United States Department of State

Bureau of Economic and Business Affairs

BATTLING

INTERNATIONAL 

BRIBERY 

2004

The Sixth Annual Report on Enforcement and Monitoring of the OECD Convention 

on Combating Bribery of Foreign Public Officials in International Business Transactions

as Required by Paragraph (c) (1) of the Senate Resolution of Advice and Consent 

dated July 31, 1998

This sixth and annual report required under the Senate

Resolution of Advice and Consent of July 31, 1998, examines

the progress that parties have made in implementing and

enforcing the Organization for Economic Cooperation and

Development (OECD) Convention on Combating Bribery of

Foreign Public Officials in International Business

Transactions (Antribribery Convention).

Major Findings

■ The OECD Antibribery Convention has been ratified by all

35 signatories and each party has also adopted implementing legislation that is currently in force. These are notable

achievements in the short time since the Antibribery

Convention entered into force on February 15, 1999.

• Since our last report, Ireland deposited its instrument

of ratification with the secretary general of the

OECD on September 22, 2003.

■ The U.S. Government reviews of the implementing legislation of Brazil, Chile, and Turkey are included in this

report. The implementing legislation of all parties except

Slovenia has now undergone an assessment by the OECD

Working Group on Bribery and the U.S. Government. As

summarized in the reviews, Brazil, Chile, and Turkey

have taken some significant steps toward meeting their

obligations under the convention, but there are some

remaining issues of concern.

• In Brazil, for example, there is no concept of criminal liability for legal persons. In addition, it is unclear

whether applicable administrative remedies will be

sufficiently effective, proportionate, and dissuasive.

• In Chile, issues of concern include the liability of

legal persons, the level of sanctions, limited jurisdictional coverage, and mutual legal assistance.

• Finally, in Turkey concerns remain in the areas of

corporate liability, an effective regret exception, the

definition of a foreign public official, and some of

the Turkish sanctions provisions.

■ We are generally encouraged by the efforts of the parties

to implement the Antibribery Convention. However, for a

number of countries, we still have the same concerns that

were identified in prior years’ reports about the absence

of specific legislative provisions to fulfill obligations

under the convention.

• The U.S. Government and the OECD Working Group

on Bribery are continuing to follow up on these problems with the countries concerned during the enforcement review process. In addition, the U.S. Government

may, if circumstances warrant, continue to engage

countries bilaterally to encourage progress to implement their commitments under the convention.

■ With regard to the enforcement of the Antibribery

Convention, performance remains uneven.

• Other than the United States, we are aware of only two

parties (South Korea and Sweden) whose authorities

have obtained convictions under their respective implementing laws for bribery of a foreign public official.

iii

Executive Summary
• Several other parties have initiated investigations or

legal proceedings that are now in the public eye

(Canada, France, Italy, and Norway), and other cases

are in the investigative stage.

• Unfortunately, some parties, particularly those whose

firms are very active in export markets, have been

slow to apply enforcement resources to address

transnational bribery.

• Based on information available from a variety of

sources, we estimate that between May 1, 2003, and

April 30, 2004, the competition for 47 contracts

worth U.S. $15 billion may have been affected by

bribery by foreign firms of foreign officials.

Although this represents an increase over last year’s

report of 40 contracts, the value of the contracts

dropped, from $23 billion to $18 billion. US. firms

are known to have lost at least eight of the contracts,

worth $3 billion.

• We will continue to press parties to address credible

allegations of bribery of foreign public officials. When

information is received relating to acts of bribery that

may fall within the jurisdiction of other parties to the

convention, the information will be forwarded, as

appropriate, to national authorities for action.

■ The U.S. Government continues to believe that raising

public awareness of antibribery laws is a very important

element in making the convention a success. This

includes informing the relevant prosecutorial authorities

of the new tools they have to prosecute corruption, as well

as counseling businesses and the general public about,

antibribery laws. However, based on reports from U.S.

embassies and public sources of information, such efforts

continue to vary widely among the parties.

• Some parties continue to rely on historical perceptions of low levels of corruption within their communities and direct few if any resources to the effort.

• Others, faced with limited resources, assign greater

importance to other initiatives and neglect to address

this important component of implementation and

enforcement.

• Nonetheless, some parties have recognized the need

to raise awareness of the convention among their

public and private sectors.

■ The U.S. Government believes that a rigorous peer review

mechanism will encourage parties to take the necessary

steps to investigate and to prosecute unlawful conduct by

persons subject to their jurisdiction. To this end, the U.S.

Government worked to persuade other OECD countries to

join the consensus to increase funding for convention

peer monitoring.

• In 2003, the OECD Working Group on Bribery negotiated a compromise package of institutional, structural, and financial reforms that will provide for stable funding of peer reviews through 2007. The

OECD Council approved the reform package in

February 2004.

■ Phase II enforcement reviews, begun in late 2001 with a

review of Finland, have been accomplished for eight other

parties: Bulgaria, Canada, France, Germany, Iceland,

Luxembourg, Norway, and the United States. The United

States assessed the initial pace of the enforcement peer

review cycle to be too slow. Additional budget resources

will enable the OECD Working Group on Bribery to

review the rest of the parties by the end of 2007.

• The goal of Phase II of the monitoring process is to

study the structures that parties have in place to

enforce the laws and rules implementing the convention and the Revised Recommendation and to assess

their application in practice. Summaries for Bulgaria,

Canada, France, Luxembourg, and Norway are

included in this report.

■ Each of the 35 signatories to the Antibribery Convention

has affirmed that bribes paid to foreign public officials

are not tax deductible. Despite important positive steps

taken by the parties to disallow the deductibility of bribes,

we remain concerned that the practice of tax deductibility still continues. Careful monitoring is needed to ensure

that the rules are actually enforced; the United States will

continue to play an active role in this effort.

■ In April 2004, the Working Group recommended that

Estonia be invited to join and accede to the Convention.

Estonia’s accession may occur before the end of 2004. The

United States advocates a careful and deliberate approach to

enlargement of the parties to the convention. The primary

focus should be to attract countries whose accession to the

convention would bring significant mutual benefit, and

whose companies are important global market participants.

• The financial resources of the Working Group are not

sufficient to permit the rapid expansion of membership without reducing OECD staff support for priority activities such as peer review of convention

enforcement. Therefore, the United States will continue to advocate a careful and incremental enlargement strategy.

■ The U.S. Government believes that the question of expanding the convention’s coverage to include bribes to political

parties and candidates merits the attention of the Working

Group. We will seek to achieve consensus among convention parties to ensure such coverage.

■ The United States will continue to urge other governments to promote awareness of the convention and

national laws in their business communities. In addition,

fulfilling a commitment made with our G-8 partners at

Sea Island, Georgia in June 2004, we will encourage

efforts of our private sectors to develop and implement

corporate compliance programs to promote adherence to

laws against foreign bribery.

iv
Contents 

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii 

Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Creating New Commitments and Enforcing Them . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Fighting Corruption and Promoting Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Chapter 1 Ratification Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Slovenia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

Efforts to Encourage Implementation and Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 

Chapter 2 Review of National Implementing Legislation . . . . . . . . . . . . . . . . . . . . . . 11 

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

Concerns about Implementing Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Amendments to Implementing Legislation Described in Prior Reports . . . . . . . . . . . . . . . . . . . . . 12 

Formal Review: Phase I Bis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

Iceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

Slovak Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

Other Reporting: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

U.S. Implementing Legislation: FCPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Turkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

Chapter 3 Review of Enforcement Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 

Enforcement of National Implementing Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 

Enforcement by Other Parties to the Antibribery Convention . . . . . . . . . . . . . . . . . . . . . . . . . 22 

Enforcement in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 

Department of Justice Opinion Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 

Efforts to Promote Public Awareness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 

U.S. Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 

Efforts of Other Signatories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 

v
Monitoring Process for the Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 

OECD Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 

Phase I Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Phase II Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 

Monitoring of the Convention by the U.S. Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 

Chapter 4 Laws Prohibiting Tax Deduction of Bribes . . . . . . . . . . . . . . . . . . . . . . . 31 

Chapter 5 Subsequent Efforts to Strengthen the Convention . . . . . . . . . . . . . . . . . 33

Outstanding Issues Relating to the Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 

Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Chapter 6 Adding Signatories to the Convention . . . . . . . . . . . . . . . . . . . . . . . . . . 35 

Classified Annex (Transmitted Separately)

Tables

Table 1: Ratification Status of Signatory Countries to the OECD 

Antibribery Convention (As of June 7, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 

Table 2: OECD Convention on Combating Bribery 

of Foreign Public Officials in International Business Transactions . . . . . . . . . . . . . . 29 

Table 3: Status of the Five Issues as of May 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 

Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1

A. Senate Resolution of Advice and Consent of July 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . A2 

B. OECD Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5

1. Convention on Combating Bribery of Foreign Public Officials 

in International Business Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6

2. Commentaries on the Convention on Combating Bribery of 

Foreign Government Officials in International Business Transactions . . . . . . . . . . . . . B14

3. Revised Recommendations of the Council on Combating Bribery

in International Business Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B20

4. Recommendation of the Council on the Tax Deductibility of 

Bribes to Foreign Public Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B28

5. U.S. Phase I Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B29

6. U.S. Phase II Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B51

C. United States Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C89

1. Antibribery and Books and Records Provisions of the FCPA . . . . . . . . . . . . . . . . . . . . C90

2. FCPA - Opinion Procedure Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C107

3. FCPA Prosecutions and Civil Enforcement Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . C110

Section I: Foreign Bribery Criminal Prosecutions Under the FCPA . . . . . . . . . . . C115

Section II: Foreign Bribery Civil Actions Instituted by the 

Department of Justice under the FCPA . . . . . . . . . . . . . . . . . . . . . . . . . C123 

Section III: Foreign Bribery Civil Actions by the SEC under the FCPA . . . . . . . . . C124

D. Websites Relevant to the Convention, Anticorruption, Ethics,

Transparency, and Corporate Compliance Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D127

vi
Corruption poses a serious threat to collective security,

democracy and sustainable development. It imposes enormous

costs on countries and destabilizes critical rule of law institutions and market-based systems that underpin democracy

throughout the world. Corruption distorts public policy, leads

to the misallocation of resources, increases budgetary costs to

governments, undermines the rule of law and particularly

hurts the poor. It robs nations of their human and natural

resources and is a tax on development. Corruption often facilitates criminal activities, such as drug trafficking and money

laundering, and can fuel transnational crimes and social/political conflict that threaten regional as well as global security. 

Reducing corruption and enhancing transparency are top

United States Government priorities because they are central

to advancing our national security interests, supporting sustainable development and developing stable democracies.

Transparency is a key component of domestic good governance and transparent systems are essential to build the trust

of citizens, to create the necessary business climate, to stem

corruption and to ensure that government revenues go to their

intended purpose.

Creating New Commitments 

and Enforcing Them

The United States is a strong leader in the international campaign to reduce corruption by promoting transparency and

strengthening judicial systems and rule of law. For that reason, we led efforts to launch the Organization for Economic

Cooperation and Development Convention on Combating

Bribery of Foreign Public Officials in International

Transactions (“the Antibribery Convention”). The convention

was signed in December 1997 after more than a decade of

U.S.-led effort to create a new multilateral agreement to criminalize the bribery of foreign public officials. Today, the convention is one of many initiatives and instruments in regional

and international fora aimed at fighting corruption. It is considered one of the most rigorous anti-corruption conventions,

and continues to serve as a model for new initiatives. 

The United States can be proud of the progress achieved

in the five and half years since the convention entered into

force on February 15, 1999. Members of the Organization for

Economic Cooperation and Development (OECD) and five

non-member countries put “peer pressure” into action by

reviewing each signatory’s laws to implement the convention.

Peer review proved to be a successful method to identify shortcomings in the implementing laws, and propose corrective

measures. Most convention parties acted to remedy deficiencies in their new laws, although several are still working on

changes to bring their legislation into full conformity with the

convention. 

Convention parties applied valuable lessons from the

early days of peer review when they began to examine each

other’s enforcement practices. The first cycle of peer monitoring of enforcement was designed to assess each party’s capacity to investigate allegations of bribery, build cases based on

evidence, and prosecute. The work began slowly. Initially, the

OECD did not have sufficient budget resources to conduct

reviews at a fast enough pace. The U.S. was concerned about

the slow progress of peer review. An accelerated effort was

needed to keep the pressure on other countries to improve

enforcement capacity. More money was required to hire addi1

Introduction
tional expert staff to ensure a monitoring schedule of at least

seven country examinations per year. After a concerted

reform effort led by Italy and the U.S., additional financial

resources were dedicated to convention peer monitoring starting in 2003. It was the first time in over a decade that member countries reached consensus to set aside a significant slice

of the OECD budget for antibribery work. The new infusion

of funds enabled the OECD Working Group on Bribery to step

up the pace of peer pressure on its member countries to implement the convention. 

Beyond its obvious significance to ensure transparency

and public scrutiny of convention enforcement, the OECD

peer review mechanism is an important learning tool. A typical peer review of enforcement is broad in coverage, and

extends beyond assessment of a country’s investigative and

prosecutorial practices. Examined countries are asked to

explain how they publicize their antibribery laws through outreach to the business and legal communities and civil society.

Each examination is an opportunity to highlight the self-regulatory function of corporate compliance programs. U.S. companies use compliance programs to train company employees,

up to the highest levels, to comply with the Foreign Corrupt

Practices Act and other U.S. laws and regulations. However,

corporate compliance remains a relatively new phenomenon

outside the U.S. and is not yet widely implemented by

European and Japanese companies. Peer review provides the

context to remind other countries to encourage companies to

strengthen internal compliance procedures. The peer review

of U.S. enforcement in June of 2002 provided an opportunity

to explain how the internal compliance phenomenon evolved

in the U.S. Finally, because the peer review reports are made

public on the OECD website, countries have a strong incentive

to improve their own procedures to enforce the convention. 

To date, the peer review procedures of the OECD

Antibribery Convention are the most rigorous — and the most

stringently applied — of any international anti-corruption

instrument. Because of persistent U.S. pressure, the Working

Group on Bribery adopted an accelerated peer review calendar

in 2004, and new internal guidelines to ensure that country

examinations are consistent over time. U.S. agencies continue

to provide strong oversight and consistent participation by our

federal prosecutors to raise the quality of peer monitoring and

promote enhanced professional contacts between convention

country prosecutors and law enforcement experts. The U.S. is

encouraging other convention parties to send their prosecutors

and law enforcement experts to participate in all peer review

examinations. Through stronger cross-border law enforcement ties, the U.S. believes convention countries will help to

improve each other’s capacity to implement antibribery laws. 

The U.S. is encouraged by signs of greater support among

convention parties for the peer review mechanism. Agreement

was reached in 2003-2004 to update internal procedures and

protect the budget of the Working Group on Bribery. In addition, through the peer monitoring process, U.S. agencies are

learning about bribery investigations in progress. Some may

lead eventually to prosecutions. It is significant that parties

are applying new investigative techniques to the challenge of

gathering evidence to build antibribery cases. Progress is not

as rapid as the U.S. might have wished but civil society and

business organizations are likely to increase pressure on their

national authorities to enforce the convention more aggressively in the future. Some national governments increasingly cite

“level playing field” considerations when they point out that

certain parties (their competitors for large international contracts) could be more vigilant to investigate credible allegations

of foreign bribery by corporations based in their territories. 

Fighting Corruption 

and Promoting Transparency

Recent high-profile U.S. Government development initiatives,

such as the Millennium Challenge Account and Group of

Eight (G8) action plans, incorporated important anti-corruption principles and gave new expression to the global fight

against corruption. At the June 2004 G8 Summit in Sea

Island, Georgia, G8 leaders renewed and expanded their

pledge to combat corruption and improve transparency. The

2004 G8 statement on Fighting Corruption and Improving

Transparency builds on a 2003 initiative to cooperate with

developing countries in the fight to eradicate corruption. The

United States and the United Kingdom were champions of

both the 2003 and 2004 G8 action plans. The 2003 G8 Evian

Declaration on Fighting Corruption and Improving

Transparency proposed actions to reduce corruption and

enhance transparency as part of a strategy to ensure that development assistance resources and budget revenues achieve their

intended purpose. It proposed a partnership between donor

and recipient countries to change the incentives to make corruption less attractive to public officials, expose the economic

and political costs of corruption and institutionalize effective

checks and balances on corrupt regimes. 

The G8 Evian Declaration called for action to:

• Improve public financial management and accountability to

ensure that public and donor resources are used effectively.

• Strengthen enforcement of the OECD Antibribery

Convention and accelerate peer reviews of implementation.

• Deny safe haven to corrupt public officials and their assets.

• Negotiate a UN anticorruption convention.

• Fight financial abuses.

• Promote Transparency in Government Procurement; and

• Encourage governments and companies to develop and

implement action plans to establish high standards of

transparency with respect to all budget flows (revenues

and expenditures) and with respect to the awarding of

government contracts and concessions. 

A year later, at the Sea Island Summit, having already

helped to get the UN Corruption Convention successfully

launched, the G8 announced new measures to implement the

Evian Declaration, and reported on progress since June 2003

(www.g8usa.gov/documents). At Sea Island, the G8 launched

four new pilot projects with partner countries committed to

implement transparency in their budgets, government procure2
ment and concession-letting procedures: Georgia, Nicaragua,

Nigeria and Peru. Each volunteer pilot country entered into a

political compact with the G8, outlining their respective commitments to reduce corruption. The first group of four pilot

countries demonstrated determination by providing detailed

roadmaps of recent and planned efforts to promote economic

openness through transparency and to root out corruption.

The U.S. looks forward to working with them to achieve lasting economic reforms. We also will continue to engage with

G8 partners and members of the international community to

support the ambitious goals of these four countries. We

believe their efforts will bring significant development benefits to their people, and hope these initial compacts encourage

others to take similar steps. 

The Sea Island documents feature a comprehensive set of

commitments to help developing countries improve public

financial management and transparency in government procurement and the awarding of concessions. There is a strong parallel emphasis on actions pledged by G8 governments to fight

corruption, including a new set of measures to recover the proceeds of corruption. The United States hopes the International

Financial Institutions will work with G8 countries to implement

the action plan. The IFIs’ country assistance strategies and surveillance programs share the G8 goal of achieving greater transparency in public finance and government operations. Other

G8 governments may choose to assist by providing technical

assistance to help developing countries build the capacity to follow through on their commitments. We welcome the strong

interest shown by civil society, including the private sector, and

look forward to their direct participation in the pilot projects

with compact countries. 

At Sea Island, the G8 announced the following specific

actions to strengthen peer review and enforcement of the

Antibribery Convention; they are summarized in each pilot

compact document as well: 

“We made good progress to fulfill the G8’s Evian

pledge to strengthen OECD monitoring of the

Antibribery Convention. The OECD Council

approved a reform package in February 2004, including a mechanism to fund the Working Group on

Bribery (WGB). It achieves stable funding through

2007 to complete a full round of important peer

reviews that examine each member country’s enforcement track record.”

• We will adhere rigorously to our updated 2004-2007

enforcement review schedule, honour our pledges to

serve as lead examiners or examinees, and send our prosecutors and other law enforcement officials to participate

in peer reviews.

• We will encourage efforts of our private sectors to develop and implement corporate compliance programs to promote adherence to laws against foreign bribery, and welcome the positive steps already taken by certain industries

to develop specific principles relevant to their specific

activities to promote such compliance.” 

Including OECD Antibribery Convention enforcement in

the G8 Declaration sends a strong signal that developed country signatories recognize their responsibility to prevent their

companies and citizens from exporting bribery and corruption

to other countries. The convention is an important part of the

G8 initiative because it demonstrates that all governments

have a crucial role to play in establishing and reinforcing the

rule of law and holding companies accountable for their

actions when operating abroad. Developing country representatives have expressed support for the long-standing U.S. position to urge other signatory countries to implement and

enforce the OECD Convention. 

Transparency, accountability and domestic good governance provide the foundation for many U.S. Government technical assistance programs, including the Millennium

Challenge Account (MCA) announced in Monterey in 2002,

and the Africa Growth and Opportunity Act. President Bush

has stated that the “MCA will reward nations that root out corruption, respect human rights, and adhere to the rule of law.”

Progress in addressing corruption is one of several criteria for

qualifying as an MCA recipient country. In his May 10, 2004,

remarks at the ceremony announcing the first group of countries eligible to submit proposals for Millennium Challenge

Account (MCA) assistance, the President noted: 

“In many nations, poverty remains chronic and desperate. Half the world’s people still live on less than $2

a day. This divide between wealth and poverty,

between opportunity and misery, is far more than a

challenge to our compassion. Persistent poverty and

oppression can spread despair across an entire nation,

and they can turn nations of great potential into the

recruiting grounds of terrorists. The powerful combination of trade and open markets and good government is history’s proven method to defeat poverty on a

large scale, to vastly improve health and education, to

build a modern infrastructure while safeguarding the

environment, and to spread the habits of liberty and

enterprise.” 

To reinforce the message of government responsibility to

combat corruption, the U.S. leads multilateral efforts to promote the enforcement and monitoring not only of the OECD

Antibribery Convention, but also: the Inter-American

Convention Against Corruption, the Council of Europe

Criminal Law Convention Against Corruption, the Stability

Pact Anti-Corruption Compact for Southeast Europe, and the

Financial Action Task Force. We were key players in the successful conclusion of negotiations that produced the United

Nations Convention Against Corruption, the first global anticorruption convention. In 2003 and 2004, the United States

played the leading role to develop important new regional anticorruption initiatives for the Special Summit of the Americas

and in Asia-Pacific Economic Cooperation. Finally, the

United States provides technical assistance and financial support for countries that are implementing their commitments

under the conventions and regional instruments listed above.

We furnish assistance for the countries involved in the Asian

3
Development Bank-OECD Anticorruption Initiative for the

Asia-Pacific region, and emerging governance efforts in

Africa and the Middle East. 

Background

The U.S. launched a campaign against international corrupt

practices more than twenty-five years ago with the passage of

the Foreign Corrupt Practices Act (FCPA) of 1977. The law

established substantial penalties for persons making payments

to foreign officials, political parties, party officials and candidates for political office, to obtain or retain business.

Enactment of the FCPA reflected deep concern by the

American public about the involvement of U.S. companies in

unethical business practices. Disclosures in the mid-1970s

indicated that U.S. companies spent millions of dollars to

bribe foreign public officials and thereby gain unfair advantages in competing for major commercial contracts. 

The FCPA has had a major impact on how U.S. companies

conduct international business. However, in the absence of

similar legal prohibitions by key trading partners, U.S. businesses were put at a significant disadvantage in international

commerce. Their foreign competitors continued to pay bribes

without fear of penalties, which resulted in billions of dollars

in lost sales to U.S. exporters.

Recognizing that bribery and corruption in foreign commerce could be effectively addressed only through strong

international cooperation, the United States undertook a longterm effort to convince the leading industrial nations to join it

in passing laws to criminalize the bribery of foreign public

officials. The Omnibus Trade and Competitiveness Act of

1988 reaffirmed this goal and called on the U.S. Government

to negotiate an agreement at the OECD on the prohibition of

overseas bribes. After nearly ten years, the effort succeeded.

The United States and thirty-three1 other nations adopted the

Antibribery Convention in 1997. It entered into force for

twelve of the signatories on February 15, 1999. All signatories to the convention also agreed to implement the OECD’s

1996 recommendation on eliminating the tax deductibility of

bribes and by now have adopted laws to that effect.

Enlisting the active support of the private sector and civil

society is a key element in promoting the objectives of the

Antibribery Convention. Because of the influence of the

FCPA, U.S. businesses developed corporate compliance programs and ethical guidelines to fight bribery and corruption.

In addition, the OECD Guidelines for Multinational

Enterprises were expanded in June 2000 to include,

inter alia, a major section on combating bribery. Awareness by 

1 In November 2001, Slovenia became the thirty-fifth signatory to the

convention.

business of these instruments and the incorporation of these

objectives in the private sector’s approach to doing business

are essential components to the convention’s full implementation. We are working with other OECD Convention signatories

to reinforce the message that companies must not export

bribery and corruption into the markets where they do business and to encourage the private sector in other countries to

adopt a more active and pragmatic approach to corporate compliance. We also welcome the important contributions of

organizations like Transparency International, in support of

the OECD Antibribery Convention. 

The Commerce, State, Justice, and Treasury Departments

work as a team to monitor implementation and enforcement of

the convention. U.S. agencies established a comprehensive

monitoring process that includes active participation in the

OECD meetings on the convention, bilateral discussions with

other governments on implementation and enforcement issues

and careful tracking of bribery-related developments overseas.

Preparation of the annual reports to Congress on the implementation and enforcement of the Antibribery Convention is

part of the process of making it an effective multilateral, anticorruption instrument. 

Conclusion

Five years into implementation of the OECD Convention, the

U.S. Government’s principal goal is to encourage other signatories to enforce their antibribery laws. There are encouraging

signs that some countries are taking steps to investigate allegations of foreign bribery. However, more needs to be done,

and — to be effective — it must involve serious efforts by the

international community. The U.S. Government continues to

receive reports that bribery of foreign public officials influences the awarding of contracts in many countries. There are

few foreign bribery prosecutions, to date, outside the U.S. The

governments of OECD Convention parties need to be more

proactive to raise public awareness of antibribery laws and the

consequences of non-compliance. Fortunately, the U.S.

approach is beginning to attract more support within the

OECD Working Group on Bribery, especially from G8 governments who would like to see consistent enforcement by

other parties. The U.S. was encouraged by the cooperative

effort to reform and re-finance the Working Group on Bribery

during 2003-2004. 

To address the serious challenge of achieving more robust

enforcement, the U.S. Government is working with other convention countries at the OECD and bilaterally, to encourage

discussion of the mechanics of investigating and prosecuting

transnational bribery cases. To this end, we are exploring ways

to engage them on a practical level, including technical assistance (capacity building) exchanges to reach out to those

countries whose prosecutors have not yet had much experience in developing bribery cases and taking them to court.

Some governments have approached us bilaterally for information and assistance. Our outreach efforts also will be aimed

at encouraging prosecutors to participate in OECD peer

review meetings and other convention-related work.

4
The U.S. Government remains firm in its commitment to

reduce and eliminate the bribery of foreign public officials.

We will encourage our OECD partners to renew their own

commitment under the convention to fight this global problem

by investigating allegations of bribery and prosecuting cases,

when appropriate. Our collective efforts to secure effective

enforcement of the convention are essential to the promotion

of good governance, rule of law and sustainable development

throughout the world.

1. In early May 2004, the first group of Millenium Challenge Account

nations was selected: Armenia, Benin, Bolivia, Cape Verde, Georgia,

Ghana, Honduras, Lesotho, Madagascar, mali, Mongolia, Mozambique,

Nicaragua, Senegal, Sri Langka, and Vanuatu.

5

In this final report to Congress, the U.S. Department of State is

pleased to report that the Organization for Economic

Cooperation and Development (OECD) Convention on

Combating Bribery of Foreign Public Officials in International

Business Transactions (the Antibribery Convention) has been

ratified by all 35 signatories and that each party has adopted

implementing legislation that is currently in force (see Table 1).

These are notable achievements in the short time since the

Antibribery Convention entered into force on February 15,

1999.

Since our July 2003 report to Congress, Ireland deposited

its instrument of ratification with the Secretary General of the

OECD on September 22, 2003, and became the 35th party to

the Antibribery Convention. In addition, the legislation of

three parties to the Antibribery Convention, adopted by the

respective countries but not reviewed as of the publication date

of our last report, was reviewed by the OECD Working Group

on Bribery: Brazil in June 2003, Chile in October 2003, and

Turkey in January 2004. U.S. Government assessments of the

legislation of these three parties are included in Chapter 2 of

this report, and assessments for other parties in prior reports

are available at www.state.gov/e/eb/rls/rpts/bib and at

www.export.gov/tcc. The legislation of each of the original 34

signatories has undergone an assessment by the OECD

Working Group on Bribery and by the U.S. Government.

Although the laws of Slovenia were reviewed as part of its

accession process, a full review is expected to be undertaken

in 2005. The OECD Working Group on Bribery’s assessments

for all parties can be viewed at www.oecd.org/document/24/0,2340,en_2649_34859_1933144_1_1_1_1,00.html

and at www.export.gov/tcc.

The following information is an update on the internal legislative processes completed by Ireland to enact implementing

legislation since our 2003 report to Congress. In addition, supplemental legislative information on Slovenia, the 35th signatory and the first country to accede to the Antibribery Convention,

is included. The information that follows is based on data

obtained from the U.S. embassy and on reports from the Irish

and Slovenian Governments to the OECD, the latter of which

are publicly available at the OECD Web site referred to above. 

Ireland 

Ireland enacted the Prevention of Corruption (Amendment)

Act 2001 in mid-2001 to implement the Antibribery

Convention. The government subsequently approved ratification of the Antibribery Convention in December 2001, and

Parliament (Dáil Éireann) completed the necessary parliamentary procedures when it passed a resolution approving the

terms of the Antibribery Convention on December 17, 2002.

The intervention of a general election in the summer of 2002

had slowed this process. Thereafter, further administrative procedures were required that called for formal government decisions. Ireland subsequently deposited its instrument of ratification with the Secretary General of the OECD on September

22, 2003. The Antibribery Convention entered into force for

Ireland on November 21, 2003. 

Slovenia 

Slovenia enacted the law authorizing accession to the

Antibribery Convention in December 2000. The law was pub7

1

Ratification Status 
lished in the official gazette, volume 1/2001, on January 8,

2001. Slovenia deposited its instrument of accession with the

Secretary General of the OECD on September 6, 2001. The

Antibribery Convention entered into force for Slovenia on

November 5, 2001. Recognizing that further amendments to

domestic laws were required for Slovenia to conform to the

requirements of the Antibribery Convention, the Slovenian

Parliament adopted several pieces of legislation, the last of

which was sent to Parliament in 2003 and entered into force in

April 2004. The OECD Working Group on Bribery is expected to review Slovenia’s laws in 2005. 

Efforts to Encourage Implementation 

and Enforcement 

The U.S. Government recognized that the Antibribery

Convention’s effectiveness for reducing bribery would be constrained until all signatories had become parties. Therefore,

since the convention’s entry into force, the United States has

expended significant efforts to encourage signatories to adopt

implementing legislation and complete their ratification procedures for the Antibribery Convention. In 2002, with 33 of the 35

signatories in a position to prosecute cases of bribery under

their jurisdiction, the U.S. Government shifted its energies to

encouraging parties’ enforcement of their implementing laws.

Coupled with the peer pressure applied in the OECD Working

Group on Bribery and with encouragement by other governments, an international treaty has entered fully into force among

all of its signatories in just under five years, a notable achievement. We continue to see indications that enforcement is being

taken seriously by some parties. (The issue of enforcement is

discussed in detail in Chapter 3 of this report.) 

U.S. efforts to encourage other signatories to ratify, adopt

implementing legislation, and enforce the Antibribery

Convention have been concerted and consistent and have

included the personal involvement of the Secretaries of the

Departments of Commerce, State, and Treasury, and the

Attorney General of the U.S. Department of Justice. Public

statements by senior U.S. officials to direct senior and stafflevel contacts with foreign governments, including editorial

pieces in major publications and participation in international

conferences, were important facets of those efforts. The level

and intensity of U.S. efforts have remained high across administrations. This commitment clearly conveys to the world the

importance the U.S. Government places on the Antibribery

Convention as a potentially effective tool in combating corruption and promoting good governance and rule of law. The

U.S. Government is committed to the success of the

Antibribery Convention, and our efforts to secure enforcement

of the laws implementing the convention will continue. 

The fight against global corruption is a shared responsibility of governments, the private sector, and civil society.

Therefore, we will continue to encourage businesses to implement and adhere to antibribery awareness and compliance programs. For example, in its June 2004 declaration from Sea

Island, Georgia, the Group of Eight, building on its 2003 declaration at Evian, France, committed to joint efforts to fight corruption and increase transparency. Among their commitments

was “to continue to encourage our private sectors to develop,

implement and enforce corporate compliance programs relating

to our domestic laws criminalizing foreign bribery of public

officials.” 

Furthermore, U.S. officials and organizations like

Transparency International maintain that businesses should

establish anticorruption programs. Although such programs

are present in most of the larger U.S. companies, further

expansion to small and medium enterprises, both domestically and internationally, will help promote the objectives of the

Antibribery Convention, good governance, and rule of law. An

example of recent efforts is a move by 19 leading international engineering and construction companies to combat global

corruption within their own industry. On January 25, 2004, as

part of the World Economic Forum’s Annual Meeting at

Davos, Switzerland, 19 companies, which represent annual

revenues in excess of US$70 billion, signed and adopted a set

of business principles countering bribery. Expansion of such

initiatives to other sectors with broader representation of

countries should be encouraged. In the coming years, the U.S.

Government will continue to encourage U.S. and foreign private sectors to support the Antibribery Convention through

such awareness and corporate compliance programs. 

8
9

Table 1: Ratification Status of Signatory Countries to the OECD Antibribery Convention 

(As of June 7, 2004) 

Instrument of Ratification Convention

Signatory Country Ratified Legislation Approved Deposited with OECD1 Entered into Force 

Totals: 35 35 35 35 35 

Argentina October 18, 2000 November 1, 19994 February 8, 2001 April 9, 2001 

Australia October 18, 1999 June 17, 1999 October 18, 1999 December 17, 1999 

Austria April 1, 1999 October 1, 19982 May 20, 1999 July 19, 1999 

Belgium June 9, 1999 April 3, 19992 July 27, 1999 September 25, 1999 

Brazil August 6, 2000 June 11, 20022 August 24, 20005 October 23, 20005 

Bulgaria June 3, 1998 January 15, 1999 December 22, 1998 February 15, 1999 

Canada December 17, 1998 December 10, 1998 December 17, 1998 February 15, 1999 

Chile March 8, 2001 October 20022 April 18, 20015 June 17, 20015 

Czech Republic December 20, 1999 April 29, 1999 January 21, 2000 March 21, 2000 

Denmark March 30, 2000 March 30, 2000 September 5, 2000 November 4, 2000 

Finland October 9, 1998 October 9, 1998 December 10, 1998 February 15, 1999 

France May 25, 1999 June 30, 2000 July 31, 2000 September 29, 2000 

Germany November 10, 1998 September 10, 1998 November 10, 1998 February 15, 1999 

Greece November 5, 1998 November 5, 1998 February 5, 1999 February 15, 1999 

Hungary December 4, 1998 December 22, 1998 December 4, 1998 February 15, 1999 

Iceland August 17, 1998 December 22, 1998 August 17, 1998 February 15, 1999 

Ireland September 22, 2003 July 9, 2001 September 22, 2003 November 21, 2003 

Italy September 29, 2000 September 29, 2000 December 15, 2000 February 13, 2001 

Japan May 22, 1998 September 18, 1998 October 13, 1998 February 15, 1999 

Korea December 17, 1998 December 17, 1998 January 4, 1999 February 15, 1999 

Luxembourg January 15, 2001 January 15, 2001 March 21, 2001 May 20, 2001 

Mexico April 21, 1999 April 30, 1999 May 27, 1999 July 26, 1999 

The Netherlands December 13, 2000 December 13, 2000 January 12, 2001 March 13, 2001 

New Zealand May 2, 2001 May 2, 2001 June 25, 2001 August 24, 2001 

Norway December 18, 1998 October 27, 1998 December 18, 1998 February 15, 1999 

Poland June 11, 2000 September 9, 2000 September 8, 2000 November 7, 2000 

Portugal March 31, 2000 June 4, 2001 November 23, 2000 January 22, 2001 

Slovak Republic February 11, 1999 September 1, 19993 September 24, 1999 November 23, 1999 

Slovenia December 2000 N/A September 6, 20015 November 5, 2001 

Spain December 1, 1998 January 11, 2000 January 14, 2000 March 14, 2000 

Sweden May 6, 1999 March 25, 1999 June 8, 1999 August 7, 1999 

Switzerland December 22, 1999 December 22, 1999 May 31, 2000 July 30, 2000 

Turkey February 1, 2000 January 11, 20032 July 26, 20005 September 24, 20005 

United Kingdom November 25, 1998 1889, 1906, 19164 December 14, 1998 February 15, 1999 

February 14, 2002 

United States November 20, 1998 November 10, 1998 December 8, 1998 February 15, 1999 

1 The convention entered into force on February 15, 1999, for each signatory that had deposited its instrument of ratification on or before that date. 

For all other signatories, the convention entered into force on the sixtieth day after each signatory deposited its instrument of ratification or 

accession with the secretary general of the OECD. 

2 Date legislation came into effect. 

3 Date partial implementing legislation came into effect. 

4 The U.K. initially relied exclusively on existing legislation to implement the Convention but adopted the Anti-terrorism, Crime and Security Act of 

2002 on February 14, 2002 to address some of the concerns of the OECD Working Group on Bribery. 

5 Instrument of Accessibility

Introduction 

This chapter contains the U.S. Government reviews of the

implementing legislation of Brazil, Chile, and Turkey.1 The

legislation of these three parties to the Antibribery Convention

was adopted by the respective countries but not reviewed by

the OECD Working Group on Bribery until after the publication date of our last report. These U.S. Government reviews

were prepared following the same procedures and using the

same sources as described in prior reports. This chapter also

contains brief descriptions of actions undertaken by some parties to amend their legislation to conform to recommendations

of the OECD Working Group on Bribery. 

The views contained in this chapter are those of U.S.

Government agencies and staff and not necessarily those of

the OECD Working Group on Bribery. The Working Group

country reports on the implementing legislation reviewed to

date are made public on the OECD Web site at

www.oecd.org/document/24/0,2340,en_2649_34859_1933144

_1_1_1_1,00.html and are linked at www.export.gov/tcc.

The U.S. Government continues to monitor parties’

implementation and enforcement of the convention, both independently and within the OECD Working Group on Bribery.

In the ongoing Phase II of the Working Group’s monitoring

process, the focus is on how countries apply and enforce their

implementing legislation (See Chapter 3). We note that parties’ performance in implementing the convention through the

adoption of legislation must be distinguished from the

enforcement of those laws. As discussed in Chapter 3, performance by parties in regard to enforcement remains uneven. 

Concerns about Implementing Legislation 

On the basis of information that is currently available, we are

generally encouraged by the efforts of the parties to implement the Antibribery Convention. However, for a number of

countries, we still have the same concerns that were identified

in prior years’ reports: about how requirements were

addressed and, in some cases, about the absence of specific

legislative provisions to fulfill obligations under the convention, including the following: 

• Basic elements of the offense: laws that do not specifically cover certain basic elements of the offense of

bribery of foreign public officials contained in Article 1

of the convention: e.g., laws that do not specifically cover

offering, promising, or giving a bribe; bribes to third parties or through intermediaries; laws that do not use the

convention’s autonomous definition of foreign official or

require dual criminality. 

• Liability of legal persons: a lack of corporate liability, or

the addition of inappropriate requirements for the conviction of a natural person holding a management or other

position within the corporation in order to trigger corporate liability. 

• Sanctions: fines and prison terms that either do not rise to

the level of being effective, dissuasive, and proportionate or

are not at least equal to penalties for domestic bribery. 

• Enforcement: statutes of limitation that are too short,

require dual criminality to bring an action or require a

complaint from the “victim” (e.g., the government of the

corrupt official) to commence an investigation. 

11

2

Review of National

Implementing Legislation
• Jurisdiction: limitations on jurisdiction; in particular, a

lack of nationality jurisdiction or extremely limited territoriality jurisdiction. 

• Extradition/mutual legal assistance: laws that do not

provide for adequate extradition or mutual legal assistance as required by the convention or are contingent on

dual criminality requirements. 

• Inappropriate defenses and exceptions: for example, if the

bribe was solicited by the foreign public official instead of

being initiated by the bribe payor, or if the bribe agreement

was cancelled and reported to authorities before its completion (e.g., “effective regret” and “effective repentance”). 

• Potential conflict with other instruments: differences

between laws implementing European Union (EU) or

other anticorruption conventions and the OECD

Antibribery Convention. 

The U.S. Government and the OECD Working Group on

Bribery are continuing to follow up on these problems with the

countries concerned during the Phase II review process (see

Chapter 3). In addition, the U.S. Government may, if circumstances warrant, continue to engage countries bilaterally to

encourage progress to implement fully their commitments

under the convention. 

Amendments to Implementing Legislation

Described in Prior Reports 

This section contains summaries of actions undertaken by

some parties to amend their legislation over the past several

years to conform to recommendations of the OECD Working

Group on Bribery. These summaries are based on reports to

the Working Group, reports from U.S. embassies, and public

sources. Using this information and the U.S. Government

review produced in the prior reports to Congress, the reader

should get a general appreciation of what the particular party

has done, or must still do to effectively implement the convention. However, this information is based on a variety of

sources and may not be complete. In addition, although we

note action by a party to correct a deficiency, additional recommendations may still remain unfulfilled. 

Therefore, we caution the reader and recommend additional research. The amendments of some of the parties identified

below have been formally reviewed by the Working Group,

either through the process known in the Working Group as the

Tours de Table, or through the more formal “Phase I bis”

process, which was established to monitor the implementation

of the Working Group’s recommendations. Actions by the

other parties, who claim to have taken action to correct deficiencies in their implementing legislation but who have not

undergone such a review, are also included. When parties have

indicated that draft legislation is before their parliament or is

subject to other internal governmental review, we did not

include that information given the uncertain fate of such

processes, which has been quite prolonged for some countries. 

As part of the procedure for providing new information in

the context of the Working Group’s periodic Tours de Table,

parties are now required to provide updated written information to the OECD Secretariat staff that briefly describes the

status of its implementing legislation. In particular, parties

must describe measures that are under consideration or have

been adopted to take account of Phase I recommendation, as

well as to provide information on other legislation relevant to

the effectiveness of the convention. As of June 2004, the

Secretariat has received updated information from only 13

countries: Austria, the Czech Republic, Denmark, France,

Germany, Japan, Mexico, Netherlands, Slovenia, Sweden,

Switzerland, Turkey, and the United States. That information is

available to the public and published on the OECD Web site at

www.oecd.org. 

Formal Review: Phase I Bis

Bulgaria: 

On June 8, 2000, Bulgaria adopted amendments to its Penal

Code relating to the criminalization of “offering” and “promising” of a bribe as well as the abolition of the concept of

“provocation” as a defense. Furthermore, on September 13,

2002, Bulgaria adopted legislation to introduce non-material

(non-valuable) advantages into the scope of the definition of

bribery, revoked the defense of “informing the authorities”,

applicable to bribery of foreign public officials, and introduced fines as an additional sanction to imprisonment. An

amendment also addressed the definition of a foreign public

official under its implementing legislation. 

Iceland:

On April 27, 2000, Iceland’s parliament passed legislation

amending the Penal Code. The amendment removed the ceiling on the level of fines applicable to legal persons and the

statute of limitations for legal persons was increased to five

years. 

Japan:

Japan adopted changes to its Unfair Competition Prevention

Law on June 22, 2001, which entered into force on December

25, 2001. The amendments eliminate the “main office exception” and expand the definition of foreign public official as it

relates to public enterprises. We understand that two bills were

submitted to the Diet early in 2004 that address nationality

jurisdiction and seizure of the proceeds of bribery.

Nonetheless, a number of other weaknesses in Japan’s implementing legislation were identified in a prior report and will

require further corrective action. 

Slovak Republic:

In June 2001, legislation was adopted to extend the foreign

bribery offense to third-party beneficiaries and to make its

sanctions equal to those imposed for bribery of domestic public officials. The statute of limitations for this offense was

extended to five years. This legislation entered into force on

August 1, 2001. 

12
United Kingdom:

December 14, 2001, the United Kingdom approved amendments to the Corruption Acts under the Anti- Terrorism, Crime

and Security Act 2001 (Anti-Terrorism Act). The amendments

are located in Part 12 of the Anti-Terrorism Act, sections

108–110. The amended legislation entered into effect on

February 14, 2002. Although the recent amendments to the

Corruption Acts appear to address the more serious concerns

identified by the U.S. Government, that is, that the Corruption

Acts apply to foreign public officials and acts committed by

U.K. nationals and corporations outside the United Kingdom,

several concerns still do not appear to have been addressed. In

addition, on June 27, 2003, provisions on corruption were

brought into force in Scotland and are similar to those for the

rest of the United Kingdom. The convention was extended to

the Isle of Man in June 2001. 

Hungary:

In December 2001, Hungary enacted amendments providing

for criminal liability for managers for bribery acts by their

employees, deleting the “unlawful disadvantage” defense,

increasing prison sentences for natural persons, extending the

statute of limitations for certain offenses, changing the definition of foreign public officials, and reworking its laws on confiscation of assets and bribe proceeds. This legislation entered

into force on April 1, 2002. In December 2001, Hungary also

enacted legislation establishing the criminal liability of legal

persons for any intentional breach of the Criminal Code,

including antibribery provisions. 

Although in most instances the Working Group concluded that the relevant amendments adequately implemented the

recommendations arising from Phase I reviews, outstanding

issues remained for some parties. Those matters will be

addressed in Phase II. 

Other Reporting: 

On December 11, 2003, Argentine Law No. 25825 entered

into force, which amended Article 258 bis, the description of

the offense of bribery of a foreign official. Argentine officials

indicate that the provision is now in conformity with the recommendations of the OECD Working Group on Bribery.

Australia reported that the domestic offenses of bribery have

been updated and the penalties raised to those imposed on

bribery of foreign public officials. In Canada, on November

7, 2003, Royal Assent was granted to Bill C-45 which codifies

and modernizes the Canadian criminal law in relation to corporate criminal liability. For example, it established rules for

attributing to organizations, including corporations, criminal

liability for the acts of their representatives. In 2003, the

Finnish parliament reviewed the Criminal Code to eliminate

the dual criminality provision and extended the active and passive bribery offense to members of parliament. On December

24, 2002, the Government of Greece published in the official

gazette amendments to its implementing legislation. Those

amendments include a definition of “foreign public official”

by reference to Article 1 of the convention and address the

responsibility of legal persons in reference to “enterprises and

legal persons.” In June 2003, the Norwegian parliament

passed legislation that raises the level of penalties for natural

persons up to 10 years imprisonment, which will have consequences on the investigative techniques as well as on the

statute of limitations applicable to the offense. In November

2001, Portugal adopted Law No. 108/2001 which provides for

the criminal liability of legal persons and establishes bribery

as a predicate offense for money laundering purposes. On

November 26, 2003, Spain published in its Official Gazette

Law No.15/2003. The law amends Article 31 of the Penal

Code, which introduces criminal liability of legal persons and

provides for accessory sanctions for legal persons. In addition,

Law 15/2003 amended the Criminal Code by making the

penalty for corrupting a foreign official equal to the penalty

for corrupting a Spanish official. Legislation submitted to the

Swedish parliament on February 26, 2004, will enter into

force on July 1, 2004, which will extend the maximum penalty to six years imprisonment for serious cases of active

bribery. A bill on the criminal responsibility of legal persons

was approved by the Swiss parliament on March 21, 2003,

which entered into force on October 1, 2003. Fines up to SwF5

million can now be imposed on Swiss companies guilty of

bribery of foreign public officials, irrespective of whether a

natural person has been incriminated or whether an organ of

the enterprise acted negligently. 

U.S. Implementing Legislation: FCPA 

In addition to the 1998 amendments to the Foreign Corrupt

Practices Act of 1977 (FCPA),3 which are fully described in

the 2001 report to Congress, the United States has taken the

following actions to implement the Antibribery Convention: 

• On November 1, 2002, to conform to the Working

Group’s Phase I recommendation, Congress approved

amendments to the U.S. sentencing guidelines. The

amendments adjust the sanctions for the bribery of foreign public officials to those applicable to bribery of

domestic public officials. 

• In March 2002, the President signed an executive order to

define the European Union’s organizations and Europol

as public international organizations, thereby extending

the application of the FCPA to bribery of officials from

those organizations. 

• Effective August 23, 2000, the Civil Asset Forfeiture

Reform Act expanded the grounds for civil and criminal

forfeiture, making the proceeds of violations of the FCPA

forfeitable. 

The following summary of foreign legislation should not

be relied on as a substitute for direct review of applicable legislation by persons contemplating business activities relevant

to these provisions. 

13
Brazil 

Brazil signed the convention on December 17, 1997, and

deposited its instrument of ratification on August 24, 2000.

Brazil enacted the implementing legislation through Law No.

10,467, which amended the Penal Code to include bribery of

a foreign official as an offense. 

There are a few issues of concern with Brazil’s implementing legislation. For example, Brazilian law essentially has

no concept of criminal liability for legal persons. Because of

the absence of case law applying the administrative remedies,

it is difficult to determine whether these measures are effective, proportionate and dissuasive. 

Basic Statement of the Offense 

The basic statement of the offense of bribery is found in the

2002 act, which adds a new chapter to the Brazilian Penal

Code, Crimes Committed by Individuals Against a Foreign

Public Administration. Article 337–B in that chapter defines

the offense as: 

promising, offering or giving, directly or indirectly, an

improper advantage to a foreign public official or to a

third person, in order for him or her to put into practice, to omit, or to delay any official act relating to an

international business transaction. 

The article does not set forth an express intent requirement, but Brazilian authorities explained that Brazilian law

assumes felonious intent in the absence of a specified mental

element. Brazilian authorities stated that the article covers

bribery through an intermediary. 

Jurisdictional Principles 

The Brazilian Penal Code adopts the principle of territoriality.

Article 6 of the Penal Code provides that “the criminal offense

is deemed to have occurred in the place where the act or omission, in whole or in part, occurred, as well as where the result

was produced or planned to be produced.” Brazil explained

that for jurisdiction to be exercised it is enough for the crime

to have “touched” Brazilian territory. Although Brazil did not

provide any examples to demonstrate how substantial a connection to Brazil must be, Brazilian authorities stated that a

telephone call, fax or email originating in Brazil would be sufficient to trigger jurisdiction. 

Brazil’s Penal Code provides for extraterritorial jurisdiction, including nationality jurisdiction, in a wide range of

cases that include foreign bribery abroad. It should be noted

that Brazil does not have nationality jurisdiction over permanent residents of Brazil who commit offenses abroad. Unlike

naturalized Brazilians, however, permanent residents of Brazil

are subject to extradition. 

Coverage of Payor/Offeror 

Article 337–B covers only natural persons. Brazil does not

have a law imposing criminal liability on legal persons for the

offense of bribery of a foreign public official. Under Brazilian

law a corporation or enterprise exists only as an artificial entity within the limits the law imposes. The Brazilian constitution

does provide for criminal liability for legal entities “in respect

of acts committed against the economic and financial order

and against the popular economy.” Whether legislation creating criminal liability for a corporation can be created under

this exception is the subject of intense debate in Brazil and

Brazilian authorities stated that there is no likelihood that the

issue will be resolved in the near future. Likewise, there is no

non-criminal liability for legal persons for criminal offenses.

However, a legal entity is subject to administrative liability. 

Coverage of Payee/Offeree 

Article 337–D provides that persons promising, offering, or

giving an improper advantage to a foreign public official or to

a third person will be guilty of an offense. Public officials are

covered in Article 337–D, which defines a foreign public official as “anyone, even though temporarily or in an unpaid

capacity, who holds a position, a job or a public function in

state bodies or in diplomatic representations of a foreign country.” The article also deems “anyone who holds a position, a

job or function in an organization or enterprise directly or

indirectly controlled by the Public authorities of the foreign

country or in international public organizations” to be “equivalent to a foreign public official.” Brazilian authorities stated

that the definition of “foreign public official” is based on the

domestic definition of “public official” which has been broadly interpreted in Brazilian law. However, differences do exist

in the two definitions and it is not clear whether the definition

of foreign public official found in Article 337–D is more

restrictive than its domestic counterpart. 

Penalties 

Article 337–B of the Brazilian Penal Code provides for the

offense of bribery of a foreign official a term of imprisonment

from one to eight years. The article also provides for a fine in

addition to the prison term. The fine cannot be substituted for

the prison term. The penalties for bribing a foreign official are

the same as those for bribing a domestic official. Both the

prison term and fine assessed will be raised by one-third if the

advantage or promise causes the official to breach his or her

functional duty. 

Article 49 of the Penal Code states that fines under

Brazilian law will consist of a number of daily fines. Article

49 states that “the amount of the daily fine will be set by the

judge but may not be less than one-thirtieth of the highest

monthly minimum wage ruling at the time of commission of

the crime, nor be more than 5 (five) times this wage.”

Brazilian law also requires that the fine consist of not less than

10 days of the fine and not more than 360 days of the fine.

Article 68 of the Penal Code governs the calculation of fines,

14
which takes into account the basic penalty, any aggravating or

mitigating circumstances, subjective factors such as the

degree of guilt of the perpetrators or previous record, and the

convicted person’s salary, income, and assets. 

Administrative liability can be imposed on legal or natural persons under Brazilian law resulting in a suspension or

exclusion from all public tenders or contracts with the public

administration. Brazilian authorities have also stated that

bribery of a foreign official falls within a group of crimes that

affect international competition and is consequently subject to

a fine ranging from 1 to 30 percent of a company’s gross pretax earnings for the previous financial year. The amount will

not be less than the amount of the advantage and can be doubled for repeat offenders. In addition, if a situation is considered severe, the penalty can include a disqualification from

public financing or bids for five years. Brazilian law provides

for the payment of damages to a successful claimant based on

civil liability. An offender may also lose his or her “position,

public function or term of office.” 

Confiscation of proceeds is provided under Article 91 of

the Brazilian Penal Code upon conviction. The law does not

expressly provide that confiscation can be imposed on a third

party, but Brazilian authorities have explained that it can be

imposed on a third-party accomplice who possesses the instrumentality or proceeds from an offense. Confiscation under

Brazilian law can be applied only to someone who has taken

part in the offense and cannot be levied against a third party

who did not participate in the crime. Likewise, assets in the

hands of an injured party cannot be confiscated or seized. 

Books and Records Provisions 

The Brazilian books and records provisions are contained in

the Companies Law (Law No. 6,404, which requires corporations to maintain permanent bookkeeping records in conformity with commercial legislation and generally accepted

accounting principles. Businesses and companies are required

to maintain a uniform system of bookkeeping and keep a daily

journal. Brazil confirmed that the measures do not contain an

express prohibition of off-the-books accounts. Brazilian

authorities, however, clarified that several other provisions of

the Companies Law as well as the tax law address off-thebooks accounts and can be used to enforce a prohibition. 

Law No. 6,385 of 1976, which governs the securities market, requires that accounts of listed companies as well as other

companies regulated by the Brazilian Securities and Exchange

Commission, that are involved in the distribution and intermediation of securities must be audited by registered independent

audit firms or independent accounting auditors. 

Money Laundering 

The provisions on money laundering are contained in Law No.

9,613 of 1998 as amended by Law No. 10,467 of 2002. The

law includes bribery of both domestic and foreign public officials as predicate offenses for purposes of Brazilian money

laundering legislation. Brazilian authorities have confirmed

that judicial proceedings or sentencing of money laundering

offenses are not dependent on either judicial proceedings or

sentencing for the predicate offenses. However, the charges

must contain sufficient evidence of the existence of the predicate offense. 

Extradition and Mutual Legal Assistance

The legal basis for extradition in Brazil is found in Law No.

6,815 of 1980. Extradition may be granted when a state bases its

request on a treaty or when it promises reciprocity to Brazil.

Brazil has stated that the convention would be considered a

legal basis to extradite someone for the offense of bribery of a

foreign public official, subject to the condition of reciprocity.

Brazil’s Federal Constitution expressly forbids the extradition of

Brazilian nationals, both native and naturalized citizens. An

exception exists for naturalized citizens who committed the

extraditable offense prior to his or her date of naturalization.

Brazilian authorities stated that a legal duty exists to investigate

or prosecute a case in Brazil in which an extradition request has

been denied solely on the grounds of nationality. 

Under Brazilian law, mutual legal assistance depends

upon the existence of either bilateral or multilateral agreements. Brazil is a party to a number of multilateral mutual

legal assistance agreements and has concluded or will conclude 27 bilateral accords. Brazil has noted that Article 9 of

the convention is self-executing in Brazil and is itself a sufficient basis for granting mutual legal assistance. Whether

Brazil requires dual criminality depends on the language of

the specific agreement in question. 

Complicity, Attempt, Conspiracy 

Article 29 of Brazil’s Penal Code establishes liability for complicity relating to a foreign bribery offense. The article states

that “the penalties prescribed for the criminal offense also

apply to whomever, in any way, conspires in the criminal

offense, insofar as the person concerned is found guilty.”

Punishment under the article may be reduced by one sixth to

one third “if the participation was of a lesser degree.” Article

14 of the Penal Code governs the crime of attempt. The article

provides that a crime is attempted “when the performance is

begun, but it is not carried out through circumstances foreign

to the wishes of the offender.” The penalty applicable to the

crime of attempt is the penalty applicable to the crime the

offender tried to commit reduced by one-third to two-thirds. 

Chile 

Chile signed the Antibribery Convention on December 17,

1997, and deposited its instrument of ratification with the

OECD on April 18, 2001. The implementing legislation, Law

No. 19,829, entered into force on October 8, 2002. Law No.

19,829 amended the Chilean Criminal Code by adding Article

250 bis A, which criminalizes the bribery of a foreign public

official in international business transactions. The law also

added Article 250 bis B, which closely follows the definition

of foreign public official set forth in the convention. 

15
The most significant concerns with the Chilean legislation

include: the absence of liability for legal persons, the difference in sanctions for persons who offer bribes and those who

pay bribes as a result of solicitations, as well as differences in

penalties for domestic and foreign bribery offenses, and limited jurisdictional coverage. 

Basic Statement of the Offense 

Article 250 bis A of Chile’s Criminal Code provides: 

He who offers a foreign public official an economic

advantage, for that official or a third person, to act or

refrain from acting in order to obtain or retain—for

him or a third party—any business or advantage in the

field of international commercial transactions shall be

punished with imprisonment, fine and disqualification, as referred to in Article 248 bis, first paragraph.

The same punishment shall be imposed on he who

offers the said advantage to a foreign public official

for his having acted or refrained from acting. 

He who, under the circumstances described in the

foregoing paragraph, has consented to the offering of

said advantage shall be punished with short term

imprisonment, minimum degree, as well as the fine

and disqualification referred to above. 

The text of Article 250 bis A covers the offering of a

bribe, but does not expressly refer to the act of giving a bribe.

In the absence of case law, it is unclear whether the offense

covers the act of giving a bribe. Furthermore, the text does not

stipulate that the bribery of a foreign public official may be

committed through intermediaries, though according to

Chilean officials, the act of an intermediary is punishable

under the general rules on participation contained in the

Criminal Code. The text draws a distinction between a person

who offers a bribe to a foreign public official and a person

who bribes as a result of a bribe solicitation by a foreign public official, which is a lesser offense under Chilean law (see

penalties below). It is unclear whether “economic advantage”

includes more than monetary bribes, although Chile states that

it does. 

Jurisdictional Principles 

Chile exercises territorial jurisdiction for foreign bribery

offenses in cases where the offense was initiated in Chile.

Chile has also indicated that Chilean courts may extend jurisdiction to cover offenses that produce consequences in Chile,

though it is not clear if the courts will do so. Chile’s law does

not provide for nationality jurisdiction and it is unclear

whether assertion of nationality jurisdiction is possible under

Chile’s system. 

Coverage of Payor/Offeror 

Article 250 bis A covers natural persons, but not legal persons.

Chilean law does not provide for criminal liability for legal

persons or for the possibility of imposing fines on a corporate

or other legal entity. Further, there is no civil liability for legal

persons for the foreign bribery offense, though there is a general sanction available for the dissolution of the corporation or

foundation if the entity has an “unlawful” purpose. Chilean

authorities have indicated that the executive branch has

pledged to consider criminal liability for legal persons. 

Coverage of Payee/Offeree 

The basic statement of the offense covers bribery acts made to

a foreign public official. Article 250 bis B defines “foreign

public official” as: 

any person holding a legislative, administrative, or

judicial office of a foreign country, whether appointed or elected, and any person exercising a public function for a foreign country, including for a public

agency or public enterprise. It shall also mean any

official or agent of a public international organization. The definition of foreign public official closely

follows the definition set forth in the convention.

Article 250 bis A also stipulates that the advantage

can be for that official or a third person. It is unclear

whether third person includes legal persons as well as

natural persons. 

Penalties 

The level of sanctions applicable for the offense of bribery

depends on whether the briber (1) offers a bribe to a public

official (“offers”) or (2) consents to a bribe solicitation (“consents”). The level of monetary sanctions for offering and consenting in giving a bribe are similar in that they both are punishable with a fine amounting to twice the economic advantage and provisional partial or absolute disqualification.

Article 250 bis A, however, provides that consenting in giving

a bribe is a lesser offense punished with short-term imprisonment in its minimum degree (range not given), whereas offering a bribe is punishable with “short-term imprisonment” in

its minimum to medium degree (61 days to 3 years). 

There are discrepancies in the range of penalties for

domestic and foreign bribery even though domestic and foreign bribery are similar in scope. A comparison of the sanctions shows that the range of sanctions for domestic bribery is

higher than the range of sanctions for foreign offenses. A similar discrepancy exists between the accessory sanctions for

domestic bribery and foreign bribery. 

According to Chilean authorities, Articles 24 and 251 of

the Criminal Code permit confiscation for acts of bribery.

Chilean officials stated that these provisions provide for confiscation of bribe proceeds upon conviction and the seizure of

property received by a domestic or foreign public official.

Chilean authorities have not provided any information as to

16
whether the possibility exists under Chilean criminal law of

provisional seizure of a bribe or its proceeds either for the purpose of securing evidence or the imposition of a fine or confiscation. 

Article 119 of the Administrative Statute provides for the

dismissal of a public official who has been convicted of foreign bribery. Chilean authorities also stated that if a subsidy,

award or economic advantage has been obtained through

bribery, the granting authority shall render the illegal act null

and void. 

The statute of limitations for foreign bribery is five years

and is “suspended” once a criminal action is filed against the

alleged offender. Furthermore, Article 100 of the Criminal

Code provides that for any period the offender spends abroad

during the running of the statute of limitations, such period

extends the initial five-year limitations period one day for

every day spent abroad. It appears from this provision that the

limitations period could be extended up to 10 years maximum. 

Books and Records Provisions 

The Chilean Corporations Law and the Commercial Code set

forth accounting rules. In addition, regulatory bodies have the

authority to issue accounting regulations for entities under

their control, which have the force of law in the absence of

specific laws. Chile applies international accounting regulations absent specific guidance under Chilean regulations pursuant to Law No. 13,011. 

Article 25 of the Commercial Code sets forth the general

obligation for natural or legal persons to keep books for

accounting purposes and Article 27 requires the maintenance

of a general journal detailing all business transactions. Article

4 of the Decree—Law No. 3,538 of 1980—requires corporations listed in the Securities Register to maintain books and

records. Law No. 18,045 on the Securities Market sets forth

obligations for “open” corporations and “partnerships limited

by shares” on the maintenance of books and records provisions. Finally, the General Banking Law applies to financial

institutions regulated by the Commission of Banks and

requires that all transactions must be recorded, clearly identifying their origin or purpose. It is not clear, however, whether

Chile’s accounting rules directly address the prohibition of,

and penalties for, off-the-books accounts or inadequately identified transactions. 

Money Laundering 

In Chile, neither domestic nor foreign bribery of a public official is a predicate offense for money laundering, although the

Chilean Government is currently conducting a study to change

this. 

Extradition and Mutual Legal Assistance 

Chile may provide extradition on the basis of multilateral and

bilateral treaties. Chilean authorities state that in the absence

of a treaty, Articles 637, 647 and 651 of the Old Procedure

Code and the convention may serve as a legal basis for extradition. According to Chile, there are no constitutional or legal

provisions barring the extradition of its nationals, though they

state that they prefer to prosecute Chilean nationals in a

Chilean court of law. 

The Criminal Procedure Code governs the conditions that

need to be satisfied to request or provide extradition. Chile

may request extradition in a criminal proceeding for any

offense whose maximum length of imprisonment exceeds one

year under the Old Procedure Code (Article 635) and for any

offense whose minimum length of imprisonment exceeds one

year or where the imprisonment imposed exceeds one year

under the New Procedure Code (Article 431).4 Under the Old

Procedure Code, there is no length of imprisonment requirement where another party requests extradition (Article 644).

Under the New Procedure Code, however, there is a requirement that a person has been accused or sentenced for an

offense of more than one year imprisonment (Article 440).

According to Chile, dual criminality is satisfied by virtue of

Article 10.4 of the convention. 

Chile is restricted in its ability to provide mutual legal

assistance in criminal and non-criminal matters and can only

provide assistance to countries with which it has concluded

legal assistance treaties. Chile has stated that in the absence of

a treaty with another party to the convention, it would consider the convention to be the basis for providing mutual legal

assistance. 

Complicity, Attempt, Conspiracy 

Chilean authorities stated that complicity is a form of criminal

participation that is punishable under the general rules on participation in the Criminal Code. Because complicity is generally a less serious offense, the sanctions are less stringent than

those imposed on the perpetrator. It is unclear whether and

how Chilean law covers incitement, aiding and abetting and

authorization of foreign bribery due to a lack of information. 

Article 7 of the Criminal Code governs the offense of

attempt generally and provides for a penalty that is two

“degrees” less than the penalty applied to the completed

offense. Chile has no law punishing conspiracy to bribe a

domestic public official or a foreign public official. 

Turkey 

Turkey signed the convention on December 17, 1997, and

deposited its instrument of ratification with the OECD on

January 1, 2000. The Turkish implementing legislation,

Amendment to the Law Regarding Prevention of Bribery of

Foreign Public Officials in International Business

Transactions No. 4782 of January 2, 2003 (the 2003 law),

entered into force on January 11, 2003. The legislation establishes criminal liability for the active bribery of a foreign public official through amendments to Articles 4, 211 and 220 of

the Turkish Criminal Code. 

Although Turkey has taken some significant steps toward

meeting its obligations under the convention, some issues of

concern remain. For example, to impose corporate liability,

the law requires: 

17
(1) that the act of bribery was committed by an authorized

representative, 

(2) that the bribe was given for the benefit of a legal person,

and 

(3) that the authorized representative will be punished in

order to proceed against the corporate body.

Turkey’s law provides for an “effective regret” exception,

which is inconsistent with the convention. The definition of

foreign public official does not make expressly clear whether

it covers officials or agents of a public agency, public enterprise or public international organization. It is also not clear

whether the Turkish provisions for sanctions will be sufficient

to meet the “effective, proportionate, and dissuasive” standard

in the convention. 

Basic Statement of the Offense 

The basic statement of the offense is found in Article 211/3,

Active Bribery of Foreign Public Officials, of the Turkish

Criminal Code, which provides that: 

The offering or the promising or the giving of the benefits

directly or indirectly specified in the first paragraph to the

officials whether appointed or elected and carrying out a legislative, administrative or judicial function in a foreign country or exercising a public function in the international business

transactions for [either] obtaining or retaining the business or

taking improper advantage or keeping them shall be regarded

as bribery. 

The first paragraph of Article 211 defines the term benefits as “any money, gift or any other benefits,” which includes

“any exorbitant difference between the market value of any

movable or immovable property they have sold, purchased, or

transferred for such purposes and the amount actually received

or paid.” According to Turkey, bribery requires the element of

intent and the offender must be aware of the causal link

between the benefit provided and the end attained. 

Article 215 of the Turkish Criminal Code, Effective

Regret and Non-Violation, provides specific provisions for situations where either the person offering the bribe or the public official declines to complete the illegal transaction and

reports it to the relevant authorities. The Turkish authorities

stated that the purpose of the provision is not only to prevent

bribery, but also to reward contrition and disclose information

about the persons involved in an act of bribery. 

Jurisdictional Principles 

Article 3 of the Turkish Criminal Code establishes territorial

jurisdiction, but it does not expressly establish such jurisdiction

where an offense is committed in part in Turkey. Turkish officials

explained that in accordance with the principle of territoriality, if

bribery of a foreign public official is committed either completely or partially in Turkey, the suspect or suspects are tried in

Turkey and will be punished under Turkish law, even if they are

sentenced abroad. The Turkish authorities have not provided case

law to support this assertion, however. It is also not clear how an

offense is deemed to have been committed in Turkey. 

The Turkish Criminal Code generally does not address

nationality jurisdiction. Article 4/3 of the code does provide

that “whoever commits a felony during and in connection with

performance of an office or mission on behalf of Turkey in

foreign countries shall be prosecuted in Turkey.” Article 4/3

covers the scope of extraterritorial jurisdiction over offenses

occurring abroad, but only in connection with the performance

of an office or mission on behalf of Turkey. Consequently,

nationality jurisdiction can only be applied in a narrow set of

circumstances because there does not appear to be any authority for the application of jurisdiction to offenses committed

abroad by Turkish nationals. 

Coverage of Payor/Offeror 

The bribery offenses in Article 213 apply to “any person” and

Turkish officials have explained that on the basis of this language it is understood that anyone can be an offender, including a public official. Turkish officials stated that the 2003 law

amended Article 220 of the Turkish Criminal Code to establish

corporate liability for bribery offenses. Specifically, Article

220 provides that “if the bribery offenses in this section are

committed by authorized representatives of corporate bodies”

who are punished, then “the corporate body shall also be punished.” Turkish authorities did not provide a list of the types of

entities covered by Article 220, although they stated that it

applies to both private law and public legal persons. The standard of liability for a corporate body requires: 

(1) that the act of bribery was committed by an authorized

representative, 

(2) that the bribe was given for the benefit of a legal person,

and 

(3) that the authorized representative will be punished in

order to proceed against the corporate body. 

Turkey explained that an authorized representative is a

person who is legally bound to the corporate body, which

requires a legal link between the representative and the legal

personality. The “legal link” between the authorized representative and the corporate body, which is necessary to trigger

corporate liability according to Turkish officials, is a mere formality. No actual proof of complicity between the natural person and the corporate body needs to exist to punish the corporate body. There are several concerns about Turkey’s definition

of authorized representative, which include who within the

corporate body constitutes an authorized representative and

how it can be proved that a particular representative was

“authorized.” Another point of concern is whether the law

would cover a situation in which a regular employee has

bribed a foreign public official with the authorization of the

corporate body. 

Coverage of Payee/Offeree 

Article 211/3 refers to the bribery of “officials whether

appointed or elected and carrying out a legislative, administrative or judicial function in a foreign country or exercising a

18
public function in international business transactions.” Turkish

officials stated that “exercising a public function in international business transactions” includes persons other than officials or agents as well as officials or agents of a public international organization. However, no express coverage of persons “exercising a public function for a foreign country,

including for a public agency or public enterprise” exists.

Turkish authorities also explained that the “directly or indirectly” language of 211/3 covers a situation where the benefit

of a bribe flows to a third party and a case in which the bribe

is made through an intermediary. Turkish officials qualified

the explanation by saying that the article applies only in cases

where there is a relationship between the official and the third

party. “Relationship” is not defined and, as a result, it is not

clear whether this creates a gap in coverage. 

Penalties 

The penalties for bribery are found in Articles 213 and 220 of

the Turkish Criminal Code for natural and legal persons

respectively. Article 213 carries a maximum jail term of 12

years depending on the degree of the breach of law or regulations or whether the action was taken in whole or in part.

Article 213 does not establish a pecuniary penalty.

Aggravating factors may be applied to a violation of Article

213 under Article 214, which provides that “punishment shall

be increased from one-third to half according to the degree of

breach of the law and regulation.” Article 219 provides both

aggravating and mitigating factors to the crime of bribery.

Based on the type of offender (that is, commanding or judicial

authority) and the value of the bribe or benefit, the penalties

can be aggravated (“increased by half ”) or mitigated

(“reduced by two-thirds”). 

Article 220 provides for “a heavy fine from two to three

times the benefit derived from the crime” for legal persons

guilty of bribery. It is not clear whether the aggravating and

mitigating factors in Articles 214 and 219 apply to violations

by legal persons. It is also not clear whether Turkish law

imposes a sanction in situations where the benefit cannot be

quantified. 

Article 36 of the Criminal Courts Procedure Law provides

that objects that can be used as evidence in an investigation or

objects whose confiscation may be ordered may be kept under

protection. If the holder of the object does not voluntarily surrender the objects, they may be seized. Turkish officials

explained that Article 86 includes both the bribe and the proceeds of bribery. Article 217 of the Turkish Criminal Code

specifically provides for the confiscation of property and benefits involved in bribery. Turkish officials described the scope

of the article as very wide and covering not only the confiscation of the bribe, but also any benefit deriving from the bribe.

Confiscation under Articles 86 and 217 apply to natural persons, legal persons, and third parties. 

The Turkish Criminal Code also provides for a number of

civil penalties and administrative sanctions for persons convicted of bribery. Article 219/4 states that persons convicted of

bribery shall be permanently prohibited from accepting government employment. Likewise, the Turkish Public

Procurement Law prevents persons, whether legal or natural,

“established to be involved in acts such as to conduct or

attempt to conduct procurement fraud by means of fraudulent

and corrupt acts, promises, threats, unlawful influence, undue

interest, agreement, corruption, bribery or other actions,” from

participating in a public tender. The Public Sector

Procurement Contracts Law subjects bidders, either foreign or

domestic, who engage in “fraud, intrigue, promises, threats,

using influence, or arranging for (personal) gain or other

means or attempting the same” to a temporary or permanent

ban on participation in any bidding processes carried out by

any public institution or organization. The length of the ban

depends on the seriousness of the relevant acts. 

Books and Records Provisions 

Turkey’s basic bookkeeping requirement is found in the

Turkish Commercial Code. Turkey also has a Uniform Chart

of Accounts designed to regulate the basic concepts and principles of accounting and to guide the preparation of financial

statements. The Uniform Chart of Accounts is intended to provide an accurate reflection of company operations and results.

The Turkish Tax Procedures Code also provides extensive

rules requiring businesses to record financial information and

provides sanctions for failing to properly record information. 

All Turkish companies must comply with the accounting

principles found in the Uniform Chart of Accounts and the

accounting laws found in the tax code. Sole proprietors are

required to comply only with the basic component of the

Uniform Chart of Accounts. Registered and listed companies

must comply with the rules and regulations of the capital markets board. Joint stock companies with 250 or more shareholders are considered public and therefore subject to the capital

markets law. Banks, insurance companies, private financial

institutions, financial leasing companies, stocks and bonds

investment funds, and intermediary institution and investment

partnerships must use different accounting techniques. 

Money Laundering 

Money laundering provisions are contained in Law No. 4208

on the Prevention of Money Laundering. Article 5 of Law No.

4782/03 added both domestic and foreign bribery of a public

official to the list of predicate offenses. The Turkish authorities stated that a conviction regarding the predicate offense is

not required to proceed against the money launderer. 

Extradition/Mutual Legal Assistance 

Turkey has no specific law governing extradition. However,

Article 90 of the Turkish constitution provides, however, that

“international agreements duly put into effect carry the force

of law.” According to Turkish officials, the multilateral and

bilateral agreements relating to extradition to which Turkey is

a party carry the weight of domestic law. Turkish officials also

stated that in the absence of a relevant treaty the convention

will serve as a legal basis for extradition. The Turkish Counsel

of Ministers has the final authority to grant extradition

19
requests; it is not clear whether a denial of extradition may be

appealed. Article 9 of the Turkish Criminal Code states that a

Turkish national cannot be extradited to a foreign country.

Turkish officials stated, however, that where nationality is the

only reason for denying an extradition request for bribery of a

foreign official, the case will be submitted to the relevant

authorities. 

Turkey also has no specific law regulating mutual legal

assistance, but it provides mutual legal assistance in criminal

matters pursuant to treaties. Where there is no applicable

treaty, Turkey may provide mutual legal assistance in criminal

matters based upon the principle of reciprocity. Turkish

authorities said that in the absence of an applicable treaty, they

consider the convention to be a sufficient legal basis for providing mutual legal assistance for foreign bribery offenses. 

Complicity, Attempt, Conspiracy

The Sixth Chapter of the Turkish Criminal Code, Participation

in Felonies and Misdemeanors, governs complicity by providing for the crimes of abetting in Article 64 and participation in

a crime in Article 65. Turkish officials said that both provisions apply to bribery of foreign officials. Under Turkish law,

anyone abetting another person to commit an offense is subject to the same punishment as the perpetrator. Participation in

a crime includes inciting, giving instructions, and facilitating

the commission of a crime. The punishment for someone

guilty of participation is a reduced version of the base crime.

Should it be the case, however, that the crime could not have

been accomplished without the assistance of the person who

participated in the crime, no reduction in penalty is provided.

An intermediary involved in an act of bribery of a foreign official is covered under the crime of complicity. 

Articles 61 and 62 of the Turkish Criminal Code govern

the crime of attempt, which occurs when anyone commences

the execution of an intended felony and due to reasons beyond

his or her control cannot complete the felony. The punishment

for attempt under Turkish law is a reduced version of the punishment for the relevant felony. Turkey distinguishes between

failure to complete a crime due to circumstances under the

control of the agent, and the failure to complete a crime due to

circumstances beyond the control of the agent. In the former

case, the agent will not be punished. In the latter case, punishment will be applied. 

It is not clear if the Turkish Criminal Code provides for

the crime of conspiracy to bribe a foreign official. 

1. U.S. Government assessments of the implementing legislation of the following 27 countries appear in the 2001 report: Argentina, Australia,

Austria, Belgium, Bulgaria, Canada, the Czech Republic, Denmark,

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

Luxembourg, Mexico, Poland, the Netherlands, Norway, the Slovak

Republic, South Korea, Spain, Sweden, Switzerland, and the United

Kingdom. 

2 Assessments of New Zealand and Portugal appear in the 2002 report,

and for Ireland in the 2003 report. All of the reports are available at

www.export.gov/tcc. 

3 The IAFCA amended the FCPA to: (1) include payments made to secure

“any improper advantage”; (2) include all foreign persons who commit

acts in furtherance of the bribery act while in the United States; (3) to

include officials of public international organizations within its definition of public official; (4) provide for jurisdiction over the acts of U.S.

businesses and nationals in furtherance of unlawful payments that take

place wholly outside the United States; and (5) eliminate the disparity in

penalties applicable to U.S. nationals and foreign nationals employed by

or acting as agents of U.S. companies. 

4 The New Procedure Code will gradually replace the Old Procedure

Code on a region by region basis by December 2004. 

20
Enforcement of 

National Implementing Legislation 

As of July 2004, all parties have laws in place that substantially conform to the requirements of the Antibribery Convention.

Some parties are making greater efforts than others to increase

awareness of the convention and their domestic implementing

laws. Other parties are responding to credible allegations of

bribery of foreign officials with investigations, and, in several

cases, convictions. However, performance remains uneven. In

2004, after strong encouragement by the U.S. Government, the

monitoring cycle for convention enforcement was accelerated,

with a total of seven country examinations scheduled per

annum. As more parties prepare for and experience their peer

reviews, they are becoming aware of the power of public

scrutiny. Reports summarizing parties’ efforts to implement

the convention appear on the OECD Web site at

www.oecd.org/document/24/0,2340,en_2649_34859

_1933144_1_1_1_1,00.html. Civil society, including non-governmental organizations, is using those reports to raise pointed questions about the quality of each party’s measures and

efforts to enforce the convention. Progress is incremental, but

U.S. agencies are confident that peer monitoring is beginning

to achieve its intended effect: to put pressure on convention

parties to improve their actions to investigate credible allegations of foreign bribery and to prosecute when a solid case can

be made. 

Unfortunately, some parties, particularly those whose

firms are very active in export markets, have been slow to

apply enforcement resources to address transnational bribery.

The U.S. Government recognizes that achieving the convention’s goals will take time. As the peer monitoring program

progresses, all parties to the convention should apply

resources to the task of building capacity to launch investigations, bring prosecutions, and obtain convictions under their

laws. It also is important to expand public awareness campaigns and ensure that business groups and legal communities,

as well as law enforcement experts and prosecutors, are fully

aware of the legal and institutional framework that makes foreign bribery a criminal offense for companies based in a

party’s territory. Technical cooperation between law enforcement authorities and prosecutors in the OECD Antibribery

Convention countries will strengthen enforcement practices

and improve cross-border cooperation. U.S. enforcement

authorities have offered assistance to their counterparts in

other convention countries and have encouraged the OECD

Working Group on Bribery to promote joint meetings with

prosecutors. 

To give life to commitments embodied in multilateral

anticorruption instruments like the Antibribery Convention,

countries must back them with concrete actions. Such actions

include following up on all credible allegations of bribery, initiating prosecutions when evidence supports the allegations,

and imposing sanctions that are effective, proportionate, and

dissuasive. It is the responsibility of each party to implement

and enforce its national laws as well as to be proactive and not

await Phase II review or other public scrutiny of its enforcement regimes before taking action. 

21

3 

Review of Enforcement

Measures 
Enforcement by Other Parties

to the Antibribery Convention 

Other than the United States, we are aware of only two parties

(Korea and Sweden) whose authorities have obtained convictions under their respective implementing laws for bribery of

a foreign public official. A number of other parties have initiated investigations or legal proceedings that are now in the

public eye, and other cases are in the investigative stage. We

continue to follow allegations in the press, which we believe

should, in some instances, prompt the relevant law enforcement authorities to proceed with an inquiry. We continue to

call on all parties to enforce the convention rigorously. 

Korea

Korea has launched two investigations under its implementing

legislation. One of those cases has resulted in a conviction.

Both cases concern the alleged involvement of Korean nationals in bribing U.S. military procurement officers at U.S. military facilities in Korea. In 2002, the Seoul prosecutor’s office

indicted and subsequently obtained the conviction of the president of a construction company on bribery charges involving

a U.S. Army colonel who was the commander of the contracting command in Korea. A second bribery case related to U.S.

Army procurement was initiated in November 2003.

Prosecutors indicted eight Korean businessmen, who were

owners or directors of delivery companies, and on February 3,

2004, referred four U.S. Army officers to the Army’s criminal

investigation command. 

Sweden

In November 2002, the prosecutor general’s office pressed

charges against two Swedish consultants who were accused of

bribing World Bank officials. The two men were suspected of

paying 3 million Swedish krona (US$390,000) in bribes to

win World Bank consulting contracts. The case was tried in

December 2003, and on January 12, 2004, one defendant was

sentenced to one year and the other to one-and-a-half years’

imprisonment. Both cases are being appealed. 

Canada

Canada is prosecuting a Canadian oil field services company

for allegedly bribing a U.S. Immigration and Naturalization

Service (INS) official to facilitate entry of its employees into

the United States and thwart the entry of its competitors. The

INS official pleaded guilty in July 2002 to accepting $28,300

Canadian in bribes from the oil company, served a six-month

sentence, and was deported to the United States, where he

faced further prosecution. We understand that the case against

the Canadian firm will be tried this fall in Alberta. 

France

In late 2003, a French magistrate confirmed that he has

opened an investigation into suspicious payments made by a

consortium that included a French company to an agent in

connection with an oil and gas project in Nigeria. In addition,

at the end of April 2002, a judicial investigation was opened

by a tribunal in the Paris suburbs to look into charges of misuse of corporate assets and receiving of misuse of corporate

assets. This followed a notification by the French Financial

Intelligence Unit (TRACFIN) of suspicious large-scale transfers involving the French bank accounts of a minister from a

non- EU foreign country. In order to extend the judicial investigation, initially limited to the alleged misuse of corporate

assets and receiving of misuse of corporate assets, to cover the

matter of bribery which emerged during a letters rogatory procedure, the Public Prosecutor laid before the examining magistrate a “supplementary brief “ on the active bribery of a person entrusted with public authority in a foreign state, an

offence defined and punished under Articles 435–3 and 435–5

of the Penal Code. 

Italy

Italian authorities are investigating a major Italian energy

company for allegedly bribing foreign public officials in several countries in the Middle East. Several company executives

reportedly inflated invoices from consulting firms for work

related to contracts worth approximately 1 billion euros in

three Middle Eastern countries from 1999 to 2001. The excess

funds reportedly were used to bribe foreign officials in those

Middle Eastern countries. The trial is expected to start within

a year. 

Norway

In September 2003, Norwegian investigative authorities

opened a bribery investigation of a large Norwegian oil and

gas company. This company was formally charged with violation of the Norwegian penal code’s provision criminalizing

bribery of foreign public officials. 

A number of other investigations have been initiated by

parties, but the details are not available in the public domain.

The U.S. Government will watch developments in those cases

closely. We note that some potential cases may be dismissed at

an early stage because the initial evidence indicates that a

bribe offer or payment was made before implementing legislation was in force for a country. In such cases investigative

authorities should ensure that bribery transactions are fully

scrutinized to guarantee that any ongoing or promised future

payments under pre-Antibribery Convention contracts are

fully investigated and prosecuted as appropriate. Because of

the significant amounts of money involved, bribery transactions often are structured over many years. 

Further, although we recognize that reports in the general

media of alleged bribery of foreign public officials are not

always sufficiently credible to result in an official inquiry, in

some cases such reports should at least prompt prosecutors to

make preliminary inquiries. Furthermore, prosecutors in party

states should develop information on potential violations from

successful prosecutions by governments whose public officials were bribed. The U.S. Government expects and encourages each party to follow such cases and to bring its own prosecutions if warranted. U.S. agencies are concerned about the

apparent inaction of some parties and their failure to initiate

investigations where a conviction has been obtained in the

bribed official’s country and where the facts appear to support

22
such an investigation (e.g., bribe payor of a party or an actionable time period). A rigorous approach to prosecuting credible

cases is essential both to fulfill a party’s obligations under the

convention as well as to help support the rule of law. We recognize that many countries, like ours, preserve the confidentiality of criminal investigations until and unless they result in

public enforcement action. Therefore we may not have a full

picture of foreign enforcement efforts. Nonetheless, all parties

should take concrete steps in response to credible reports of

bribery of foreign public officials. 

Enforcement in the United States 

In the United States, under the Foreign Corrupt Practices Act

(FCPA), investigation of bribery of foreign public officials and

prosecution are subject to the same rules and principles that

govern any other federal criminal or civil investigation. To

ensure that uniform and consistent prosecutorial decisions are

made in this area, all criminal investigations, and some civil

actions, under the FCPA are supervised by the Criminal

Division of the U.S. Department of Justice. The Securities and

Exchange Commission (SEC) has civil enforcement authority

over issues under the FCPA, parts of which are incorporated

into the Securities Exchange Act of 1934. 

In the 27 years since the passage of the FCPA, the U.S.

Department of Justice has brought 39 criminal prosecutions,

seven civil enforcement actions under the antibribery provisions of the FCPA, and 19 foreign bribery criminal cases

under federal criminal statutes other than the FCPA. In addition, the SEC has brought nine civil enforcement actions since

1997 under the antibribery provisions and the books and

records provisions of the Securities Exchange Act of 1934.

Since July 1, 2003, the following enforcement actions have

been instituted, advanced procedurally, or concluded: 

• United States v. Hans Bodmer: In 2003, a grand jury in

New York returned an indictment charging Hans Bodmer,

a Swiss lawyer, with conspiring to violate the FCPA in

connection with alleged bribery of senior officials of the

government of Azerbaijan. At the United States’ request,

Korea extradited Mr. Bodmer to the United States in

2004. 

• United States v. James H. Giffen: In April 2003, a grand

jury in New York returned an indictment charging James

Giffen, a U.S. citizen, who acts as a counselor to the government of Kazakhstan on oil transactions, with, among

other things, violations of the FCPA, money laundering,

and fraud associated with the diversion of fees paid by oil

companies and the deposit of funds into Swiss bank

accounts held for the benefit of Kazakh officials. The trial

is scheduled for October 2004. 

• United States v. David Kay: In December 2001, a grand

jury sitting in Houston, Texas, returned an indictment

charging David Kay, an officer of American Rice Inc.,

with violating the FCPA by allegedly authorizing bribes

of Haitian customs officials. In March 2002, the grand

jury returned a superseding indictment adding a second

defendant, Douglas Murphy, a former officer of

American Rice Inc. In April 2002, the district court dismissed the indictment, finding that the alleged conduct

did not fall within the FCPA’s requirement that the bribes

be paid to obtain or retain business. The United States

appealed this decision, and in February 2004, the Court of

Appeals for the Fifth Circuit reinstated the indictment.

The trial is now scheduled for August 2004. 

• In a related administrative proceeding, In the Matter of

American Rice, Inc., the SEC entered a settled cease-anddesist order against American Rice, two former American

Rice employees involved in rice shipments to Haiti, Joel R.

Malebranche and Allen W. Sturdivant, and a former

American Rice controller in Haiti, Joseph A. Schwartz, Jr.

The SEC found that American Rice paid bribes with regard

to at least 12 shipments of rice into Haiti. In general,

Malebranche negotiated each bribe, Schwartz issued checks

drawn on American Rice’s bank account and falsely recorded the amounts as routine business expenditures on

American Rice’s books and records, and Sturdivant falsified

the shipping records with respect to each shipment. In each

case, the respondents’ actions were allegedly authorized by

the respondents’ superiors. The SEC further found that

American Rice lacked internal controls that were reasonably designed to prevent or detect FCPA violations. Each of

the respondents consented to cease and desist from further

violations. (Note: This case was concluded in January 2003,

but was not noted in our 2003 report). 

• In the Matter of BJ Services Company: In March 2004,

the SEC entered a settled cease-and-desist order against

BJ Services Company for violations of the FCPA’s antibribery, books-and-records, and internal control provisions

stemming, in part, from illicit payments made through the

company’s Argentinean subsidiary to customs officials. In

one instance, an Argentinean customs official demanded

a bribe for the release of equipment that had been imported into the country in violation of Argentinean customs

law. Payment of the bribe ensured that the company could

avoid fines and charges relating to reimportation of the

equipment and also avoid any disruption to its business.

On a subsequent occasion, bribes were paid to an

Argentinean customs official to overlook a prior customs

violation and not fine the company. Those payments were

improperly characterized on the company’s books and

records. BJ Services Company consented to cease and

desist from further violations. 

• SEC v. Schering-Plough Corporation: In June 2004,

Schering-Plough consented to pay a $500,000 civil penalty without admitting or denying allegations that it violated the books and records and internal control provisions

of the FCPA. These violations resulted from payments

made by Schering-Plough’s Polish subsidiary to the

Chudow Castle Foundation, a charitable organization

based in Poland, from February 1999 through March

23
2002. During the period in which these illicit payments

were made, the individual who headed the Chudow Castle

Foundation also served as the Director of the Silesian

Health Fund. The Silesian Health Fund was a Polish governmental body that, among other things, provided money

for the purchase of pharmaceutical products and influenced the purchase of those products by other entities,

such as hospitals, through the allocation of health fund

resources. According to the complaint, Schering-Plough

Poland paid 315,800 Zlotys (approx. U.S.$76,000) to the

Chudow Castle Foundation to induce the Director to

influence the health fund’s purchase of Schering-Plough’s

pharmaceutical products. The complaint alleges that none

of the payments made by Schering-Plough Poland were

accurately reflected on the subsidiary’s books and records

and that the company’s internal controls were inadequate

to detect the improper payments. 

• Additionally, in a parallel enforcement proceeding, the

SEC entered a settled case-and-desist order requiring

Schering-Plough to cease and desist from committing or

causing violations of the FCPA’s books and records and

internal control provisions. As part of the settled ceaseand-desist order, Schering-Plough was ordered to retain

an independent consultant to review the company’s policies and procedures regarding compliance with the FCPA

and to implement any changes recommended by the

consultant. 

The Antibribery Convention requires parties to take

measures necessary to ensure either that the party can extradite its nationals or that it can prosecute its nationals for

bribery of foreign public officials, and if it denies a request to

extradite its nationals solely on that basis, it shall submit the

case to its authorities for prosecution. In the case of United

States v. Frerik Pluimers, the United States made such a

request to the Netherlands and has been waiting for appropriate action since 2000. [Please refer to appendix C of this

report for a comprehensive list of FCPA prosecutions and civil

enforcement actions by the DOJ and independent civil

enforcement actions by the SEC.] 

Department of Justice Opinion Procedure 

The U.S. Department of Justice has also provided guidance to

American businesses engaged in international business transactions. Since 1980, in response to requests from U.S. businesses, the department has issued 40 opinions stating whether

it would take enforcement action if the requestors proceeded

with actual proposed transactions. In 2004, the department

issued one opinion: 

In Opinion Release 04–01 the U.S. Attorney General

opined that a U.S. law firm that proposed to sponsor

and present, in conjunction with a ministry of the

People’s Republic of China (“PRC”), a comparative

law seminar in Beijing, China, which would entail

among other things, paying the costs of the seminar for

certain foreign public officials, could proceed with the

seminar without fear of FCPA prosecution based on the

facts and circumstances described in the request. 

The opinion procedure is set forth at 28 C.F.R. Part 80. The

opinion procedures and the opinions issued to date are available

on the Department of Justice Fraud Section’s Web site at

www.usdoj.gov/criminal/fraud/fcpa.html. Please see Appendix

2C of this report for a copy of the opinion procedures. 

Efforts to Promote Public Awareness

U.S. Efforts 

Of any party to the convention, the United States has the most

extensive public outreach program to promote awareness of

the Antibribery Convention and its implementing legislation.

The United States recognizes the importance of awarenessraising activities. For many years, prior to the adoption of the

Antibribery Convention, the U.S. Government sought to educate the business community and the general public about

international bribery and the FCPA. As a result, U.S. companies that are engaged in international trade generally are aware

of the requirements of U.S. law. Since U.S. ratification of the

Antibribery Convention and the passage of the International

Antibribery and Fair Competition Act of 1998 (IAFCA), the

U.S. Government has increased efforts to raise public awareness of U.S. policy on bribery and of initiatives to eliminate

bribery in the international marketplace. 

Officials of the Commerce, State, and Justice

Departments continue to be in regular contact with business

representatives to brief them on new developments in antibribery issues and to discuss problems they encounter in their

operations. As part of a vigorous outreach program, the three

departments’ Web sites provide detailed information on the

convention, relevant U.S. laws, and the wide range of U.S.

international activities to combat corruption. (See Appendix D

for websites.) 

Efforts of Other Signatories 

Efforts to raise public awareness about the Antibribery

Convention and domestic laws implementing the convention

continue to vary widely among the parties. Some parties continue to rely on historical perceptions of low levels of corruption within their communities and direct few if any resources

to the effort. Others, faced in some cases with limited

resources, assign greater importance to other initiatives and

also fail to address this important component of implementation and enforcement. Nonetheless, some parties have recognized the need to raise awareness of the convention among

their public and private sectors. For example, in Australia, the

attorney general’s department is developing guidelines on

bribery for Australian government employees operating overseas. The government is also developing information on the

convention to be inserted into a passport pack that Australians

receive when traveling overseas. 

As host of the 2005 Global Forum on Fighting

Corruption, Brazil is organizing national, regional, and global antibribery events to raise awareness of the Antibribery

24
Convention, including in the private sector and civil society.

The Government of Chile recently created a National

Corruption Expert Group, which is composed of public officials from entities of the Chilean administration that specialize in the prevention, detection, and prosecution of acts of corruption. The group will include support for the activities of the

OECD Working Group on Bribery in Chile. The Government

of Finland established a body composed of officials from different ministries whose purpose is fighting corruption, and the

Government of Korea established a task force to promote

implementation of the convention. In July 2003, Italy enacted

a law that established a high commissioner for the prevention

and the fight against corruption and other forms of illicit practices in public administration. In Mexico the Secretariat of

Public Administration partnered with several private-sector

entities to promote greater awareness of the convention among

the business, academic, and legal communities, and held seminars, including one in September 2003 that was directed at the

accountancy profession and titled “International Instruments

Related to the Fight Against Corruption.” The Government of

Norway started collecting information from its diplomatic

missions on whether Norwegian enterprises have reported

about bribery in the countries in which they operate. In addition, Norway’s Phase II review revealed an extensive program

of outreach related to the convention. In Sweden the prosecutor general created a special anticorruption unit within the city

court of Stockholm, which will operate at the national level. In

Switzerland the State Secretariat for the Economy, in collaboration with the other departments and with Transparency

International (Switzerland), published a brochure aimed at

Swiss enterprises that are active abroad, which provides them

with information on bribery laws and related anticorruption

resources. In addition, a number of the parties to the convention have posted their national implementing legislation on

their government Web sites or the OECD Anti-Corruption

Division Web site at www.oecd. org/document/30/0,2340,

en_2649_34859_2027102_1_1 _1_1,00.html.

These, and similar efforts by other parties, contribute to

securing the objectives of the Antibribery Convention. Although

businesses are responsible for understanding and complying

with the laws in the environments in which they operate, each

party to the convention bears the responsibility of publicizing the

fact that bribery is no longer an acceptable way to obtain an

international contract and that serious criminal and civil penalties can be imposed on those who bribe or attempt to bribe foreign public officials. Each enforcement review to date has

emphasized the importance of raising awareness of the convention among public officials and the private sector. The U.S.

Government will continue to urge other parties to the convention

to undertake active public awareness programs. In addition, such

initiatives should include a component that encourages businesses to develop and adopt effective corporate compliance programs

to ensure compliance with national laws implementing the convention. Full participation in implementation and enforcement

by governments, business, and civil society is critical to making

the Antibribery Convention an effective deterrent to corruption.

Monitoring Process for the Convention 

Monitoring is crucial for promoting the effective implementation and enforcement of the Antibribery Convention. The

OECD has developed a comprehensive monitoring process

that provides for input from the private sector and non-governmental organizations. In addition to the OECD process, the

U.S. Government undertakes its own monitoring. The United

States continues to encourage all parties to participate fully in

the OECD monitoring process and to establish their own internal mechanisms for ensuring follow-through on the convention by governments and the private sector. 

OECD Monitoring 

The OECD Working Group on Bribery recognizes that a rigorous process of multilateral surveillance of implementation

and enforcement is necessary. Therefore, to ensure the effectiveness of the Antibribery Convention and related anticorruption instruments, the OECD Working Group on Bribery has

established a rigorous process to monitor implementation and

enforcement of the convention and the 1997 Revised

Recommendation of the OECD Council on Combating

Bribery in International Business Transactions (Revised

Recommendation). 

The monitoring process has two phases: an implementation phase (Phase I) and an enforcement phase (Phase II). The

objective of Phase I is to evaluate whether a party’s implementing legislation meets the standards set by the convention

and the Revised Recommendation. The objective of Phase II is

to study and assess the structures and methods of enforcement

put in place by countries to enforce the application of those

laws. Both phases entail: 

(1) the issuance of questionnaires to the reviewed country, 

(2) the subsequent analysis of its replies by an examination

team composed of staff from the OECD Working Group

on Bribery secretariat and lead examiners from two party

states, and 

(3) the drafting of an interim report by the examination team. 

The report is discussed and further evaluated at a

Working Group meeting, which results in a final report. The

shortcomings are identified, and effective approaches to

implementation and enforcement are provided to the

reviewed country. Phase II examinations also include onsite

visits by the examination team. An important objective of

both phases is to improve the capacity of parties to fight

bribery of foreign public officials in international business

transactions through parties’ mutual critical evaluation of

compliance with the requirements of the Antibribery

Convention and Revised Recommendation. For a detailed

description of the framework for monitoring the convention

and Revised Recommendation, which includes a summary of

the modalities for the process, please refer to this chapter in

the 2001 report to Congress at www.export.gov/tcc. The

25
modalities are also available on the OECD’s public Web site

at:

• www.oecd.org/document/21/0,2340,en_2649_34859_

2022613_1_1_1_1,00.html for Phase I and 

• www.oecd.org/document/27/0,2340,en_2649_34859

_2022939_1_1_1_1,00.html for Phase II. 

Financial support for the monitoring of the Antibribery

Convention remained uncertain through 2002; however, the

OECD Council agreed to reallocate budget funds for the

2003–2004 budget cycle to support an accelerated cycle of

peer reviews. The U.S. Government worked to persuade other

OECD countries to join the consensus to increase funding for

convention peer monitoring. In 2003 the OECD Working

Group on Bribery succeeded in negotiating a compromise

package of institutional, structural, and financial reforms that

will provide for stable funding of peer reviews through 2007.

The OECD Council approved the reform package in February

2004. The U.S. Government firmly believes that a rigorous

Phase II enforcement process is needed to encourage parties to

take the necessary steps to investigate and to prosecute unlawful conduct by persons subject to their jurisdiction. 

Phase I Reviews 

As of July 2004, the OECD Working Group on Bribery completed Phase I reviews of the implementing legislation of 34

parties. Only the implementing legislation of Slovenia remains

to be reviewed. That review is expected to take place sometime

in 2005. The individual country reviews by the Working Group

are available on the OECD’s public Web site at

www.oecd.org/document/24/0,2340,en_2649_34859_

1933144_1_1_1_1,00.html. 

The Commerce Department’s Trade Compliance Center

also maintains a link to those materials through its site at

www.export.gov/tcc. U.S. Government assessments of the

implementation of parties reviewed since our last report

(Brazil, Chile, and Turkey), and brief descriptions of actions

undertaken by some parties to amend their legislation over the

past several years to conform to recommendations of the

Working Group, are included in Chapter 2 of this report. For

all other U.S. Government assessments, please refer to the earlier annual reports to Congress available at the same Web

address. A copy of the Phase I Review of the U.S. is contained

in Appendix B of this report.

Phase II Reviews 

The goal of Phase II of the monitoring process is to study the

structures that parties have in place to enforce the laws and

rules implementing the convention and the Revised

Recommendation and to assess their application in practice.

Phase II began in late 2001 with a review of Finland. Since

then, the enforcement regimes of Bulgaria, Canada, France,

Germany, Iceland, Luxembourg, Norway, and the United

States have undergone review. The dates, countries of lead

examiners, and related information for these and all Phase II

reviews can be found in Table 2 at the end of this chapter. 

In early 2004, after a little over two years of experience in

conducting Phase II examinations, the OECD Working Group

on Bribery developed new review guidelines to supplement

the existing procedures and to provide guidance and best practices for lead examiners, countries to be reviewed, the OECD

Secretariat, and the Working Group as a whole. The guidelines

recognize that it is not necessary for every Phase II review to

cover the same laundry list of topics. Nor is it necessary or

desirable to devote time and resources to issues already being

examined and addressed in other fora. Instead, the review

should focus on the particular issues raised by the examined

country’s implementation of the convention and its governmental, economic, and geographic organization. Furthermore,

the facts and circumstances presented by a particular country

may require that issues not addressed in previous Phase II

reviews be included in the review of that country. The Working

Group believes that, to be effective, the Phase II process must

be transparent, rigorous, and credible. 

Following are brief summaries highlighting various issues

raised in enforcement reviews of Bulgaria, Canada, France,

Luxembourg, and Norway. Summaries for Finland and the

United States and for Germany and Iceland can be found in

the 2002 and 2003 reports to Congress, respectively. For more

detailed analyses and recommendations of the Working

Group, see www.oecd. 28 Addressing the Challenges of

International Bribery and Fair Competition, 2004 org/document/24/0,2340,en_2649_34859_1933144_1_ 1_1_1,00.html.

Phase II reports and recommendations of the OECD Working

Group on Bribery go to www.oecd.org/document/

24/0,2340,en_2649_37447_1933144_1_1_1_3744 7,00.html.

A copy of the Phase II Review of the U.S. is contained in

Appendix B of this report.

Bulgaria

The OECD Working Group on Bribery conducted the Phase II

review of Bulgaria during the group’s February 2003 meeting.

Corruption is a nationally debated issue in Bulgaria, and

although the Working Group examiners were impressed with

the amount of resources and energy the Bulgarian government

is focusing on the issue generally, bribery of foreign public

officials is not as high on the agenda as domestic corruption.

There have been no prosecutions under Bulgaria’s law implementing the convention. 

Bulgaria has made several amendments to its foreign

bribery law to meet the convention’s requirements following its

Phase I examination. For example, some of the amendments

addressed offers and promises to bribe, deleted certain defenses, and expanded the definition of a foreign public official.

However, one of the main problems with Bulgaria’s implementation and enforcement of the Antibribery Convention is that it

still does not provide for liability of legal persons for bribery of

foreign public officials or sanctions for corporate liability. The

Working Group recommended that Bulgaria proceed diligently

with procedures addressing those remaining problems. It also

recommended excluding from government contracts any entities whose officers and directors engaged in foreign bribery. 

26
In addition, the Working Group recommended that

Bulgaria provide more training of government officials to

make them aware of the new antibribery laws, particularly

those officials responsible for the detection, reporting, and

enforcement regarding the offense of bribery of foreign public

officials, as well as training of tax authorities. Furthermore,

the Working Group recommended that the relevant Bulgarian

agencies in charge of investigating and prosecuting foreign

bribery simplify and streamline their procedures, enhance

their cooperation and coordination, increase resources, and, to

the extent possible, consider centralizing expertise among

those responsible for investigating the offense. The Working

Group also noted that the Bulgarian private sector, businesses

and, particularly, professionals in the legal, auditing, and

accounting professions, could use more education on the foreign bribery laws, and recommended that Bulgaria increase

public awareness by educating and advising the private sector

on the offense. A key recommendation was that Bulgaria

encourage more widespread development and use of corporate

codes of conduct and compliance policies in the Bulgarian private sector. Apparently the private sector has begun these

efforts on its own initiative, with certain business groups having already created corporate codes of compliance. 

Canada

The Working Group conducted Canada’s Phase II review at its

June 2003 meeting. Although there have been no completed

prosecutions involving bribery of foreign public officials in

Canada (there was one ongoing matter at the time of the Phase

II review), the Working Group made several general recommendations regarding effective measures for preventing and

detecting foreign bribery as well as for effectively prosecuting

and sanctioning foreign bribery offenses. 

The Working Group recommended that Canada consider

giving a coordinating role to one of the principal agencies responsible for implementing the Canadian antibribery law. Better coordination will help to avoid the duplication of resources and to

maintain specialized knowledge and expertise, at both the federal and the provincial level, in the enforcement of the offense. The

Working Group also recommended that Canada establish a more

systematic and coordinated approach to promoting awareness of

its antibribery laws in all the relevant government agencies, at

both the federal and provincial level, in order to prevent and

detect foreign bribery. Although both the Department of Justice

and the Department of Foreign Affairs and International Trade, as

well as Canada’s export credit agency, have publicized the

Canadian law implementing the convention within the private

sector and have provided training to key government officials, the

Working Group encouraged Canada to do more. The Working

Group suggested more training for the relevant agencies involved,

police and prosecutors, customs, and those most likely to come

into contact with companies abroad. Also, as in many countries,

the larger multinational companies were more aware of the foreign bribery offense than small and medium-sized businesses

were; therefore, the Working Group recommended that more

information be targeted to those companies. 

The Working Group also made several recommendations

concerning accounting requirements, external audits, and

internal company controls to clarify the prohibition of off-thebooks accounts and transactions and the use of false documentation, to encourage more effective external audits and auditor

independence, and to spur the development and adoption of

adequate internal company controls and standards of conduct.

Another important recommendation was to review the prohibition under the federal Income Tax Act against reporting to

law enforcement agencies any non-tax-related criminal offenses detected in the course of tax audits. In addition, the

Working Group recommended that Canada reconsider its decision not to establish nationality jurisdiction over the offense of

foreign bribery (as most other commonlaw countries did,

including the United States and the United Kingdom, when

they enacted laws implementing the OECD Antibribery

Convention). 

France

The OECD Working Group on Bribery conducted the Phase II

review of France during its October 2003 meeting. Although

the French Phase II review revealed some problems, the

Working Group and the United States were encouraged to

learn that France had brought one prosecution for foreign

bribery, in which it charged a French national and a foreign

official. The Working Group also learned that France was conducting several other investigations into allegations of foreign

bribery, had referred one investigation to another country, and

was executing mutual legal assistance requests from other

countries investigating foreign bribery. 

In addition, the Working Group made a number of recommendations that it felt would improve France’s efforts to raise

awareness of the Antibribery Convention and make its

enforcement efforts more effective. For instance, the group

recommended that French officials send regular reminders to

diplomatic missions concerning their responsibility to report

allegations of bribery by French enterprises to the public prosecutor. The Working Group also suggested that France step up

its efforts to publicize the law implementing the convention

with the private sector, and encourage its companies to develop and adopt corporate compliance programs that address the

issue of transnational bribery. Furthermore, the Working

Group noted that the French permit victims of bribery of

domestic and European Union officials to initiate prosecutions

but did not extend the same rights to victims of bribery in

other foreign countries. The Working Group called on France

to accord equal treatment in the prosecution of all cases of

bribery of foreign officials. 

The Working Group expressed concern over reports that

France has a general legal culture that has resisted prosecuting

corporations. Despite the creation of corporate criminal liability in 1994, certain legal impediments to prosecuting corporations, potential impediments to the exercise of extraterritorial

jurisdiction, and some recent court cases suggest prosecutors

might encounter difficulties in establishing the elements of the

crime. 

27
Luxembourg

The Working Group conducted the Phase II review of

Luxembourg at its April 2004 meeting. The Phase II report on

the Luxembourg review indicated that Luxembourg authorities

are concerned not only about transnational bribery by their

companies, but also by foreign companies and nationals using

Luxembourg banks or companies to further international

bribery schemes. Accordingly, Luxembourg officials stated

that they would provide assistance to the home country of such

companies and nationals, enabling those countries to bring

enforcement actions. In fact, Luxembourg has instructed its

prosecutors to give mutual legal assistance requests priority

over the government’s own investigations. 

The most serious flaw in Luxembourg’s enforcement

regime is its continued failure to implement liability for corporations. Luxembourg has repeatedly assured the Working

Group that a law creating such liability is being prepared, and

it stated that it expects to introduce a bill after its national elections in June. The Working Group made a series of recommendations concerning improving awareness of Luxembourg’s

antibribery law among its public and private sectors, improving the enforcement of reporting requirements by public servants, and implementing whistle-blower protection in the private sector. In addition, the group recommended empowering

police to conduct preliminary investigations of bribery allegations and, of course, encouraged the introduction and passage

of a law on corporate criminal liability. Finally, the Working

Group indicated that it would consider an unprecedented follow-up on-site examination after Luxembourg reported on its

efforts to implement the Working Group’s recommendations. 

Norway

The Working Group conducted Norway’s Phase II review at its

December 2003 meeting. Norway received a generally favorable Phase II review. Although no cases of the new offense of

bribery of foreign public officials have been tried in Norway,

Norway has had one conviction for bribery of a foreign public

official. That case, which was brought under an alternative

aggravated breach of trust offense, predated the implementation of the convention. Several investigations apparently were

under way at the time of the Phase II review. 

Norway has made numerous amendments to its law

implementing the convention since its Phase I review. For

example, Norway added a definition of a “foreign public official,” clarified what constitutes an aggravated bribery offense,

increased the prison terms for the offense of foreign bribery,

broadened the coverage regarding reporting of suspicious

transactions under its money laundering legislation, and significantly increased the statute of limitations from 2 years to 5

and 10 years, respectively, for natural and legal persons. In

addition, compared with many OECD countries, Norway conducted a widespread public campaign to address international

corruption, both within the government and within the private

sector. The private sector has adopted corporate codes of compliance and generally seems aware of the foreign bribery

issue, particularly the larger companies. Nonetheless, the

Working Group recommended that this publicity continue, so

that all relevant actors, including small and medium-sized

businesses, accountants, auditors, and government employees,

particularly in diplomatic posts, are aware of the Antibribery

Convention. The Working Group also recommended that

Norway consider allocating more resources to agencies

responsible for investigating foreign bribery. 

Monitoring of the 

Convention by the U.S. Government 

Since the Antibribery Convention entered into force, monitoring the implementation and enforcement of the convention has

been a priority for the U.S. Government. The U.S. Government

is committed to ensuring full compliance with agreements

with its trading partners. The Commerce, State, and Justice

Departments continue to cooperate as an interagency team to

monitor implementation and enforcement of the convention.

Each agency brings its own expertise and has a valuable role

to play. 

The United States continues to have the most intensive

monitoring program of any signatory country. Our process is

transparent and open to input from the private sector and nongovernmental organizations. We encourage other parties to

undertake similar programs and expect them to find it in their

interest to ensure that all parties are complying with the obligations of the convention. In this way, we all make it an effective multilateral anticorruption instrument. 

28
29

Table 2: OECD Convention on Combating Bribery of Foreign Public Officials 

in International Business Transactions

(Phase II Country Examinations through 2007)

Date of Examination Country Phase I Phase II On-site Visit for the

under Phase II Examined Examiners Examiners Phase II Examination

November 2001 Finland Czech Republic Czech Republic September 12–14, 2001

Sweden South Korea

June 2002 United States Japan France March 11–15, 2002

United Kingdom United Kingdom

October 2002 Iceland Denmark Denmark May 27–30, 2002

Slovak Republic Slovak Republic

December 2002 Germany Canada Austria June 3–6, 2002

South Korea Japan

February 2003 Bulgaria Norway Norway November 26–29, 2002

Poland Poland

June 2003 Canada Brazil United States February 16–21, 2003

United States Switzerland

October 2003 France Italy Canada June 23–27, 2003

Luxembourg Italy

December 2003 Norway Finland Finland September 8–12, 2003

Hungary Czech Republic

April 6–8, 2004 Luxembourg Greece Belgium November 17–21, 2003

Switzerland France

June 22–24, 2004 Mexico Netherlands Netherlands February 2–6, 2004

Spain Spain

South Korea Germany Australia 2004

Italy Finland

October 12–13, 2004 Italy Mexico Germany April 19–23,2004

United Kingdom United Kingdom

Switzerland Austria Belgium May 10–14, 2004

Canada Hungary

December 7–9, 2004 Japan South Korea Italy June 28–July 2, 2004

United States United States

United Kingdom France France July 19–23, 2004

Netherlands Canada

1. As exigencies in the Working Group arise, this schedule may be subject to change.

2. The Phase II review of the United Kingdom will be carried out as scheduled on the basis of its existing foreign bribery provisions 

in the Anti-Terrorism Act.
30

Table 2 (continued)

Date of Examination Country Phase I Phase II On-site Visit for the

under Phase I Examined Examiners Examiners Phase II Examination

March 15–17, 2005 Hungary Austria Denmark Mid-October 2004

Italy Austria

Greece Portugal Portugal Mid-October 2004

Switzerland Ireland

June 14–16, 2005 Sweden Finland Poland Mid-January 2005

Poland Iceland Belgium

France Argentina Mid-January 2005

Luxembourg Switzerland

October 18–20, 2005 Slovak Republic Czech Republic Hungary May/June 2005

Greece Turkey

Australia New Zealand New Zealand May/June 2005

Norway Japan

December 14–16, 2005 Austria Belgium Luxembourg June/July 2005

Denmark Greece

March 22–24, 2006 Czech Republic Bulgaria Iceland October 2005

Iceland Slovenia

Spain Japan Mexico October 2005

Mexico Chile

June 13–16, 2006 Netherlands Germany Norway Mid-January 2006

Iceland Ireland

Denmark Australia Slovak Republic Mid-January 2006

Sweden Sweden

October 24–26, 2006 Argentina Slovak Republic Spain May/June 2006

Spain Brazil

New Zealand Australia Australia May/June 2006

Argentina South Korea

December 12–14, 2006 Poland Belgium Slovenia July/September 2006

Hungary Turkey

March 2007 Portugal Chile Netherlands October 2006

Ireland Brazil

Ireland Argentina Sweden October 2006

United Kingdom New Zealand

Bulgaria

June 2007 Slovenia Chile Greece Mid-January 2007

Turkey Luxembourg

Chile Argentina/ Argentina Mid-January 2007

Spain Mexico

October 2007 Turkey Slovenia Germany May/June 2007

Brazil Bulgaria

Brazil Portugal Portugal May/June 2007

Chile Chile
The OECD Council made an important contribution to the

fight against bribery in 1996 by recommending that member

countries that had not yet disallowed the tax deductibility of

bribes to foreign public officials should reexamine such

treatment with the intention of denying deductibility. This

recommendation was reinforced in the 1997 Revised

Recommendation of the OECD Council on Combating

Bribery in International Business Transactions (Revised

Recommendation), which laid the foundation for negotiation

of the OECD Antibribery Convention. All 35 parties to the

convention agreed to implement the OECD Council’s recommendation on denying the tax deductibility of bribes. 

Each of the 35 parties to the Antibribery Convention has

affirmed that bribes paid to foreign public officials are not tax

deductible.1 Some parties deny tax deductibility of bribes

explicitly in their laws, while others permit deductions only

for expenses specified in their tax laws or related to proper

business activity. 

Despite the important positive steps taken by parties to

the convention, the U.S. Government remains concerned that

tax systems that permit tax deductibility of bribes to foreign

public officials may be continuing for one or more of the following reasons: 

(1) the legal framework may disallow the deductibility of

only certain types of bribes or only bribes by companies

above a certain size, 

(2) the standard of proof for denying a tax deduction (e.g., the

requirement of a conviction for a criminal violation) may

make effective administration of such laws difficult, 

(3) the relevant laws may not be specific enough to effectively deny deductibility of bribes in all circumstances, 

(4) the prohibition is not currently applicable to a country’s

territories and dependencies, and 

(5) overly broad categories for allowable deductions may permit disguised bribe payments.

As part of the monitoring process, the OECD Working

Group on Bribery examines each party’s implementation of

the Revised Recommendation, including the prohibition of tax

deductibility of bribes to foreign public officials. Phase II

reviews by the OECD Working Group on Bribery have identified potential weaknesses in the application of rules denying

deductibility. For example, tax examiners may not be sufficiently aware of the laws or policies that require them to deny

tax deductions for bribes to foreign public officials, especially where such prohibitions are not explicitly disallowed under

domestic laws. Also, tax examiners may not be sufficiently

trained in detecting deductions related to the payment of

bribes to foreign officials. In addition, because domestic laws

may protect the confidentiality of taxpayer information and

taxpayer rights against self-incrimination, tax officials may

not be permitted to share with prosecutors certain information

they obtain regarding the payment of bribes. To address those

weaknesses, the Working Group proposed that countries

expressly deny the deductibility of bribes in their relevant laws

and increase tax authorities’ and other public officials’ awareness of the non-tax deductibility of bribes by issuing guidelines and providing special training to help them detect the

payment of bribes to foreign officials. The Bribery Awareness

Handbook, published by the OECD Committee on Fiscal

31

4 

Laws Prohibiting Tax 

Deduction of Bribes 
Affairs, is a useful manual for tax officials to assist in the

detection of bribes. The Working Group also recommended

that a party require its tax officials to report suspected foreign

bribery to investigative authorities. As noted above, however,

the sharing of information between tax officials and prosecutors may be subject to confidentiality restrictions on taxpayer

information that are designed to promote sound tax administration, as well as restrictions to protect taxpayers from selfincrimination. Furthermore, the Working Group recommended that accountants or auditors responsible for a company’s

books also be required to report suspicious transactions to

management or to investigative authorities pursuant to the

Revised Recommendation. 

Whatever the legal or administrative gaps that perpetuate

the practice of tax deductibility of bribes to foreign public

officials, signatories to the Antibribery Convention are obligated to stop the practice. Furthermore, all parties must recognize that enacting rules denying deductibility is only the first

step; careful monitoring to ensure that the rules are actually

enforced must continue. The Working Group on Bribery has

indicated that as the monitoring process moves forward, it will

follow up on the effectiveness of existing mechanisms to identify and disallow tax deductions for bribes to foreign public

officials; the United States will continue to play an active role

in that effort. 

1 As part of the monitoring process on the Antibribery Convention and the

Revised Recommendation, the OECD gathers information on signatories’ laws implementing the recommendation on tax deductibility.

Information on current and pending tax legislation regarding the tax

deductibility of bribes is available on the OECD Web site www.oecd.org

/topic/0,2686,en_2649_34551_1_1_1_1_ 37447,00.html. The information on the Web site is based entirely on reports that the signatories

themselves have provided to the OECD Secretariat. 

32
Outstanding Issues Relating to the Convention 

When the Antibribery Convention was negotiated in

1997, the United States sought to include coverage of bribes

paid to political parties, party officials, and candidates for

public office. Those channels of bribery and corruption are

covered in the U.S. Foreign Corrupt Practices Act (FCPA);

however, they are not specifically covered in the convention.

The original signatories did agree that expansion of the convention’s coverage should be studied further. 

In all, five issues were identified at a December 1997

OECD Council meeting for additional examination: 

• bribery acts in relation to foreign political parties, 

• advantages promised or given to any person in anticipation of that person becoming a foreign public official, 

• bribery of foreign public officials as a predicate offense

for money laundering legislation, 

• the role of foreign subsidiaries in bribery transactions,

and 

• the role of offshore centers in bribery transactions. 

Those issues have been discussed to varying degrees over

the past several years in the OECD Working Group on Bribery.

However, although several countries have stated that they

would make bribery of foreign public officials a predicate

offense for their respective money laundering legislation, no

agreement has been reached to formally expand the scope of

the convention to cover any of the five issues listed above. For

a more detailed review of the history of those discussions,

please refer to prior reports to Congress, which are available at

www.export.gov/tcc. 

Although the U.S. Government considers expanding the

scope of the Antibribery Convention to include bribes to political parties and candidates to be particularly important, to

date, we have not persuaded other convention parties to support the inclusion of this broader coverage of bribery in the

convention. The United States remains concerned that failure

to prohibit the bribery of political parties, party officials, and

candidates for office may create a loophole through which

bribes may be directed now and in the future. Although no

such loophole exists in the FCPA, our experience shows that

firms nevertheless attempt to obtain or retain business with

such bribes. In fact, the first case brought under the FCPA

involved a payment to a political party and party officials. In

the fight against corruption, bribes to political parties, party

officials, and candidates are no less damaging than bribes to

government officials. Based in part on press reports, it appears

that companies based in states who are party to the convention

may still attempt to use this mode of bribery to obtain or retain

business in foreign markets. 

33

5 

Subsequent Efforts to 

Strengthen the Convention 
34

Recent Developments 

Since 1997, the Working Group has held consultations with

the private sector and non-governmental organizations on several of the five issues. In 2001, the OECD Working Group on

Bribery distributed a questionnaire to determine whether parties’ laws implementing the Antibribery Convention applied to

bribes to political parties and candidates. The questionnaire

also requested information concerning bribery transactions

involving foreign subsidiaries. Most parties were slow to

return their responses to the OECD Secretariat. After repeated

reminders 25 out of 35 Parties had responded by October of

2003. 

In early 2003, the chairman of the OECD Working Group

on Bribery, Mark Pieth, urged the group to develop a new

work program centered on substantive issues, including the

five that were identified in 1997. In response to Mr. Pieth’s

interest, the United States proposed an ad hoc meeting in 2003

for Working Group experts to exchange views on foreign subsidiaries, a topic France had originally proposed in 1997. In

October 2003, the Working Group experts met in Paris to discuss the topic of bribery by foreign subsidiaries of companies

based in Antibribery Convention countries. In preparation for

the meeting, parties were urged to update their responses to

the 2001 questionnaire. Information submitted by the majority of parties indicated that most would assert jurisdiction over

the acts of a foreign-incorporated company that attempted to

bribe a foreign official within the parties’ territory. No party,

including the United States, holds parent corporations strictly

liable for the criminal acts of their subsidiaries. However, in

the United States and in other convention countries that

impose liability on legal persons, parent corporations may be

held liable for the acts of their subsidiaries that are authorized,

directed, or controlled by the parent corporation. The Working

Group concluded that the convention, as currently drafted,

adequately addressed the issue of bribes paid through foreign

subsidiaries and that most of the parties had in place the legal

tools necessary to prosecute parent corporations or their officers for bribes paid through foreign subsidiaries. 

The Working Group has heard presentations by academic

experts on corporate supervision of subsidiaries under the

countries’ various domestic legal systems. Several parties to

the convention have proposed topics for examination with the

possible goal of amending the convention in the future to

expand its coverage. From 2001 to 2003, the Working Group

received new proposals to study international sports bribery

and “private-to-private” bribery. The group reserved decisions

on both matters while work on internal and budgetary reform

was pending in 2003–2004, and while negotiations to conclude the new United Nations Convention Against Corruption

were under way. Table 3 provides the status of the five issues

as of May 2004. 

Issue 

Bribery acts in relation to political parties 

Bribery of foreign public officials as a predicate offense

for money laundering legislation 

Role of off shore centers in bribery transactions 

Role of foreign subsidiaries in bribery transactions 

Advantages promised or given to any person in anticipation of that person becoming a foreign public official 

Note: WGB = Working Group on Bribery

Status 

2001 questionnaire: Responses are incomplete (about

25 of 35 parties have replied; some responses are

incomplete). 

Addressed by WGB in peer reviews of each party’s

implementing legislation and enforcement. 

Action shifted, de facto, to Financial Action Task Force

(OECD). 

WGB experts exchanged views in October 2003. WGB

will monitor as enforcement issue in peer reviews. Most

parties can prosecute if head office had knowledge or

reason to know of bribery act. 

Most countries agree that a bribe paid in anticipation of

an act done after a person becomes a foreign public

official would be covered. Issue has not received further

attention. 

Table 3: Status of the Five Issues as of May 2004 
35

6 

The United States and the OECD Working Group on

Bribery believe that a targeted expansion of the Antibribery

Convention membership could help to eliminate bribery of foreign public officials in international business transactions. The

United States expects that a modest number of additional qualified applicants may satisfy the conditions for accession to the

convention in the coming years. In December 2003, the

Working Group agreed on language to update the criteria and

procedures for accession. Revised accession criteria were

approved by the OECD Council as part of a reform package for

the Working Group in February 2004. That decision opens the

door for renewed consideration of applications from non-OECD

member countries interested in adhering to the convention. 

Responding to countries’ interest in being associated with

the Antibribery Convention and the Working Group, the

United States is working closely with other members of the

OECD Working Group on Bribery to develop an outreach

strategy. The primary focus should be to attract countries

whose accession to the convention would bring significant

mutual benefit, and whose companies are important global

market participants. The financial resources of the Working

Group are not sufficient to permit the rapid expansion of

membership without reducing OECD staff support for priority activities such as peer review of convention enforcement.

Therefore, the United States will continue to advocate a careful and incremental enlargement strategy. 

In any event, each new Working Group member is expected to meaningfully participate in the group’s work and to

effectively implement and enforce the convention. 

In April 2004, the Working Group agreed to send a recommendation forward to the OECD Council recommending

that Estonia be invited to join the Working Group. Estonia’s

accession could occur before the end of 2004. 

Adding Signatories 

to the Convention 

A1

A 

Senate Resolution of

Advice and Consent of

July 31, 1998
A2
A3
A4
B5

B

OECD Documents
CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS 

IN INTERNATIONAL BUSINESS TRANSACTIONS

Adopted by the Negotiating Conference on 21 November 1997

Preamble

The Parties,

Considering that bribery is a widespread phenomenon in international business transactions, including trade and

investment, which raises serious moral and political concerns, undermines good governance and economic development, and distorts international competitive conditions;

Considering that all countries share a responsibility to combat bribery in international business transactions;

Having regard to the Revised Recommendation on Combating Bribery in International Business Transactions,

adopted by the Council of the Organisation for Economic Co-operation and Development (OECD) on 23 May 1997,

C(97)l23/FINAL, which, inter alia, called for effective measures to deter, prevent and combat the bribery of foreign

public officials in connection with international business transactions, in particular the prompt crlminalisation of such

bribery in an effective and coordinated manner and in conformity with the agreed common elements set out in that

Recommendation and with the jurisdictional and other basic legal principles of each country;

Welcoming other recent developments which further advance international understanding and co-operation in

combating bribery of public officials, including actions of the United Nations, the World Bank, the International

Monetary Fund, the World Trade Organisation, the Organisation of American States, the Council of Europe and the

European Union;

Welcoming the efforts of companies, business organisations and trade unions as well as other non-governmental

organisations to combat bribery;

Recognising the role of governments in the prevention of solicitation of bribes from individuals and enterprises in

international business transactions;

Recognising that achieving progress in this field requires not only efforts on a national level but also multilateral

co-operation, monitoring and follow-up;

Recognising that achieving equivalence among the measures to be taken by the Parties is an essential object

and purpose of the Convention, which requires that the Convention be ratified without derogations affecting this

equivalence;

B6
Have agreed as follows:

\

Article 1

The Offence of Bribery of Foreign Public Officials

1. Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for

any person intentionally 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.

2. Each Party shall take any measures necessary to establish that complicity in, including incitement, aiding and abetting, or authorisation of an act of bribery of a foreign public official shall be a criminal offence. Attempt and conspiracy to bribe a foreign public official shall be criminal offences to the same extent as attempt and conspiracy to

bribe a public official of that Party.

3. The offences set out in paragraphs 1 and 2 above are hereinafter referred to as “bribery of a foreign public official”.

4. For the purpose of this Convention;

a. “foreign public official” means 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

organisation;

b. “foreign country” includes all levels and subdivisions of government, from national to local;

c. “act or refrain from acting in relation to the performance of official duties” includes any use of the public

official’s position, whether or not within the official’s authorised competence.

Article 2

Responsibility of Legal Persons

Each Party shall take such measures as may be necessary, in accordance with its legal principles, to establish the

liability of legal persons for the bribery of a foreign public official.

B7
Article 3

Sanctions

1. The bribery of a foreign public official shall he punishable by effective proportionate and dissuasive criminal

penalties. The range of penalties shall be comparable to that applicable to the bribery of the Party’s own public officials and shall, in the case of natural persons, include deprivation of liberty sufficient to enable effective mutual

legal assistance and extradition.

2. In the event that, under the legal system of a Party, criminal responsibility is not applicable to legal persons, that

Party shall ensure that legal persons shall be subject to effective, proportionate and dissuasive non-criminal sanctions, including monetary sanctions, for bribery of foreign public officials.

3. Each Party shall take such measures as may be necessary to provide that the bribe and the proceeds of the bribery

of a foreign public official, or property the value of which corresponds to that of such proceeds, are subject to

seizure and confiscation or that monetary sanctions of comparable effect are applicable.

4. Each Party shall consider the imposition of additional civil or administrative sanctions upon a person subject to

sanctions for the bribery of a foreign public official.

Article 4

Jurisdiction

1. Each Party shall take such measures as may be necessary to establish its jurisdiction over the bribery of a foreign

public official when the offence is committed in whole or in part in its territory.

2. Each Party which has jurisdiction to prosecute its nationals for offences committed abroad shall take such measures as may be necessary to establish its jurisdiction to do so in respect of the bribery of a foreign public official,

according to the same principles.

3. When more than one Party has jurisdiction over an alleged offence described in this Convention, the Parties

involved shall, at the request of one of them, consult with a view to determining the most appropriate jurisdiction

for prosecution.

4. Each Party shall review whether its current basis for jurisdiction is effective in the fight against the bribery of foreign public officials and, if it is not, shall take remedial steps.

B8
Article 5

Enforcement

Investigation and prosecution of the bribery of a foreign public official shall be subject to the applicable rules and

principles of each Party. They shall not be influenced by considerations of national economic interest, the potential

effect upon relations with another State or the identity of the natural or legal persona involved.

Article 6

Statute of Limitations

Any statute of limitations applicable to the offence of bribery of a foreign public official shall allow an adequate

period of time for the investigation and prosecution of this offence.

Article 7

Money Laundering

Each Party which has made bribery of its own public official a predicate offence for the purpose of the application

of its money laundering legislation shall do so on the same terms for the bribery of a foreign public official, without

regard to the place where the bribery occurred.

Article 8

Accounting

1. In order to combat bribery of foreign public officials effectively, each Party shall take such measures as may be

necessary, 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 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, as well as the use of false documents,

by companies subject to those laws and regulations, for the purpose of bribing foreign public officials or of biding

such bribery.

2. Each Party shall provide effective, proportionate and dissuasive civil, administrative or criminal penalties for such

omissions and falsifications in respect of the books, records, accounts and financial statements of such companies.

B9
Article 9

Mutual Legal Assistance

1. Each Party shall, 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 offences within the scope of this Convention and for non-criminal proceedings within the

scope of this Convention brought by a Party against a legal person. The requested Party shall inform the requesting Party, without delay, of any additional information or documents needed to support the request for assistance

and, where requested, of the slams and outcome of the request for assistance.

2. Where a Party makes mutual legal assistance conditional upon the existence of dual criminality, dual criminality

shall be deemed to exist if the offence for which the assistance is sought is within the scope of this Convention.

3. A Party shall not decline to render mutual legal assistance for criminal matters within the scope of this Convention

on the ground of bank secrecy.

Article 10

Extradition

1. Bribery of a foreign public official shall be deemed to be included as an extraditable offence under the laws of the

Parties and the extradition treaties between them.

2. If a Party which makes extradition conditional on the existence of an extradition treaty receives a request for extradition from another Party with which it has no extradition treaty, it may consider this Convention to be the legal

basis for extradition in respect of the offence of bribery of a foreign public official.

3. Each Party shall take any measures necessary to assure either that it can extradite its nationals or that it can prosecute its nationals for the offence of bribery of a foreign public official. A Party which declines a request to extradite a person for bribery of a foreign public official solely on the ground that the person is its national shall submit the case to its competent authorities for the purpose of prosecution.

4. 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 Patty. Where a Party makes extradition conditional upon the existence of

dual criminality, that condition shall be deemed to be fulfilled if the offence for which extradition is sought is within the scope of Article 1 of this Convention.

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Article 11

Responsible Authorities

For the purposes of Article 4, paragraph 3, on consultation, Article 9, on mutual legal assistance and Article 10, on

extradition, each Party shall notify to the Secretary-General of the OECD an authority or authorities responsible for

making and receiving requests, which shall serve as channel of communication for these matters for that Party, without prejudice to other arrangements between Parties.

Article 12

Monitoring and Follow-up

The Parties shall co-operate in carrying out a programme of systematic follow-up to monitor and promote the full

implementation of this Convention. Unless otherwise decided by consensus of the Parties, this shall be done in the

framework of the OECD Working Group on Bribery in International Business Transactions and according to its terms

of reference, or within the framework and terms of reference of any successor to its functions, and Parties shall bear

the costs of the programme in accordance with the rules applicable to that body.

Article 13

Signature and Accession

1. Until its entry into force, this Convention shall be open for signature by OECD members and by non-members

which have been invited to become full participants in its Working Group on Bribery in International Business

Transactions.

2. Subsequent to its entry into force, this Convention shall be open to accession by any non signatory which is a member of the OECD or has become a full participant in the Working Group on Bribery in International Business

Transactions or any successor to its functions. For each such nonsignatory, the Convention shall enter into force on

the sixtieth day following the date of deposit of its instrument of accession.

Article 14

Ratification and Depository

1. This Convention is subject to acceptance, approval or ratification by the Signatories, in accordance with their

respective laws.

2. Instruments of acceptance, approval, ratification or accession shall be deposited with the Secretary-General of the

OECD, who shall serve as Depositary of this Convention.

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Article 15

Entry into Force

1. This Convention shall enter into force on the sixtieth day following the date upon which five of the ten countries

which have the ten largest export shares set out in DAFPE/IMEIBRiI97)18/FINAL (annexed), and which represent

by themselves at least sixty per cent of the combined total exports of those ten countries, have deposited their

instruments of acceptance, approval, or ratification. For each signatory depositing its instrument after such entry

into force, the Convention shall enter into force on the sixtieth day after deposit of its instrument.

2. If, after 31 December 1998, the Convention has not entered into force under paragraph 1 above, any signatory

which has deposited its instrument of acceptance, approval or ratification may declare in writing to the Depositary

its readiness to accept entry into force of this Convention under this paragraph 2. The Convention shall enter into

force for such a signatory on the sixtieth day following the date upon which such declarations have been deposited by at least two signatories. For each signatory depositing its declaration after such entry into force, the

Convention shall enter into force on the sixtieth day following the date of deposit.

Article 16

Amendment

Any Party may propose the amendment of this Convention. A proposed amendment shall be submitted to the

Depositary which shall communicate it to the other Parties at least sixty days before convening a meeting of the Parties

to consider the proposed amendment. An amendment adopted by consensus of the Parties, or by such other means as

the Parties may determine by consensus, shall enter into force sixty days after the deposit of an instrument of ratification, acceptance or approval by all of the Parties, or in such other circumstances as may be specified by the Parties at

the time of adoption of the amendment.

Article 17

Withdrawal

A Party may withdraw from this Convention by submitting written notification to the Depositary. Such withdrawal shall be effective one year after the date of the receipt of the notification. After withdrawal, co-operation shall continue between the Parties and the Party which has withdrawn on all requests for assistance or extradition made before

the effective date of withdrawal which remain pending.

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ANNEX 

STATISTICS ON OECD EXPORTS 

Notes: * 1990-

1995; ** 1991-1996; 1993-1996

Source: OECD, (1) IMP

Concerning Belgium-Luxembourg: Trade statistics for Belgium and Luxembourg are available only on a combined basis for the two countries. For purposes of

Article 15, paragraph 1 of the Convention, if either Belgium or Luxembourg deposits its instrument of acceptance, approval or ratificatin, or if both Belgium and

Luxembourg deposit their instruments of acceptance, approval or ratification, it shall be considered tha one of the countries which have the ten largest exports

shares has deposited its instrument and the joint exports of both countries will be counted towards the 60 percent of combined total exports of those ten countries,

which is required for entry into force under this provision.

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1990-1996 1990-1996 1990-1996

US$ million % %

of total OECD of 10 largest

United States 287,118 16.9% 19.7%

Germany 254,746 14.1% 17.5%

Japan 212,665 11.8% 14.6%

France 138,471 7.7% 9.5%

United Kingdom 121,258 6.7% 8.3%

Italy 112,449 6.2% 7.7%

Canada 91,215 5.1% 6.3%

Korea (1) 81,364 4.5% 5.6%

Netherlands 81,264 4.5% 5.6%

Belgium-Luxembourg 78,598 4.4% 5.4%

Total 10 largest 1,459,148 81.0% 100%

Spain 42,469 2.4%

Switzerland 40,395 2.2%

Sweden 36,710 2.0%

Mexico (1) 34,233 1.9%

Australia 27,194 1.5%

Denmark 24,145 1.3%

Austria* 22,432 1.2%

Norway 21,666 1.2%

Ireland 19,217 1.1%

Finland 17,296 1.0%

Poland (1)** 12,652 0.7%

Portugal 10,801 0.6%

Turkey* 8,027 0.4%

Hungary** 6,795 0.4%

New Zealand 6,663 0.4%

Czech Republic *** 6,263 0.3%

Greece* 4,606 0.3%

Iceland 949 0.1%

Total OECD 1,801,661 100%
COMMENTARIES ON THE CONVENTION ON COMBATING BRIBERY OF 

FOREIGN PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS TRANSACTIONS

Adopted by the Negotiating Conference on 21 November 1997

General:

1. This Convention deals with what, in the law of some countries, is called “active corruption” or “active bribery”,

meaning the offence committed by the person who promises or gives the bribe, as contrasted with “passive

bribery’, the offence committed by the official who receives the bribe. The Convention does not utilise the term

“active bribery” simply to avoid it being misread by the non technical reader as implying that the briber has taken

the initiative and the recipient is a passive victim. In fact, in a number of situations, the recipient will have induced

or pressured the briber and will have been, in that sense, the more active.

2. This Convention seeks to assure a functional equivalence among the measures taken by the Parties to sanction

bribery of foreign public officials, without requiring uniformity or changes in fundamental principles of a Party’s

legal system.

Article I. The Offence of Bribery of Foreign Public Officials:

Re paragraph 1:

3. Article 1 establishes a standard to be met by Parties, but does not require them to utilise its precise terms in defining the offence under their domestic laws. A Party may use various approaches to fulfil its obligations, provided

that conviction of a person for the offence does not require proof of elements beyond those which would he

required to be proved if the offence were defined as in this paragraph. For example, a statute prohibiting the bribery

of agents generally which does not specifically address bribery of a foreign public official, and a statute specifically limited to this case, could both comply with this Article. Similarly, a statute which defined the offence in

terms of payments ‘to induce a breach of the official’s duty” could meet the standard provided that it was understood that every public official had a duty to exercise judgement or discretion impartially and this was an

“antonomous” definition not requiring proof of the law of the particular official’s country.

4. It is an offence within the meaning of paragraph 1 to bribe to obtain or retain business or other improper advantage whether or not the company concerned was the best qualified bidder or was otherwise a company which could

properly have been awarded the business.

5. “Other improper advantage” refers to something to which the company concerned was not clearly entitled, for example, an operating permit for a factory which fails to meet the statutory requirements.

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6. The conduct described in paragraph 1 is an offence whether the offer or promise is made or the pecuniary or other

advantage is given on that person’s own behalf or on behalf of any other natural person or legal entity.

7. It is also an offence irrespective of, inter alia, the value of the advantage, its results, perceptions of local custom,

the tolerance of such payments by local authorities, or the alleged necessity of the payment in order to obtain or

retain business or other improper advantage.

8. It is not an offence, however, if the advantage was permitted or required by the written law or regulation of the foreign public official’s country, including case law.

9. Small “facilitation” payments do not constitute payments made “to obtain or retain business or other improper

advantage within the meaning of paragraph 1 and, accordingly, are also not an offence. Such payments, which, in

some countries, are made to induce public officials to perform their functions, such as issuing licenses or permits,

are generally illegal in the foreign country concerned, Other countries can and should address this corrosive phenomenon by such means as support for programmes of good governance. However, criminalisation by other countries does not seem a practical or effective complementary action.

10. Under the legal system of some countries, an advantage promised or given to any person, in anticipation of his or

her becoming a foreign public official, fails within the scope of the offences described in Article t, paragraph t or

2. Under the legal system of many countries, it is considered technically distinct from the offences covered by the

present Convention. However, there is a commonly shared concern and intent to address this phenomenon through

further work.

Re paragraph 2:

11. The offences set out in paragraph 2 are understood in terms of their normal content in national legal systems.

Accordingly, if authorisation, incitement, or one of the other listed acts, which does not lead to further action, is

not itself punishable under a Party’s legal system, then the Party would not be required to make it punishable with

respect to bribery of a foreign public official.

Re paragraph 4:

12. “Public function” includes any activity in the public interest, delegated by a foreign country, such as the

performance of a task delegated by it in connection with public procurement.

13. A “public agency” is an entity constituted under public law to carry out specific tasks in the public interest.

14. A “public enterprise” is any enterprise, regardless of its legal form, over which a government, or governments, may,

directly or indirectly, exercise a dominant influence. This is deemed to be the case, inter alia, when the government

or governments hold the majority of the enterprise’s subscribed capital, control the majority of votes attaching to

shares issued by the enterprise or can appoint a majority of the members of the enterprise’s administrative or managerial body or supervisory board.

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15. An official of a public enterprise shall be 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.

16. In special circumstances, public authority may in fact be held by persons (e.g., political party officials in single

party states) not formally designated as public officials. Such persona, through their de facto performance of a public function, may, under the legal principles of some countries, be considered to be foreign public officials.

I7. “Public international organisation” includes any international organisation formed by states, governments, or other

public international organisations, whatever the form of organisation and scope of competence, including, for

example, a regional economic integration organisation such as the European Communities.

18. “Foreign country” is not limited to states, but includes any organised foreign area or entity, such as an autonomous

territory or a separate customs territory.

19. One case of bribery which has been contemplated under the definition in paragraph 4.c is where an executive of a

company gives a bribe to a senior official of a government, in order that this official use his office — though acting outside his competence — to make another official award a contract to that company.

Article 2. Responsibility of Legal Persons:

20. In the event that, under the legal system of a Party, criminal responsibility is not applicable to legal persons, that

Party shall not be required to establish such criminal responsibility.

Article 3. Sanctions:

Re paragraph 3:

21. The “proceeds” of bribery are the profits or other benefits derived by the briber from the transaction or other

improper advantage obtained or retained through bribery.

22. The term “confiscation” includes forfeiture where applicable and means the permanent deprivation of property by

order of a court or other competent authority. This paragraph is without prejudice to rights of victims.

23. Paragraph 3 does not preclude setting appropriate limits to monetary sanctions.

Re paragraph 4:

24. Among the civil or administrative sanctions, other than non-criminal fines, which might be imposed upon legal

persons for an act of bribery of a foreign public official are: exclusion from entitlement to public benefits or aid;

temporary or permanent disqualification from participation in public procurement or from the practice of other

commercial activities; placing under judicial supervision; and a judicial winding-up order.

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Article 4. Jurisdiction:

Re paragraph 1:

25. The territorial basis for jurisdiction should be interpreted broadly so that an extensive physical connection to the

bribery act is not required.

Re paragraph 2:

26. Nationality jurisdiction is to be established according to the general principles and conditions in the legal system

of each Party. These principles deal with such matters as dual criminality. However, the requirement of dual criminality should be deemed to be met if the act is unlawful where it occurred, even if under a different criminal statute.

For countries which apply nationality jurisdiction only to certain types of offences, the reference to “principles”

includes the principles upon which such selection is based.

Article 5. Enforcement:

27. Article 5 recognises the fundamental nature of national regimes of prosecutnrial discretion. It recognises as well that,

in order to protect the independence of prosecution, such discretion is to be exercised on the basis of professional

motives and is not to be subject to improper influence by concerns of a political nature. Article 5 is complemented by

paragraph 6 of the Annex to the 1997 OECD Revised Recommendation on Combating Bribery in International

Business Transactions, C(97)123/FINAL (hereinafter, “1997 OECD Recommendation”), which recommends, inter

alia, that complaints of bribery of foreign public officials should be seriously investigated by competent authorities

and that adequate resources should he provided by national governments to permit effective prosecution of such

bribery. Parties will have accepted this Recommendation, including its monitoring and follow-up arrangements.

Article 7. Money Laundering:

28. In Article 7, “bribery of its own public official” is intended broadly, so that bribery of a foreign public official is

to be made a predicate offence for money laundering legislation on the same terms, when a Party has made either

active or passive bribery of its own public official such an offence. When a Party has made only passive bribery of

its own public officials a predicate offence for money laundering purposes, this article requires that the laundering

of the bribe payment he subject to money laundering legislation.

Article 8. Accounting:

29. Article 8 is related to section V of the 1997 OECD Recommendation, which all Parties will have accepted and

which is subject to follow-up in the OECD Working Group on Bribery in International Business Transactions. This

paragraph contains a series of recommendations concerning accounting requirements, independent external audit

and internal company controls the implementation of which will be important to the overall effectiveness of the

fight against bribery in international business. However, one immediate consequence of the implementation of this

Convention by the Parties will be that companies which are required to issue financial statements disclosing their

material contingent liabilities will need to take into account the full potential liabilities under this Convention, in

particular its Articles 3 and 8, as well as other losses which might flow from conviction of the company or its agents

for bribery. This also has implications for the execution of professional responsibilities of auditors regarding indications of bribery of foreign public officials. In addition, the accounting offences referred to in Article 8 will generally occur in the company’s home country, when the bribery offence itself may have been committed in another

country, and this can fill gaps in the effective reach of the Convention.

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Article 9. Mutual Legal Assistance:

30. Parties will have also accepted, through paragraph 8 of the Agreed Common Elements annexed to the 1997 OECD

Recommendation, to explore and undertake means to improve the efficiency of mutual legal assistance.

Re paragraph 1:

31. Within the framework of paragraph I of Article 9, Parties should, upon request, facilitate or encourage the presence

or availability of persons, including persons in custody, who consent to assist in investigations or participate in

proceedings. Parties should take measures to be able, in appropriate cases, to transfer temporarily such a person in

custody to a Party requesting it and to credit time in custody in the requesting Party to the transferred person’s sentence in the requested Party. The Parties wishing to use this mechanism should also take measures to he able, as a

requesting Party, to keep a transferred person in custody and return this person without necessity of extradition proceedings.

Re paragraph 2:

32. Paragraph 2 addresses the issue of identity of norms in the concept of dual criminality. Parties with statutes as

diverse as a statute prohibiting the bribery of agents generally and a statute directed specifically at bribery of foreign public officials should be able to co-operate fully regarding cases whose facts fall within the scope of the

offences described in this Convention.

Article 10. Extradition:

Re paragraph 2:

33. A Party may consider this Convention to be a legal basis for extradition if, for one or more categories of cases

falling within this Convention, it requires an extradition treaty. For example, a country may consider it a basis for

extradition of its nationals if it requires an extradition treaty for that category but does not require one for extradition of non-nationals.

Article 12. Monitoring and Follow-up:

34. The current terms of reference of the OECD Working Group on Bribery which are relevant to monitoring and follow-up are set out in Section VIII of the 1997 OECD Recommendation. They provide for:

i) receipt of notifications and other information submitted to it by the [participating] countries;

ii) regular reviews of steps taken by [participating] countries to implement the Recommendation and to make

proposals, as appropriate, to assist [participating] countries in its implementation; these reviews will he

based on the following complementary systems:

— a system of self evaluation, where [participating] countries’ responses on the basis of a questionnaire

will provide a basis for assessing the implementation of the Recommendation;

— a system of mutual evaluation, where each [participating) country will be examined in turn by the

Working Group on Bribery, on the basis of a report which will provide an objective assessment of the

progress of the [participating] country in implementing the Recommendation.

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iii) examination of specific issues relating to bribery in international business transactions;

...

v) provision of regular information to the public on its work and activities and on implementation of the

Recommendation.

35. The costs of monitoring and follow-up will, for OECD Members, be handled through the normal OECD budget

process. For non-members of the OECD, the current rules create an equivalent system of cost sharing, which is

described in the Resolution of the Council Concerning Fees for Regular Observer Countries and Non-Member Full

Participants in OECD Subsidiary Bodies, C(96)223/FINAL.

36. The follow-up of any aspect of the Convention which it not also follow-up of the 1997 OECD Recommendation or

any other instrument accepted by all the participants its the OECD Working Group on Bribery will be carried out

by the Parties to the Convention and, as appropriate, the participants party to another, corresponding instrument.

Article 13. Signature and Accession:

37. The Convention will be open to non-members which become full participants in the OECD Working Group on

Bribery in International Business Transactions. Full participation by non-members in this Working Group is

encouraged and arranged under simple procedures. Accordingly, the requirement of full participation in the

Working Group, which follows from the relationship of the Convention to other aspects of the fight against bribery

in international business, should not be seen as an obstacle by countries wishing to participate in that fight. The

Council of the OECD has appealed to non-members to adhere to the 1997 OECD Recommendation and to participate in any institutional follow-up or implementation mechanism, i.e., in the Working Group. The current procedures regarding full participation by nonmembers in the Working Group may be found in the Resolution of the

Council concerning the Participation of Non-Member Economies in the Work of Subsidiary Bodies of the

Organisation, C(96)64/REV1/FINAL. In addition to accepting the Revised Recommendation of the Council on

Combating Bribery, a full participant also accepts the Recommendation on the Tax Deductibility of Bribes of

Foreign Public Officials, adopted on 11 April 1996, C(96)27/FINAL.

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REVISED RECOMMENDATION OF THE COUNCIL ON COMBATING BRIBERY

IN INTERNATIONAL BUSINESS TRANSACTIONS

Adopted by the Council on 23 May 1997

THE COUNCIL,

Having regard to Articles 3, 5a) and 5 b) of the Convention on the Organisation for Economic Co-operation and

Development of 14 December 1960;

Considering that bribery is a widespread phenomenon in international business transactions, including trade and

investment, raising serious moral and political concerns and distorting international competitive conditions;

Considering that all countries share a responsibility to combat bribery in international business transactions;

Considering that enterprises should refrain from bribery of public servants and holders of public office, as stated

in the OECD Guidelines for Multinational Enterprises;

Considering the progress which has been made in the implementation of the initial Recommendation of the

Council on Bribery in International Business Transactions adopted on 27 May 1994, C(94)75/FINAL and the related

Recommendation on the tax deductibility of bribes of foreign public officials adopted on 11 April 1996,

C(96)27/FINAL; as well as the Recommendation concerning Anticorruption Proposals for Bilateral Aid Procurement,

endorsed by the High Level Meeting of the Development Assistance Committee on 7 May 1996;

Welcoming other recent developments which further advance international understanding and co-operation regarding bribery in business transactions, including actions of the United Nations, the Council of Europe, the European

Union and the Organisation of American States;

Having regard to the commitment made at the meeting of the Council at Ministerial level in May 1996, to criminalise the bribery of foreign public officials in an effective and co-ordinated manner;

Noting that an international convention in conformity with the agreed common elements set forth in the Annex, is

an appropriate instrument to attain such criminalisation rapidly.

Considering the consensus which has developed on the measures which should be taken to implement the 1994

Recommendation, in particular, with respect to the modalities and international instruments to facilitate criminalisation of bribery of foreign public officials; tax deductibility of bribes toforeign public officials; accounting requirements, external audit and internal company controls; and rules and regulations on public procurement;

Recognising that achieving progress in this field requires not only efforts by individual countries but multilateral

co-operation, monitoring and follow-up;

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General

I. RECOMMENDS that Member countries take effective measures to deter, prevent and combat the bribery of foreign public officials in connection with international business transactions,

II. RECOMMENDS that each Member country examine the following areas and, in conformity with its jurisdictional and other basic legal principles, take concrete and meaningful steps to meet this goal:

i) criminal laws and their application, in accordance with section III and the Annex to this Recommendation;

ii) lax legislation, regulations and practice, to eliminate any indirect support of bribery, in accordance with

section IV;

iii) company and business accounting, external audit and internal control requirements and practices, in accordance with section V;

iv) banking, financial and other relevant provisions, to ensure that adequate records would be kept and made

available for inspection and investigation;

v) public subsidies, licences, government procurement contracts or other public advantages, so that advantages could be denied as a sanction for bribery in appropriate cases, and in accordance with section VI for

procurement contracts and aid procurement;

vi) civil, commercial, and administrative laws and regulations, so that such bribery would be illegal;

vii) international co-operation in investigations and other legal proceedings, in accordance with section VII.

Criminalisation of Bribery of Foreign Public Officials

III. RECOMMENDS that Member countries should criminalise the bribery of foreign public officials in an

effective and co-ordinated manner by submitting proposals to their legislative bodies by 1 April 1998, in

conformity with the agreed common elements set forth in the Annex, and seeking their enactment by the

end of 1998.

DECIDES, to this end, to open negotiations promptly on an international convention to criminalise bribery

in conformity with the agreed common elements, the treaty to be open for signature by the end of 1997,

with a view to its entry into force twelve months thereafter.

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Tax Deductibility

IV. URGES the prompt implementation by Member countries of the 1996 Recommendation which reads, as

follows: “that those Member countries which do not disallow the deductibility of bribes to foreign public

officials re-examine such treatment with the intention of denying this deductibility. Such action may be

facilitated by the trend to treat bribes to foreign officials as illegal.”

Accounting Requirements, External Audit and Internal Company Controls

V. RECOMMENDS that Member countries take the steps necessary so that laws, rates and practices with

respect to accounting requirements, external audit and internal company controls are in line with the following principles and are fully used in order to prevent and detect bribery of foreign public officials in

international business.

A. Adequate Accounting Requirements

I) Member countries should require companies to maintain adequate records of the sums of

money received and expended by the company, identifying the matters in respect of which the

receipt and expenditure takes place. Companies should be prohibited from making off-thebooks transactions or keeping off-the-books accounts.

ii) Member countries should require companies to disclose in their financial statements the full

range of material contingent liabilities,

iii) Member countries should adequately sanction accounting omissions, falsifications and fraud.

B. Independent External Audit

i) Member countries should consider whether requirements to submit to external audit are adequate.

ii) Member countries and professional associations should maintain adequate standards to ensure

the independence of external auditors which permits them to provide an objective assessment

of company accounts, financial statements and internal controls.

iii) Member countries should require the auditor who discovers indications of a possible illegal act

of bribery to report this discovery to management and, as appropriate, to corporate monitoring

bodies.

iv) Member countries should consider requiring the auditor to report indications of a possible illegal act of bribery to competent authorities,

C. Internal Company Controls

i) Member countries should encourage the development and adoption of adequate internal company controls, including standards of conduct.

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ii) Member countries should encourage company management 10 make statements in their annual reports

about their internal control mechanisms, including those which contribute to preventing bribery.

iii) Member countries should encourage the creation of monitoring bodies, independent of management, such

as audit committees of boards of directors or of supervisory boards.

iv) Member countries should encourage companies to provide channels for communication by, and protection

for, persons not willing 10 violate professional standards or ethics under instructions or pressure from hierarchical superiors.

Public Procurement

VI. RECOMMENDS:

i) Member countries should support the efforts in the World Trade Organisation to pursue an agreement on

transparency, in government procurement;

ii) Member countries’ laws and regulations should permit authorities to suspend from competition for public

contracts enterprises determined to have bribed foreign public officials in contravention of that Member’s

national laws and, to the extent a Member applies procurement sanctions to enterprises that are determined

to have bribed domestic public officials, such sanctions should be applied equally in case of bribery of foreign public officials.

iii) In accordance with the Recommendation of the Development Assistance Committee, Member countries

should require anti-corruption provisions in bilateral aid-funded procurement, promote the proper implementation of anti-corruption provisions in international development institutions, and work closely with

development partners so combat corruption in all development co-operation efforts.2

International Co-operation

VII. RECOMMENDS that Member countries, in order to combat bribery in international business transactions, in

conformity with their jurisdictional and other basic legal principles, take the following actions:

i) consult and otherwise co-operate with appropriate authorities in other countries in investigations and other

legal proceedings concerning specific cases of such bribery through such means as sharing of information

(spontaneously or upon request), provision of evidence and extradition;

ii) make full use of existing agreements and arrangements for mutual international legal assistance and where

necessary, enter into new agreements or arrangements for this purpose;

iii) ensure that their national laws afford an adequate basis for this co-operation and, in particular, in accordance with paragraph 8 of the Annex.

1 Member countries’ systems for applying sanctions for bribery of domestic officials differ as to whether the determination of bribery is based on a criminal

conviction, indictment or administrative procedure, but in all cases it is based on substantial evidence.

2 This paragraph summarises the DAC recommendation, which is addressed to DAC members only, and addresses it to all OECD Members and eventually nonmember countries which adhere to the Recommendation.

B23
Follow-up and Institutional Arrangements

VIII. INSTRUCTS the Committee on International Investment and Multinational Enterprises, through its

Working Group on Bribery in International Business Transactions, to carry out a programme of systematic follow-up to monitor and promote the full implementation of this Recommendation, in cooperation with

the Committee for Fiscal Affairs, the Development Assistance Committee and other OECD bodies, as

appropriate. This follow-up will include, in particular:

i) receipt of notifications and other information submitted to it by the Member countries;

ii) regular reviews of steps taken by Member countries to implement the Recommendation and to make proposals, as appropriate, to assist Member countries in its implementation; these reviews will be based on the

following complementary systems:

— a system of self evaluation, where Member countries’ responses on the basis of a questionnaire will

provide a basis for assessing the implementation of the Recommendation;

— a system of mutual evaluation, where each Member country will be examined in turn by the Working

Group on Bribery, on the basis of a report which will provide an objective assessment of the progress

of the Member country in implementing the Recommendation.

iii) examination of specific issues relating to bribery in international business transactions;

iv) examination of the feasibility of broadening the scope of the work of the OECD to combat international

bribery to include private sector bribery and bribery of foreign officials for reasons other than to obtain or

retain business;

v) provision of regular information to the public on its work and activities and on implementation of the

Recommendation.

IX. NOTES the obligation of Member countries to co-operate closely in this follow-up programme, pursuant

to Article 3 of the OECD Convention.

X. INSTRUCTS the Committee on International Investment and Multinational Enterprises to review the implementation of Sections III and, in co-operation with the Committee on Fiscal Affairs, Section IV of this

Recommendation and report to Ministers in Spring 1998, to report to the Council after the first regular review

and as appropriate there after, and to review this Revised Recommendation within three years after its adoption.

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Co-operation with Non-members

XI. APPEALS to non-member countries to adhere to the Recommendation and participate in any institutional follow-up or implementation mechanism.

XII. INSTRUCTS the Committee on International investment and Multinational Enterprises through its

Working Group on Bribery, to provide a forum for consultations with countries which have not yet adhered,

in order to promote wider participation in the Recommendation and its follow-up.

Relations with International Governmental and Non-governmental Organisations

XIII. INVITES the Committee on International Investment and Multinational Enterprises through its Working

Group on Bribery, to consult and co-operate with the international organisations and international financial institutions active in the combat against bribery in international business transactions and consult regularly with the non-governmental organisations and representatives of the business community active in

this field.

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ANNEX

Agreed Common Elements of Criminal Legislation and Related Action

1) Elements of the offence of active bribery

i) Bribery is understood as the promise or giving of any undue payment or other advantages, whether directly

or through intermediaries to a public official, for himself or for a third party, to influence the official to act

or refrain from acting in the performance of his or her official duties in order to obtain or retails business.

ii) Foreign public official means any person holding a legislative, administrative or judicial office of a foreign

country or in an international organisation, whether appointed or elected or, any person exercising a public function or task in a foreign country.

iii) The offeror is any person, on his own behalf or on the behalf of any other natural person or legal entity.

2) Ancillary elements or offences

The general criminal law concepts of attempt, complicity and/or conspiracy of the law of the prosecuting state are

recognised as applicable to the offence of bribery of a foreign public official.

3) Excuses and defences

Bribery of foreign public officials in order to obtain or retain business is an offence irrespective of the value or the

outcome of the bribe, of perceptions of local custom or of the tolerance of bribery by local authorities.

4) Jurisdiction

Jurisdiction over the offence of bribery of foreign public officials should in any case be established when the

offence is committed in whole or in part in the prosecuting State’s territory. The territorial basis for jurisdiction

should be interpreted broadly so that an extensive physical connection to the bribery act is not required.

States which prosecute their nationals for offences committed abroad should do so in respect of the bribery of foreign public officials according to the same principles.

States which do not prosecute on the basis of the nationality principle should he prepared to extradite their nationals in respect of the bribery of foreign public officials.

All countries should review whether their current basis for jurisdiction is effective in the fight against bribery of

foreign public officials and, if not, should take appropriate remedial steps.

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5) Sanctions

The offence of bribery of foreign public officials should be sanctioned/punishable by effective, proportionate and

dissuasive criminal penalties, sufficient to secure effective mutual legal assistance and extradition, comparable to

those applicable to the bribers in cases of corruption of domestic public officials.

Monetary or other civil, administrative or criminal penalties on any legal person involved, should be provided, taking into account the amounts of the bribe and of the profits derived from the transaction obtained through the bribe.

Forfeiture or confiscation of instrumentalities and of the bribe benefits and the profits derived from the transactions obtained through the bribe should be provided, or comparable fines or damages imposed.

6) Enforcement

In view of the seriousness of the offence of bribery of foreign public officials, public prosecutors should exercise

their discretion independently, based on professional motives. They should not be influenced by considerations of

national economic interest, fostering good political relations or the identity of the victim.

Complaints of victims should be seriously investigated by the competent authorities.

The statute of limitations should allow adequate time to address this complex offence.

National governments should provide adequate resources to prosecuting authorities so as to permit effective prosecution of bribery of foreign public officials.

7) Connected provisions (criminal and non-criminal)

— Accounting, recordkeeping and disclosure requirements

In order to combat bribery of foreign public officials effectively, states should also adequately sanction

accounting omissions, falsifications and fraud,

— Money laundering

The bribery of foreign public officials should be made a predicate offence for purposes of money laundering legislation where bribery of a domestic public official is a money laundering predicate offence, without regard to the place where the bribery occurs.

8) International co-operation

Effective mutual legal assistance is critical to be able to investigate and obtain evidence in order to prosecute cases

of bribery of foreign public officials.

Adoption of laws criminalising the bribery of foreign public officials would remove obstacles to mutual legal assistance created by dual criminality, requirements.

Countries should tailor their laws on mutual legal assistance to permit co-operation with countries investigating

cases of bribery of foreign public officials even including third countries (country of the offeror; country where

the act occurred) and countries applying different types of criminalisation legislation to reach such cases.

Means should be explored and undertaken to improve the efficiency of mutual legal assistance.

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RECOMMENDATION OF THE COUNCIL ON THE TAX DEDUCTIBILITY

OF BRIBES TO FOREIGN PUBLIC OFFICIALS

Adopted by the Council on 11 April 1996

THE COUNCIL,

Having regard to Article 5 (b) of the Convention on the Organisation for Economic Co-operation and Development

of 14th December 1960;

Having regard to the OECD Council Recommendation on Bribery in International Business Transactions

[C(94)75/FINAL];

Considering that bribery is a widespread phenomenon in international business transactions, including trade and

investment, raising serious moral and political concerns and distorting international competitive conditions;

Considering that the Council Recommendation on Bribery called on Member countries to take concrete and meaningful steps to combat bribery in international business transactions, including examining tax measures which may

indirectly favour bribery;

On the proposal of the Committee on Fiscal Affairs and the Committee on International Investment and

Multinational Enterprises:

I. RECOMMENDS that those Member countries which do not disallow the deductibility of bribes to foreign

public officials re-examine such treatment with the intention of denying this deductibility. Such action may

be facilitated by the trend to treat bribes to foreign public officials as illegal.

II. INSTRUCTS the Committee on Fiscal Affairs, in cooperation with the Committee on International

Investment and Multinational Enterprises, to monitor the implementation of this Recommendation, to promote the Recommendation in the context of contacts with non-Member countries and to report to the

Council as appropriate.

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