Is the OECD the Answer? It's Only Part of the Solution

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  I. INTRODUCTION  II. BACKGROUND        A. The Convention on Combating Bribery of Foreign Public        Officials in International Business Transactions        B. The Impact of International Law on Individual States        C. Domestic Implementation of the Convention           1. Implementation of the Convention in the United Kingdom           2. Implementation of the Convention in the United States III. ANALYSIS        A. Russia           1. Russia's New Anti-Bribery Laws           2. Russia's Obligation to Combat Bribery by Being Party to           the Partnership and Cooperation Agreement        B. India        C. China           1. China's Anti-Bribery Legislation           2. WTO Membership Urges China to Fight Bribery  IV. RECOMMENDATION        A. International Economic Pressure        B. The Role of Non-Governmental Organizations        C. The OECD Can Create a Better Transition for Implementing        the Convention        D. The WTO Should Create Stronger Rules to Incentivize India        and China to Implement the Convention   V. CONCLUSION 

I. INTRODUCTION

In 1997, the Organization for Economic Co-operation and Development (OECD) created the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Convention or OECD Convention). (1) Essentially, "[t]he Convention requires that all participating [countries] criminalize the bribery of foreign officials, outline appropriate sanctions for violations, and agree to extradite those charged with a bribery offense." (2) The Convention "is the first and only international anticorruption instrument focused on the 'supply side' of the bribery transaction." (3) Rather than focusing on "passive bribery"--that is, the offense committed by parties who accept bribes--the Convention combats "active bribery"--the offense committed by parties "who promise[] or give[] the bribe." (4) So far, 39 countries are parties to the Convention (party-countries)--all 34 OECD member-countries, and 5 non-member-countries. (5)

While the OECD Convention's primary goal is to create a fair business environment for companies conducting business internationally, (6) the Convention may "cause inequities among countries in international business transactions." (7) Some have commented that inequalities already exist between corporations of party-countries due to the Convention's imprecise terminology in defining what constitutes an offense. (8) However, what is more disconcerting is that corporations from party-countries that have implemented the Convention are often more reluctant to invest in certain countries due to the increased risk of violating their home country's anti-bribery laws and incurring costs associated with compliance, potential penalties, and damage to their company's reputation. (9) Consequently, corporations from party-countries that have implemented legislation may abandon countries where bribery is a prerequisite for conducting business. (10) Meanwhile, corporations from countries that have not signed the Convention (non-party-countries) enter into those abandoned countries with the understanding that they may bribe foreign public officials to gain a market advantage but will not face a risk of prosecution in their home country. (11) Thus, implementation and aggressive enforcement of the OECD Convention may simply create the environment the Convention aims to prevent. (12)

Transparency International (13) (TI) emphasizes that the OECD must continue to attempt to engage all major economies--specifically Russia, China, and India (collectively, RIC)--in signing and implementing the Convention to create a more fair international business environment. (14) While China and Russia have shown signs of welcoming the Convention, India has yet to take any substantial steps toward participating in the Convention. (15) This is troubling, especially because TI reports that only 9 party-countries are "moderately" enforcing its statutes, while the remaining 20 countries have "little or no enforcement" of their anti-bribery statutes. …