*EPF508 06/29/01
Text: Deputy Assistant Commerce Secretary on Anti-Bribery Report
(Says Compliance, Enforcement of OECD convention crucial)(1620)
With the Organization for Economic Cooperation and Development (OECD) Anti-Bribery Convention now three years old, the United States views implementing and enforcing the pact's provisions as critical, says Stephen T. Jacobs, deputy assistant secretary of Commerce for agreements compliance.
"In the coming years we expect to see the number of reported allegations of bribery by firms based in other parties to the Convention to come down, and we expect to see actions by other parties to investigate and, when warranted, to prosecute," said Jacobs. He made his comments June 29 at a press conference marking the release of two reports to Congress on the implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
The report are the Commerce Department's "Addressing the Challenges of International Bribery and Fair Competition, 2001" and the State Department's "Battling International Bribery, 2001."
"Every party must let it be known that our companies cannot pay bribes, will not pay bribes, and that tenders must be decided based on the commercial merits of the proposal," he said.
Following is the text of Jacobs' remarks as made available at the press conference:
(begin text)
PREPARED REMARKS OF DEPUTY ASSISTANT SECRETARY FOR AGREEMENTS COMPLIANCE STEPHEN P. JACOBS UPON THE RELEASE OF THE SECRETARY OF COMMERCE'S THIRD ANNUAL REPORT TO CONGRESS ON IMPLEMENTATION OF THE OECD ANTIBRIBERY CONVENTION
FRIDAY, JUNE 29, 2001
Assistant Secretary Wayne and I are pleased to once again release the annual report to Congress on implementation of the OECD Antibribery Convention. This the third of six as mandated by the International Antibribery and Fair Competition Act of 1998.
As Secretary Evans indicates in his letter transmitting the report to the Congress, we have seen meaningful progress this past year in implementation of the Convention. Since our last report, 9 additional countries have passed laws that make it a crime to bribe a foreign public official in an international business transaction and twelve have deposited their instruments of ratification with the OECD. 30 of the world's largest exporters now have laws criminalizing such bribery, representing nearly three-quarters of global trade.
I'd like to take a few moments to underscore the importance that this Administration attaches to the broader area of fighting corruption. As Tony has noted, our direction on this issue comes from the top - from the President on down. Secretary Evans has been active in moving this issue forward, bilaterally and at the OECD Ministerial.
Effective implementation and enforcement of the Convention are critical. Secretary Evans is committed to ensuring that this OECD agreement, as with every other trade agreement, is monitored and complied with by each Party. We will be looking for concrete results in the coming year.
Corruption, including bribery of foreign officials, interferes with capital markets, creates inefficiencies, traps people in poverty and undermines democracy. Elimination of corruption will help to counter these negative forces: it will make markets attractive for investors; allow resources to be allocated where they garner the greatest returns; as well as promote democracy. Elimination of bribery will eliminate the invisible tax that bribery of foreign public officials places on those least able to pay. As much as free trade is a moral imperative, so is the fight against corruption.
In the coming year we expect to see the number of reported allegations of bribery by firms based in other Parties to the Convention to come down, and we expect to see actions by other Parties to investigate and, when warranted, to prosecute. Where appropriate, the U.S. government will forward to other Parties to the Convention information relating to acts of bribery that may fall within their jurisdiction, and we will expect action where the facts warrant. In addition, we will seek to engage other signatory governments in coordinated action where bribes have been solicited by foreign public officials. Every Party must let it be known that our companies cannot pay bribes, will not pay bribes, and that tenders must be decided based on the commercial merits of the proposal. We consider the OECD monitoring process to be a success story and we will continue to be active participants, especially in the next phase of the OECD's work, which is to assess the enforcement structures and practices of Parties to the Convention.
If left unchecked corruption can negate market access gained through trade negotiations, undermine the foundations of the international trading system, and frustrate broader reforms and economic stabilization programs. As we seek additional opportunities for trade liberalization in the WTO, the FTAA or bilaterally, we are committed to ensuring that these opportunities are not undercut by corruption. The OECD Bribery Convention represents a unique agreement that we will use as an instrument to secure this objective.
We will also continue to work in other fora besides the Convention, including the Global Forum, the OAS, the Council of Europe, UN, the OECD and regional initiatives such as the Stability Pact and APEC to promote anticorruption and other Administration priorities.
Combating corruption is more than a responsibility of governments. All companies have an obligation to abide by these new laws. While these will be new rules of the game for many foreign firms, the experience of U.S. firms shows that companies can change. U.S. firms have learned this lesson well and have adapted by establishing comprehensive and effective corporate compliance programs. Foreign firms must do the same.
A good anticorruption/antibribery corporate compliance program is one that ultimately yields intended results: education, detection and deterrence.
General elements often found in successful compliance programs include:
-- full support of upper management -- this element is critical;
-- a written corporate code of conduct (i.e., a set of legal and ethical guidelines for employees to follow);
-- an established organizational compliance structure (e.g., comprised of compliance or ethics officers to implement the program);
-- anticorruption training and education seminars (to promote lethal and ethics training at every level of the company);
-- due diligence reviews (e.g., self-monitoring, monitoring of suppliers, vetting new hires, agents or business partners).
As an example of a resource available to U.S. businesses, the Commercial Service of the Commerce Department has several programs to assist U.S. companies in conducting due diligence when choosing business partners or agents overseas.
-- auditing and internal accounting controls (to help in early detection of inaccuracies and misconduct);
-- compliance mechanisms (e.g., accessability by all employees, reporting mechanisms, protections for whistle-blowers); and
-- discipline (employees should understand that failure to comply will result in disciplinary action).
These are general elements for developing a compliance program -- a program should be tailored to fit a company's needs and circumstances.
This is where an ounce of prevention is truly worth the proverbial pound of cure. All firms should police themselves -- it is in their own self interest. Not only will they avoid potential criminal prosecution, but not paying bribes will undoubtedly have a beneficial systemic effect in the business environments of the countries in which they operate. In the long run it will help their bottom lines.
Two issues of particular importance to the U.S. government are bribery acts in relation to foreign political parties and advantages promised or given to any person in anticipation of that person becoming a foreign public official. These channels of bribery and corruption are covered in the Foreign Corrupt Practices Act (FCPA), but not specifically covered in the Convention. In their 2001 communique, OECD Ministers indicated that the OECD will move ahead on these issues. We hope to see meaningful progress on these issues in the coming year.
Business associations and nongovernmental organizations, such as Transparency International, can continue to do their part in helping us monitor implementation of the Convention, educate the public and the business community about the pernicious effects of corruption, and how to combat it. We enlist their help in identifying cases of bribery to national authorities. For instance, at Commerce we maintain a bribery hotline, the internet address of which is included in the report. Only through enhanced reporting of credible allegations of bribery will the proper authorities become aware and be able to pursue many cases of bribery. We urge other countries to establish similar mechanisms for reporting and encourage interested parties to take advantage of these mechanisms.
International organizations are undertaking useful initiatives to promote cooperation on combating bribery and to ensure transparency and good business practices within their own programs. With active U.S. support, major international financial institutions have intensified efforts to help client countries prevent corruption and improve the efficiency of funded projects.
Just as important as enforcing our trade laws on unfair imports, we need to continue to ensure a level playing field for American businesses abroad. Corruption is a complex problem we face in expanding market opportunities for U.S. goods and services and intellectual property. The Bush Administration recognizes this and in the President's trade agenda, one of his objectives for Trade Promotion Authority is to "combat corruption affecting international trade".
The report also addresses advantages that may accrue to international satellite organizations as a result of privileges and immunities granted by treaty and U.S. law. Over the past year there has been a reduction in these advantages, and following INTELSAT's privatization scheduled for July 18, 2001, we can expect to see an even greater reduction in these advantages and an increasingly level playing field for satellite service providers. (Inmarsat completed its privatization in 1999.)
Thank you and Assistant Secretary Wayne and I welcome your questions.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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