Enforcement of anti-corruption laws falling short says watchdog

[FaGal]

Enforcement of anti-corruption laws falling short says watchdog
news.ft.com - By Jean Eaglesham in London - March 7, 2005


Australia, Greece and Japan are among nine countries that have failed to undertake any investigations into allegations of overseas bribery, according to a report released today calling for "substantially" greater enforcement of anti-corruption laws.

A significant international variation in governments' efforts to investigate and prosecute claims of overseas bribery is revealed in the report by Transparency International, the anti-corruption watchdog.

The report praises the "promising start" made to implementing the Organisation for Economic Co-operation and Development's anti-bribery convention, in force in most of the 35 signatory countries since 2000.

Transparency International's survey of 24 of those countries - which account for 95 per cent of OECD exports - found investigations or prosecutions were under way in 15 of them.

But the report also highlights that in only four of the countries - France, Korea, Spain and the US - has there been more than one prosecution for overseas bribery. In contrast to the 35 prosecutions mounted in the US, investigations into allegations of overseas corruption have failed to yield any prosecutions in Denmark, Finland, Mexico and the UK.

Neither formal investigations nor prosecutions appeared to have been undertaken in nine of the countries surveyed - Argentina, Australia, the Czech Republic, Greece, Japan, the Netherlands, New Zealand, Poland and Slovakia.

Transparency International said more effective enforcement of the convention was a "critical step" in fighting international corruption. Most multinational companies have headquarters in OECD countries, so greater compliance with the convention could significantly reduce the supply side of corruption, the watchdog said.

"Enforcement efforts must be stepped up substantially to achieve widespread recognition in the business community that foreign bribery does not pay," Graham Rodmell, director of corporate and regulatory affairs at Transparency International UK, said yesterday.

The report, which will today be presented to the OECD working group on bribery, calls on governments to establish national offices responsible for foreign bribery enforcement and to increase the resources devoted to this issue.

Prosecuting such cases is "expensive, time-consuming and requires specialised staff," the report states. "Marshalling the needed resources is particularly difficult, and may be impossible, where responsibility for foreign bribery cases is decentralised."

The UK is one of six countries criticised in the report - along with Argentina, the Czech Republic, Germany, Greece and Japan - for having "neither centralisation nor adequate co-ordination" of enforcement efforts.

Transparency International UK welcomed the investigations now being undertaken by the Serious Fraud Office into certain overseas bribery allegations. But it warned that most overseas bribery claims that fall outside the SFO's remit are passed on to local police forces. "There remains a concern that for these and a whole raft of other financial and economic cases, there is no single specific body with the resources and capability [needed] for investigation and prosecution," Mr Rodmell said.