Transparency Int'l Progress Report

As of the end of 2011, TI says that a total of 708 anti-bribery cases had been brought in member countries since the inception of the Convention. (The Progress report defines a “case” to include criminal prosecutions, civil actions, and investigations conducted by investigating magistrates in civil law systems.) This figure represents an increase of 144 cases since year-end 2010. Of those 144 additional cases, the report indicated that 127 of them were brought in the seven active enforcement countries of the United States, Germany, the United Kingdom, Italy, Switzerland, Norway and Denmark. The United States, Germany and United Kingdom alone accounted for 95 of those new cases, including 48 in the United States, 41 in Germany and six in the United Kingdom.

The Report also indicated that 286 anti-bribery investigations were underway worldwide during 2011, with 203 of those in the seven active enforcement jurisdictions. Again, the United States, Germany and United Kingdom lead the way with 113, 43, and 29 active investigations respectively, for a total of 185 of the active investigations across the globe ' nearly 65% of the world total.

The Progress Report decried the concentration of enforcement effort in only a handful of countries, noting, “[a]t a time when most OECD countries are beset by the global recession, it has become more difficult to get political leaders to provide strong support to combating foreign bribery.” The Report urged member countries to “reject arguments” that bribery is necessary to “winning foreign orders” as “short-sighted,” and expressed worry that such arguments could give rise to a “competitive race to the bottom.” The Progress Report also urged member countries to maintain adequate funding for anti-bribery enforcement, despite the “pressure” on such funding during recessionary times.

Some Positives

From the standpoint of anti-bribery enforcement, the Progress Report highlighted a handful of “positive changes,” including increased levels of enforcement activities in Australia, Austria and Canada, and the accession of Russia to the Convention in 2011. It also noted, however, that Russia still needs to take prompt and effective action to implement its anti-bribery law, and observed that four G20 member countries still have not joined the Convention: China, India, Indonesia and Saudi Arabia. (China recently has gained publicity for adopting legislation targeting bribery of foreign officials. See PRC Criminal Law Art. 164. Mexico and Russia also have taken recent steps in the direction of added enforcement. See Federal Law Against Corruption in Public Procurement (June 11, 2012) (Mex.), www.diputados.gob.mx/LeyesBiblio/doc/LFACP.doc; “Executive Order on National Anti-Corruption Plan for 2012-2013: Dmitry Medvedev Signed Executive Order on the National Anti-Corruption Plan for 2012-2013 and Amendments to Certain Acts of the President of the Russian Federation on Countering Corruption” (Mar. 13, 2012), http://eng.kremlin.ru/news/3539.)

The Progress Report, which TI publishes annually, is described as an “independent assessment” of OECD Convention enforcement levels in 37 of the 39 signatory countries for the year ended 2011. TI 2012 Progress Report at 4, 5. The Report does not include Russia, which only acceded to the OECD Anti-Bribery Convention in 2011, and Iceland, where TI does not have a national chapter. The Report's conclusions were based on information provided by national experts in each reporting country, and take into account the views of government officials and other knowledgeable persons, as well as reports from the OECD Working Group on Bribery and other official review reports.

Many Signatories Apparently Not Living Up to Their Pledges

The Progress Report confirmed that the bulk of anti-bribery enforcement worldwide takes place in just two countries: the United States and Germany. Those two countries account for 451 of the 708 cases brought since the inception of the Convention and for 156 of the 286 active investigations in 2011. Despite the advent of the Bribery Act, the United Kingdom lagged far behind. According to the Progress Report, both Switzerland and Italy started more anti-bribery cases in 2011 than the United Kingdom.

Other OECD signatory countries deemed by TI to have engaged in moderate enforcement of the Convention have lagged even farther behind the United States and Germany. “Moderate Enforcement” countries were those that did not qualify for Active Enforcement, but had at least one major case as well as one active investigation. Japan, the largest exporter in this group, initiated just two cases and three investigations in 2011, prompting TI to comment that “Japan still does not appear to be actively enforcing its bribery 'offence.'” Other important world economies deemed to have moderate enforcement included France, whose prosecutors, TI noted, brought cases at an “extremely slow” rate; South Korea, which brought no new cases or investigations in 2011; and Canada, which brought one new case and had 34 ongoing investigations in 2011.

TI also found that almost half of the countries examined, representing 10% of 2011 exports worldwide, had engaged in little to no enforcement of the Convention. “Little Enforcement” countries were those that did not qualify for the two higher categories and included countries that brought only minor cases and those that initiated only investigations. “No Enforcement” countries were those that had not initiated any cases or investigations. These countries included some of the United States' largest trading partners, such as Brazil, which had no enforcement activity in 2011, and Mexico, which brought no new cases and has only two ongoing investigations. U.S. Census Bureau, “Top Trading Partners ' Total Trade, Exports, Imports” (Dec. 2011), www.census.gov/foreign-trade/statistics/highlights/top/top1112yr.html (as of year-end 2011, Mexico was ranked third and Brazil was ranked eighth in total trade with the United States).

Not a Time to Relax

TI acknowledged that anti-bribery enforcement had improved since 2010, when TI's Progress Report concluded that “no overall progress” had been made. See TI 2012 Progress Report at 6; Transparency International, “Enforcement of the OECD Anti-Bribery Convention Progress Report 2011″ at 5, www.transparency.org/whatwedo/pub/progress_report_2011enforcement_of_the_oecd_anti_bribery_convention. But the Progress Report also expressed concern about what it termed “significant resistance” from the private sector and Congress to United States enforcement efforts and “recent cutbacks” in the United Kingdom that could “reduce resources and downgrade the priority attached to foreign bribery.” TI 2012 Progress Report, at 37, 38. The Progress Report urged Convention subscribers to resist efforts to relax enforcement and to provide adequate funding to enforcement efforts.

Colby A. Smith is a partner and Margot Laporte is an associate in Debevoise & Plimpton LLP's Washington, DC, office. They are members of the Litigation Department and White Collar Litigation Practice Group.

Despite the tremendous publicity surrounding global anti-bribery enforcement efforts, including the advent of the UK's Bribery Act and additional substantial fines in the United States and other countries, Transparency International's (TI's) latest Progress Report on global enforcement of the Organization for Economic Cooperation and Development's (OECD's) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Convention) finds that enforcement “remains inadequate.” See Transparency International, “Exporting Corruption? Country Enforcement of the OECD Anti-Bribery Convention Progress Report 2012″ at 6, www.transparency.org/whatwedo/pub/exporting_corruption_country_enforcement_of_the_oecd_anti_bribery_conventio (hereinafter TI 2012 Progress Report or Progress Report). According to the Progress Report, in most countries that subscribe to the Convention, enforcement is not even at a level that provides a “credible deterrent” to foreign bribery.

Disappointing Statistics

Only seven of the 39 countries that subscribe to the Convention engage in active enforcement, according to TI, a number that has not changed in the past three years. (The Progress Report defines “Active Enforcement” countries as those with a 2% or greater share of world exports that brought at least 10 major cases, of which at least three must have been initiated in the last three years and at least three concluded with substantial sanctions; or those countries with a less than 2% share of world exports that brought at least three major cases, including at least one concluded with substantial sanctions and at least one pending case initiated in the previous three years.) Those seven countries account for only 28% of the world's exports. Id. at 7. Only when active enforcement is taking place in countries accounting for more than half of global exports will TI view the prospects for conquering global corruption as “favorable.” Id. at 6. That, according to the Progress Report, would require an additional six to ten countries actively to enforce their legislation implementing the Convention.

As of the end of 2011, TI says that a total of 708 anti-bribery cases had been brought in member countries since the inception of the Convention. (The Progress report defines a “case” to include criminal prosecutions, civil actions, and investigations conducted by investigating magistrates in civil law systems.) This figure represents an increase of 144 cases since year-end 2010. Of those 144 additional cases, the report indicated that 127 of them were brought in the seven active enforcement countries of the United States, Germany, the United Kingdom, Italy, Switzerland, Norway and Denmark. The United States, Germany and United Kingdom alone accounted for 95 of those new cases, including 48 in the United States, 41 in Germany and six in the United Kingdom.

The Report also indicated that 286 anti-bribery investigations were underway worldwide during 2011, with 203 of those in the seven active enforcement jurisdictions. Again, the United States, Germany and United Kingdom lead the way with 113, 43, and 29 active investigations respectively, for a total of 185 of the active investigations across the globe ' nearly 65% of the world total.

The Progress Report decried the concentration of enforcement effort in only a handful of countries, noting, “[a]t a time when most OECD countries are beset by the global recession, it has become more difficult to get political leaders to provide strong support to combating foreign bribery.” The Report urged member countries to “reject arguments” that bribery is necessary to “winning foreign orders” as “short-sighted,” and expressed worry that such arguments could give rise to a “competitive race to the bottom.” The Progress Report also urged member countries to maintain adequate funding for anti-bribery enforcement, despite the “pressure” on such funding during recessionary times.

Some Positives

From the standpoint of anti-bribery enforcement, the Progress Report highlighted a handful of “positive changes,” including increased levels of enforcement activities in Australia, Austria and Canada, and the accession of Russia to the Convention in 2011. It also noted, however, that Russia still needs to take prompt and effective action to implement its anti-bribery law, and observed that four G20 member countries still have not joined the Convention: China, India, Indonesia and Saudi Arabia. (China recently has gained publicity for adopting legislation targeting bribery of foreign officials. See PRC Criminal Law Art. 164. Mexico and Russia also have taken recent steps in the direction of added enforcement. See Federal Law Against Corruption in Public Procurement (June 11, 2012) (Mex.), www.diputados.gob.mx/LeyesBiblio/doc/LFACP.doc; “Executive Order on National Anti-Corruption Plan for 2012-2013: Dmitry Medvedev Signed Executive Order on the National Anti-Corruption Plan for 2012-2013 and Amendments to Certain Acts of the President of the Russian Federation on Countering Corruption” (Mar. 13, 2012), http://eng.kremlin.ru/news/3539.)

The Progress Report, which TI publishes annually, is described as an “independent assessment” of OECD Convention enforcement levels in 37 of the 39 signatory countries for the year ended 2011. TI 2012 Progress Report at 4, 5. The Report does not include Russia, which only acceded to the OECD Anti-Bribery Convention in 2011, and Iceland, where TI does not have a national chapter. The Report's conclusions were based on information provided by national experts in each reporting country, and take into account the views of government officials and other knowledgeable persons, as well as reports from the OECD Working Group on Bribery and other official review reports.

Many Signatories Apparently Not Living Up to Their Pledges

The Progress Report confirmed that the bulk of anti-bribery enforcement worldwide takes place in just two countries: the United States and Germany. Those two countries account for 451 of the 708 cases brought since the inception of the Convention and for 156 of the 286 active investigations in 2011. Despite the advent of the Bribery Act, the United Kingdom lagged far behind. According to the Progress Report, both Switzerland and Italy started more anti-bribery cases in 2011 than the United Kingdom.

Other OECD signatory countries deemed by TI to have engaged in moderate enforcement of the Convention have lagged even farther behind the United States and Germany. “Moderate Enforcement” countries were those that did not qualify for Active Enforcement, but had at least one major case as well as one active investigation. Japan, the largest exporter in this group, initiated just two cases and three investigations in 2011, prompting TI to comment that “Japan still does not appear to be actively enforcing its bribery 'offence.'” Other important world economies deemed to have moderate enforcement included France, whose prosecutors, TI noted, brought cases at an “extremely slow” rate; South Korea, which brought no new cases or investigations in 2011; and Canada, which brought one new case and had 34 ongoing investigations in 2011.

TI also found that almost half of the countries examined, representing 10% of 2011 exports worldwide, had engaged in little to no enforcement of the Convention. “Little Enforcement” countries were those that did not qualify for the two higher categories and included countries that brought only minor cases and those that initiated only investigations. “No Enforcement” countries were those that had not initiated any cases or investigations. These countries included some of the United States' largest trading partners, such as Brazil, which had no enforcement activity in 2011, and Mexico, which brought no new cases and has only two ongoing investigations. U.S. Census Bureau, “Top Trading Partners ' Total Trade, Exports, Imports” (Dec. 2011), www.census.gov/foreign-trade/statistics/highlights/top/top1112yr.html (as of year-end 2011, Mexico was ranked third and Brazil was ranked eighth in total trade with the United States).

Not a Time to Relax

TI acknowledged that anti-bribery enforcement had improved since 2010, when TI's Progress Report concluded that “no overall progress” had been made. See TI 2012 Progress Report at 6; Transparency International, “Enforcement of the OECD Anti-Bribery Convention Progress Report 2011″ at 5, www.transparency.org/whatwedo/pub/progress_report_2011enforcement_of_the_oecd_anti_bribery_convention. But the Progress Report also expressed concern about what it termed “significant resistance” from the private sector and Congress to United States enforcement efforts and “recent cutbacks” in the United Kingdom that could “reduce resources and downgrade the priority attached to foreign bribery.” TI 2012 Progress Report, at 37, 38. The Progress Report urged Convention subscribers to resist efforts to relax enforcement and to provide adequate funding to enforcement efforts.

Colby A. Smith is a partner and Margot Laporte is an associate in Debevoise & Plimpton LLP's Washington, DC, office. They are members of the Litigation Department and White Collar Litigation Practice Group.