*EPF509 06/29/01
Fact Sheet: Major Findings on Report on OECD Anti-Bribery Pact
(Implementation of OECD Convention by signatory countries) (1010)
The following fact sheet on the major findings of the third annual report to the U.S. Congress on the implementation of the Organization for Economic Cooperation and Development (OECD) Anti-Bribery Convention was released by the Commerce Department June 29.
Note: In the following text "billion" equals 1,000 million.
Following is the text of the fact sheet:
(begin text)
FACT SHEET: THIRD ANNUAL REPORT TO CONGRESS
IMPLEMENTATION OF THE OECD ANTI-BRIBERY CONVENTION
Major Findings of the Report to Congress
-- Meaningful progress has been made over the past year in the implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. As of June 4, 2001, thirty-two(1) of the thirty-four Convention signatories had deposited instruments of ratification with the OECD Secretariat and thirty had laws on the books that make it a crime to bribe foreign public officials in international business transactions. These countries represent over three-quarters of global trade. Only Brazil, Chile, Ireland, and Turkey must still complete legislative action to bring the Convention into force and only Ireland must deposit its instrument of ratification with the OECD.
-- The OECD process to monitor implementation and enforcement of the Convention and the 1997 Revised Recommendation has proven to be rigorous. Thus far, review of the implementing legislation of twenty-eight countries, including the United States, has been completed by the OECD Working Group on Bribery. The U.S. government assessments of the legislation of twenty-seven foreign Parties, including the seven reviewed since our last report (Argentina, France, Denmark, Italy, Luxembourg, the Netherlands, and Poland) are included in Chapter 2 of the 2001 report.
-- Phase II of the monitoring process which will include on-site visits to study the enforcement structures and practices of Parties to the Convention begins this year with the review of Finland. The U.S. government believes that Phase II will be the true litmus test of a Party's commitment to the Convention and its eventual effectiveness.
-- The U.S. government has received reports indicating that the bribery of foreign public officials influenced the awarding of billions of dollars in contracts around the world. For example, in the period from May 1, 2000 to April 30, 2001, the competition for 61 contracts worth $37 billion may have been affected by bribery of foreign officials, and of these contracts, U.S. firms are believed to have lost at least nine, worth approximately $4 billion. Firms from Convention signatory countries continue to account for about 70 percent of these allegations.
-- We are not aware at this time of any prosecution by another Party to the Convention for bribery payments to foreign public officials. Nonetheless, we are disturbed by continuing reports of alleged bribery of foreign public officials by firms based in countries where the Convention is in force. In the coming year we will redouble our efforts to encourage the relevant authorities in each Party to address all credible allegations of bribery, and will seek to engage other signatory governments in coordinated action where bribes have been solicited by foreign public officials.
-- Further substantial progress has been achieved in implementing the OECD Council recommendation to eliminate any remaining tax deductibility for bribes to foreign public officials, with only one country (New Zealand) reporting that it has not yet completed action necessary to disallow these deductions.
-- At the urging of the United States, OECD Ministers in their 2001 communiqu?indicated that the OECD will move ahead on two issues of particular importance: 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. The Working Group will explore this important issue in the coming months.
-- Since our last report, one applicant country (Slovenia) has been favorably considered for accession. We expect a small number of additional qualified applicants to satisfy the conditions for Working Group observership or full accession to the Convention in the coming years.
-- 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.)
Background on Bribery and the OECD Convention
The Foreign Corrupt Practices Act (FCPA) of 1977 made it a crime for U.S. companies to bribe foreign public officials. Up until recently, however, foreign companies were free to bribe without fear of penalty and could even deduct the bribes from their taxes. Consequently, firms that tried to compete fairly and ethically were often disadvantaged.
The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions entered into force in February 1999. All 30 OECD members and four nonmembers are signatories to the Convention.(2)
The July 2001 report to Congress is the third of six annual reports mandated by the International Anti-Bribery and Fair Competition Act of 1998 (IAFCA). The IAFCA authorized changes in U.S. law to implement the Convention. The report and more information on the IAFCA, the Convention, and bribery issues can be found on the following websites: www.mac.doc.gov/tce and www.ita.doc.gov/legal. Businesses can report complaints concerning bribery of foreign public officials at www.mac.doc.gov/tcc/anti_b/antibrib.html.
(1)On June 25, 2001, after the 2001 report went to print, New Zealand became the thirty-third signatory to deposit its instrument of ratification with the OECD.
(2)Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Spain, the Slovak Republic, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.
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(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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