Coinciding with the publication of Transparency International's 2014 Corruption Perception Index and International Anti-Corruption Day, the OECD's (Organisation for Economic Co-Operation and Development) Christmas contribution comes in the form of its Foreign Bribery Report focusing on the bribery of foreign public officials.  The report raises particular concerns for senior management and compliance professionals in the extractive, construction and telecoms sectors, as well as those companies that tender for public procurement contracts. 

OECD findings: notable statistics

  • 53% of cases involved corporate management or CEOs.
  • 75% of cases involved payments through intermediaries (including agents, corporate vehicles and lawyers).
  • 80 individuals were imprisoned after a foreign bribery conviction.
  • USD14.9 million was the highest amount forfeited by an individual in a foreign bribery case.
  • 57% of cases involved bribes to obtain public procurement contracts.
  • 66.6% of cases occurred in the extractive, construction, transportation and  storage and information and communication sectors.
  • On average, bribes equalled 34.5% of the transaction profits.

A look ahead to 2015

Together with its finding that 53% of cases of foreign bribery involved senior management or CEO involvement, perhaps the most startling finding is that bribery and corruption is not just a problem in developing economies.  Almost one in two cases of foreign bribery occurred in countries with a high developmental level.

Regulatory scrutiny of bribery and corruption has continued to increase in 2014, with high profile investigations of global corporations making headlines throughout the year and this trend is set to continue in 2015.

This newsletter has already set out this firm's view that an expansion of the section 7 Bribery Act 2010 offence of a commercial organisation failing to prevent bribery to include all aspects of financial crime seems highly likely. That, coupled with the high profile involvement of British companies in bribery and corruption investigations in 2014, and the OECD's recommendation that sanctions for bribery and corruption offences should extend beyond monetary sanctions to include the seizure of assets, leads us to suspect that those corporates, large and small, that fall within the scope of the Bribery Act 2010, will be under even greater scrutiny in 2015. 

The findings in relation to the involvement of senior management and CEOs, and the high level of intermediaries facilitating bribery and corruption, serve only to highlight the importance, not only of due diligence on those outside the corporate structure, but for the necessity for robust, practical and effective compliance procedures to be put in place within the company, enforced and reviewed periodically. 

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