and organized crime. Besides, at the request of the President, we are making recommendations for further decriminalization of financial and economic offenses.

– The finance police agency is also fighting economic crimes. What are the results in this area?

– Our task is to ensure economic security of the country. First of all is countering shadow economy, affecting the corruption rates. Staring from 2012, the agency approves annual plans for fighting the shadow economy. We have initiated a range of new actions to be included in the drafting Comprehensive national plan against shadow economy in 2013-2014.

Overall, more than 90% of the total number of the detected economic crimes are related to the shadow economy, a third of them are grave crimes. For example, due to the agency’s work, the amount of alcohol excise payment to the budget increased by 18% and made 21.5 billion tenge.

Work of nearly 500 illegal gambling clubs was suppressed, including 80 underground casinos, more than 7,000 slot machines, 95 roulette and 106 poker tables and more than 29 million tenge were seized. 282 criminal cases on pseudo-entrepreneurship and fictitious transactions were initiated. 45 people were detained when cashing 1.2 billion tenge.

Over the last year the agency inspected more than 50 problem objects that were not commissioned timely or did not reach the design capacity. 19 crimes at 14 objects were revealed; the damage amounted to 2.5 billion tenge.

– At the meeting with the heads of law enforcement bodies the President re-emphasized the need to strengthen the fight against terrorism and extremism. Are the financial police involved in this work?

– Since the beginning of 2013, the financial police are empowered to prevent and suppress the financing channels of extremist and terrorist organizations.

In order to step up the work, the plans are approved for inter-agency cooperation with the Interior Ministry and the National Security Committee on combating terrorism.

– Who is the main partner of the financial police in fighting corruption?

– There’s a state program, fulfilled by the law enforcement agencies and the whole society. Together with the Nur Otan party, the National Economic Chamber “Union “Atameken”, PF “Transparency Kazakhstan”, the Forum of Entrepreneurs, the Civil Alliance we are working on nurturing a sustainable anti-corruption ideology and public immunity to corruption.

The agency’s anti-corruption initiatives have been supported by the youth movement “Karsy”, the Alliance of Students and Kazakhstan Youth Congress. The Public Council for fighting corruption and shadow economy has been working under the agency for almost four years, comprising representatives of political parties, business associations and NGOs. Similar councils are functioning in the territorial divisions.

The main vector of our activity is formation of intolerance to corruption in the society.