Despite continued media focus on both domestic and cross-border corruption scandals, significant anti‑corruption challenges persist. As concluded in Transparency International’s (“TI’s”) 2014 Progress Report on global enforcement of the Organization for Economic Cooperation and Development’s (“OECD’s”) Anti-Bribery Convention (the “Convention”), “[t]he fundamental goal of creating a corruption-free level playing field for global trade is still far from being achieved.”1 Echoing a refrain from many prior TI reports, the latest report stated that “the performance of the majority of the 40 countries that agree to combat foreign bribery in international business transactions is far from satisfactory.”2
As in 2013, only four of the 40 countries that subscribe to the Convention (the United States, the United Kingdom, Germany, and Switzerland) engage in active enforcement, according to TI.3 The 2014 Progress Report lamented that “there are still 22 countries with Little or No Enforcement and eight countries with only Limited Enforcement.”4 The TI 2014 Progress Report noted that Canada and New Zealand both have improved their ranking by one level, with Canada joining Italy, Australia, Austria, and Finland in the category of countries with “moderate” enforcement efforts, and New Zealand moving into the category of countries in which there is “limited enforcement.”5 Two countries, Bulgaria and Denmark, regressed, falling into the category of countries with “little or no enforcement.”6
The 22 countries identified as having little or no enforcement (ranked here from strongest to weakest in terms of their enforcement programs) are Japan, the Netherlands, South Korea, Russia, Spain, Belgium, Mexico, Brazil, Ireland, Poland, Turkey, Denmark, the Czech Republic, Luxembourg, Chile, Israel, the Slovak Republic, Colombia, Greece, Slovenia, Bulgaria, and Estonia.7
For in-house counsel and compliance professionals looking to assess the significance of these rankings and similar work done by the OECD itself, the goal of the TI Progress Report must be kept in context. By focusing on the status of cross-border anti-corruption regimes, the TI Progress Reports essentially concede that domestic anti-bribery enforcement in much of the world is weak, and thus cross‑border enforcement by the major exporting nations who have signed the Convention is important to achieving anti-corruption compliance. Nevertheless, while the TI Progress Report – the tenth annual report on the subject that TI has published – is a useful reminder of the still-nascent stage of many cross‑border anti-bribery regimes, compliance professionals should not rely too heavily on the country-by-country assessments. From the perspective of a global company, what matters most in assessing the enforcement environment in any particular country is the combined government resources devoted to antibribery enforcement, that is, those devoted by both local and foreign governments active in enforcing anti-bribery laws in and with respect to a given jurisdiction.
Those resources will include those of governments with concurrent jurisdiction over a particular transaction, such as the United States in situations in which the FCPA applies, the United Kingdom in matters in which the UK Bribery Act 2010 applies, as well any government with authority under any local anti-bribery law. In this respect, the TI 2014 Progress Report serves more as a roadmap to which governments are most likely to prosecute corrupt conduct that is subject to regulation under a trans-national anti-bribery regime, rather than necessarily whether corrupt conduct will be prosecuted. Nor does the TI 2014 Progress Report necessarily provide strong signals of where the risk of corruption itself is greatest. The TI Corruption Perceptions Index, long a mainstay of compliance risk assessments and due diligence prioritization, provides significantly more guidance in that respect.
Given the TI Progress Reports’ past impact, the TI 2014 Progress Report may be most significant for the calls it has set out for additional legislative and policy reforms in the OECD Convention signatory countries. The report noted, for example, that following past calls for reform over a number of years, including by TI, Brazil, Canada, Germany, Portugal, and Spain have strengthened their anti‑corruption regimes, while Denmark, France, Hungary, Iceland, Portugal, and the UK have improved protections against whistleblowers.8 In its press release accompanying the TI 2014 Progress Report, TI called upon the OECD Working Group on Bribery as well as OECD Convention signatories to take the following steps:
- Continue the OECD monitoring program, and improve it by including civil society organizations in on-site visits and making available replies to questionnaires submitted to Convention signatories available to civil society organizations.
- Convene meetings in countries where there has been substantial foreign bribery to discuss how the interests of those countries in which bribery takes place can be better represented in foreign bribery proceedings, thus increasing the input of countries affected by foreign bribery.
- Prepare a study on the practice of settlements, including analysis of the varying approaches to court approval, transparency, and deterrent effects.
- Collect and publish data on mutual legal assistance requests related to foreign bribery.
- Provide additional information about pending and concluded cases, particularly in countries (such as Germany) that do not release certain details about defendants.9
As such reforms are debated in OECD member countries and ultimately embodied in future legislation, multinational firms subject to multiple cross-border and domestic anti-bribery regimes will continue to need to manage a complex and dynamic regulatory environment.