U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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59–118

" ! SENATE 105TH CONGRESS

2d Session

TREATY DOC.

1998

105–43

CONVENTION ON COMBATING BRIBERY OF FOREIGN

PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS

TRANSACTIONS

MESSAGE

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS TRANSACTIONS, ADOPTED AT PARIS ON NOVEMBER 21, 1997, BY A CONFERENCE HELD

UNDER THE AUSPICES OF THE ORGANIZATION FOR ECONOMIC

COOPERATION AND DEVELOPMENT (OECD). CONVENTION

SIGNED IN PARIS ON DECEMBER 17, 1997, BY THE UNITED

STATES AND 32 OTHER NATIONS

MAY 4, 1998.—Convention was read the first time and, together with

the accompanying papers, referred to the Committee on Foreign Relations and ordered to be printed for the use of the Senate.

(III)

LETTER OF TRANSMITTAL

THE WHITE HOUSE, May 1, 1998.

To the Senate of the United States:

With a view to receiving the advice and consent of the Senate to

ratification, I transmit herewith the Convention on Combating

Bribery of Foreign Public Officials in International Business Transactions (the ‘‘Convention’’), adopted at Paris on November 21, 1997,

by a conference held under the auspices of the Organization for

Economic Cooperation and Development (OECD). The Convention

was signed in Paris on December 17, 1997, by the United States

and 32 other nations.

I transmit also, for the information of the Senate, interpretive

Commentaries on the Convention, adopted by the negotiating conference in conjunction with the Convention, that are relevant to the

Senate’s consideration of the Convention. I transmit also, for the

information of the Senate, the report of the Department of State

with respect to the Convention.

Since the enactment in 1977 of the Foreign Corrupt Practices Act

(FCPA), the United States has been alone in specifically criminalizing the business-related bribery of foreign public officials. United

States corporations have contended that this has put them at a significant disadvantage in competing for international contracts with

respect to foreign competitors who are not subject to such laws.

Consistent with the sense of the Congress, as expressed in the Omnibus Trade and Competitiveness Act of 1988, encouraging negotiation of an agreement within the OECD governing the type of behavior that is prohibited under the FCPA, the United States has

worked assiduously within the OECD to persuade other countries

to adopt similar legislation. Those efforts have resulted in this Convention that once in force, will require that the Parties enact laws

to criminalize the bribery of foreign public officials to obtain or retain business or other improper advantage in the conduct of international business.

While the Convention is largely consistent with existing U.S.

law, my Administration will propose certain amendments to the

FCPA to bring it into conformity with and to implement the Convention. Legislation will be submitted separately to the Congress.

I recommend that the Senate give early and favorable consideration to the Convention, and that it give its advice and consent to

ratification.

WILLIAM J. CLINTON.

(V)

LETTER OF SUBMITTAL

DEPARTMENT OF STATE, Washington, April 9, 1998.

The PRESIDENT,

The White House.

THE PRESIDENT: I have the honor to submit to you, with a view

to transmittal to the Senate for its advice and consent to ratification, the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Convention was

adopted on November 21, 1997 by a conference held in Paris under

the auspices of the Organization for Economic Cooperation and Development (OECD). It was signed in Paris on December 17, 1997

on behalf of 33 countries, including the United States: 28 of the 29

OECD Member States (all except Australia) and five non-OECD

Members who are participants in the OECD’s Working Group on

Bribery in International Business Transactions.

The signatories include Argentina, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, the Czech Republic, Denmark, Finland,

France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan,

Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Switzerland,

Sweden, Turkey, the United Kingdom, and the United States.

I transmit also, for the information of the Senate, interpretive

Commentaries on the Convention that were adopted by the negotiating conference in conjunction with the Convention. Although

not submitted for the advice and consent of the Senate, the Commentaries are relevant to the Senate’s consideration of the Convention.

The Convention is a historic achievement in the fight against

bribery. It represents the fruit of many years of efforts by the

United States to persuade other industrialized countries to adopt

laws, similar to the U.S. Foreign Corrupt Practices Act (FCPA), to

criminalize the business-related bribery of foreign public officials.

In May 1997 the OECD Council approved the opening of negotiations of this Convention, with a view to its signature by the end

of 1997 and its entry into force by the end of 1998. The Council

also recommended that Member States submit relevant legislative

proposals to their parliaments by April 1, 1998, and seek the enactment of such laws by the end of 1998.

Article 1(1) of the Convention requires each Party to establish

bribery of a foreign public official as a criminal offense under its

laws. Such bribery is defined as the intentional offer, promise, or

giving of any undue pecuniary or other advantage by any person,

whether directly or through intermediaries, to a foreign public offi-
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cial, for that official or for a third party, to induce that official to

act or to 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. Such bribery is

further defined in Article 1(2) to include complicity in, including incitement, aiding and abetting, or authorization of an act of bribery

of a foreign public official. Attempt and conspiracy to bribe a foreign public official must also be criminalized by each Party to the

same extent that attempt and conspiracy to bribe a public official

of such Party are criminal offenses. This language is generally consistent with U.S. law. However, to comply fully with the Convention, which covers bribes by ‘‘any person,’’ the United States will

have to expand the scope of the FCPA to encompass bribes paid by

foreign persons who are not affiliated with issuers that have securities registered under the Exchange Act.

‘‘Foreign public official’’ is defined by Article 1(4) as any person

holding a legislative, administrative, or judicial office of a foreign

country, whether appointed or elected; any person exercising a public function for a foreign country, including for a public agency or

public enterprise; and any official or agent of a public international

organization. Paragraph 14 of the Commentaries states that a

‘‘public enterprise’’ is any enterprise, regardless of form, over which

a government, or governments, may, directly or indirectly, exercise

a dominant influence. Under Paragraph 15 of the Commentaries,

an official of a public enterprise is deemed to perform a public function unless the enterprise operates on a normal commercial basis

in the relevant market, i.e., on a basis which is substantially equivalent to that of a private enterprise, without preferential subsidies

or other privileges. Paragraph 17 of the Commentaries notes that

‘‘public international organization’’ includes any international organization formed by states, governments, or other public international organizations, including a regional economic integration

organization such as the European Community. The FCPA does not

cover bribery of officials of ‘‘public international organizations.’’ To

conform with the Convention, the FCPA will have to be amended

to encompass bribery of such officials.

The Convention does not apply to bribes to foreign political parties or party officials per se, although it would cover, by its terms,

business-related bribes to foreign public officials made through political parties or party officials, as well as bribes directed by corrupt foreign public officials to political parties or party officials.

Paragraph 16 of the Commentaries notes that persons that hold de

factor public authority, such as political-party officials in singleparty states, may be considered to be foreign public officials under

the legal principles of some countries. The United States has urged

that bribes paid to foreign political parties and party officials be

covered under the Convention, as they are under the FCPA, and

such coverage will be a topic of future negotiations within the

OECD Working Group on Bribery.

‘‘Foreign country’’ is defined by Article 1(4) to include all levels

and subdivisions of government, from national to local. ‘‘Act or refrain from acting in relation to the performance of official duties’’

is defined to include any use of the public official’s position, whether or not within the official’s authorized competence.
VII

Article 2 provides that each Party shall take such measures as

may be necessary, in accordance with its legal principles, to establish that legal persons are liable for the bribery of foreign public

officials. Paragraph 20 of the Commentaries explains that Parties

are not required to establish such criminal responsibility (as opposed to civil liability) if legal persons cannot be subjected to criminal responsibility under a given Party’s legal system.

Article 3(1) provides that bribery of foreign public officials shall

be punishable by ‘‘effective, proportionate and dissuasive criminal

penalties.’’ If a Party’s legal system does not provide for criminal

responsibility of legal persons, under Article 3(2) that Party must

ensure that legal persons are subject to effective, proportionate and

dissuasive non-criminal sanctions, including monetary sanctions,

for bribery of foreign public officials. Under Article 3(3), the bribe

and the proceeds of the bribery of a foreign public official, or property corresponding in value to that of such proceeds, are subject to

seizure and confiscation, or comparable monetary sanctions are applicable. Parties are required by Article 3(4) to consider imposing

additional civil or administrative sanctions upon persons subject to

sanctions for bribery of foreign public officials.

Article 4(1) requires that each Party take necessary measures to

establish its jurisdiction over bribery of a foreign public official

when such offense is committed in whole or in part in its territory.

Paragraph 25 of the Commentaries states that the territorial basis

for jurisdiction should be interpreted broadly so that an extensive

physical connection to the act of bribery is not required. Under Article 4(2), those Parties that have jurisdiction to prosecute their nationals for offenses committed abroad must take the necessary

measures to establish such jurisdiction, according to the same principles, with respect to the bribery of foreign public officials. Article

4(3) provides that the concerned Parties shall, at the request of

one, consult with a view to determining the most appropriate jurisdiction for prosecution if more than one Party has jurisdiction over

an offense covered by the Convention. Parties are required, under

Article 4(4), to review whether their current basis for jurisdiction

are effective with regard to bribery of foreign public officials and,

if not, to take remedial steps. Current U.S. law governing foreign

bribery contains a territorial element and is generally limited to

bribery by U.S. persons and foreign persons affiliated with issuers

that have securities registered under the Exchange Act. To implement fully the Convention, the United States will have to expand

the FCPA to encompass acts within its territory by other foreign

persons. The United States also proposes to assert jurisdiction over

the acts of U.S. persons outside the United States.

Article 5 states that investigation and prosecution of the bribery

of a foreign public official is subject to the applicable rules and

principles of each Party. It further provides that considerations of

national economic interest, the potential effect upon relations with

another State, or the identity of the persons involved shall not influence such investigation and prosecution.

Article 6 provides that any statute of limitations applicable to

bribery of foreign public officials shall allow an adequate period of

time for the investigation and prosecution of the offense.
VIII

Article 7 requires that each Party that has made bribery of its

own public officials a predicate offense under its money laundering

legislation do so on the same terms for bribery of foreign public officials, without regard to the place where the bribery occurred. The

United States has already enacted such legislation.

Article 8(1) requires that each Party take necessary measures,

within the framework of its laws and regulations regarding the

maintenance of books and records, financial statement disclosures,

and accounting and auditing standards, to prohibit the following

acts by companies for the purpose of bribing foreign public officials

or of hiding such bribery: establishment of off-the-books accounts,

the making of off-the-books or inadequately identified transactions,

the recording of non-existent expenditures, the entry of liabilities

with incorrect identification of their object, or the use of false documents. Each Party must, under Article 8(2), provide effective, proportionate and dissuasive civil, administrative or criminal penalties

for such omissions and falsifications. This provision is consistent

with the books and records and reporting requirements under U.S.

securities laws.

Article 9(1) requires that each Party, to the fullest extent possible under its laws and relevant treaties and arrangements, provide prompt and effective legal assistance to another Party for the

purpose of criminal investigations and proceedings brought by a

Party concerning offenses within the scope of the Convention, as

well as for the purpose of non-criminal proceedings within the

scope of the Convention brought by a Party against a legal person.

Pursuant to Article 9(2), where a Party makes mutual legal assistance conditional upon the existence of dual criminality, dual criminality is deemed to exist if the offense for which the assistance is

sought is within the scope of the Convention. Article 9(3) states

that a Party may not, on the ground of bank secrecy, decline to

render mutual legal assistance for criminal matters within the

scope of the Convention. This provision is particularly important,

because U.S. prosecutions have sometimes been frustrated by difficulty in obtaining foreign evidence because of lack of dual criminality.

Article 10(1) provides that bribery of a foreign public official shall

be deemed to be included as an extraditable offense under the laws

of the Parties and the extradition treaties between them. Under

Article 10(2), a Party that receives a request for extradition regarding bribery of a foreign public official from another Party with

which it has no extradition treaty may consider the Convention to

be the legal basis for such extradition. Each Party must, pursuant

to Article 10(3), ensure that it can either extradite or prosecute its

nationals for bribery of a foreign public official. If a Party declines

to extradite a person for bribery of a foreign public official solely

on the ground that the person is its national, that Party is required

to submit the case to its competent authorities for the purpose of

prosecution. Article 10(4) states that extradition for bribery of a

foreign public official is subject to the conditions set out in the domestic law and applicable treaties and arrangements of each Party.

Where a Party makes extradition conditional upon the existence of

dual criminality, dual criminality shall be deemed to exist if the of-
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fense for which extradition is sought is within the scope of Article

1 of the Convention.

Article 11 provides that each Party shall designate an authority

or authorities responsible for making and receiving requests and

serving as a channel of communication regarding consultations on

overlapping jurisdiction under Article 4, mutual legal assistance

under Article 9, or extradition under Article 10. The United States

intends to designate the Department of Justice as the relevant authority for purposes of Articles 4 and 9, and the Department of

State as the relevant authority for purposes of Article 10.

Article 12 states that the Parties shall cooperate in carrying out

a program of systematic follow-up to monitor and promote implementation of the Convention. Unless the Parties decide otherwise

by consensus, this is to be done within the framework of the OECD

Working Group on Bribery in International Business Transactions

or any successor to its functions, and the Parties will bear the costs

of the program in accordance with the rules applicable to that

body.

Article 13(1) provides that the Convention shall be open, until its

entry into force, for signature by OECD members and by non-members that have been invited to become full participants in the

Working Group on Bribery in International Business Transactions.

Under Article 13(2), after the Convention enters into force, it shall

be open to accession by any non-signatory that is an OECD member or that has become a full participant in the Working Group on

Bribery in International Business Transactions or any successor to

its functions. For each such non-signatory, the Convention shall

enter into force on the sixtieth day following the date of the deposit

of its instrument of accession. OECD members contemplate an active outreach program to encourage non-members to accede to the

Convention.

Article 14(1) provides that the Convention is subject to acceptance, approval or ratification by signatories in accordance with

their respective laws. Article 14(2) states that instruments of acceptance, approval, ratification, or accession shall be deposited with

the OECD Secretary-General.

Article 15 sets forth a two-track process for entry into force of the

Convention. Under Article 15(1), the Convention will enter into

force on the sixtieth day following the date on which five of the ten

OECD countries with the ten largest export shares for 1990–1996,

as set forth in the Annex, and which by themselves represent at

least sixty percent of the combined total exports of those ten countries, deposit their instruments of acceptance, approval or ratification. For each signatory depositing its instrument after such entry

into force, the Convention will enter into force on the sixtieth day

following the date of deposit.

If, after December 31, 1998, the foregoing requirement has not

been satisfied, under Article 15(2) any signatory that has deposited

its instrument of acceptance, approval, or ratification may declare

in writing to the OECD Secretary-General its readiness to accept

entry into force of the Convention. For such a signatory, the Convention will enter into force on the sixtieth day following the date

on which such declarations have been deposited by at least two signatories. For each signatory depositing its declaration after such
X

entry into force, the Convention will enter into force on the sixtieth

day following the date of deposit.

Article 16 provides that any Party may propose, through submission to the OECD Secretary-General, an amendment of the Convention. The Secretary-General shall communicate the proposed

amendment to the other Parties at least sixty days before convening a meeting of the Parties to consider it. An amendment adopted

by consensus of the Parties, or by such other means as the Parties

may determine by consensus, shall enter into force for all Parties

sixty days after the deposit of an instrument of ratification, acceptance, or approval by all Parties, or in such other circumstances as

the Parties may specify at the time of adoption of the amendment.

Article 17 provides that a Party may withdraw from the Convention, effective one year after the OECD Secretary-General’s receipt

of written notification thereof. After withdrawal, cooperation shall

continue between the withdrawing Party and other Parties on all

pending requests for assistance or extradition made before the effective date of withdrawal.

The final clauses of the Convention do not contain a provision

prohibiting reservations. However, the Preamble recognizes that

achieving equivalence among measures to be taken by the Parties

is an essential object and purpose of the Convention, and that this

requires that the Convention be ratified ‘‘without derogations affecting this equivalence.’’ This is a call upon Parties to refrain from

entering reservations that would affect such equivalence, and it is

consistent with the international practice that States may not formulate a reservation that is incompatible with the object and purpose of the treaty.

The Annex includes OECD and International Monetary Fund

(IMF) statistics, in absolute and percentage terms, on the value of

exports for each OECD member for the period 1990–96. These figures will be used in determining whether the entry into force requirements of Article 15(1) have been satisfied.

The Convention is largely consistent with existing U.S. law.

However, as set forth above, certain amendments to the FCPA are

proposed in order to conform with and to implement the Convention. Proposed legislation is being prepared and is expected to be

submitted to the Congress at an early date.

The Department of Justice, the Department of Commerce, the

Department of the Treasury, the Securities and Exchange Commission, and the Office of the United States Trade Representative join

the Department of State in recommending that the Convention be

transmitted to the Senate at an early date for its advice and consent to ratification.

Respectfully submitted,

STROBE TALBOT.
(1)
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