USIS Washington 

10 September 1998


(United States leads OECD drive against bribery) (560)

By Phillip Kurata

USIA Staff Writer

Washington -- Congress is in the final stages of enacting legislation
that would make the United States the first country to implement an
international treaty outlawing bribery of foreign officials.

Twenty-nine member states of the Organization for Economic Cooperation
and Development and five non-member states have signed the Convention
on Combating Bribery of Foreign Public Officials in International
Business Transactions.

The Senate ratified the OECD treaty and passed enabling legislation on
July 31. A parallel bill, the International Anti-Bribery and Fair
Competition Act of 1998, is winding its way through the House of
Representatives. Congressman Rick White said the two houses of
Congress have set October 8 as a deadline to eliminate discrepancies
between their versions and vote a unified bill into law

"American business and American workers, the most productive in the
world, are prime beneficiaries of free and open markets overseas,"
said Congressman Mike Oxley, one of the co-sponsors of the House bill.
"But ... all too often overseas contracts have been won by those
offering payments under the table rather than the best deal on the
table." Oxley made those comments at a September 10 hearing of the
House Finance Subcommittee. Commerce Department officials say U.S.
businesses lost $30,000 million dollars worth of contracts last year
to foreign competitors that bribe foreign officials.

The United States criminalized bribery of foreign officials by U.S.
businesses in 1977 with the passage of the Foreign Corrupt Practices
Act. U.S. companies responded by adopting "internal corporate
controls, effective internal and external auditing and codes of
conduct" or ran the risk of prosecution and adverse publicity if
discovered to have engaged in corruption, said Andrew Pincus, general
counsel of the Commerce Department.

The OECD treaty is modeled on the U.S. Foreign Corrupt Practices Act.
Once ratified by all 34 signatories, the treaty would go a long way
towards leveling the playing field for U.S. businesses, Pincus said.

The treaty calls for fines, loss of business and, in some cases,
imprisonment for business people caught paying bribes. The treaty has
provisions on mutual legal assistance and extradition to facilitate
inter-governmental cooperation in the war against corruption. The
treaty calls for eliminating the tax deduction for bribes that is
granted to companies in Germany, France and other OECD countries.

The U.S. effort to generate international support to outlaw corruption
began to bear results in the late 1980's and early 1990's. "Some
bribe-receiving countries became too demanding," said Eleanor Roberts
Lewis, Chief Counsel for International Commerce at the Commerce
Department. "Instead of asking for one to five per cent of the value
of the contract, as they typically did, some government officials
began to ask for 20 to 30 per cent of the contract."

"Instead of a few thousand or few hundred thousand dollars, companies
were asked to pay millions of dollars. Companies started to realize
these numbers were digging into their bottom line, and some went to
their governments to complain and lobby for anti-corruption
legislation," Lewis said.

U.S. officials say the financial crises in Russia and Asia have driven
home the need for greater transparency in international business
dealings to foster healthy growth.