OECD bribery report demands action from leadership

By Tim Harvey, CFE, JP

Global Fraud Focus: Examining cross-border issues

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." That's from a 2014 foreign bribery report, released by the Organisation for Economic Co-operation and Development (OECD). "Intermediaries, both agents and corporate vehicles, are used in most corrupt transactions while the majority of bribes are paid to obtain public procurement contracts."

The findings in the "OECD Foreign Bribery Report: An Analysis of the Crime of Bribery of Foreign Public Officials," are based on the analysis of 427 bribery cases that have been concluded since the entry of the OECD Anti-Bribery Convention in 1999 in the participating 41 state parties. (See page 3.)

The report contains a wealth of statistical information worthy of close analysis. Here I include the most relevant statistics for fraud fighters and focus on conclusions and next steps.

"The prevention of business crime," writes OECD Secretary–General Angel Gurría in the report's preface, "should be at the centre of corporate governance policies, and public procurement needs to be synonymous with integrity, transparency and accountability."

The report — a clear wake-up call — has identified bribery at every international level. "In a number of foreign bribery cases concluded to date," the report notes in its conclusion, "the bribes have been paid or authorised by representatives at the highest level of a company, showing the ongoing need for executives to lead by example in implementing their companies' anti-bribery compliance programmes. While SMEs [small- and medium-sized enterprises] were among the minority of companies sanctioned (4 percent), companies of all sizes involved in international business should implement measures to combat the risk of foreign bribery. … There is also scope for greater incentivising preventive anti-bribery compliance programmes, including by recognising the existence and effectiveness of such programmes in mitigation of sanctions in foreign bribery cases."

The report defines the act of committing foreign bribery as "to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business" (page 37).

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