01 July 1999
(Background on bribery, Convention implementation to date) (800) [Following is a Fact Sheet on the Organization for Economic Cooperation and Development (OECD) Anti-Bribery Convention. The fact sheet was released June 30, 1999 by the Commerce Department's International Trade Administration]: (begin text) Department of Commerce International Trade Administration June 30, 1999 FACT SHEET: OECD ANTI-BRIBERY CONVENTION Background -- Bribes to foreign public officials influence the award of international contracts. According to estimates, in just the five years from April 1994 to April 1999, bribes to foreign officials played a role in the award of 294 contracts worth about $145 billion. -- The Asian Development Bank (ADB) recently estimated that corruption costs many governments as much as 50 percent of their tax revenues. The ADB 1998 annual report also concluded that corruption contributed substantially to the onset of the Asian financial crisis. -- Although the Foreign Corrupt Practices Act of 1977 (FCPA) prohibits bribery by U.S. companies operating overseas and imposes substantial penalties for violations of the law, foreign companies were free to bribe foreign public officials without fear of penalty, and, in some cases, could deduct bribes from their taxes as business expenses. -- On November 21, 1997, all 29 OECD members and five nonmembers adopted the OECD Anti-Bribery Convention. It is now in effect for Bulgaria, Canada, Finland, Germany, Greece, Hungary, Iceland, Japan, Korea, Norway, the United Kingdom and the United States, and will go into effect for Austria, Mexico and Sweden this summer. -- Several key exporting countries, including France, Italy, Switzerland and the Netherlands, have not deposited an instrument of ratification. A top U.S. priority is getting the remaining signatories that have not brought the Convention into effect to do so at the earliest possible date. Major Findings of the Report -- Overall, the United States is encouraged by the seriousness with which signatories are approaching implementation of the Convention. Generally the eleven countries whose legislation we examined have all sought to address the requirements of the Convention. In some implementing legislation, however, a number of issues require further examination. -- The OECD has established comprehensive procedures to examine the adequacy of the laws that each signatory enacts to carry out the goals of the Convention. The United States is confident that each country's legislation will be subjected to a rigorous and comprehensive review that will allow identification of shortcomings. -- The signatories to the Convention have made great strides in eliminating any remaining tax deductibility for bribes to foreign public officials. But some countries have not yet acted to disallow such deductions, and in others questions remain about the implementation of the laws ending tax deductibility. -- It is too early to make definitive judgements regarding the effectiveness of enforcement. Several countries, for example, Sweden, which is appointing a special ambassador, are working to raise public awareness and promote implementation of the Convention. Non-governmental organizations are also educating their business communities, notably in Canada, Poland, Australia and Bulgaria. -- While there is no consensus on expanding the scope of the convention, the OECD has agreed to examine several issues. Two are particularly important: bribery in relation to foreign political parties and advantages promised or given to any person in anticipation of that person becoming a foreign public official. Other issues include bribery of foreign public officials as a predicate offense for money laundering legislation, and the role of foreign subsidiaries and offshore centers in bribery transactions. -- Major international organizations, such as the OECD, the Organization of American States (OAS), the World Trade Organization and the United Nations General Assembly, have launched a variety of anti-corruption initiatives. International financial institutions, such as the IMF, World Bank and regional development banks, are devoting more resources to help client countries eliminate corrupt practices. -- U.S. business associations and non-governmental organizations, such as Transparency International, played a key consultative role in the negotiation of the Convention and the passage of implementing legislation. We will continue to involve the private sector in our efforts to monitor the Convention. The Commerce Department's International Trade Administration, working closely with the Office of the General Counsel and other U.S. agencies including the State Department and Justice Department, will closely monitor implementation of the Convention. Information on the Convention and international bribery issues is available on various Department websites (e.g., www.mac.doc.gov/tcc/treaty.htm and www.ita.doc.gov/legal/master.htm). Bribery complaints can be reported directly to the Department on the Trade Compliance Center's Trade Complaint Hotline: http://www.mac.doc.gov/tcc/pbrintro.htm OECD Member Countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States. The non-member signatories are Argentina, Brazil, Bulgaria, Chile, and the Slovak Republic. (end text)