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OECD : Important Milestone in Curbing International Bribery

Ministers from the world's 29 leading industrial nations have formally adopted Recommendations on anti-corruption actions at their conference in Paris yesterday at the Organisation for Economic Co-operation and Development. The agreement, which includes action to end tax deductibility for foreign bribes and to criminalise the action of bribing foreign officials, represents a milestone on the road to securing the prohibition of foreign bribery by multinational corporations.

To date the United States is the only country to have introduced a comprehensive law (the Foreign Corrupt Practices Act in 1977) that makes it a criminal offence for a corporation to pay bribes in a foreign country. Today's actions involve all 29 OECD members, which are the home countries of almost all large multinational enterprises. It is important for controlling the "supply side" of global corruption.

For a time agreement had seemed unlikely, with some countries pressing for an international convention against corruption and others, who thought the treaty process would be much too slow and far too uncertain, pressing for concerted and coordinated action at the national level. In the end, it was agreed that a convention covering criminalisation should be negotiated by the end of this year, with a view to its coming into force at the end of 1998 and countries should press ahead with abolishing tax deductibility.

Common elements of criminal legislation were defined. The fact that a bribe was paid to obtain or retain business will be an offence regardless of the amount of the bribe or of local custom, or of the tolerance of bribery by local authorities, and the punishment the offence attracts should be comparable to those applicable to bribers in the case of the corruption of domestic public officials. Prosecutors should not be influenced by considerations of national economic interest, fostering good political relations or the identity of the victim. Bribe benefits and profits from transactions obtain through bribery will be confiscated, or comparable fines and damages imposed.

Peter Eigen, Chairman of Transparency International (TI) the global non-governmental coalition to curb corruption, said today that his organisation will be monitoring the actions of governments in regard to maintaining the time schedule. "The agreement also aims at including non-governmental organisations in regular consultations in future," he said. "This is a welcome departure from past practice, when some governments had seemed rather cautious of NGO involvement, and will enable us to play a significant role in the months and years ahead."

"This is an important development," he said, "And one which our organisation and supporters in many countries around the globe will warmly welcome." He said that the organisation was pleased that the tax deductibility issue had been separated from criminalisation.

"There is no reason why the ending of tax deductibility should await completion of a treaty," he said, "And we are pleased that the Council has thrown its full weight behind the recommendations of May 1996 which urged the unilateral abolition of tax deductibility by members countries without delay."

Transparency International played a role in securing the agreement in Paris by mobilising a number of business leaders from European countries, who signed a open letter urging the Council to agree on effective measures to end tax deductibility and to criminalise the bribing of foreign officials.

"This was a unique contribution to the debate," said Dr Eigen, "And helped demonstrate to political leaders that there is a growing view in the private sector that corruption is not only wrong, but is bad for business and bad for corporations themselves."


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Jeremy Pope, Executive Director at our London office
e-mail: pope@transparency.org