THE 1997 OECD CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS TRANSACTIONS: AN EXAMPLE OF PIECE-MEAL REGULATION OF GLOBALISATION

Italian Yearbook of International Law

Volumn 9, Issue , 2000, Pages 26-50

  Sacerdoti, Giorgio ^a  

^a NONE

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EID: 85184241033     PISSN: 03915107     EISSN: None     Source Type: Book Series    
DOI: 10.1163/221161399X00042     Document Type: Article

References (33)

1. Reflections on globalisation are countless. For some references see BECK, Was ist Globaliesierung?, Frankfurt, 1997; CLARK, Globalisation and Fragmentation, Oxford, 1997; DUNNING, Governments, Globalisation and International Business, Oxford, 1997; BAUMAN, Globalisation, London, 1998; ACOCELLA, Globalizzazione e stato sociale, Bologna, 1999; WEISS (ed.), Globalisation with a Human Face, The Hague, 1999.
2. On the other hand participation of other countries to the MAI, which would have been welcome by OECD members negotiating the convention would probably not have materialized due to various features that were perceived as a discrimination against latecomers and non-OECD members.
3. See World Bank, Helping Countries to Combat Corruption, 1997; UNDP, Corruption: Integrity Improvements in Developing Countries, 1998; TANZI, Corruption Around the World, IMF Working Paper 98/63.
4. t Torino, 1999, p. 253.
5. OJ EC C 195, 25 June 1997, based on Article K(3)(2) of the Maastricht Treaty. See SALAZAR, "Recenti sviluppi internazionali nella lotta alia corruzione", Cassazione penale, 1998, p. 1529.
6. EU members have undertaken to criminalize also private corruption in accordance with "common action" 98/742/ of 22 December 1998, adopted by the Council on the basis of Article K(3) of the Treaty on European Union, to be carried out within two years, OJ EC L 358, 31 December 1998,
7. For the text see ILM, 1996, p. 724.
8. Argentina, Bulgaria, Brazil, Chile and the Slovak Republic had been admitted as full members to the Working Group. In general see PIERROS and HUDSON, 'The Hard Graft of Tackling Corruption in International Business Transactions, Progress in International Cooperation and the OECD Convention", JWT, No. 2, 1998, p. 77; CAVALERIE, "La Convention OCDE du 17 D&embre 1997 sur la lutte contre corruption d'agents publics Strangers dans les transactions commerciales internationales", AFDI, 1998, p. 609; DRAETTA, "La nuova Convenzione OECD e la lotta alia corruzione nelle operazioni commerciali intemazionali", DO, 1998, p. 969.
9. ZEDALIS, "HOW Does the New OECD Convention on Bribery Stack Up Against the Foreign Corrupt Practices Act?", JWT, 1998, No. 1, p. 167.
10. PIETH and EIGEN (eds), Korruption in internationalen Geschdftsverkehr, Neuwied, 1998; World Bank, Helping Countries to Combat Corruption, Washington, 1997.
11. OECD, Document DAFFE/IME/BR (95)9REV3, Paris, 1995. For a review of the initial work by the OECD, see YANNACA SMALL, "Les paiements illicites dans le commerce international et les actions enterprises pour les combattre", AFDI, 1994, p. 792.
12. OECD, Revised Recommendation on Combating Bribery in International Business Transactions, Document C(97)125, Paris, 1997.
13. OECD, Documents DAFFE/IME/BR(97)16 and DAFFE/IME/BR(97), Official Text of the Convention and the Commentaries, Paris, 1997. During this last phase of the negotiations, the Council of the European Union adopted, for the first time in history, two common positions under Article K(3) of the Maastricht Treaty that the Member States followed during the negotiations pursuant to Article K(5). The first, more general position is dated 6 October 1997 (EC OJ L 279, 13 October 1997). The second, of 13 November 1997 (EC OJ L 320, 21 November 1997), defines the positions "which the Member States intend to support" in the framework of the OECD and Council of Europe negotiations on different important points, especially to ensure that the texts being prepared correspond to the principles introduced in the framework of the Union. During the OECD negotiation, the question arose of how the delegations of EU Member States could maintain the degree of flexibility required in the negotiations to conclude a treaty when they were tied by a common position, unanimously adopted and officially published in the Official Journal. See generally PARISI and RINOLDI, Giustizia e affari interni nellVnione Europea, Torino, 1996.
14. YASSEEN, "L'interpr&ation des trails d'apres la Convention de Vienne", RCADI, 1976, III, p.l.
15. The fight against corruption in countries that benefit from international multilateral assistance is now being pursued through other means, such as making any aid and assistance conditional upon the reorganisation of their administration in accordance with the principles of "good governance". See World Bank, cit. supra note 3. For the European context, see EC Commission, Une politique de I'Union contre la corruption, COM(97)192.
16. In this perspective, the Convention does not admit any reservations, although this exclusion can be deducted only from the preamble and is not stated in the operative part.
17. The United States has not managed to obtain the support of the other Member countries for the extension of criminalisation to include the corrupt financing of candidates to elections and of political parties (both covered by the FCPA), a specific case regulated differently in different countries, and not everywhere the object of criminal sanctions. If the granting of a pecuniary advantage to a political party or its officers is the vehicle for an act of bribery in legal sense, however, it will clearly fall under the Convention. The matter remains on the agenda of the Working Group.
18. The text does not define "international business transactions", which must be interpreted broadly in the light of the preamble. Furthermore, according to Article 1(1) corruption must occur "with a view to obtaining or retaining business or other improper advantage in the conduct of international business". The text therefore not only covers bribery in transboundary export operations, procurement or investment, but also in contracts and related business, even if it arises only at a later stage (for instance, bribery by an established foreign investor to escape or reduce taxation).
19. The European Union Convention addresses this question differently in its Article 6 relating to the "criminal responsibility of company directors". The criminal responsibility of directors or others responsible for acts of corruption "committed by persons subject to their authorities or for the benefit of the company" is provided for. The cases covered by the OECD Convention are for all purposes the same.
20. In enforcing the OECD Convention, the United States has amended the FCPA, adding the nationality link to territorial jurisdiction, so that US citizens and companies outside the country are now subject to the prohibition of bribing foreign public officials.
21. See generally BERNASCONI, "La confisca e la punibilitk del riciclaggio del provento della corruzione di pubblici funzionari", Rivista trimestrale di diritto penale dell'economia, 1996, p. 539; PIETH, "The Prevention of Money Laudering: A Comparative Analysis", European Journal of Crime, Criminal Law and Criminal Justice, 1998, p. 159.
22. ICC, Les commissions illicites^ Publ. 480/2, 1992; ICC, Extortion and Bribery in International Business Transactions (Revision of the ICC Rules of Conduct of 1977), 1996; for a critical view of corporate codes see LAUFER, "Corporate Liability, Risk Shifting and the Paradox of Compliance", Vand. L. Rev., 1999, p. 1343.
23. The Working Group held sessions in 1996 and 1997 with prosecutors of several countries (such as France, Switzerland and Italy), to learn about the practical difficulties they encounter in investigating bribery cases with an international dimension. A direct result of these contacts is Article 9(3) of the Convention: "A party shall not decline to render mutual assistance for criminal matters within the scope of this Convention on the ground of bank secrecy". The fact that off-shore financial centres are not a party of the Convention remains an issue which is tackled by various other fora besides OECD, for example at the UN level.
24. UN, Financial Heavens, Banking Secrecy and Money Laundering, New York, UN Office for Drug Control and Crime Prevention, 1998; OECD, Report and Recommendations on Harmful Tax Competition, 1998. As of the beginning of the year 2000 the OECD was drawing up a list of tax havens practising harmful tax competition; the FAFT was dealing with "non cooperative" territories and countries in anti-money laudering action; the G7 Finance Ministers Working Group on Financial Crime had drafted 'Ten Key Principles for the Improvement of International Cooperation Regarding Financial Crime and Regulatory Abuse".
25. See in this respect the OECD Council Recommendation of 1996 on the Tax Deductibility of Bribery to Foreign Public Officials, Doc. C(96)27.
26. The Council of Europe opened for signature at the end of 1999 a Civil Law Convention against Bribery. Under it, contracts providing for bribes shall be null and void, and contracts obtained through bribery shall be voidable (Article 8). As to civil law aspects see generally TERCffiR, "La corruption et le droit des contrats", La Semaine judiciaire (Suisse), 1999, p. 225.
27. See DAC Recommendation on Anti-Corruption Proposals for Aid Funded Procurement, DAC (96)1, and DAC (98)12 as to implementation by members.
28. Information may be found at the World Bank's web site: www.worldbank.org.
29. See Doc. BR(98)8 for the Phase 1 procedure, and Doc. BR(98)17 for the outline of Phase 2.
30. We follow the systematic approach of CASSESE, // controllo internazionale, Milano, 1971.
31. According to the letter of Article IV, Section 3(a) the Fund "shall oversee the compliance of each member with its obligations under Section 1". The flexibility if not the vagueness of the "general obligations of members" laid down in Section 1 after the demise of the gold exchange standard renders the application of legal standards for ascertaining compliance problematic except in blatant instances. See generally VAN DUK (ed.), Supervisory Mechanisms in International Economic Organisations, The Hague, 1984.
32. Agreement Annex 3 to the Marrakesh Agreement Establishing the WTO. The Mechanism was first established during the negotiations of the Uruguay Round, see QURESHI, 'The New GATT Trade Policy Review Mechanism", JWT, 1990, No. 1, p. 149.
33. This is the well-known argument of the "external constraint" which may bring changes that would not otherwise be undertaken. For instance Italy has introduced in its legislation through and thanks to the implementing provisions of Articles 2 and 3 of the OECD Convention providing for the liability of legal persons for transnational bribery a full set of rules and non criminal sanctions on companies also for domestic bribery and environmental and labour law infringements (approval of the bill was pending in June 2000 at the closing of this paper).