Corporations Aware of Foreign Bribery, OECD Report Finds

By Yin Wilczek

Dec. 2 — In a groundbreaking report on transnational bribery, the Organisation for Economic Cooperation and Development found that most international bribes are paid by large corporations, usually with the knowledge of senior-level executives.

The OECD's Foreign Bribery Report, released Dec. 2, studied 427 transnational bribery cases that occurred between February 1999 and June 2014. In 41 percent of the cases, management-level employees paid or authorized the bribes, while chief executive officers were involved in 12 percent of the cases, according to the report.

The findings have important implications not just for law enforcement authorities across the globe, but also for corporate compliance programs, according to the report.

‘Face to Face' With Enemy

The findings bring “us, for the first time, face to face with our foe,” OECD Secretary-General Angel Gurría said in the report's preface. The report says, “Corporate leadership is involved, or at least aware, of the practice of foreign bribery in most cases, rebutting perceptions of bribery as the act of rogue employees.”

In a same-day speech at an event in Paris to launch the report, Leslie Caldwell, assistant attorney general for the Justice Department's Criminal Division, also spoke about the importance of coordinated responses by different jurisdictions to combat foreign bribery. All countries, not just OECD members, “must contribute to this international effort if we are going to meaningfully deter and root out global corruption,” she said.

Other Findings

Among other highlights, the report found that four sectors accounted for almost two-thirds of the cases (extractive at 19 percent, construction at 15 percent, transportation and storage at 15 percent, and information and communications at 10 percent) the most prevalent bribes were those paid to obtain public procurement contracts (57 percent), followed by customs clearance (12 percent); and almost half the cases took between five and 10 years to resolve, and some cases continued for up to 15 years after the last corrupt act.

Meanwhile, the high level of involvement by senior executives indicates the continuing need for companies to set the right tone at the top, according to the report. In addition, even though small- and medium-size enterprises accounted for only 4 percent of the companies sanctioned, corporations of all sizes with global businesses should implement measures to detect and prevent the risk of foreign bribery, the report states.

This is the 20th anniversary of the OECD Working Group on Bribery, and the OECD's Anti-Bribery Convention has been in force for 15 years.

To contact the reporter on this story: Yin Wilczek in Washington at mailto:%20ywilczek@bna.com

To contact the editor responsible for this story: Mike Moore at mmoore@bna.com

The OECD's Foreign Bribery Report is available at http://www.oecd.org/corruption/oecd-foreign-bribery-report-9789264226616-en.htm.