Antibribery Conventions And Global Law Enforcement Efforts

• Author: Robert W. Tarun
• Profession: Former Executive Assistant U.S. Attorney in Chicago
• Pages: 71-91

CHAPTER 3

Antibribery Conventions and

Global Law Enforcement Efforts

Multinational companies should take notice of the increasing global focus on

prosecuting bribery of foreign government officials. This focus is evident from a

number of major international treaties directed against these practices; legislation

in the signatory nations implementing these pacts, and 2011 and 2013 foreign

bribery prosecutions by law enforcement authorities in Australia and Canada, as

well as in France, Germany, Switzerland, the United Kingdom, and the United

States in 2010. The U.K. Bribery Act 2010, which became effective July 1, 2011,

in particular has drawn major attention from companies that carry on business

in whole or in part in the United Kingdom and are thereby now subject to a very

expansive law. It draws in significant part upon the language of the Organiza-

tion for Economic and Cooperative Development (OECD) Convention on Com-

bating Bribery of Foreign Officials in International Business Transactions. The

increased presence of multijurisdictional government investigations will require

multinational companies to increasingly engage counsel to handle the often con-

flicting interests, privacy laws, local anticorruption laws, and demands of U.S.

and foreign law enforcement authorities.

I. THE ORGANIZATION FOR ECONOMIC

AND COOPERATIVE DEVELOPMENT CONVENTION

A. Background

The OECD was formed in 1961. The OECD Convention on Combating Bribery of

Foreign Officials in International Business Transactions (the OECD Convention)

was signed on December 17, 1997.1 This treaty requires all signatories to take steps

to criminalize the payment of bribes to foreign public officials and to establish

appropriate sanctions on firms and individuals guilty of violating these provisions.

The OECD Convention does not eliminate the tax deductibility of bribes permit-

ted by some countries and does not generally apply to bribes made to political par-

ties. The U.S. State Department has described the OECD Convention as “one of the

most rigorous anti-corruption conventions and [one that] continues to serve as a

model for new initiatives.”2

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72 CHAPTER 3

B. The OECD Convention and Domestic Legislation

The OECD Convention is the narrowest of the multilateral treaties and, like the U.S.

Foreign Corrupt Practices Act, focuses only on transnational active bribery.3 There

are 40 parties to the Anti-Bribery Convention: 35 member country signatories and

five non-OECD member countries (Argentina, Brazil, Bulgaria, the Russian Federa-

tion, and South Africa).4 In the United States, the International Anti-Bribery and

Fair Competition Act of 1998 amended the FCPA to implement the 1997 OECD

Convention.5 Other countries have similarly adopted legislation, which varies widely

on many significant points. As a result, corporations conducting international busi-

ness must carefully scrutinize the law in each OECD country where they do business.

The OECD Convention has not yet achieved the goal of leveling the playing

field between U.S. persons subject to the FCPA and their foreign competitors. In

2004 a U.S. State Department report found many deficiencies in the implement-

ing legislation of the signatories, including, among others, France, Japan, and the

United Kingdom.6 The report noted, however, that many of the deficient countries

are in the process of considering, or implementing, amendments to their legisla-

tion that may put more teeth in their enforcement programs.7 In the wake of the

enactment of the U.K. Bribery Act of 2010, the United Kingdom has finally put

teeth in its antibribery enforcement program. Persons engaged in international

commerce and their counsel are wise to stay abreast of new foreign bribery legisla-

tion and related developments.

C. The Main Provisions of the OECD Convention

In general, the OECD Convention requires signatory nations to adopt “effective,

proportionate, and dissuasive criminal sanctions” to those persons who bribe for-

eign public officials.8 It calls for each nation to exercise its full jurisdictional pow-

ers to punish foreign bribery where the offense is committed in whole or in part

on its soil, or is committed by its nationals abroad.9 Like the FCPA, the OECD

Convention contains both antibribery and record-keeping provisions. Other sig-

nificant points of the OECD Convention include the following:

1. Active Bribery Only

The OECD Convention criminalizes only “active bribery,” which involves offering

or giving a bribe. “Passive bribery,” or the act of soliciting a bribe, is not addressed

on the basis that it is presumably already a criminal offense in most countries.

2. Definition of Bribery

“Active bribery” is defined as a bribe offered or given “in order to obtain or retain busi-

ness or other improper advantage in the conduct of international business.” As with

the FCPA, small facilitation payments made with the intention of expediting or secur-

ing the performance of a routine governmental action are excluded from the definition

of improper payments under the OECD Convention. By referring to “other improper

advantage,” the OECD Convention intends to address situations where a payment is

made to obtain something to which the company is clearly not entitled (e.g., an oper-

ating permit for a factory that failed to meet local health and safety standards).10 The

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