Despite a 15-year-old promise to do so, many of the world’s leading economies are failing to do enough to prevent corruption and bribery, according to a new report from anti-corruption watchdog Transparency International.
The Organisation for Economic Co-operation and Development’s Anti-Bribery Convention, adopted in 1997, was a pledge by signatory countries to make foreign bribery a crime and hold both individuals and enterprises culpable. Forty-one countries, accounting for approximately two-thirds of world exports, signed the agreement. Years later, however, only four “are actively investigating and prosecuting companies that cheat taxpayers when they bribe foreign officials to get or inflate contracts, or obtain licenses and concessions,” Transparency International says. Five countries were classified as having “moderate enforcement,” while another eight had what was deemed to be “limited enforcement.” 22 have "little or no enforcement" procedures in place to ensure their companies do not participate in or facilitate corruption.
The new report is the 10th annual update by Transparency International on the OECD agreements. “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,” José Ugaz, chairman of Transparency International, said in a statement. “Unfortunately, we are a long way from that tipping point.”
"Fifteen years should have been enough to enforce these commitments,” he added. “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.”
The four leading enforcers (Germany, Switzerland, United Kingdom, 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, the report claims. Also, nine G20 countries fell into the “little” or “no enforcement” categories, meaning they are also failing to meet goals set in the G20’s anti-corruption action plan.
Transparency International makes the argument that enforcement metrics are low because investigators “lack political backing to go after big companies, especially where the considerations of national economic interest trump anti-corruption commitments.” Another reason given for why cross-border bribery in international business deals thrives is that investigators lack the resources to track the complex money laundering techniques increasingly used to conceal bribery deals.
The report also notes that “corrupt deals are increasingly masked by sophisticated shell companies whose real beneficial owner is not known, even to authorities.”
In response, Transparency International is calling for greater multi-national cooperation in order to keep pace with the increasingly cross-border nature of crime. The group also reiterated its call on the EU and G20 to ensure the publication of beneficial ownership in public registers of company information. A nation-by-nation breakdown of enforcement efforts can be found here.
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