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OECD Insights on Global Anti-Bribery Efforts

Explore detailed reports and recommendations on combating foreign bribery worldwide by the OECD Working Group on Bribery. Learn about key areas such as legal definitions, sanctions, jurisdiction, and enforcement practices.

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OECD Insights on Global Anti-Bribery Efforts

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  1. OECD Working Group on Bribery Is the World Really Fighting Foreign Bribery? Athens, 10 May 2016 Drago KOS

  2. OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (1997) • 17th anniversaryofitsenteringintoforce in February 2016; - 41 memberStates (LithuaniaandCostaricaabout to join); - Articles on: definition of the offence (including definitions of a »foreign public official«, »foreign country«, »act or refrain from acting in relation to the performance of official duties)” , liability of legal persons, sanctions (effective, proportionate, dissuasive + seizure and confiscation), jurisdiction (allowing double jeopardy), enforcement (shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved), statute of limitations, money laundering, accounting, mutual legal assistance, extradition, responsible authorities, monitoring and follow-up.

  3. Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions (2009) - Chapters on : general, criminalisation of bribery of fpo, tax deductibility, reporting foreign bribery, Accounting Requirements, External Audit, and Internal Controls, Ethics and Compliance, Public Advantages, including Public Procurement, Officially Supported Export Credits, International Cooperation, Follow-up and institutional arrangements, Co-operation with non Members, Relations with international governmental and non-governmental organisations + - Annex I: Good Practice Guidance on Implementing Specific Articles of the Convention on Combating Bribery of Foreign Public Officials in International Business Transaction - Annex II: Good practice guidance on internal controls, ethics, and compliance

  4. OECD Working Group on Bribery in International Business Transactions It wasestablished in 1994, (generating 80% oftheworldexportand 90% ofoutward FDI), todayit has 41 members + severalobservers (China, India, Indonesia, Malaysia, Thailand,...). It is responsibleformonitoringofimplementationandenforcementoftheConvention, 2009 Recommendation + relatedinstruments. Itspeer-review monitoring system is conducted in threephases (the 4th will start in 2016) and is consideredbyTransparencyInternational to be the ‘gold standard’ of monitoring.

  5. Evaluation Phases Phase 1: Initialassessmentofcountries’ nationallegislation to determinetheirconformitywiththe OECD Convention Phase 2: AssessmentofthepracticalapplicationandimplementationoftheConventionandrelateddocuments Post-Phase 2 assessmentmechanism (December 2009, givesthe general proceduralframeworkforallfuturephases) Phase 3: Up-to-dateassessmentofthecountries’ structures to implementtheConventionand 2009 Recommendation (WG cross-cuttingissues, progress on identifiedweaknesses, enforcementefforts, changes in the nat’l legislation)

  6. Foreign Bribery Report*, I. Based on the WGBknowledge and drawing on that gain by the 17 most active countries in dealing with 427 concrete cases of foreign bribery from 1999 to 2014, the OECD issued the analytical Foreign Bribery Report at the end of 2014. In it, the OECD attempted to identify common characteristics, mechanisms, areas and procedures manifestedin foreign bribery. *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

  7. Foreign Bribery Report*, II. The fourmain sectors involved in foreign bribery cases were the extractive (19%), construction (15%), transportation and storage (15%) and information and communication (10%) sectors. Almost half of the cases involved bribery of public officials from countries with high to very high levels of human development. *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

  8. Foreign Bribery Report*, III. In 41% of cases, management-level employees paid or authorised the bribe, whereas the company CEO bribed in 12% of cases. *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

  9. Foreign Bribery Report*, IV. Bribes were promised, offered or given most frequently to employees of public enterprises (27% of cases), followed by customs officials (11%), health officials (7%) and defence officials (6%). *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

  10. Foreign Bribery Report*,V. In the majority of cases, bribes were paid to obtain public procurement contracts (57%), followed by clearance of customs procedures (12%). The bribes were considerable: on average, bribes equalled 10.9% of the total transaction value and 34.5% of the profits. *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

  11. Foreign Bribery Report*,VI. One in three cases came to the attention of authorities through self-reporting by defendant companies or individuals. The next most common sources were law enforcement authorities (13%) and mutual legal assistance between countries (13%). Companies that self-reported became aware of the foreign bribery in their international operations primarily through internal audits (31% of cases) and merger and acquisition due diligence procedures (28% of cases). *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

  12. Foreign Bribery Report*,VII. Prisonsentences were handed down only to 80 individuals who were found guilty of foreign bribery; the longest combined prison sentence imposed to date in a case involving a conviction for conspiracy to commit foreign bribery is 13 years for one individual. In total, there were also 261 fines imposed on individuals and companies, with the highest combined fine against a single company totalling EUR 1.8 billion. The highest monetary sanction imposed against an individual in a foreign bribery case was a forfeiture order amounting to USD 149 million. *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

  13. Foreign Bribery Report*,VIII. In 69% of foreign bribery cases, sanctions were imposed by way of settlement between the prosecution service or court and the company responsible. Sometimes it is difficult to shake off the impression that settlements are used more as a way of damage control by companies and the individuals involved rather than as a means of ensuring that justice is really done. *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm *http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm

  14. Transparency International Progress Report 2015*, I. Since 1999: 20 WGB MS with 20,5% worldexportswithlittleor no enforcement(Japan, Russia, Spain, Belgium, Mexico, Brazil, Ireland, Poland, Turkey, Denmark, CzechRepublic, Luxembourg, Argentina, Chile, Israel, Slovak Republic, Colombia, Slovenia, Bulgaria, Estonia) 9 WGB MS with 12,6 worldexportswithlimitedenforcement(France, Netherlands, South Korea, Sweden, Hungary, South Africa, Portugal, Greece, New Zealand)  6 WGB MS with 8,9% worldexportswithmoderateenforcement(Italy, Canada, Australia, Austria, Norway, Finland) 4 WGB MS with 22,8% worldexportswithactiveenforcement (US, Germany, UK, Switzerland) *http://issuu.com/transparencyinternational/docs/2015_exportingcorruption_oecdprogre/1?e=2496456/14890701

  15. European Enforcement • Little or No Enforcement • Belgium • Bulgaria • Czech Republic • Denmark • Estonia • Ireland • Luxembourg • Poland • Slovak Republic • Slovenia • Spain • Active Enforcement • Germany • Switzerland • UK • Moderate Enforcement • Austria • Finland • Italy • Norway • Limited Enforcement • France • Greece • Hungary • Netherlands • Portugal • Sweden

  16. Transparency International Progress Report 2015*, II. Countriesimproving: Norway, Greece, Netherlands, SouthKorea (France,..) Countryregressing: Argentina

  17. Transparency International Recommendations The WGB should: monitor whether governments provide additional resources forfightinginternationalbribery in some ofthecountries, take action to ensure that enforcement efforts result in effective, proportionate and dissuasive sanctions, undertake a review of settlement practices in foreign bribery casesto ensure that settlement agreements receive judicial approval, that their terms are transparent, and that penalties are effective, proportionate and dissuasive, remedyconcernsregardingfullcompliancewithArticle 5 oftheConvention, givehigh priority to correcting the deficiencies indeveloping effective laws and practices fortheprotectionofwhistleblowers,, make sure that availability of, and access to, enforcement information is improved

  18. Future Activities of the WGB - to keepstandardsoftheConventionalive(=to enhanceeffortsforitsimplementation, incl. bytheMinisterial meeting fromMarch 2016) to continueissuingtargetedandfocusedrecommendation - to continuecooperatingwithothergovernmental, non-governmentalandbusinesspartners, continuebuilding a trustworthy platform forglobalgovernance, ensurefairconditions in globaltradeforall (memberandnon-member) statesoftheworld

  19. Future Challenges of the WGB - selection of topics for evaluation forPhase IV andforfurtherphases - big players at the door (China, India, Indonesia, UAE,..), equal treatment, monitoring “fatigue”, reluctance of some of the existing members to undergo serious monitoring, different levels of activities of national delegations, - workload during the WG sessions,..

  20. Topics for the Evaluation in Phase IV Taylor-madeapproachon: Progress on Phase III recommendations Detectingforeignbribery (incl. protectionofwhistle-blowers, acces to publicinformation, role ofthemedia) Enforcementofforeignbribery (incl. newchallengesarisingfromchangesmadeafterPhase III, cases, LE resourcesandexpertise, int‘lcooperation, Article 5, enforcementresults) Engagementwith legal persons (incl. responsibilityof legal persons, engagingwiththeprivatesector)

  21. Topics for the Evaluation in Future Phases What to do: to continue monitoring ofexistingtexts (Convention + 2009 Recommendation) OR to expand area of monitoring (e.g. to demandside + ?)

  22. Enforcement, Enforcement, I. Statistics as of December 2014: 361 individuals and 126 entities from 17 State Parties were sanctioned under criminal proceedings between 1999 and the end of 2014 At least 95 individuals were sentenced to prison At least 110 individuals and 200 entities in 8 State Parties were sanctioned in different proceedings for other offences related to foreign bribery (ML, accounting) Around 393 investigations in 25 State Parties were taking place at the end of 2014, the same as prosecutions against 142 individuals and 14 entities in 12 State Parties The largest single fine for foreign bribery was imposed against Siemens – 1,8 billion EUR in total sanctions in 4 jurisdictions

  23. Enforcement, Enforcement, Enforcement, II. The WGB willalsotry to: Improveusefulnessofthe WGB ForeignBriberyMatrix Analysereasonsfortheacquittalsandforinterruptionsofpre-trialproceedings in foreignbriberycases Analyseeffectivenessofinternationalcoooperation

  24. Our Final Goal To ensurea level playing field !

  25. . THANK YOU ! QUESTIONS, COMMENTS, REMARKS ?

  26. Sources 1. OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions: http://www.oecd.org/corruption/oecdantibriberyconvention.htm 2. OECD ForeignBriberyReport: http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm 3. OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions: http://www.oecd.org/daf/anti-bribery/oecdantibriberyrecommendation2009.htm 4. OECD WorkingGroup on Bribery, Country reports on the implementation of the OECD Anti-Bribery Convention: http://www.oecd.org/daf/anti-bribery/countryreportsontheimplementationoftheoecdanti-briberyconvention.htm 5. TransparencyInternationalProgressReport 2015: http://issuu.com/transparencyinternational/docs/2015_exportingcorruption_oecdprogre/1?e=2496456/14890701

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