Wednesday, June 16, 2010

OECD: Few Nations Punish Foreign Bribery

By Channing Turner | June 15, 2010 6:10 pm

A majority of countries who pledged in 1997 to fight international corruption are falling down on the job, theOrganization for Economic Cooperation and Development has found.

In an annual report released Tuesday, the OECD’s Working Group on Bribery said most of its member nations failed to levy a single penalty since the group established its Anti-Bribery Convention a decade ago.

The 1997 Anti-Bribery Convention — which was adopted by 38 countries, including the U.S., and took effect in 1999 — established legally binding standards to criminalize bribery of foreign public officials in international business transactions.

According to the report, roughly one-third — 13 out of 38 — member nations of the Anti-Bribery Convention reported sanctions. In these countries, a total of 77 entities and 148 individuals were involved in criminal proceedings since 1999, and approximately 280 investigations are ongoing.

The U.S. showed the most anti-bribery activity, sanctioning 40 individuals and 20 companies, with an additional 28 deferred prosecution agreements, according to the report. Italy reported the second-highest number of proceedings with 21 individual and 18 company sanctions, while Hungary came in third with 27 individual sanctions.

Twenty-seven countries reported no sanctions since 1999; Ireland did not provide enforcement information.

“We have come far in the last ten years, but there is no time to rest on our laurels,” said Mark Pieth, chairman for the OECD Working Group on Bribery, in the report. “To fight foreign bribery, the 38 Working Group governments must continue to enforce their laws and to implement the Group’s peer-monitoring system.”

The OECD report’s findings echo a recent, similar report by TRACE International, a non-profit association focused on multinational anti-bribery efforts.

The TRACE report, which summarized all enforcement activity since 1977, found that 22 nations have enforced foreign anti-bribery laws in the past 25 years, with the United States representing 75 present of all “outbound enforcement,” or investigations brought against non-U.S. entities or individuals. The combined efforts of 21 other nations make up the remaining 25 percent.

Attorney General Eric Holder recently addressed the OECD in Paris, where he praised the group for its anti-bribery efforts. The Department of Justice collaborates with the organization in cases involving antitrust, cybercrime and anti-corruption.

Holder expressed his commitment to prosecuting corruption, pointing to the Justice Department’s use of the Foreign Corrupt Practices Act to pursue bribery beyond domestic borders.

In addition, the U.S. will complete the final phase of a three-part peer-review process this month in compliance with the OECD’s enforcement efforts.

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