Fifteen Years Later: The OECD Reports On Transnational Corruption

On December 2, 2014, the OECD published its Foreign Bribery Report. The report reviews the first 15 years of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and its application through the anticorruption laws adopted by the 41 signatory countries, such as Canada's Corruption of Foreign Public Officials Act, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act.

The report's analysis of the 427 cases of corruption since the Convention came into force in 1999 shows the following:

• In over half of the cases, bribes were approved by corporate management – namely, by management-level employees (41%) or by chief executive officers (12%).
• Employees of state-controlled businesses were the main recipients of the bribes (27%), followed by customs agents (11%), public health organization agents (7%) and agents from the defence industry (6%).
• Two-thirds of the cases concerned four sectors in particular: extractive (19%), construction (15%), transportation and warehousing (15%) and information and communication (10%).
• Nearly half of the cases involved public officials from highly developed countries.
• In three cases out of four, bribes were paid through intermediaries, including commercial agents, distributors and local brokers, as well as legal entities located in financial centres or tax havens.
• Among the reasons that motivated offenders were obtaining public contracts (57%), facilitating customs procedures (12%), obtaining an advantageous fiscal treatment (6%), obtaining a permit (4%) and obtaining confidential information (4%).
• A total of 261 fines were imposed, the heaviest being €1.8 billion.

According to the same report, a third of the cases originated from the offenders themselves. In addition, among the cases of businesses voluntarily reporting themselves, 31% surfaced through internal control mechanisms, and 28% were discovered in the course of pre-transactional due diligence.

Although the report has, by its own admission, a restricted scope due to the limited number of resolved cases, it nonetheless paints a useful picture of the challenges faced by businesses as well as by the authorities since the Convention came into force. To address these challenges, the report recommends greater investigative powers for the authorities and reinforced integrity measures regarding the granting of public contracts. This trend has already emerged in Canada in the last few years.

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