Corruption And International Enforcement

by Michael Volkov

global1International enforcement of corruption laws is increasing but far slower than many predicted.  As anti-corruption law enforcement increases, companies and individuals face the risk of a multi-jurisdictional nightmare:  when a company has to pay fines in multiple jurisdictions for a single bribery scheme, or an individual may be subject to multiple punishment for the same conduct.  This possibility could become a reality.   Practitioners will be involved in negotiations in multiple jurisdictions to resolve a company’s liability in multiple jurisdictions.  (Global cartel practitioners are already negotiating with multiple jurisdictions to resolve liability for a global cartel).

The OECD recently issued its annual report (here).  Russia and Colombia are the 39th and 40th countries to join the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Together, the 40 country members account for approximately 80 percent of all the world’s exports.

Each day the press reports on countries considering or enacting new anti-corruption legislation targeting foreign bribery.  The OECD maintains national chapters in 37 OECD countries.

The OECD Convention contains both anti-bribery and accounting/books and records provisions. It requires parties to criminalize the intentional offer of “any undue advantage,” directly or through intermediaries, to a foreign public official, to obtain or retain business or other improper advantage in the conduct of international business. Like the FCPA, the OECD Conventions permits facilitation payments.global3

The OECD Working Group on Bribery continues to conduct enforcement reviews of countries and issues public reports on these evaluations.

Countries are ranked for foreign bribery enforcement based on four categories:  Active, Moderate, Little and No enforcement.

Seven countries have Active Enforcement programs:  Denmark, Germany, Italy, Norway, Switzerland, United Kingdom and United States

Twelve countries have Moderate Enforcement programs: Argentina, Australia, Austria, Belgium, Canada, Finland, France, Japan, Korea (South), Netherlands, Spain and Sweden

Ten countries have Little Enforcement programs: Brazil, Bulgaria, Chile, Hungary, Luxembourg, Mexico, Portugal, Slovak Republic, Slovenia and Turkey.

Eight countries have No Enforcement programs: Czech Republic, Estonia, Greece, Ireland, Israel, New Zealand, Poland and South Africa.

global5The trend, however, is moving towards more aggressive enforcement.  Most countries have enacted laws prohibiting bribery by individuals.  Few countries have enacted criminal laws against corporations for foreign bribery.  OECD noted its serious concern about several countries which have not enacted any criminal laws against corporations for foreign bribery and the difficulties which law enforcement is experiencing in sharing information across jurisdictions.

The trends show that, despite these difficulties, several countries are improving their enforcement efforts: Australia, Austria and Canada have increased enforcement and have risen to the Moderate Enforcement category.  Each of the Active Enforcement countries have increased significantly the number of cases they bring each year.

The OECD continues to play a strong leadership role in the global fight against corruption. They have faced a number of serious challenges but have made great strides in the last five years in raising awareness, pressuring countries to improve their anti-bribery laws.  The next five years should see significant improvements in global enforcement efforts.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

Written by:

Michael Volkov

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