The deterrent effect of enforcement of foreign bribery laws is the subject of Transparency International’s Exporting Corruption series of reports. The level of foreign bribery law enforcement activity by jurisdiction is an important risk factor for companies that undertake business abroad to consider when conducting a bribery risk assessment. Companies operating internationally often must consider their enforcement risks in a variety of countries outside of their home country.
Transparency International has published the 14th edition of its “Exporting Corruption” report[1]. The report provides an assessment of the enforcement of the OECD Anti-Bribery Convention (short for OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions) by 47 global exporting countries, the majority of which are signatories to the OECD Anti-Bribery Convention.
An objective of law enforcement action is to deter and prevent crime by incentivising companies to implement corporate anti-bribery compliance processes. A recent OECD[2] study that considered the relationship between enforcement of the crime of foreign bribery in one’s country and having an anti-corruption compliance programme, found most companies from country’s where the foreign bribery offence has been enforced (95.9%) had anti-corruption compliance programmes.
A larger number of enforcement actions reflects a lower bribery risk environment in the enforcing jurisdiction, because of rigorous enforcement and the general deterrent effect of this. Conversely, foreign bribery laws that are not enforced are unlikely to be effective as a deterrent to companies located in the enforcing jurisdiction.
Exporting Corruption ranks the world’s biggest exporters on how well they investigate and sanction companies for paying bribes abroad. The report classifies countries into one of four enforcement categories to show their level of enforcement of the Convention in the period 2016-2019:
- Active enforcement – reflects a major deterrent to foreign bribery
- Moderate enforcement – encouraging progress but insufficient deterrence
- Limited enforcement – little deterrence
- Little or no enforcement – no deterrence
Countries are given weighted scores for the number of investigations started, charges filed to commence cases and cases concluded with sanctions, with the highest score given for concluding a major case with substantial actions. A country’s share of world exports is also factored in when determining scores.
The enforcement rankings outlined in Exporting Corruption provide a measure that companies can consider in their overall assessment of inherent business bribery risk for countries in which they have operations or are otherwise located.
[1] Exporting Corruption 2022: Assessing Enforcement of the OECD Anti-Bribery Convention, accessed at https://www.transparency.org/en/publications/exporting-corruption-2022
[2] OECD (2020), Corporate Anti-Corruption Compliance Drivers, Mechanisms, and Ideas for Change, p17