The Fight Against Bribery of Foreign Public Officials: Lessons Learned by the OECD and the IBANicola Bonucci co-Chair of the IBA Anti-Corruption Committee and Head of the Legal Directorate, OECD, Paris

5th ICAC Symposium, Hong Kong, 9-11 May 2012

The views expressed are personal and do not necessarily represent those of the OECD, the Parties to the OECD Anti-Bribery Convention or the IBA.

The OECD Anti-Bribery Convention in a snapshot

• Signed in 1997, entered into force in February 1999;

• Number of Parties: 39 countries. All OECD countries plus some emerging economies (e.g Argentina, Chile, Brazil, Israel, Russia, South Africa – Colombia future 40th member)… and one day China, India ?

• More than 100 country reports adopted and published.

The Convention: 2 main objectives

• A legal one: The Convention requires Parties to criminalise and actively pursue the supply-side (i.e the active bribery of foreign public officials) and to introduce corporate liability for foreign bribery.

• An economic one: to establish a level-playing field and a fair and non-distorted competition in international business transactions.

What has changed with the Convention ?

BEFORE

• Bribery of foreign public officials was an offence only in the US

• Bribes were tax deductible in a number of OECD countries

• Transnational bribery was considered a legitimate way to do business

NOW

• All Parties to the OECD Convention have introduced the offence

• Bribes are no more tax deductible

• Negative effects of transnational bribery are duly recognised and bribing is punished

A tool, the monitoring process

• Two principles:– Examination that the national

legislation corresponds to the commitments undertaken; and

– Examination that the legislation is effective and properly enforced.

• A specific body (the Working Group on Bribery) is entrusted to monitor the implementation of the Convention

What does monitoring achieve ?

• Harmonisation of legislations;• Builds confidence in the Convention;• Allows countries to question each other’s

track record in terms of enforcement;• Constitutes an opportunity for systemic

pressure and for name and shame when necessary.

The Convention’s results

As of March 2011 :

• 199 individuals and 91 entities have been sanctioned under criminal proceedings for foreign bribery in 13 Parties between the time the Convention entered into force in 1999 and the end of 2010.

• At least 54 of the sanctioned individuals were sentenced to prison for foreign bribery.

• A record amount of EUR 1.24 billion was imposed in combined fines on a single company for foreign bribery.

• Approximately 260 investigations are ongoing in 15 Parties to the Anti-Bribery Convention. Criminal charges have been laid against over 120 individuals and 20 entities in 5 Parties.

How full is the glass ?

• 15 years after the entry into force of the Convention, major companies are still under investigations and/or prosecuted;

• New and more sophisticated schemes;

• The role of intermediaries.

The first results of the Foreign Bribery Impact study

• Scheduled for publication in 2012;

• First analysis of trends in finalised cases of bribery of foreign public officials in international business, some initial figures:

– On average, bribes paid are equal to 8% of the contract price;

– 64% of corrupt transactions involve the use of an intermediary;

– 46% of cases of foreign bribery involve bribes paid to officials in countries with a high or very high Human Development Index.

The trends for 2012 and beyond

• The level of enforcement is at an all-time high and is likely to remain there.

• Multi-jurisdictional investigations are on the rise, an investigation on passive bribery in country A may lead to an investigation on active bribery in country B and vice versa.

• Informal international cooperation will continue to improve, together with increased mutual legal assistance.

• Civil society and media are more and more aware – towards a zero tolerance.

•  Peer review and peer pressure in the OECD will be maintained. Countries lagging behind will face an increasing questioning and pressure from other parties to the Convention. Other monitoring mechanisms like UN or OAS are speeding up.

From enforcement to ownership...the IBA Anti-Corruption Strategy

ReportThe IBA’s October 2010 report Risks And Threats Of Corruption And The

Legal Profession uncovered a number of thought provoking results:• Nearly half of respondents stated corruption was an issue in the

legal profession in their own jurisdiction. The proportion was even higher –over 70% in regions like CIS, Latin America, Africa and Eastern Europe.

• 30% of respondents recognised that they have lost business to corrupt firms who have engaged in international corruption.

• More than a fifth of respondents said they have been approached to act as an agent or middleman in a transaction that could reasonably be suspected to involve international corruption.

• Nearly a third of respondents said a legal professional they know has been involved in international corruption offences.

SurveyIn 2010 we took a sample of more than 700 lawyers in almost 100 jurisdictions who gave us their views regarding perceptions and levels of awareness of corruption in the legal profession.

The IBA’s 2010 report - Summary of conclusions

IBA Anti-Corruption Strategy Website

IBA Anti-Corruption Strategy Website

For further information regarding the strategy visit: http://www.anticorruptionstrategy.org/

Thank you for your attention

Websites: http://www.oecd.org/daf/nocorruption http://www.anticorruptionstrategy.org

E-mail: Nicola.Bonucci@oecd.org