OECD Council Agrees to Recommend Ending Tax Deductibility of Bribes to Foreign Public Officials

Issued by Transparency International Secretariat



On 11 April, 1996 the Council of the Organisation for Economic Co-operation and Development (OECD) agreed to recommend to all Member countries of the OECD in a strongly worded resolution to stop tax deductibility of bribes to foreign public officials. The Council instructed its Committee on Fiscal Affairs in cooperation with its Committee on International Investment and Multinational Enterprises to monitor the implementation of this recommendation, to promote the Recommendation in the context of contacts with non-Member countries of the OECD and to report to the Council as appropriate.

Peter Eigen, the Chairman of Transparency International (TI) expressed today in Berlin his satisfaction with this important step. "We have been supporting the OECD initiative on combatting corruption in international trade and investment whole heartedly" he said, "and the Recommendation on Bribery of Foreign Public Officials in International Business Transactions of May 1994 has become an important element in our strategy to build a global coalition against corruption."

Tax deductibility permitted by some countries is considered particularly damaging to efforts to control international corruption, both as a symbol of official acceptance of corruption, and as a tangible subsidy to those companies, who make the tax payers carry a major portion of their bribe payments. " Disallowing tax deductibility for bribes would serve as the strongest and most politically visible symbol of the common international commitment to combat bribery" says the OECD Report.

This recommendation can best be implemented by making bribes to foreign officials illegal, which was another step proposed in the 1994 Recommendation. "We at TI hope that the OECD will develop a consensus also on making corruption illegal under criminal, civil, commercial and administrative law, and will move swiftly through the other clusters of measures recommended in 1994" says Eigen; "this coordinated approach offers to companies, that have been caught in the international corruption trap, an escape from their prisoners' dilemma: all countries can stop allowing bribes simultaneously. Most companies have understood that their present corrupt practices cannot continue -- they have become too expensive and too risky, and too damaging to open markets and democracies.

Transparency International welcomes the OECD action. It confirms a global trend evidenced last week by 21 members of the Organisation of American States, when they signed a far-reaching Convention against foreign bribery in Caracas.


For any press enquiries please contact

In Germany
Prof. Dr. Peter Eigen, Chairman
tel. + (49 30) 343 8200
fax + (49 30) 3470 3912
e-mail .(JavaScript must be enabled to view this email address)
http://www.transparency.org

or

Mr. Jeremy Pope,
Executive Director
e-mail .(JavaScript must be enabled to view this email address)

Latest

Support Transparency International

Risk of impunity increases with outcome of Portuguese-Angolan corruption trial

A verdict last week by the Lisbon Court of Appeals in the trial of former Angolan vice president Manuel Vicente has disappointed hopes for a triumph of legal due process over politics and impunity. It also has worrying implications for the independence of Portugal’s judiciary.

The UK just made it harder for the corrupt to hide their wealth offshore

If counted together, the United Kingdom and its Overseas Territories and Crown dependencies would rank worst in the world for financial secrecy. Fortunately, this could soon change.

The new IMF anti-corruption framework: 3 things we’ll be looking for a year from now

Last Sunday, the International Monetary Fund (IMF) unveiled its long-awaited framework for “enhanced” engagement with countries on corruption and governance issues. Here are three aspects we at Transparency International will be looking at closely in coming months as the new policy is rolled out.

While the G20 drags its feet, the corrupt continue to benefit from anonymous company ownership

The corrupt don’t like paper trails, they like secrecy. What better way to hide corrupt activity than with a secret company or trust as a front? You can anonymously open bank accounts, make transfers and launder dirty money. If the company is not registered in your name, it can't always be traced back to you.

Urging leaders to act against corruption in the Americas

The hot topic at the 2018 Summit of the Americas is how governments can combat corruption at the highest levels across North and South America.

The impact of land corruption on women: insights from Africa

As part of International Women’s Day, Transparency International is launching the Women, Land and Corruption resource book. This is a collection of unique articles and research findings that describe and analyse the prevalence of land corruption in Africa – and its disproportionate effect on women – presented together with innovative responses from organisations across the continent.

Passport dealers of Europe: navigating the Golden Visa market

Coast or mountains? Real estate or business investment? Want your money back in five years? If you're rich, there are an array of options for European ‘Golden Visas’ at your fingertips, each granting EU residence or citizenship rights.

Social Media

Follow us on Social Media