This panel was convened at 10:45 am, Friday, April 5, by its moderator, Susan Rose-Ackerman of Yale Law School, who introduced the panelists: Nicola Bonucci of the Organisation for Economic Co-operation and Development; Pascale Dubois of the World Bank; Claudia J. Dumas of Transparency International-USA; and William Jacobson of Weatherford International. *
* Ms. Dumas and Mr. Jacobson did not submit remarks for the Proceedings.
THE FIGHT AGAINST FOREIGN BRIBERY AND INTERNATIONAL LAW: AN EXCEPTION OR A WAY FORWARD?
By Nicola Bonucci ([dagger])
Twenty years ago, the international legal framework related to the fight against corruption, and in particular the one concerning the fight against transnational bribery, was not even in limbo; it was nonexistent.
The specific offense of bribery of foreign public officials was not covered by any international or national rule, with one single--albeit important--exception. This was the Foreign Corrupt Practices Act (FCPA) adopted in 1977 by the United States following the so-called "Lockheed scandal." In fact, this was so often considered part of doing international business that not only was bribing a foreign public official not criminalized anywhere except in the United States, but in a number of countries (including G7 ones) a bribe was tax-deductible as a necessary, if not legitimate, business expense! On the international level there was not a single text concerning bribery, and the issue was taboo in many international institutions, like the United Nations or the World Bank.
Today, the panorama is radically different. Since the mid-1990s, there has been an array of treaties on the fight against bribery, including foreign bribery: an OAS convention, a convention negotiated with the framework of the OECD, two conventions negotiated within the Council of Europe (one by the African Union and one very recently by the Arab League), and naturally the United Nations Convention Against Corruption, signed in Merida in 2003 and entered into force on December 14, 2005. Today the fight against bribery is a universal issue, as UNCAC has 166 parties even though it should be noted that Asia has no regional convention on the subject.
This extraordinary movement of what, within the context of the International Law Commission, would be considered a progressive development of international law, led an Arbitral Tribunal of the International Centre for Settlement of Investment Disputes (ICSID) to recognize in an award rendered in 2006 that:
in light of domestic laws and international conventions relating to corruption, and in light of the decisions taken in this matter by courts and arbitral tribunals, this Tribunal is convinced that bribery is contrary to the international public policy of most, if not all, States or, to use another formula, to transnational public policy. Thus, claims based on contracts of corruption or on contracts obtained by corruption cannot be upheld by this Arbitral Tribunal. (1) As one of the main bases for its finding, the Tribunal noted that "a number of international conventions were concluded during the last decade" and that:
in concluding these Conventions, States have shown their common will to fight corruption, not only through national legislation, as they did before, but also through international cooperation. In doing so, States not only reached a new stage in the fight against corruption, but also solidly confirmed their prior condemnation of it. (2) As a practitioner with a public international law background, I thought it worthwhile to analyze this acceleration of history and treaty-making of the last 15 years, and to try to identify its specificity as well as its innovative features. During these brief remarks, I will focus on the international framework concerning the fight against bribery of foreign public officials (referred to here, for the sake of brevity, as "foreign bribery").
FROM NATIONAL LAW TO INTERNATIONAL LAW AND VICE VERSA
In a very prominent case currently under investigation in France, known as the "Karachi affair," the key question for the prosecutors is to be able to determine if the "commissions" paid in 1994-1995 by France when it sold submarines to Pakistan gave rise to kickbacks. Why is that so? Because in the absence of any kickback there is no case, as the "commissions" were paid before the entry into force of the Convention on Combating Bribery of Foreign Public Officials in International Business Transaction, negotiated within the OECD in 1997 (the Anti-Bribery Convention).
Indeed, in those years there was no OECD country--with the exception of the United States--in which the bribing of foreign public officials constituted an offense. A French company bribing a French public official would face harsh penalties, but the same company could bribe a Belgian public official in all impunity and, as earlier mentioned, could even claim the bribe as a tax deduction.
The United States enacted the FCPA in 1977, but this national legislation remained anomalous for twenty years. Since its enactment, however, a number of voices have called for a "multilateralization" of the offense in order to offer a level playing field for U.S. national companies.
In 1988, in the context of an important amendment to the FCPA, Congress requested that the President negotiate an agreement with members of the Organisation for Economic Cooperation and Development (OECD) to prohibit bribery in international business transactions by the United States' major trading partners and competitors. Subsequent negotiations at the OECD culminated in the Anti-Bribery Convention, which required parties to make it a crime to bribe foreign officials.
The Anti-Bribery Convention, which is open to non-OECD members, today has 40 parties (the 34 OECD members, plus Argentina, Bulgaria, Brazil, Colombia, Russia, and South Africa), and it is the only international legal instrument focused on foreign bribery. However, "anti-foreign bribery" provisions can be found in all the other treaties mentioned above, and we can now say that the world community is required to criminalize foreign bribery.
While the foreign bribery provisions of these various treaties are not identical, they are very similar and fully compatible. In fact, none of the treaties in question provides for a uniform approach: they all focus on a public policy purpose, i.e., to criminalize foreign bribery but to leave the parties free to choose one or the other legal form to achieve that purpose. Thus, the Anti-Bribery Convention is based on what Mark Pieth has called "functional equivalence," as illustrated by the Convention's preamble, which states that "achieving equivalence among the measures to be taken by the Parties is an essential object and purpose of the Convention."
Therefore, if it cannot be said that the FCPA has been translated directly into international law, it is clear that the public policy purpose it introduced, i.e., the foreign bribery offense, has become universal through international law. To my knowledge, there are not many examples of a single piece of national legislation which has become the basis of a transnational public policy.
But, conversely, international law has governed major developments in national laws in light of the fact that this transnational public policy, as reflected in the international conventions, is not self-executing and requires substantive changes in the national legislations, including the criminal code. Since the entry into force of the Anti-Bribery Convention, its 40 parties had to change various provisions of their national legislation in order to establish this new foreign bribery offense. The same has been done, or will have to be done, by all parties to UNCAC, including countries like China or India who are not parties to the Anti-Bribery Convention.
SOFT LAW, HARD LAW, AND INTERNATIONAL LAW-MAKING
The developments that led to the Anti-Bribery Convention reveal an...