OECD Convention on Bribery of Foreign Public Officials in International Business Transactions
Adopted: 21 November 1997 by the Negotiating Conference
Signatories: 37 (as of 1 November 2007)
Ratifications: 37 (as of 1 November 2007)
Entry into force: 15 February 1999
Open to: all 30 OECD countries and 7 non-member countries (Argentina, Brazil, Chile, Bulgaria, Estonia, Slovenia and South Africa).
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Full convention text
The Organisation for Economic Co-operation and Development (OECD) was established in 1961 to replace a European economic cooperation organisation and is an international organisation composed of the industrialised market economy countries, as well as some developing countries. Its 30 member countries share a commitment to democratic government and the market economy and seek to encourage economic growth, high employment and financial stability among member countries and contribute to the economic development of less-advanced members and non-member countries. The OECD provides them with a forum in which to establish and coordinate policies. Its work covers economic and social issues, from macroeconomics to trade, education, environment development and science and innovation.
The OECD Convention on Bribery of Foreign Public Officials in International Business Transactions (OECD Convention) is the most focused of the major anti-corruption conventions in terms of subject matter. Its aim is “to address the supply side of bribery by covering a group of countries accounting for the majority of global exports and foreign investment”. It does so by providing a framework for developed countries to work in a coordinated manner to criminalise the bribery of foreign public officials in international business transactions. The 37 states (31 OECD and 7 non-OECD) that have ratified the OECD Convention have undertaken to introduce criminal sanctions against such bribery.
Categories of obligations
As stated by the OECD, the obligations of the parties to the OECD Convention fall into five categories:
- Criminalisation: the Convention obligates signatory states to define foreign bribery as a crime and to punish acts of bribery in international business. They are required to do so with an adequate statute of limitations.
- Anti-money laundering: States are required to treat concealment of the proceeds of corruption as a money laundering offence, with certain limited exceptions.
- Provisions regarding private sector: the Convention requires states to establish the liability of companies and to prohibit accounting practices used in order to bribe foreign public officials or to hide such bribery. Thus parties are required to prohibit the establishment of off-the-books accounts and similar practices used to conceal bribery.
- International cooperation: given that foreign bribery involves actors in different jurisdictions and that international financial channels are often used to carry out or hide international bribery, the Convention prescribes mutual legal assistance between countries and the exchange of information. It also makes extradition easier in relation to offences governed by the Convention and provides for seizure and confiscation of the proceeds of corruption.
- Monitoring: the parties to the Convention are required to cooperate in a follow-up review process to monitor and promote the full implementation of the Convention. They commit to bearing the costs of such programme.
The Convention is supplemented by the Revised Recommendation of the Council of the OECD on Combating Bribery in International Business Transactions, adopted on 23 May 1997. The Recommendation covers criminalisation, and also recommends the elimination of tax deductibility of bribes, detailed accounting requirements and measures regarding public procurement. It also contains instructions regarding monitoring and other follow-up by the OECD. The Recommendation is subject to the same review process as the OECD Convention.
Concerns about the adequacy of coverage of the OECD Convention led the OECD Council in December 1997 to identify five issues 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 offence for money laundering legislation.
- The role of foreign subsidiaries in bribery transactions.
- The role of off-shore centres in bribery transactions.
The OECD Secretariat prepared a 1998 report on these topics, but there has been little follow up.
On the first topic, in October 2000 Transparency International also convened a expert group which developed five proposals, the La Pietra Recommendations, intended to address concerns that payments to political parties may be used to circumvent the intentions of the Convention. An informal OECD Working Group consultation with civil society, the private sector, and trade union representatives was held in February 2001 to consider possible future actions on the bribery of political parties and candidates.
TI has also made other submissions to the OECD on topics related to the coverage and effectiveness of the OECD Convention.
Private sector bribery and the question of whether the obligations of the Convention should be extended to include an explicit prohibition of payments to immediate family members of foreign public officials was another issue that was raised by the United States together with the International Chamber of Commerce. For background see for example the US Department of Commerce 2001 report.
Download the summary overview for additional information about the OECD Convention and its strengths and weaknesses.