CHAPTER 15 INTERNATIONAL AND NATIONAL ANTI-CORRUPTION LAWS: AN OVERVIEW

• Jurisdiction: United States

Human Rights Law and the Extractive Industries
(Feb 2016)
CHAPTER 15
INTERNATIONAL AND NATIONAL ANTI-CORRUPTION LAWS: AN OVERVIEW
Gwendolyn Wilber Jaramillo
Partner
Foley Hoag LLP
Boston, MA
Anthony D. Mirenda
Partner
Foley Hoag LLP
Boston, MA

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GWENDOLYN WILBER JARAMILLO is a partner in the law firm Foley Hoag, LLP. She is co-chair of the firm's International Business practice group and head of its Trade Sanctions and Export Controls practice. She is also a member of the firm's Corporate Social Responsibility practice group. Gwendolyn's diversified international practice encompasses trade, transactional, general corporate, and compliance concerns. She assists clients in the extractive, natural resources, technology, and life sciences sectors on developing and implementing of trade compliance and social responsibility strategies, policies, and procedures, as well as emerging legal and regulatory requirements in these areas. She advises on mergers and acquisitions, with a focus on cross-border acquisitions and establishment of international operations. In the area of foreign trade, Gwendolyn concentrates her practice in advising clients regarding compliance with U.S. export regulations and sanctions programs, including development of compliance programs and compliance with OFAC regulations. Gwendolyn is a frequent speaker on trade sanctions, compliance, and social responsibility issues. She received her JD from the University of Chicago Law School, with honors.

ANTHONY MIRENDA is a partner in the law firm Foley Hoag, LLP in Boston. He represents privately owned and publicly held companies as well as state-owned enterprises operating in the energy sector in anti-corruption and anti-fraud compliance, internally and externally driven investigations, and disputes. Tony helps organizations that have been the victims of criminal wrongdoing, and has assisted clients in pursuing criminal referrals, civil actions against the wrongdoers, and fidelity insurance claims. He also represents national and international corporations, and their officers, directors, and others in federal criminal and regulatory investigations, particularly concerning allegations of securities, health care, and government contracting fraud, in complex civil litigation, and in confidential internal investigations. He has tried complex civil and criminal cases in federal and state courts around the country. Tony has authored amicus briefs filed with the U.S. Supreme Court and other appellate courts on behalf of civil rights and criminal justice organizations. He received his JD in 1987 from Harvard Law School.

There has long been wide recognition of the critical interplay between combatting corruption on a global scale and the advancement of human rights and civil society.

• "Corruption is inherently wrong. It is a misuse of power and position and has a disproportionate impact on the poor and disadvantaged. It undermines the integrity of all involved and damages the fabric of the organizations to which they belong...." ¹

• "Bribery blights lives. Its immediate victims include firms that lose out unfairly. The wider victims are government and society, undermined by a weakened rule of law and damaged social and economic development." ²

• "Corruption is a global problem.... It undermines democratic values and public accountability and weakens the rule of law. And it threatens stability and security by facilitating criminal activity within and across borders, such as the illegal trafficking of people, weapons, and drugs...." ³

This article will provide an overview of the seminal international conventions and standards on combatting corruption, as well as three benchmark national anti-corruption legal frameworks: the U.S. Foreign Corrupt Practices Act, the Canada Corruption of Foreign Public Officials Act, and the U.K. Bribery Act. International law and standards covered in this review include the OECD Convention on Combating Bribery of Foreign Public Officials, the UN Convention Against Corruption, and the Extractive Industries Transparency Initiative.

I. International Conventions on Combatting Corruption

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A. OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

OECD Convention Overview

The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ("OECD Convention") aims to stop the flow of bribes and requires each signatory country to make foreign bribery a crime for which individuals and enterprises are responsible. The OECD Anti-Bribery Convention was adopted in 1997 and came into force on February 15, 1999.⁴

To date, 41 states have ratified the OECD Anti-Bribery Convention, including all 34 member states of the OECD and seven non-member states: Argentina, Brazil, Bulgaria, Colombia, Latvia, Russia, and South Africa.⁵ The 41 signatory countries are responsible for approximately two-thirds of world exports and almost 90 per cent of total foreign direct investment outflows.⁶ Since the OECD Convention entered into force in 1999 and through the end of 2014, 361 individuals and 126 entities have been sanctioned under criminal proceedings for foreign bribery in 17 signatory countries.⁷

The Convention's basic exhortation is that parties to the Convention must implement in their national law criminal the prohibition of certain conduct, i.e.:

for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business. ⁸

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In addition, the Convention requires the criminal prohibition of certain related conduct, namely "complicity in, including incitement, aiding and abetting, or authorisation of an act of bribery of a foreign public official." Finally, the Convention requires that attempt and conspiracy to bribe a foreign public official shall be deemed criminal offences to the same extent as attempt and conspiracy to bribe a public official of the state party to the Convention.⁹

In order to facilitate consistent implementation in local law, the Convention also sets forth the definitions of key terms, including the following:

• "Foreign public official" means any person holding a legislative, administrative or judicial office of a foreign country, whether appointed or elected; any person exercising a public function for a foreign country, including for a public agency or public enterprise; and any official or agent of a public international organization.

• "Foreign country" includes all levels and subdivisions of government, from national to local; and

• "Act or refrain from acting in relation to the performance of official duties" includes any use of the public official's position, whether or not within the official's authorized competence.

Finally, the Convention requires that state parties to the Convention implement a recordkeeping requirement "to prohibit the establishment of off-the-books accounts, the making of off-the-books or inadequately identified transactions, the recording of non-existent expenditures, the entry of liabilities with incorrect identification of their object, as well as the use of false documents, by companies subject to those laws and regulations, for the purpose of bribing foreign public officials or of hiding such bribery."¹⁰

State parties to the Convention are required to assert jurisdiction over bribery of foreign public officials by their nationals when such conduct takes place abroad, and if a State's current jurisdictional scope is insufficient to reach such conduct, the State is required to take measures to remedy this.¹¹

The Convention requires that state parties respect requests for mutual legal assistance arising from alleged violations of conduct within the scope of the Convention, and non-criminal investigations arises from conduct within the scope of the Convention.¹² In addition, extradition on the basis of violations within the scope of the Convention must be included in the extradition treaties between the parties to the Convention.¹³

OECD Convention Implementation

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As of the end of 2014, approximately 393 investigations were ongoing in 25 signatory countries, and prosecutions were ongoing against 142 individuals and 14 entities in 12 signatory countries for offences under the Convention.¹⁴

The OECD Convention also establishes a peer monitoring mechanism to ensure the thorough implementation of the international obligations that countries have taken on under the Convention. This monitoring is carried out by the OECD Working Group on Bribery, and provides country monitoring reports which contain recommendations for improved implementation in the country in question. Monitoring occurs in four phases (review of adequacy of implementing legislation; review of effectiveness of implementation of legislation; review of pending recommendations from earlier phases and implementation of 2009 recommendations; a fourth phase will begin in 2016).¹⁵

Civil society has been active in monitoring implementation of the OECD Convention as well. The NGO Transparency International, for example, publishes an annual Exporting Corruption report in which it summarizes progress and key developments in signatory countries, and ranks parties to the Convention by their enforcement activity and global economic profile.¹⁶

The OECD Convention is supplemented by a number of companion instruments. The OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions was adopted by the OECD Council on November 26, 2009, and released on the tenth anniversary of...