OECD: Global Corruption Enforcement Is On the Rise

The new Report of the OECD Working Group on Bribery details its recent work while providing an overview of anti-bribery enforcement around the globe. The Anti-Bribery Convention came into force in 1999. As of December 2011 there were 38 parties to the Convention, 34 of whom are OECD member along with Argentina, Brazil, Bulgaria and South Africa. In 2011 Columbia and Russia became members of the Working Group on Bribery. The two countries will join the Convention in 2012. The 40 Working Group members account for almost 80% of world exports, according to the Report, and nearly 90% of global outward flows of foreign direct investment.

The Anti-Bribery Convention is the only legally binding global instrument to focus on the payment of bribes to foreign officials, according to the Report. It requires all signers to make foreign bribery of public officials a criminal offence. The Convention also requires countries to investigate and where appropriate prosecute those who offer or pay bribes while requiring that tax deductions for the payments be denied.

Since the Convention came into force much has been accomplished as the basic statistics in the Report demonstrate. In this regard:

• 210 individuals and 90 entities have been criminally prosecuted in 14 states;

• 66 individuals have been sent to prison;

• 43 individuals and 92 entities have been sanctioned in criminal, administrative and civil cases for other offenses related to foreign bribery such as money laundering or accounting in four states; and

• Approximately 300 investigations are on-going in 26 states that are parties to the Anti-Bribery Convention and criminal charges have been brought in 13 states against 158 individuals and 13 entities.

The United States is by far the leader in anti-bribery enforcement as illustrated by the statistics tabulated in the Report. Since the Convention came into force 190 actions have been brought against individuals. This includes 22 plea agreements, 59 agreed sanctions and 39 settlements. Another 97 actions have been brought against business organizations, including 30 plea agreements and 48 deferred and non-prosecution agreements and 55 settlements. These actions were brought by:

• United States: 97 against individuals which includes 22 plea agreements and 39 settlements and 79 against business organizations which includes 28 plea agreements, 48 deferred and non-prosecution agreements and 50 settlements;

• Hungary: 26 against individuals and none against business organizations;

• Korea: 16 against individuals and 4 against business organizations;

• Germany: 14 against individuals plus 59 agreed sanctions under the German criminal code and 3 against business organizations;

• Italy: 10 against individuals which include 9 plea agreements and 3 against business organizations, all of which are plea agreements;

• Japan: 6 against individuals and 4 against a business organization;

• Norway: 5 against individuals and 1 against a business organization;

• France: 4 against individuals and none against business organization; and

• United Kingdom: 3 against individuals and 2 against business organization.

As these statistics illustrate, enforcement is concentrated in relatively few countries, while a number have not brought any actions against either an individual or a business organization. The OECD statistics are only for bribery actions. They do not include actions based solely on provisions such as the books and records and internal control provisions of the FCPA. This makes it difficult to analyze overall enforcement efforts.

The OECD statistics do suggest a marked focus on individuals, a point which has been emphasized by U.S. enforcement officials but a source of criticism in recent Congressional hearings considering possible amendments to the FCPA. In those hearings there have been claims that U.S. enforcement officials have not brought enough cases against individuals. Overall, the statistics suggest that global anti-bribery enforcement is on the rise, a point which should be well recognized in the United States.