Berlin, 23 October 2014, Transparency International.
Only 4 countries actively enforce 15 year-old rules designed to keep global trade fair
Many leading economies are failing to stop their companies from spreading corruption around the world, anti-corruption group Transparency International warned today in its annual progress report on enforcement of the OECD anti-bribery convention.
Fifteen 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.
“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,” said Transparency International chair José Ugaz. “Unfortunately, we are a long way from that tipping point, and that means the vision of corruption-free global trade remains far away.”
Twenty-two of the countries party to the OECD Convention are doing little or nothing by way of enforcement. The 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.
Governments need to act on secret company ownership
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.
Today corrupt deals are increasingly masked by sophisticated shell companies whose real beneficial owner is not known, even to authorities.
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 on 15 February 1999.
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.
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.