International experts - Published: 19 December 2013
Mark Pieth
President of the Basel Institute on Governance, Professor for Criminal Law and chairman - Basel University

Could you explain the concept of “functional equivalence” which is at the heart of the OECD Convention?

The concept of functional equivalence is a derivative of a theory of comparison of law: Comparatists have over time moved away from mere comparison of institutions, they have developed an idea what institutions mean in their specific context. Seen from there the emphasis lies on how the different parts of a legal system interact. This concept has been used in the context of the OECD for a normative purpose: to establish whether a standard has been achieved.

Why did the Working Group “create” this concept?

In the early days of negotiating the Convention countries like Japan in particular thought they were unable to introduce criminalization of foreign bribery into their traditional criminal code. They chose to place it where they thought it belonged: In the unfair competition legislation. The Working Group on Bribery held that this was acceptable as long as the results achieved amounted to fulfilling the requirements of the Convention.

Is it possible that this concept of “functional equivalence” has opened a “Pandora’s box” for inconsistent multijurisdictional approaches ?

Pandora’s box? I would put it the other way round: There was at the time no chance of unifying law throughout the world. Functional equivalence allows harmonization without actually having to work on the basis of a single legal format.

How is the OECD Permanent Working Group on the follow-up of the Convention addressing the multijurisdictional issues that arise from this concept?

In our commentary (Pieth/Low/Bonucci 2014, The OECD Convention on Bribery, A Commentary, p. 37 et seq.) we give some detail how the concept of functional equivalence has been translated into the monitoring practice. It must be said, though, that sometimes the evaluation teams are not fully acquainted with the background of this concept and that the Working Group is in danger of losing sight of the particular approach. 

Could “functional equivalence” be an obstacle for non-Member countries trying to join the convention?

Again, I would see the contrary to be the case: Functional equivalence allows non-member countries with a very different legal system (take East-Asian countries) to join the Convention without having to change their entire legal concepts. This has proven true especially in the context of article 2 (corporate liability), where the Convention does not require corporate criminal liability in a narrow sense: Administrative liability is acceptable, as long as it follows the rules and generates effective, proportionate and dissuasive sanctions.

To conclude : what would you wish for the future of this Convention?

Obviously my wish for the future of this Convention would be that by approaching harmonization in a cautious manner through this concept of functional equivalence we would gradually narrow the gaps, ultimately achieving comparable standards. I am not, however, arguing for a single unified text.

Prof. Mark Pieth President, Basel Institute on Governance Professor for Criminal Law, University of Basel Chairman, OECD Working Group on Bribery Basel Institute on Governance Steinenring 60 4051 Basel Switzerland

December 2013

Professor Mark Pieth has been a Professor of Criminal Law and Criminology at the University of Basel, Switzerland since 1993. From 1989 to 1993, Prof. Pieth was Head of Section – Economic and Organised Crime at the Swiss Federal Office of Justice (Ministry of Justice and Police). Dr. Pieth has Chaired the OECD Working Group on Bribery in International Business Transactions since 1990. He will leave this position on January 1, 2014. In 2004 Mark Pieth was appointed by the UN Secretary General to the Independent Inquiry Committee into the Iraq Oil-for-Food Programme. In autumn 2008, Prof. Pieth was made a member of the Integrity Advisory Board of the World Bank Group (IAB), advising the President of the Bank and the Audit Committee on integrity issues. Professor Pieth continues to consult corporations, international organisations and foreign governments on issues related to governance and to publish extensively in the field of economic and organised crime, money laundering, corruption, sanctions and criminal procedures.

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