Interviews

Anti-bribery report

by Mark Rowe

Many countries are failing to stop companies from spreading corruption around the world, the anti-corruption group Transparency International has warned in its annual progress report on enforcement of the OECD anti-bribery convention.

Some 15 years after the entry into force of the convention, only four of 41 countries signed up are actively investigating and prosecuting companies that cheat taxpayers when they bribe foreign officials to get or inflate contracts, or obtain licences and concessions. Five countries were classified as having moderate enforcement, while another eight had limited enforcement.

Transparency International chair José Ugaz said: “For the anti-bribery convention to achieve a fundamental change in the way companies operate, we need a majority of leading exporters to be actively enforcing it, so that the other countries will be pressured to follow suit. Unfortunately, we are a long way from that tipping point, and that means the vision of corruption-free global trade remains far away.”

TI says that 22 of the countries party to the OECD Convention are doing little or nothing by way of enforcement. Those 22 countries represent 27 per cent of world exports. Transparency International said enforcement is low because investigators lack political backing to go after big companies, especially where the considerations of national economic interest trump anti-corruption commitments. Investigators also often lack the resources to investigate complex white-collar crime.

One reason cross-border bribery in international business deals thrives – despite being outlawed – is that investigators lack the resources to track the complex money laundering techniques increasingly used to conceal bribery deals, Transparency International said. The pressure group says that corrupt deals are increasingly masked by sophisticated shell companies whose real beneficial owner is not known, even to authorities.

TI says that the OECD needs to help authorities work together across borders if they are to keep pace with the increasingly cross-border nature of crime, Transparency International said. The anti-corruption group also reiterated its call on the EU and G20 to ensure the publication of beneficial ownership in public registers of company information.

“Fifteen years should have been enough to enforce these commitments. The OECD has worked hard to make the convention a powerful tool and pushed governments to adopt tough laws. Now it needs to make sure that enforcement authorities have all the support they need to counter the growing power of cross-border crime networks,” Ugaz said.

The Convention was adopted in 1997 and entered into force in February 1999.

The four leading enforcers (Germany, Switzerland, UK, United States) completed 225 cases and started 57 new cases from 2010-2013. The other 35 countries completed 20 and started 53. Twenty countries have not brought any criminal charges for major cross-border corruption by companies in the last four years. Canada is the only country to show significant improvement since last year’s report, having significantly improved its foreign bribery law and started several investigations.

Nine of the 20 countries with the least public sector corruption are doing little or nothing to make sure their companies follow the same standards overseas, allowing them to contribute to public sector corruption elsewhere. And TI adds that nine of the countries in the G20 are in the little or no enforcement categories, meaning they are failing to meet the goals set in the G20’s anti-corruption action plan. For the report visit the TI website – http://www.transparency.org/exporting_corruption.

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