Anti-Corruption Certification

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Anti-Corruption Compliance Blog - Published: 01 December 2017
Philippe Montigny
President, ETHIC Intelligence Certification Committee
Corruption – as a human feature – will never be eradicated but 20 years after the OECD Convention, people know that corruption and impunity do not go together any longer

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I remember the satisfaction of the signatory countries’ representatives when, 20 years ago, an agreement was reached at the OECD on Combating Bribery of Foreign Public Officials in International Business Transactions. Finally, there was a legal instrument to combat this insidious practice. Yet the text was only signed by a few states and countries’ willingness to prosecute its companies for acts of corruption committed overseas - acts which resulted in contracts and profits at home - was, except for the United States, largely absent.

These countries did not appreciate the fact that the Anti-Bribery Convention Working Group, under the leadership of Mark Pieth, Criminal Law Professor at the University of Basel, was to meet each trimester to assess the Convention’s application. They did not expect for these punctual meetings to be such an efficient tool in controlling the Convention’s application. Nor were they convinced of the American government’s determination to apply the extraterritorial prong of the FCPA to litigate foreign companies, particularly in Europe, for offenses of transnational corruption. Such investigations prompted national governments to commit to indicting their national companies themselves, instead of abandoning them to the American Department of Justice’s long arm.

The OECD Anti-Bribery Convention has led to impressive results; nearly 350 companies and 500 individuals have been convicted since its implementation. On the Convention’s 20th anniversary over 400 investigations are in progress in 25 countries and a further 150 individuals are currently being prosecuted.

In addition to the increase in litigation for acts of foreign bribery, the Convention has induced four unexpected consequences.

1. A progressive harmonization of prosecutorial methods

Ten years after the Convention, the earthquake that was the Siemens corruption affair in Europe, produced significant unforeseen consequences. The American government’s investigation into the industrial giant led German authorities to modify their own indictment methods to keep up with faster and more efficient American prosecutors.
The involvement of a law firm, Debevoise & Plimpton, as part of the investigation and the use of negotiated settlements by the Americans, changed forever the way in which cases of corruption would be investigated and litigated in non-US countries. These developments were necessary to meet the specific challenges of transnational corruption investigations, in which the complexity and obscure nature of the offenses constituted major obstacles to traditional approaches.
Following the Italian Pattegiamento and the use of negotiated settlements in the Netherlands, the United Kingdom (2014), Brazil (2014) and France (2016) followed suit by introducing similar procedures designed to encourage voluntary disclosure by companies who had discovered corruption offenses.

The progressive harmonization of prosecutorial methods facilitates and offers a certain coherence to the multijurisdictional investigations of transnational corruption.

This emerging compatibility remediates, to a certain extent, the fact that article 4 of the Convention (Parties are requested to cooperate in cases where a corruption offense involves more than one country), had not yet been formally utilized.

The first consequence then of the OECD Anti-Bribery Convention’s implementation was the improved harmonization of prosecutorial procedures amongst signatory countries in cases of transnational and national corruption.

2. The publication of national guidelines

Signatory states’ national prosecutorial procedures getting more uniform positively impacts the coherence of the international anti-corruption framework.

The second consequence of the OECD Anti-Bribery Convention’s transposition into national law is the increasing number of countries issuing guidelines - either in the form of recommendations or obligations – to companies on how to prevent and detect corruption.

With the Law Decree 231 in Italy, the Italian authorities started the trend as early as 2001, which was followed by the publication of the US Federal Sentencing Guidelines’ Chapter 8 in the US in 2004. But it was the UK Bribery Act (UKBA), published in 2011, with its provision for the concept of a ‘failure to prevent corruption’ offense that really accelerated the change. The extraterritorial dimension of the ‘failure to prevent’ corruption offense concerns any company that is doing business in the UK and is coupled with an affirmative defense for companies who have implemented procedures recommended in the Guidance. The extraterritorial reach of the British law and the six principles of its complementary Guidance have become a global reference in corruption prevention.

In the wake of the UKBA, the Russian (art. 13.3 FL 273 of January 2013), Brazilian (Law No. 12,486 2014 Clean Company Act), Spanish (Organic Law 1/2015, of July 1, 2015) French (8 December 2016) and Mexican authorities (GLAR 19 July 2017) have adopted guidelines either in the form of recommendations or obligations.

These guidelines are generally coherent and have a common goal: provide companies with references with which they can build their corruption prevention programs.

Thus, discussions on best practices within the OECD Convention’s Working Group encouraged the signatory states to compare their methods of investigation and prosecution, which in turn facilitated the publication of national directives and guidelines by certain signatories determined to formalize their fight against corruption at the national level.

3. An increase in national prosecutions outside the OECD zone

Even more surprising than the intensification in the fight against corruption amongst signatory nations, is the growth in national prosecutions by the authorities of countries which are not signatory to the Anti-Bribery Convention.

As OECD signatory countries began convicting companies for acts of corruption carried out in third-party countries, these third-party nations became more interested in corruption prevention at home.

Indeed, these non-signatory nations, often poorly ranked on the Transparency International Corruption Perception Index, have been reinforcing their legislation and launching prosecutions not only of companies, but also of certain public officials and political leaders. Recent examples have been observed in Algeria, China and Saudi Arabia.

Thus, the Convention’s third consequence is that, in addition to an increased number of sanctions for acts of transnational corruption by the 43 signatory countries, there is a perceptible rise in national prosecutions by nations that have not yet signed the Convention.

4. The emergence of an international standard: ISO 37001

The fourth consequence, indirect yet extremely important, is the emergence of an international standard designed conjointly by businesses and government representatives: the ISO 37001 on Anti-Bribery Management Systems.

The publication of the ISO 37001 results from three complementary advances.

  • The first is the development of national guidelines amongst signatory countries of the Anti-Bribery Convention, which emphasized the possibility of establishing a common body of best practices.
  • The second is a direct result of the UK Bribery Act Guidance which includes in its sixth principle a reference to certification as a potential method to verify the effective implementation of a corruption prevention system. Since then, certification has been considered a viable method to validate corporate corruption prevention systems.
  • The third development can be found in Article 1 of the Convention which demands that signatory states incriminate acts of corruption whether they are committed directly or indirectly and encourages companies to ensure that their third parties do not commit corruption. Certification is a way for companies to verify that their third parties have implemented systems to detect and prevent corruption like theirs.

Finally, ISO 37001 addresses a frequent criticism of the OECD Convention which is that it only concerns active corruption and does not allow for the prosecution of corrupt public officials. Because the ISO 37001 also applies to public administrations it can be reasonably assumed that public agencies would be interested by certification and would expect companies answering public calls for tender to have an equally visible commitment to integrity through an easily identifiable standard’s certification. It is not to say that certification is a universal panacea to corruption but simply to underline how the ISO 37001 certification demonstrates top management’s willingness - whether in the public or private sector – to commit appropriate resources to the detection and prevention of corruption.

People in their twenties are in the best shape they will ever be and usually believe anything is possible: the OECD convention, at only 20, has already achieved so much in shaping the way companies carry out their business. Yet it is at its strongest and still can accomplish much more to ensure increasingly transparent, equitable and efficient business practices.

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About Philippe Montigny

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Philippe Montigny is the founder of ETHIC Intelligence, a leading anti-corruption certification agency that has been certifying companies since 2006. He is currently the Chairman of the Technical and Impartiality committees and has over 20 years of experience in anti-corruption compliance, beginning at the Office of the OECD Secretary-General, for which he was involved in the ministerial negotiations that led to the OECD Anti-Bribery Convention in 1997. Philippe Montigny was also a co-drafter of the compliance management system standard (ISO 19600) published in 2014 and of the anti-bribery management system standard (ISO 37001) published in 2016 and served as ISO liaison officer between the two.

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