Transparency International
Report finds enforcement against foreign bribery shockingly low among half of G20 countries
Fewer of the world’s biggest exporters are actively investigating and punishing companies paying bribes abroad, according to a new report released today by Transparency International.
Exporting Corruption 2020: Assessing Enforcement of the OECD Anti-Bribery Convention, finds that active enforcement against foreign bribery significantly decreased since 2018. The share of global exports from countries that actively enforce against foreign bribery and related money laundering is down by more than a third.
Only four out of 47 countries, which make up 16.5 per cent of global exports, actively enforced legislation against foreign bribery, compared to seven countries and 27 per cent of global exports in 2018.
Worst offenders
According to the report, the biggest global exporters with the worst track records are China, Japan, the Netherlands, South Korea, Hong Kong, Canada, India and Mexico.
In fact, most countries assessed (34 out of 47), conducted practically no enforcement of their foreign bribery laws.
“Money lost to foreign bribery wastes millions of dollars that could otherwise go to lifesaving services like health care,” said Delia Ferreira Rubio, Chair of Transparency International. “Too many governments choose to turn a blind eye when their companies use bribery to win business in foreign markets. G20 countries and other major economies have a responsibility to enforce the rules.”
China, the world’s largest exporter, failed to open a single investigation into foreign bribery between 2016 and 2019, despite Chinese companies appearing in multiple scandals and investigations by other countries.
Two other non-OECD major exporters – Hong Kong and India – did not open a single foreign bribery investigation from 2016 to 2019. Singapore opened only one investigation and concluded one case with sanctions during the past four years.
The US, UK, Switzerland and Israel are the only countries assessed that continue to actively enforce against foreign bribery.
Improvers and decliners
Since 2018, four countries, accounting for 12.4 per cent of global exports, declined in performance, while six countries, accounting for 6.8 per cent of world exports, improved.
Germany, which is the third largest exporter (with 7.6 per cent of global exports) pursued fewer investigations and closed fewer cases against graft overseas. Similarly, Italy, a top-10 exporter (2.6 per cent), also declined, as did Norway.
Conversely, France and Spain, which account for 3.5 per cent and two per cent of global exports respectively, improved their performance.
“Despite big corruption cases involving companies like Airbus, Odebrecht, and many others, our research shows that many countries are barely investigating foreign bribery,” said Gillian Dell, Senior Advisor at Transparency International and lead author of the report. “Unfortunately, it’s all too common for businesses in wealthy countries to export corruption to poorer countries, undermining institutions and development. And no country is immune.”
Recommendations
Transparency International calls on all countries that are signatories to the OECD Anti-Bribery Convention, as well as the other major global exporters to do more to enforce against foreign bribery, including:
- End secrecy in ownership of companies which acts as a barrier to investigation of foreign bribery.
- Make case outcomes public to show how international corruption is being handled.
- Stop treating foreign bribery as a victimless crime and build in victims’ compensation into the enforcement process.
- Strengthen laws and enforcement systems to handle complex international corruption cases.
- Explore increased liability of parent companies for the actions of their subsidiaries to help prevent foreign bribery and related money laundering.
For a full list of recommendations, read the report: https://www.transparency.org/en/exporting-corruption
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About Transparency International
Through chapters in more than 100 countries and an international secretariat in Berlin, Transparency International has been leading the fight against corruption for the last 27 years.
About Exporting Corruption
Since 2005, the Exporting Corruption series by Transparency International places countries into four categories of foreign bribery enforcement according to the number of investigations and cases the authorities open and conclude with sanctions over a four-year period. Different weights are assigned according to the stages of enforcement and the significance of cases. Countries’ share of world exports also factors into their placement.