The Secretary-General was invited by ETHIC Intelligence to contribute answers to written questions for publication on the occasion of International Anti-Corruption Day on December 9.
The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions celebrates its 15th birthday. Do you believe that it has in fact reduced the incidence of corruption of foreign public officials by companies based in the signatory countries?
Since the OECD Anti-Bribery Convention came into force in 1999, there has been a seismic shift in the perception of foreign bribery. The Convention is the first and only legally binding instrument to focus exclusively on the supply side of bribery in business. Prior to the advent of the Convention, bribing public officials in foreign countries to obtain business deals was, if not an acceptable, at least a tolerated business practice in many OECD countries. Tax deductibility of bribes was the norm. Today 41 countries have passed laws making foreign bribery a crime and it is not possible anymore to deduct bribe payments from tax returns.
Several hundred cases of the corruption of foreign public officials have been judged. Do you think this can be considered a high number or is it still too low? Do you believe the number of convictions will decrease or increase in the coming years?
The recently released OECD Foreign Bribery Report shows that since the entry into force of the Convention, 427 cases have been concluded in 17 countries, resulting in USD 5.4 billion in combined monetary sanctions, and 80 people behind bars. This is impressive given that 15 years ago foreign bribery was not illegal and there were zero convictions except in only one country. I also believe that based on the fact that there are currently 390 ongoing investigations, we will see an increase in convictions in the years to come. The latest round of peer monitoring reviews has shown progress in a number of areas, including an increased use of corporate fines and improved whistle-blower protections in several countries. Many Parties have improved coordination and communication between tax administrations and law enforcement authorities. Another fourth round of our unique peer monitoring process, Phase 4, will soon be launched and it will build on the expertise and experience of the previous three cycles and will provide countries with more, targeted recommendations on how to detect, investigate and prosecute cases. These are concrete steps taken by countries to improve enforcement and they have been underpinned by the shift of corruption to the top of the global political agenda as demonstrated by the call for action by the G20 to fight foreign bribery since 2010.
A number of signatory countries to the Convention have yet to open investigations. Do you have an idea as to why that is? Are you hopeful that the situation will evolve more rapidly in the near future?
Foreign bribery is an increasingly complex and covert crime and we are seeing a number of factors inhibiting investigations. Discussions with law enforcement officials have shown us that detecting bribe payments is one of the first challenges to effective enforcement. Detecting and investigating foreign bribery is further complicated when the offence takes place abroad and involves a corporate affiliate. There is a myriad of other factors that may influence the ability of countries to open investigations. Countries must have a robust legislative framework. Countries must be willing and able to provide mutual legal assistance. Measures must be in place to protect whistleblowers, in both the private and public sectors, and companies must see the benefits in order for them to voluntarily disclose acts of bribery. In fact, the co-operation of the private sector is paramount and businesses must be fully educated about foreign bribery. Financial managers and accountants can play a key role in detecting possible cases of bribery. Finally, the public, civil society, have a role to play in holding public officials and the private sector accountable. Progress is being made on all of these factors, for example, we are seeing an increasing number of specialised units and resources devoted to investigations. At the same time, technology and the increasingly complex nature of international business transactions means that governments must always try to be one step ahead of the bribers. This is why the upcoming Phase 4 of country reviews will focus heavily on enforcement actions and results.
Article 4-3 of the Convention requires signatory countries to cooperate when more than one country has jurisdiction on a specific case of corruption. What role do you believe the OECD could play to facilitate this cooperation which appears to be required more and more frequently?
Mutual legal assistance – improving the cross border sharing of evidence – is a critical element of stopping foreign bribery. Through Article 9 of the Convention on Mutual Legal Assistance, the Parties to the Convention commit to provide prompt and effective assistance to another Party for the purpose of criminal investigations and proceedings in foreign bribery cases. The level of international cooperation of each Party to the Convention has been systematically assessed by the Working Group on Bribery in the context of its Phase 3 monitoring and when considered insufficient, strong peer pressure has been exercised on the evaluated countries through specific recommendations. The implementation of these recommendations is closely followed up by the Working Group. And because this is such a crucial part of enforcement of the Convention, the Working Group will continue to focus closely on challenges posed by international cooperation in foreign bribery cases in its next cycle of evaluations Phase 4. As far as facilitating co-operation on cases where several countries share jurisdiction goes, the meetings of the Working Group allow for an open and transparent exchange of information, and expertise both on active investigations and prosecutions. The “Tour de Table” on foreign bribery allegations revealed in the media regularly gives rise to an in-depth dialogue on the extent of co-operation among Parties and, when necessary, contributes to granting effective legal assistance to the requesting country. In addition, the regular prosecutors’ meetings allow for further exchange of views on how to improve co-operation and make more effective requests. Both mechanisms also help ensure that multijurisdictional cases are adequately addressed by the concerned countries and facilitate coordination of the relevant law enforcement authorities. The WGB anti-bribery typology reports analyse methods and patterns used in corruption cases, by relying on actual practices of law-enforcement authorities in foreign bribery cases. In 2012, the OECD produced a specific report on international co-operation: the “Typology on Mutual Legal Assistance in Foreign Bribery Cases” focuses on the challenges that arise in providing and obtaining mutual legal assistance in foreign bribery cases. The OECD has also supported G20 governments by contributing to the research and analysis that led to the G20 High-Level Principles on Mutual Legal Assistance. Furthermore, regional initiatives, such as the ADB/OECD Anti-Corruption Initiative for Asia and the Pacific; OECD-Latin America Anti-Corruption Programme; OECD/AfDB “Initiative to Support Business Integrity and Anti-Bribery Efforts in Africa”; and the Anti-Corruption Network for Eastern Europe and Central Asia (ACN) increase the capacity for effective anti-bribery enforcement in the participating countries which are often the recipients of bribes. These initiatives also support international anti-bribery efforts by encouraging effective international cooperation and legal assistance.
Several large exporting counties are not signatory to the Convention. Do you think it is necessary to accelerate the discussion in order for them to be encouraged to join? What do you see as the current obstacles to other big players joining quickly?
Effective enforcement of the Convention by the current States Parties is only one part of the story. We need the engagement of all major economies worldwide to fight foreign bribery and level the playing field for businesses. At the recent Summit in Brisbane, G20 Leaders reiterated their call for action on foreign bribery. The newly adopted 2015 – 2016 G20 Anti-Corruption Action Plan notes that, “G20 countries commit to lead by example in combating bribery, including by active participation with the OECD Working Group on Bribery with a view to exploring possible adherence to the OECD Anti-bribery Convention”. This support adds new impetus to the WGB’s ongoing engagement with China, India, and Indonesia. The Convention requires significant legislation change and a major cultural shift in business practices. The OECD will continue to undertake technical seminars, and missions as well as providing advice on legislation and assist these countries in what we can with the hope of eventual accession to the Convention.
Companies are often faced with undue solicitations for bribes by foreign public officials in countries of weak governance and are penalized for acting with integrity by losing the market. What role could the OECD play, either alone or with others, to reduce the number and frequency of these undue solicitations?
The OECD recognises that the supply of bribes to foreign public officials is one half of the picture, and that it is also important to address the solicitation of bribes. The point of the Convention was to recognise for the first time that the supply of bribes is a global issue. Until 1999, corruption was seen mostly as a solicitation issue. However, even though the Convention addresses the supply side of bribery to balance the previous focus on solicitation, the OECD is well aware that bribery in international business transactions requires a holistic approach, which fully addresses both sides. For this reason, the OECD Recommendation of the Council on Further Combating Foreign Bribery “Urges all countries to raise awareness of their public officials on their domestic bribery and solicitation laws with a view to stopping the solicitation and acceptance of small facilitation payments”. In addition, the same OECD Recommendation encourages Parties to the OECD Anti-Bribery Convention to take preventive steps to combat foreign bribery, which includes working together with countries with weak governance zones on issues including solicitation. Moreover, to help governments, the OECD supported the development of the G20 Guiding Principles to Combat Solicitation based on best practices of countries in dealing with this challenge. As I said at the recent launch of the OECD Foreign Bribery Report, we should also look at the demand side of bribery.
What particular challenges do you believe the signatory states will be faced with in the coming years?
Garnering and maintaining high level political support are key. We hope that the commitment of G20 Leaders to fight foreign bribery and encourage adherence to the Convention by all major economies will continue to gather momentum in the years to come. As I said earlier, bribery of foreign public officials is a complex and covert crime. Both bribers and bribe recipients will go to great lengths to keep the crime hidden. Raising awareness about the crime of bribery and the Convention itself among government officials, companies, and the public remains a challenge. A lack of awareness about foreign bribery increases companies’ vulnerability to bribe solicitation and public officials’ susceptibility to engage in corrupt practices. In particular, educating small and medium-sized enterprises on the crime, detection, and prevention, has been especially difficult. When law enforcement officials lack awareness which usually also entails limited resources, and little capacity building, foreign bribery cases are less likely to be taken seriously. The recent OECD Report on Foreign Bribery, by highlighting trends, will be useful for law enforcement, governments, business and civil society stakeholders in their future actions to prevent, detect and punish the crime of bribery.
OECD Secretary General