OECD Anti-Corruption Division

1. The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions OECD Anti-Corruption Division

2. The OECD Anti-Bribery Convention • The first and only international instrument focusing on bribery of foreign public officials in international business transactions • 17 Articles • Came into force in 1999 • 38 Parties to the Convention (accounted for roughly two-thirds of world exports in 2009 and nearly 90 percent of global outward flows of foreign direct investment). • Requires its Parties to make laws that hold their citizens and companies accountable for the bribery of foreign public officials committed anywhere in the world. • Monitoring of enforcement: OECD Working Group on Bribery

3. The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions It is a crime in each of the 38 State Parties… … for companies to give, offer or promisebribes…. …to foreign public officials in any country… …to gain advantages in international business transactions.

4. The OECD Anti-Bribery Instruments • The OECD Anti-Bribery Convention • 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions • 2010 Good Practice Guidance on Internal Controls, Ethics and Compliance

5. Why fight foreign bribery? • Foreign bribery: • Undermines good governance, transparency and accountability • Distorts markets and discourages foreign investment • Negatively affects fair competition by putting companies that do not bribe at a competitive disadvantage • Facilitates other forms of transnational crime, such as trafficking in drugs, arms and human beings

6. The Foreign Bribery Offence • Focus on active bribery – “the supply side” • Any person or entity who promises, offers or gives a bribe to a “foreign public official” • Foreign bribery is a crime even if the desired results are not achieved, and even if the bribe was not necessary to achieve the desired results (e.g., if the company was the best qualified for a tender)

7. Foreign Bribery Includes • Bribery committed through an intermediary or subsidiary (i.e., bribery through a person acting as a go-between) • Bribes that benefit a foreign public official’s family, political party, or another third party

8. Definition of a Foreign Public Official • Definition of a foreign public official: any person holding an appointed or elected legislative, administrative or judicial office; any person exercising a public function; and any official or agent of a public international organisation • How the foreign country where the bribe takes place defines the person in question is therefore immaterial

9. Corporate Liability • Parties are required to establish liability of legal persons for the foreign bribery offence. • Companies must be held responsible for foreign bribery, independent of prosecution or conviction of an individual for this crime. • Criminal liability is required if the Party’s law allows it; otherwise, it must provide for administrative and/or civil liability including effective sanctions.

10. Sanctions • The Convention requires that bribery of a foreign public official be punishable by “effective, proportionate and dissuasive” sanctions: • At least comparable to sanctions for bribery of domestic public officials • Criminal or administrative sanctions, including monetary sanctions • Bribes and proceeds of bribery must be subject to seizure and confiscation.

11. Monitoring Mechanism • The OECD Working Group on Bribery conducts peer-review monitoring of Parties’ implementation of the Anti-Bribery Convention • Phase 1 (review of legislative implementation) and Phase 2 (in-depth evaluation of practical implementation) completed • Phase 3 (starting in 2010) to review: focuses on enforcement, as well as outstanding Phase 1 and 2 recommendations; legislative and institutional changes; and other key issues

12. Successes • All 38 Parties punish foreign bribery with imprisonment and often substantial fines • No Party permits tax deductibility of bribes to foreign public officials – most deny it expressly in their tax codes • More than 225 convictions of companies and individuals for foreign bribery, with maximum fine of EUR 1.24 billion for a single company • 280 investigations currently underway

13. Challenges • Concealed and complex crime, difficult to detect • Law enforcement can be reluctant to take on foreign bribery investigations and prosecutions • Need to increase and specialise resources • International cooperation is essential • Lack of awareness

14. A Global Approach to the Fight against Foreign Bribery • The OECD Working Group on Bribery works regularly with a number of countries not Party to the Anti-Bribery Convention including: • China, India, Indonesia, Russia and Thailand • The Working Group also fights bribery and corruption through regional initiatives in: • Africa, Asia-Pacific, Eastern Europe and Central Asia, and Latin America

15. Engagement with the private sector and civil society • Regular consultations with the Working Group on Bribery • Review of the OECD anti-bribery instruments • Adoption of the 2009 Anti-Bribery Recommendation • Adoption of the Good Practice Guidance for companies and business organisations • Launch of the Initiative to Raise Global Awareness of Foreign Bribery in December 2009

16. Thank you For more information: www.oecd.org/daf/nocorruption Contact: Mary.Crane-Charef@oecd.org