International Bribery and Corruption Enforcement

What is the OECD Anti-Bribery Convention?

The Organisation for Economic Co-operation and Development (OECD) is an intergovernmental organisation with 36 member countries, with a mission to promote policies that will improve the economic and social well-being of people around the world.

The OECD states that “the OECD Anti-Bribery Convention establishes legally binding standards to criminalise bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective.”

 

How compliant are countries with the Convention, and who monitors this?

Transparency International is the global civil society organisation leading the fight against corruption. In their 2018 Exporting Corruption report, they independently assess the enforcement of the OECD Anti-Bribery Convention, which requires parties to criminalise bribery of foreign public officials and introduce related measures.

Transparency International states that “the Convention is a key instrument for curbing global corruption because the 44 signatory countries are responsible for approximately 65 per cent of world exports and more than 75 per cent of total foreign direct investment outflows.”

We explore the key findings identified by Transparency International in their 2018 report.

 

What are the latest results and key findings?

The 2018 report determined that there is currently insufficient global enforcement.

Transparency International classifies countries into four enforcement levels:

  • Active Enforcement
  • Moderate Enforcement
  • Limited Enforcement
  • Little/No Enforcement

A country that is an “Active enforcer” initiates many investigations into foreign bribery offences; these investigations reach the courts; the authorities press charges and courts convict individuals and/or companies both in ordinary cases and in major cases in which bribers are convicted and receive substantial sanctions.

“Moderate Enforcement” and “Limited Enforcement” indicate stages of progress, but are considered insufficient deterrence. Where there is “Little or No Enforcement”, there is no deterrence.

The findings suggest that 22 countries have little or no enforcement, whilst 11 countries only have limited enforcement. The implications are that only about a quarter of world exports come from countries with active law enforcement against companies bribing abroad.

 

How did individual countries fare in the ratings?

7 countries, which account for 27% of global exports, have Active Enforcement: United States, Germany, United Kingdom, Italy, Switzerland, Norway and Israel.

4 countries, which account for 3.8% of global exports, have Moderate EnforcementAustralia, Sweden, Brazil and Portugal.

11 countries, which account for 12.3% of global exports, have Limited Enforcement: France, Netherlands, Canada, Austria, Hungary, South Africa, Chile, Greece, Argentina, New Zealand and Lithuania.

22 countries, which account for 39.6% of global exports, have Little or No Enforcement: China, Japan, South Korea, Hong Kong, Singapore, India, Spain, Mexico, Russia, Belgium, Ireland, Poland, Turkey, Denmark, Czech Republic, Luxembourg, Slovakia, Finland, Colombia, Slovenia, Bulgaria and Estonia.

Costa Rica, Iceland and Latvia could not be classified, as their very low shares in world exports do not permit distinctions between the enforcement categories. Peru became party to the Convention in July 2018, too recently for inclusion in the report.

 

What changes in enforcement levels were observed?

Since the previous Transparency International report in 2015:

  • 8 countries have improved their enforcement levels: Israel, Norway, Italy, Brazil, Sweden, Portugal, Argentina and Chile.
  • 4 countries have regressed: Austria, Canada, Korea and Finland.

All other countries had the same level of enforcement as in the previous 2015 report.

 

What is the global risk presented by bribery and corruption?

With rapidly increasing trade and market competition over the past few decades, the risk of cross-border bribery and corruption has increased significantly. This has significant negative consequences for people in affected countries, by threatening foreign investment, diverting resources and undermining the rule of law.

Transparency International posits that top priority should be directed to cases of large-scale corruption involving politicians and senior public officials, which have serious negative political and societal consequences.

Nyman Gibson Miralis provide expert defence in complex international bribery and corruption cases. Contact us if you require assistance.