Recommendations made by the OECD put businesses under greater pressure to implement rigorous controls, supervision and compliance training for staff to avoid liability for bribery and corruption offences.

The Organisation for Economic Co-operation and Development (OECD) has made a range of far-reaching recommendations that set the scene for an expansion of the global fight against bribery and corruption. The recommendations are contained in the OECD paper "Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions" published at the end of 2009. The full paper can be reviewed at the following link:

http://www.oecd.org/dataoecd/11/40/44176910.pdf

Businesses subject to these rules will be required to step up their internal control and compliance functions.

Key Goals

The OECD recommendations are intended to:

  • Ensure companies cannot avoid sanctions by using agents and intermediaries to bribe others on their behalf
  • Ensure countries periodically review policies on and approach to small facilitation payments
  • Improve co-operation between countries in foreign bribery investigations
  • Provide effective channels for reporting foreign bribery to law enforcement authorities and for protecting whistleblowers from retaliation
  • Facilitate collaboration with the private sector to adopt more stringent internal controls, ethics and compliance programmes

Focus on Facilitation Payments

The OECD's recommendations focus particularly on reducing, if not eliminating, facilitation payments made to a public official for the purpose of speeding up an administrative process:

"in view of the corrosive effect of small facilitation payments, particularly on sustainable economic development and the rule of law that Member countries should:

i. undertake to periodically review their policies and approach on small facilitation payments in order to effectively combat the phenomenon;

ii. encourage companies to prohibit or discourage the use of small facilitation payments in internal company controls, ethics and compliance programmes or measures, recognizing that such payments are generally illegal in the countries where they are made, and must in all cases be accurately accounted for in such companies’ books and financial records.”

The OECD also recommends:

“all countries to raise awareness of their public officials on their domestic bribery and solicitation laws with a view to stopping the solicitation and acceptance of small facilitation payments.”

The OECD is clearly hoping to trigger something of a significant shift in the way its member States treat facilitation payments, which are still recognised in many jurisdictions as an acceptable method (and cost) of doing business, albeit one which sometimes raises ethical questions.

Focus on Compliance

The practical effect of the OECD recommendations, if fully implemented, will be that businesses will come under ever greater pressure to develop and deliver wide-ranging internal control, ethics and compliance training to their staff. Failure to provide adequate training, controls and supervision may be sufficient to render a business as a whole, or senior management within the business, liable for bribery or corruption offences, even where no conviction has been secured against individual employees.

Businesses everywhere, but particularly those operating in so-called "high-risk" jurisdictions, will come under particular pressure to provide rigorous training that is specifically-tailored to their business activity.

National Developments

The OECD paper is reflective of a continuing increase in government enforcement action against companies and individuals who engage in bribery. For example, the UK Government has placed a new Bribery Bill on its official agenda for the current parliamentary session. See below for further details on the status of the Bribery Bill:

http://www.mwe.com/index.cfm/fuseaction/publications.nldetail/object_id/c193a20d-c8ef-4636-8857-f151189bfb7e.cfm