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Foreign bribery rages across the globe

Largest exporters are the worst enforcers against foreign bribery

Illustration: Andrea Settimo © Transparency International

Foreign bribery has huge costs and consequences for countries across the globe – and those costs have become more severe during the COVID-19 pandemic. With many cases of foreign bribery occurring in health care, we cannot afford for corruption to cost any additional lives.

No country is immune to exporting foreign bribery

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Our new report, Exporting Corruption, rates the performance of 47 leading global exporters, including 43 countries that are signatories to the Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention, in cracking down on foreign bribery by companies operating abroad. Four leading non-OECD Convention exporters are also covered include China, Hong Kong SAR, India and Singapore.

Money lost to foreign bribery wastes millions of dollars that could otherwise go to lifesaving services like health care. Too many governments choose to turn a blind eye when their companies use bribery to win business in foreign markets. G20 countries and other major economies have a responsibility to enforce the rules.
Delia Ferreira Rubio Chair of Transparency International

Global highlights

The report classifies each of the 47 countries analysed in one of four enforcement categories: Active, Moderate, Limited, Little or No.

Only four of the 47 countries analysed actively enforce against foreign bribery and only eight countries moderately enforce against companies that pay bribes abroad.

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.

This includes half of all G20 countries and eight of the top 15 global exporters.

Improvers and decliners

Since 2018, four countries, accounting for 12.4 per cent of global exports, declined in performance, while six countries, accounting for 6.8 per cent of world exports, improved.

Germany, which is the third largest exporter (with 7.6 per cent of global exports) pursued fewer investigations and closed fewer cases against graft overseas. Similarly, Italy, a top-10 exporter (2.6 per cent), also declined, as did Norway.

Conversely, France and Spain, which account for 3.5 per cent and two per cent of global exports respectively, improved their performance.

Investigations and cases

Our research shows that between 2016 and 2019 the countries opened at least 421 investigations and 93 cases, and concluded 244 cases with sanctions, including 125 major cases concluded with substantial sanctions

Active enforcement

Active enforcement against foreign bribery has decreased by more than one-third since 2018.

In 2020, only four out of 47 countries, making up 16.5 per cent of all global exports, actively enforced against foreign bribery, compared to seven countries and 27 per cent of global exports in 2018. The United States, the UK, Switzerland and Israel maintained their positions as active enforcers.

Other key findings

The report also highlights key gaps in information about enforcement and slow country progress in introducing central public beneficial ownership registers, a crucial tool for detecting, investigating and preventing foreign bribery.

In addition, the report examines the critical issues of victims’ compensation, international cooperation, parent-subsidiary liability and country performance in improving legal frameworks and enforcement systems to address foreign bribery.

When comparing enforcement levels with how well countries perform on the 2019 Corruption Perceptions Index (CPI), results show that high marks on the CPI don’t necessarily translate into high marks for enforcement against foreign bribery.

In fact, top performers on the CPI, including 14 of the top 20 countries, fail to adequately enforce against foreign bribery. It appears the “cleanest” countries for corruption are among some of the absolute worst countries at punishing foreign bribery.

Recommendations

Our reports calls on all countries that are signatories to the OECD Anti-Bribery Convention, as well as the other major global exporters to do more to enforce against foreign bribery, including:

  • End secrecy in ownership of companies which acts as a barrier to detection and investigation of foreign bribery.
  • Make enforcement statistics and case outcomes public to show how international corruption is being handled.
  • Stop treating foreign bribery as a victimless crime and build in victims’ compensation into the enforcement process.
  • Strengthen laws and enforcement systems to handle complex international corruption cases and improve international structures for cooperation.
  • Explore increased liability of parent companies for the actions of their subsidiaries to help deter foreign bribery and related money laundering.

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