Transparency International Report shows Much More Work to be Done to Tackle Foreign Bribery
On 13 October, Transparency International (TI) launched their 2020 Progress Report, Exporting Corruption, assessing enforcement of the OECD Anti-Bribery Convention amongst 47 leading global exporters. Together, these exporters are responsible for over 80% of world exports. The Report measures their success in enforcing against their companies’ bribery of foreign public officials to win business. The International Lawyers Project supported TI’s work by identifying pro bono national experts in several countries who prepared country reports and supported TI’s policy analysis in this thirteenth edition of the report.
Exporting Corruption is a snapshot of how much enforcement action is being taken on the “supply side” of international corruption. The countries covered include 43 of the 44 parties to the Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention, as well as four other large exporters: China, Hong Kong, India and Singapore. All 47 countries are parties to the UNCAC Convention, which like the OECD Convention, requires countries to punish bribery of foreign public officials (Article 16.1).
“Only four of the 47 countries surveyed actively enforce against foreign bribery and only nine countries moderately enforce against companies that pay bribes abroad.”
The report shows that 20 years after the OECD Convention was adopted, most countries still have a long way to go in meeting their obligations: only four countries (the United States, the UK, Switzerland and Israel) actively enforce against foreign bribery. The report found that global enforcement has decreased by 39% since 2018. According to TI, the biggest global exporters with the worst enforcement track records are China, Japan, the Netherlands, South Korea, Hong Kong, Canada, India and Mexico. The report highlights that China failed to open a single investigation into foreign bribery between 2016 and 2019 despite Chinese companies appearing in multiple scandals in the media and investigations by other countries.
The researchers found positive developments have been made in some areas. For instance, a new task force has been established in South Africa to help coordinate foreign bribery investigations and in Slovakia, a new Whistleblower Protection Office is due to start operation. In Chile and Italy, new legislation has been introduced relating to sanctions for bribery and extending the statute of limitations.
“Nearly three-quarters of all countries have limited to little or no enforcement of foreign bribery cases, making up nearly half of all global exports.”
The Report makes several key findings.
Active enforcement has reduced significantly with major non-OECD Convention exporters still failing to enforce; however, moderate enforcement has more than doubled.
No country is immune to exporting foreign bribery. Nearly every country has companies, employees, agents, intermediaries and facilitators involved in foreign bribery or related money laundering.
In regard to transparency, the Report finds that most countries fail to publish adequate enforcement information. In particular, results show very slow progress in establishing central public beneficial ownership registers of companies and trusts which is key to prevention of foreign bribery.
Concerningly, the Report finds that compensation for victims is rare as most confiscated proceeds of foreign bribery wind up in the state treasuries of the countries exporting corruption. Although international cooperation is increasing, significant obstacles remain including lack of coordination and weaknesses in legal frameworks and enforcement systems.
However, there is much more work to be done. TI has called on those who are parties to the OECD Anti-Bribery Convention, as well as other major exporters to do more to enforce against foreign bribery. TI’s Exporting Corruption report has made the following recommendations to improve enforcement action:
Ensure transparency of enforcement information.
Expand the OECD WGB’s annual report and create a public database of enforcement information.
Improve beneficial ownership transparency.
Introduce victims’ compensation as standard practice.
Improve international cooperation.
Improve and expand international structures for cooperation.
Explore increased liability of parent companies for subsidiaries.
Address weaknesses in laws and enforcement systems and call out non-compliance.
Establish high standards for non-trial resolutions.
Enlist wide support to promote foreign bribery enforcement in non-OECD Convention countries.