On 29 December 2010 the Chinese State Council issued its first white paper on corruption, entitled "China's Efforts to Combat Corruption and Build a Clean Government." Although the paper acknowledged that the corruption problem in China is very serious, it did not specifically provide for any future actions. Nevertheless, it is widely believed that Chinese officials are intent on launching a series of crackdowns in the coming months.
China has not enacted legislation which prohibits foreign bribery, although Chinese companies have been charged in overseas jurisdictions under local laws. China also continues to prosecute its public officials and the employees of Chinese state-owned corporations for receiving bribes. There have been several notable cases in the past year. For example, in November 2010 a former senior manger of China National Nuclear Corporation was found guilty of accepting bribes exceeding RMB 6 million (US$0.9 million) in the tendering process for several nuclear plants. Penalties for bribery in China are severe and, in the case of public officials, often result in life imprisonment and even execution.
French law provides that only the state prosecutor can initiate proceedings for the offence of bribery (an element of the law that has been criticised by international organisations such as the OECD). However, on 9 November 2010 the French Supreme Court (Cour de Cassation) ruled that an anti-corruption complaint lodged by Transparency International (France) was admissible; the first time a complaint from an anti-corruption institution has been permitted.
The complaint by Transparency International required the opening of a judicial investigation and the nomination of an investigating magistrate. Following the Supreme Court ruling, the magistrate will now investigate how the assets were acquired, and the source of funds held in numerous bank accounts which were discovered during an earlier police investigation. The investigation will also look into certain intermediaries involved in the transactions, namely the banks identified by the police investigation, whose compliance with anti-money laundering regulations is in question.
The prospect of criminal proceedings being initiated by bodies such as Transparency International has potentially important consequences for enforcement activity in this area. Transparency International has already followed this up with a press statement indicating its intent to lodge an identical criminal complaint as regards the assets owned in France by the former Tunisian President Mr. Ben Ali, his relatives, and close circle.
Bribery and corruption issues have a high profile in Germany following cases such as Siemens and Daimler. More recently, the MAN and Ferrostaal cases have brought home that "domestic" German businesses are at risk as well as major multi-national corporations. Following these cases, internal investigations have now become an established feature of the German legal landscape, with non-binding guidelines for the conduct of internal investigations recently having been issued by the German Federal Lawyers Association.
Recent court judgments in Germany have made clear that management can be personally liable if they fail to perform their supervisory obligations and offences are committed by the corporation's employees, including corruption offenses. This further emphasises the importance of an effective corporate compliance program. The German Federal Supreme Court (Bundesgerichtshof) has also made clear that the liability of management is not limited to civil claims. In one recent case, it was held that a compliance officer can be found criminally liable for offences committed by an employee under his supervision.
In Italy, legislation is likely to be passed in the next few months which will extend the list of crimes encompassed by the country's corporate criminal legislation, Decree 231, to include so-called "environmental crimes." Currently, Italian legislation recognises the concept of corporate liability in the context of bribery and corruption, and also provides an exemption from such liability where the corporation can demonstrate that it had implemented a governance structure suitable for preventing the crime concerned. In order to meet this standard, which is not dissimilar from the concept of "adequate procedures" under the UK Bribery Act 2010, the corporation must implement a management and control system (so-called "Modello Organizzativo"), whose compliance and efficiency must be subject to independent supervision and monitoring.
On 20 September 2010 close to 100 business leaders and policy makers gathered at the United Nations to introduce the Pearl Initiative, a private sector-led program aimed at improving corporate governance, accountability, and CSR practices of business activities across the six countries of the Gulf Cooperation Council (The UAE, Bahrain, Saudi Arabia, Oman, Quatar and Sudan). To date, over 80 prominent companies and institutions across the GCC have partnered with the initiative, including OPEC, the World Bank and Crescent Petroleum (a UAE-based upstream oil and gas company).
The Pearl Initiative will work to create a regional network of business leaders and policy makers within the Arabian Gulf Region in order to improve corporate governance and achieve better public reporting and accounting of their activities, leading to a more open and transparent business environment. The Initiative's aims derive from recent high profile scandals across the region such as Al Gosaibi/Saad Al Sanea and Nakheel which have done much to harm investor confidence. The Initiative aims to tackle corruption across the region by working with its partners to promote training and educational programs and develop forums that assist companies and institutions to develop community-based solutions to address such issues.
Russia and the CIS
As part of the OECD Working Group on Bribery Outreach Work in Eastern Europe and Central Asia, the OECD set up the Istanbul Anti-Corruption Action Plan in 2003. This Action Plan is an initiative that was launched to support anti-corruption reform efforts in Armenia, Azerbaijan, Kazakhstan, the Kyrgyz Republic, the Russian Federation, Tajikistan, Ukraine and Uzbekistan. Despite such initiatives, however, actual enforcement remains sporadic.
In Russia, President Medvedev continues to lead a high profile campaign against corruption, although the actual results have been disappointing. In light of this, the Russian "fight against corruption" seems more theoretical than real. The Russian authorities have yet to adopt a systematic and non-arbitrary approach to enforcement of existing local legislation. Nevertheless, at a meeting of the Presidential Anti-Corruption Committee on 13 January 2011, President Medvedev proposed new laws setting fines for bribery and, notably, the creation of a new offense in relation to the giving by Russian businessmen of bribes to foreign officials. The creation of this offence is essential if Russia is to sign up to the OECD Anti-Bribery Convention (which is, in turn, an important precursor to Russia's accession to the World Trade Organization).
The OECD has recently reviewed Ukraine's efforts to fight corruption and recommends, amongst other things, that the country adopts fundamental anti-corruption legislation to bring Ukraine in to compliance with international standards.
In the 2010 Corruption Perception Index produced by Transparency International, Singapore tied with Denmark and New Zealand for first place with a score of 9.3. Against this backdrop, a significant bribery case currently pending in the country is exceptional. The case involves a public official who allegedly defrauded the Singapore government of almost S$12 million (currently around US$9.2 million). As a result, it is unsurprising that the case has prompted the Singapore authorities to carry out a detailed review of government procurement processes. The case may ultimately result in a review of Singapore's Prevention of Corruption Act and, in particular, the relevant sentences applicable to bribery involving public officials.
The Spanish Criminal Code was significantly amended in 2010 by Act of Parliament 5/2010 dated 23 June 2010 (the "Act"), which came into force on 23 December 2010.
The Act introduces the concept of corporate criminal liability for the first time in Spanish law and holds corporations liable for criminal offenses committed on their behalf by their representatives (or by persons subject to the control of the corporation's managers and directors) where the crime results from a failure of supervision and control. Under the Act, a corporation can be criminally liable for offenses such as fraud, bribery and money laundering regardless of whether liability has been established on the part of an individual director or representative.
The Act brings Spanish law into line with the requirements of the OECD Anti-Bribery Convention, and also extends to the private sector as well as to public officials. The Act introduces a wide range of different penalties for corporations, including fines, suspension of trading and even winding up, and in certain circumstances penalties can even be imposed as a preventative measure pending trial. The Act also provides that the liability of a corporation will not be extinguished by its merger, absorption into another group, split or re-organisation. In such circumstances, criminal liability will transfer with the business.
As the touchstone of corporate criminal liability is the failure to exercise "proper control" over its employees and other representatives, corporations will be compelled to ensure they have effective compliance programs in place. Even where such a compliance programme is not sufficient to provide a full defence, the implementation of such a program will be treated as a mitigating factor when it comes to sentencing.
A report by the OECD's Working Group on Bribery has urged South Africa to take a more proactive role in the detection, investigation and prosecution of cases of bribery. Transparency International reported that there has been little or no enforcement of bribery cases, but there are currently four reported preliminary investigations, two of which were opened in February 2010.
Consistently perceived as one of the more corruption-ridden countries in the developing sector, (Vietnam ranks 116 out of 178 countries on Transparency International's 2010 Corruption Perception Index), and a regular recipient of substantial Official Development Assistance from multiple foreign donors, Vietnam appears to be attracting greater scrutiny from foreign authorities which has led to a number of cases in the U.S. relating to corrupt activity in Vietnam.
Enforcement activity has also stepped up within Vietnam itself. In January 2010, the former deputy director of the Ho Chi Minh City Department of Transport, Huynh Ngoc Sy, was charged with receiving US$262,000 from Pacific Consultants International, a Japanese company. In April 2010, the Vietnamese government expanded its investigation to include evidence gathered by Japanese authorities. As a result of this cross-border co-operation with Japan, a Vietnamese Court sentenced Huynh Ngoc Sy to life imprisonment on 18 October 2010 and ordered him to disgorge the US$262,000 in ill-gotten funds.
On 30 April 2010 the World Bank debarred Macmillan Limited, a UK company, declaring it ineligible to be awarded Bank-financed contracts for a period of six years in the wake of the company's admission that it had made bribes relating to a World Bank-supported education project in Southern Sudan. Under the terms of the agreement, Macmillan Limited was instructed to implement a compliance monitoring program and to engage a compliance monitor to ensure its adequacy. The original debarment period of eight years was reduced to six years on account of an early acknowledgement of misconduct by the company, and can be further reduced to three years subject to the company implementing a compliance program and further cooperating with the World Bank's Integrity Vice Presidency. The World Bank's Integrity Vice Presidency focuses on allegations of fraud and corruption involving World Bank operations or involving World Bank staff, thereby helping to ensure that development resources reach their intended recipients.