Self Reporting Not a Substitute for Vigorous Enforcement

Earlier this week, the Director of the UK Serious Fraud Office, which has responsibility for prosecuting foreign bribery cases, updated its earlier guidance on the benefits of self-reporting on overseas corruption. In a December 7th letter to Arnold & Porter, Richard Alderman answered questions on the criteria the SFO will apply when deciding whether to treat a self-reported matter criminally or civilly; the scope of investigation that will satisfy the SFO and avoid the need for additional, SFO-directed investigation; the circumstances for appointing monitors; treatment of attorney-client privilege; and whether the SFO will close a voluntary disclosure case without any actions.

In the absence of a credible threat of prosecution, the more fundamental question is whether offering benefits for self-reporting will effectively deter foreign bribery. Some companies may self-report and undertake restitution, training and sanctions in order to benefits such as civil sanctions rather than criminal prosecution; an opportunity to work with the SFO to manage issues and publicity; and a negotiated settlement rather than mandatory debarment from public contracts. Others may take their chances until the SFO has a track record of enforcement that creates the right incentives. While TI-USA commends the SFO for its efforts to foster corporate integrity and is encouraged by the prosecution of Mabey & Johnson Ltd (which arose from the company's voluntary disclosure), the UK still needs to enact a foreign bribery law and pursue major cases.

OECD Issues New Recommendation to Reinforce Anti-Bribery Efforts

Today, OECD Secretary General, Angel Gurría announced the release of a new "Recommendation of the Council for Further Combating Bribery of Foreign Public Officials" at an event hosted by Transparency International-USA in Washington, DC. The Recommendation picks up on extensive TI recommendations intended to reinforce OECD countries’ efforts to prevent, detect and investigate foreign bribery, including:
• Continued “rigorous and systematic” monitoring and reporting on implementation of the OECD Anti-Bribery Convention, including information on investigations and prosecutions;
• Suspension from public contracting or other public advantages of companies found to have bribed;
• Encouraging companies to adopt more stringent internal controls and to prohibit “facilitation payments” (An annex on good corporate practices is currently being negotiated and should be ready for adoption by March of 2010.);
• Strengthened reporting channels and whistleblower protection; and
• Increased outreach to emerging exporters which are not OECD Members to adhere to and implement the Convention.

Speakers at today's event sent a clear call to action. Following a message from Secretary of State Hillary Clinton, Secretary-General Gurría, Commerce Secretary Gary Locke and the U.S. Permanent Representative to the OECD Karen Kornbluh called for heightened attention to the anticorruption agenda. “The message we are sending on foreign bribery is clear,” said the Secretary General, “the only ones who should pay the price for this crime are its perpetrators.” “It is not a victimless crime,” noted the Commerce Secretary. “It’s not just greasing the wheels of business. It is cheating the people of these countries.” For more about the event, click here.

December 9th Event: 10 Years Later: Assessing the Impact & Future of the OECD Anti-Bribery Convention

On December 9th, International Anti-Corruption Day, Transparency International-USA will host an event at the National Press Club marking the 10th Anniversary of the OECD Anti-Bribery Convention. Featured speakers include Angel Gurria, Secretary-General, Organization for Economic Cooperation and Development (OECD) and Secretary Gary Locke, U.S. Department of Commerce. Mark Pieth, Chairman of the OECD Working Group on Bribery will make introductory remarks via a live video cast from Paris. Alan Larson, Chair, Transparency International-USA and former Under Secretary of State will moderate.

Billions of dollars are squandered on bribes paid to public officials in exchange for business advantages representing a huge, hidden tax that retards economic development and drains a significant portion of development funds from poor countries. The entry into force of the OECD Anti-Bribery Convention was a landmark in the fight against bribery in international business and development, committing the major industrialized nations to enforce foreign bribery prohibitions similar to the US Foreign Corrupt Practices Act. Ten years later, how has this convention worked in practice? In the current global economic downturn, will increased pressure to win contracts undermine vigorous, consistent enforcement? What will be the impact on competition for stimulus-related contracts? What are the prospects for engaging emerging exporters, such as China and India?

Please join us for a lively discussion. Breakfast from 7:30 am; speakers at 8:00 am. National Press Club, 529 14th Street, NW Washington, DC. RSVP by December 4th to transparency@transparency-usa.org or 202-589-1616.