Making sure that bribes don’t pay
In December 1997 the OECD Anti-Bribery Convention was signed in Paris. This was a major breakthrough because it committed the world’s leading exporting countries to prohibit bribery, thereby aiming to turn off the spigot on the supply-side of global corruption. Previously only one government had made foreign bribery a crime. Most other governments had treated foreign bribe payments as legitimate business expenses for tax purposes. It is now universally recognized that foreign bribery distorts competition, undermines good governance, and hurts the most vulnerable.
The OECD and Transparency International have worked together to promote the implementation of the Convention. After fifteen years there has been much progress. All 40 parties have passed laws making foreign bribery a crime. However, enforcement, the key to the success of the Convention, remains uneven. Almost half of the parties, including many of the larger exporters, have taken action. As of December 2011, 300 companies and individuals have been sanctioned under criminal proceedings for foreign bribery. Sixty-six individuals have been sentenced to prison. Many companies have been subjected to large fines; one company faced combined sanctions of EUR 1.24 billion. Another 300 investigations are underway.
However, in over half of the parties there has been little or no enforcement. Investigating and prosecuting foreign bribery is difficult and expensive and some governments have been unwilling or unable to muster the required resources. This problem has been aggravated by the adoption of much more sophisticated methods by bribe payers and bribe collectors. Bribery is now conducted through layers of intermediaries and complex money-laundering schemes.