Anti-Bribery Convention Has Made a Difference
By Patrick Moulette
Paris — Bribing public officials to obtain business advantages in international transactions carries a stigma and exposes corporations and their executives to an increased risk of successful prosecution, thanks to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
The treaty, which entered into force in 1999, gave the Organisation for Economic Co-operation and Development (OECD) a powerful tool against corruption. The group plays a leading role in the battle against cross-border graft — a scourge which has raised serious moral and political concerns, undermined good governance and economic development, and distorted international competition. The convention is the only international instrument that focuses on bribe-givers.
Countries that have signed the agreement must make it a crime for companies operating within their borders to bribe a foreign public official in order to obtain or retain international business (such as an infrastructure contract or a mining concession).
The 38 parties to the convention — the 30 OECD members plus Argentina, Brazil, Bulgaria, Chile, Estonia, Israel, Slovenia and South Africa — have implemented national legislation that criminalizes foreign bribery. None allow companies to claim tax deductions for bribe payments, as was the practice in some countries before the end of the 1990s. And all are working to prevent, detect, investigate and sanction foreign bribery cases.
The convention requires that signatories’ foreign bribery laws apply to both individuals and companies that promise, offer or actually give a bribe. Bribery conducted through intermediaries and transactions that benefit third parties (such as an official’s spouse) must also be included. Countries must consider foreign bribery a crime even where the briber would have been awarded the contract if it had been sought purely on merit. Graft is considered a crime regardless of whether the bribe was accepted or an official actually provided an illicit advantage, or whether corruption is tolerated or even widespread in the country concerned.
Parties to the convention are also required to establish effective and proportionate sanctions in order to discourage bribery.
As a result of the convention, more than 250 cases are under investigation in the 38 signatory countries. During the past 10 years, about 150 companies, including such well-known firms as Lucent Technologies and Siemens AG, as well as individuals including corporate officers, have been sanctioned for committing foreign bribery and related offenses in host countries. Companies have paid millions of euros or U.S. dollars in fines, and some executives have faced jail terms of up to five years.
This is remarkable, considering that before the convention foreign bribery was a crime in only a few countries and most companies considered bribery just a part of doing business internationally.
A key to the success of the convention is its peer-review monitoring process. This rigorous evaluation system is overseen by the Working Group on Bribery, which includes representatives of each party to the convention. The monitoring process motivates countries to honor their commitments under the convention and allows sharing of ideas and good practices.
Raising awareness of bribery in corporate practices and host governments’ operations is an essential part of international efforts to intensify the fight against graft. Graft remains a challenge across several countries. Monitoring shows that their awareness campaigns related to anti-bribery laws often are insufficient. Many companies, especially small and medium-sized enterprises, remain ignorant that foreign bribery is illegal. The OECD is starting an initiative to raise global awareness of foreign bribery to support and boost individual countries’ efforts to address the problem.
Although enforcement actions have increased since the convention entered into force, the OECD Working Group on Bribery and corruption-monitoring groups such as Transparency International urge more investigations and prosecutions of corporate bribery in overseas markets, particularly in nations that have lagged in cleaning up corporate corruption so far.
To further facilitate the prevention, detection and prosecution of foreign bribery, the OECD Working Group on Bribery signed into action in November a new anti-bribery recommendation. This recommendation provides measures for combating small facilitation payments, for protecting whistleblowers, and for improving lines of communication between public officials and law enforcement authorities.
An increasingly globalized marketplace has made it easier to engage in corruption and more difficult to detect it. Unscrupulous businesses faced with an increased risk of prosecution resort to paying bribes through intermediaries. That is why countries must enforce their laws vigorously, keep up monitoring corporate behavior, and work together across borders to combat bribery in international transactions.
The OECD plans to work toward extending the convention’s reach to emerging economies. Key players such as China, India and Russia must join international efforts to combat corporate graft. As these countries conduct more business beyond their borders, the tough standards in the OECD convention should serve as an international benchmark for their anti-bribery efforts.
Patrick Moulette is the head of the Anti-Corruption Division of the Organisation for Economic Co-operation and Development.
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://www.america.gov)