The paper Exporting Corruption 2022: Assessing enforcement of the OECD Anti-Bribery Convention is based on the analysis of laws and law enforcement, including information on investigations, indictments and convictions for foreign bribery in the States parties to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (hereinafter, the Convention) and in China, Hong Kong, India and Singapore.
The report states that the general positive trend in law enforcement is insignificant: “active” anti-foreign bribery law enforcement was registered only in the United States and Switzerland out of 47 countries under review. Others were divided into the following categories:
- moderate enforcement: 7 countries (Australia, France, Germany, Israel, Latvia, Norway and the United Kingdom);
- limited enforcement: 18 countries (Argentina, Austria, Brazil, Canada, Chile, Colombia, Costa Rica, Estonia, Greece, Italy, New Zealand, the Netherlands, Peru, Portugal, Slovenia, South Africa, Spain and Sweden);
- little or no enforcement: 20 countries (Belgium, Bulgaria, China, the Czech Republic, Denmark, Finland, Hong Kong, Hungary, India, Ireland, Japan, Luxemburg, Lithuania, Mexico, Poland, Russia, Singapore, Slovakia, South Korea and Turkey).
If compared to the previous edition, only Latvia and Peru have made progress, moving to the moderate and limited enforcement groups respectively.
The TI experts believe that the reasons for little or no enforcement in most countries are the following:
1. Inadequacies in legal frameworks
Most countries reviewed have considerable gaps in foreign bribery legislation.
For instance, Bulgaria, Costa Rica, the Czech Republic, Greece, India, Latvia, New Zealand, Peru, Portugal, Slovenia, China, Hong Kong and Singapore have flaws in the relevant corpus delicti. What is more, India has not criminalised foreign bribery at all.
Estonia, France, Germany, Greece, Israel, Japan, New Zealand, Norway, Slovenia, Sweden, South Korea, China and Singapore have jurisdictional limitations hampering anti-foreign bribery law enforcement. For instance, effective law enforcement in Sweden is hindered by the dual criminality requirement (the possibility to provide mutual legal assistance in criminal proceedings and extradite criminals only in the event that the relevant offence is criminalised in both requesting and requested States), while in Estonia, Germany, Greece and South Korea too short a statute of limitation is applicable to this kind of proceedings.
2. Insufficient transparency of beneficial ownership
In spite of the fact that the Convention does not have any provisions concerning beneficial ownership transparency, the findings demonstrate that almost a half of the countries, namely Australia, Argentina, Chile, Finland, Hungary, Ireland, Italy, Israel, Lithuania, Mexico, New Zealand, Norway, Peru, Poland, Russia, Slovenia, South Korea, Spain, Switzerland, the United Kingdom, the United States, China and Hong Kong, have poor law enforcement because of the lack of public beneficial ownership registries or their insufficient quality.
3. Lack of independence and funding of law enforcement authorities
The report states that considerable lack of independence, human and financial resources of courts and law enforcement authorities has a negative impact on the performance of law enforcement at least in such countries as France, Latvia, Mexico, Peru, Poland, Russia, South Africa, South Korea, Turkey and others. In particular, the TI experts highlight that insufficient autonomy of prosecutors hampers law enforcement in Argentina, Austria, Brazil, the Czech Republic, Greece and Hungary, the same with regard to judges is true for Hungary and Poland, while the lack of funding of competent authorities is registered in Belgium, Canada, Denmark, Finland, Luxemburg, Portugal, Spain, Sweden and the United Kingdom.
4. Lack of criminal liability of legal persons
Poor legislative framework which leads to ineffective liability of legal persons for foreign bribery is registered in almost a half of countries reviewed, including Argentina, Australia, Austria, Bulgaria, Chile, Costa Rica, Finland, Germany, Greece, Israel, Japan, Latvia, Lithuania, Luxemburg, Norway, Mexico, Poland, Portugal, Russia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Turkey, Hong Kong and India.
Greece and Japan, for instance, have inadequately low sanctions both for legal and natural persons if compared to the gravity of the crime. In Mexico, liability is not foreseen for public corporations.
At the same time, some of the countries under review show progress in enhancing liability of legal persons for foreign bribery. In Colombia, Law of 18 January 2022 No. 2195 “On Transparency, the Prevention of and the Fight against Corruption and other Matters” (Lei No.2195 Por Medio De La Cual Se Adoptan Medidas En Materia De Transparencia, Prevención Y Lucha Contra La Corrupción Y Se Dictan Otras Disposiciones) expanded the list of offences for which legal persons can be held liable and that of liability measures, as well as clarified the categories of persons that can be subject to penalties.
5. Lack of proper protection of whistleblowers
The report stresses that a number of countries reviewed, including Argentina, Australia, Austria, Bulgaria, Canada, Chile, Costa Rica, the Czech Republic, Estonia, Finland, Germany, Italy, Lithuania, Luxemburg, Mexico, the Netherlands, Peru, Poland, Russia, Slovenia, Spain, Switzerland, South Africa, South Korea, Turkey, the United States and Singapore, have insufficient mechanisms for protecting persons reporting corruption offences. Moreover, some countries, for example, Argentina, Colombia and Russia, do not have in principle any laws regulating the protection of whistleblowers.
Conversely, a number of European countries, including Denmark, Estonia, France, Lithuania, Portugal and Sweden, have adopted or improved their laws on the protection of whistleblowers in the recent years in line with Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law.
6. Ineffective use of pre-trial resolutions
The authors of the paper note that pre-trial resolutions are becoming ever more widespread in the countries under review. However, many countries, namely Bulgaria, Canada, Chile, France, Germany, Greece, Luxemburg, the Netherlands, Norway, Peru, Slovenia, South Africa, Spain, Switzerland, the United Kingdom and China, still have poor conditions for their conclusion. Norway, in particular, does not have a clear procedure for defining penalties and taking account of mitigating and aggravating circumstances when pre-trial resolutions are concluded, while Switzerland lacks the procedure for calculating fines and using fast-track investigative procedures.
7. Lack of enforcement against banks and insurance brokers
In most countries, such subjects as banks and insurance brokers, who are often active participants of or accomplices to foreign bribery schemes, are not held liable as bribe-givers of bribe-takers are.
However, some countries, namely France, the Netherlands, Norway, Switzerland, the United Kingdom and the United States, have seen growing attention of law enforcement to these manifestations of corruption since 2018. In particular, Société Générale was held liable for foreign bribery in France and the United States, Credit Suisse - in the United States, the United Kingdom and Switzerland, and Barclays and Deutsche Bank – in the United States etc.
8. Lack of transparency of law enforcement data
Another factor that affects the assessment of effectiveness of law enforcement consists in the lack of transparency of data on ongoing and concluded proceedings.
The authors of the report highlight that the information on convictions for foreign bribery is not provided under a separate category, and is either included in the general statistics on bribery or in other wider categories. It can be equally omitted from the statistics.
The information on the initiation of proceedings or on the conclusion of pre-trial resolutions can often be retrieved from press releases of law enforcement authorities, the media or public reports of corporations; full information on court decision on the concluded cases of foreign bribery is not provided in most countries.
At the same time, a positive trend in ensuring transparency of law enforcement data has been registered in some countries. For instance, the Czech Republic introduced an amendment to Law of 11 January 2002 No. 6/2002 “On Courts, Judges, Boards and Public Administration of Courts and on Amendments to Some Other Legal Acts” (Zákon č. 6/2002 Sb. o soudech, soudcích, přísedících a státní správě soudů a o změně některých dalších zákonů) in 2022 that obliges all courts to publish anonimised final rulings in the public database of the Ministry of Justice (Ministerstvo spravedlnosti). France adopted Law of 7 October 2016 No. 2016-1321 “On the Digital Republic” (Loi n° 2016-1321 du 7 octobre 2016 pour une République numérique) which envisages that an open access to all published court decisions be provided by 2025. In Canada, the first pre-trial resolution was immediately released.
9. Improper implementation of provisions regulating reparations
The TI experts state that in spite of the fact that mechanisms for protecting the rights of victims exist in a form or another in most countries under review (for example, the United Kingdom ensures compensations for affected States, while the Netherlands provide reparations to corporate competitors), the reparations for foreign bribery are still rare, also due to a myriad of additional terms for compensation.
In particular, the US law provides for the reparation of damage only in line with the general legal provisions on the rights of victims of the crime and only if the requesting State is not proved to be an accomplice, for example, due to the involvement of its senior officials in corruption schemes. Many civil law countries, including Belgium, France, Italy, Luxemburg, Spain and Switzerland, provide for the possibility for natural and legal persons to receive compensation, as well as for a State who is a civil party to criminal foreign bribery proceedings. In Italy, for example, Nigeria was granted civil party status in a case against Eni and Shell and submitted a sizable compensation claim.
What is more, a number of countries such as Canada, Colombia, South Africa and the United States have dedicated funds that accumulate confiscated foreign bribery assets that can be subsequently paid to the victims.
The final part of the report contains the following recommendations of the TI experts on how to enhance the effectiveness of investigations and liability for foreign bribery:
- the countries that have not ratified the Convention yet (China, Hong Kong, India and Singapore) should do so and adopt measures to implement its provisions in the domestic legislation;
- plug existing gaps in the legislation and address law enforcement challenges also by organising public meetings to discuss the findings of the OECD reviews on the implementation of the Convention and national plans to carry out recommendations, and engage representatives of the government and civil society from the countries that have suffered most from foreign bribery in the implementation of these plans;
- ensure transparency of information on law enforcement, in particular, by publishing up-to-date statistics covering all stages of the law enforcement process in foreign bribery cases, full texts of court decisions that should include, as a minimum, the names of defendants and/or companies, facts and other circumstances of the case, legal grounds for the ruling, list of sanctions imposed, arguments of the verdict and texts of pre-trial resolutions, including terms and causes for concluding the agreement, facts of the case, list of persons involved, sanctions and corrective actions;
- include in the annual report of the OECD Working Group on Bribery updated information on law enforcement against foreign bribery and create a public database on investigations into and proceedings against foreign bribery;
- develop guiding principles on the compensation of damage in foreign bribery cases, including the procedure for managing confiscated assets, in line with the Asset Recovery Principles for Disposition and Return of Confiscated Stolen Assets in Corruption Cases;
- promote international cooperation in the fight against foreign bribery, in particular, by using joint investigation mechanisms, expanding the activities of the International Anti-Corruption Coordination Centre or by creating other regional or international networks etc.