The Fight Against Bribery of Foreign Public Officials: Lessons Learned by the OECD and the IBA

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The Fight Against Bribery of Foreign Public
Officials Lessons Learned by the OECD and the IBA

• Nicola Bonucci
• co-Chair of the IBA Anti-Corruption Committee
• and Head of the Legal Directorate, OECD, Paris
• 5th ICAC Symposium, Hong Kong, 9-11 May 2012
• The views expressed are personal and do not
  necessarily represent those
• of the OECD, the Parties to the OECD Anti-Bribery
  Convention or the IBA.

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The OECD Anti-Bribery Convention in a snapshot

• Signed in 1997, entered into force in February
  1999
• Number of Parties 39 countries. All OECD
  countries plus some emerging economies (e.g
  Argentina, Chile, Brazil, Israel, Russia, South
  Africa Colombia future 40th member) and one
  day China, India ?
• More than 100 country reports adopted and
  published.

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The Convention 2 main objectives

• A legal one The Convention requires Parties to
  criminalise and actively pursue the supply-side
  (i.e the active bribery of foreign public
  officials) and to introduce corporate liability
  for foreign bribery.
• An economic one to establish a level-playing
  field and a fair and non-distorted competition in
  international business transactions.

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What has changed with the Convention ?

• BEFORE
• Bribery of foreign public officials was an
  offence only in the US
• Bribes were tax deductible in a number of OECD
  countries
• Transnational bribery was considered a legitimate
  way to do business

• NOW
• All Parties to the OECD Convention have
  introduced the offence
• Bribes are no more tax deductible
• Negative effects of transnational bribery are
  duly recognised and bribing is punished

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A tool, the monitoring process

• Two principles
• Examination that the national legislation
  corresponds to the commitments undertaken and
• Examination that the legislation is effective and
  properly enforced.
• A specific body (the Working Group on Bribery) is
  entrusted to monitor the implementation of the
  Convention

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What does monitoring achieve ?

• Harmonisation of legislations
• Builds confidence in the Convention
• Allows countries to question each others track
  record in terms of enforcement
• Constitutes an opportunity for systemic pressure
  and for name and shame when necessary.

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The Conventions results

• As of March 2011
• 199 individuals and 91 entities have been
  sanctioned under criminal proceedings for foreign
  bribery in 13 Parties between the time the
  Convention entered into force in 1999 and the end
  of 2010.
• At least 54 of the sanctioned individuals were
  sentenced to prison for foreign bribery.
• A record amount of EUR 1.24 billion was imposed
  in combined fines on a single company for foreign
  bribery.
• Approximately 260 investigations are ongoing
  in 15 Parties to the Anti-Bribery Convention.
  Criminal charges have been laid against over 120
  individuals and 20 entities in 5 Parties.

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How full is the glass ?

• 15 years after the entry into force of the
  Convention, major companies are still under
  investigations and/or prosecuted
• New and more sophisticated schemes
• The role of intermediaries.

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The first results of the Foreign Bribery Impact
study

• Scheduled for publication in 2012
• First analysis of trends in finalised cases of
  bribery of foreign public officials in
  international business, some initial figures
• On average, bribes paid are equal to 8 of the
  contract price
• 64 of corrupt transactions involve the use of an
  intermediary
• 46 of cases of foreign bribery involve bribes
  paid to officials in countries with a high or
  very high Human Development Index.

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The trends for 2012 and beyond

• The level of enforcement is at an all-time high
  and is likely to remain there.
• Multi-jurisdictional investigations are on the
  rise, an investigation on passive bribery in
  country A may lead to an investigation on active
  bribery in country B and vice versa.
• Informal international cooperation will continue
  to improve, together with increased mutual legal
  assistance.
• Civil society and media are more and more aware
  towards a zero tolerance.
•  Peer review and peer pressure in the OECD will
  be maintained. Countries lagging behind will
  face an increasing questioning and pressure from
  other parties to the Convention. Other
  monitoring mechanisms like UN or OAS are speeding
  up.

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From enforcement to ownership...the IBA
Anti-Corruption Strategy
Survey In 2010 we took a sample of more than 700
lawyers in almost 100 jurisdictions who gave us
their views regarding perceptions and levels of
awareness of corruption in the legal profession.

• Report
• The IBAs October 2010 report Risks And Threats
  Of Corruption And The Legal Profession uncovered
  a number of thought provoking results
• Nearly half of respondents stated corruption was
  an issue in the legal profession in their own
  jurisdiction. The proportion was even higher
  over 70 in regions like CIS, Latin America,
  Africa and Eastern Europe.
• 30 of respondents recognised that they have lost
  business to corrupt firms who have engaged in
  international corruption.
• More than a fifth of respondents said they have
  been approached to act as an agent or middleman
  in a transaction that could reasonably be
  suspected to involve international corruption.
• Nearly a third of respondents said a legal
  professional they know has been involved in
  international corruption offences.

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The IBAs 2010 report - Summary of conclusions
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IBA Anti-Corruption Strategy Website
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IBA Anti-Corruption Strategy Website
For further information regarding the strategy
visit http//www.anticorruptionstrategy.org/
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• Thank you for your attention
• Websites http//www.oecd.org/daf/nocorruption
• http//www.anticorruptionstrategy.org
• E-mail Nicola.Bonucci_at_oecd.org