Enforcing Enforcement: Is the Oecd Anti-Bribery Convention's Peer Review Effective?

By Tyler, Andrew | The George Washington International Law Review, January 1, 2011 | Go to article overview

Enforcing Enforcement: Is the Oecd Anti-Bribery Convention's Peer Review Effective?


Tyler, Andrew, The George Washington International Law Review


I. INTRODUCTION

Between 2008 and 2009, two investigations into the bribery of foreign officials culminated in settlements that dwarfed the previous record of $44 million.1 After a joint investigation by German and U.S. authorities, Siemens AG, the German engineering conglomerate, agreed to pay fines totaling $1.3 billion to the two countries. 2 Similarly, Halliburton/KBR, the oil and gas services corporation, agreed to a settlement of $579 million with the U.S. Department of Justice and U.S. Securities and Exchange Commission. 3 These are just two highly visible examples of the consistently (some might even say dramatically) elevating scrutiny and prosecution of foreign bribery offenses.4 This is seen not only in the growth of investigations and prosecutions around the world, but also in the proliferation of anti-bribery regimes within the United Nations, African Union, Organization of American States, Asian Development Bank, Council of Europe, and the Organisation for Economic Co-operation and Development (OECD).

The first of these anti-bribery regimes, the Foreign Corrupt Practices Act (FCPA), was enacted in 1977 by the United States to combat bribery of foreign officials by corporations and creates an expansive jurisdictional reach.6 For the first twenty years after enactment, the U.S. Securities and Exchange Commission and the U.S. Department of Justice largely left their FCPA enforcement powers dormant.7 However, since 2002, the government's powers have been used much more aggressively; the U.S. Department of Justice currently investigates more than 100 cases a year.8

In 1997, the OECD adopted the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Convention).9 The Convention's adoption followed ten years of pressure from the United States, driven by concerns about corruption generally, and especially about the competitive disadvantage U.S. companies faced internationally in the absence of such a convention.10 The Convention, whose signatories are required to make it a crime to bribe foreign public officials in international business transactions, includes thirty-four original signatories and four subsequent signatories, who represent most of the world's major economic powers.11

The global perception and understanding of bribery's effects has shifted significantly as it has become clearer that bribes are not negligible, benign costs of doing business in foreign transactions, but are instead inefficient and costly to the suppliers of bribes (often large corporations) as well as harmful to the development and growth in the countries where the bribes are paid (often referred to as demand countries).12 As scholarly and empirical data on the effects of bribery has grown, bribery has become increasingly disfavored by all stakeholders for its many pernicious effects.13

This Note will evaluate the OECD's success in achieving uniform implementation and effective application of its anti-bribery provisions through enforcement in the countries who are party to the Convention. It will argue that after ten years the Convention boasts significant successes in implementation through its peerreview process, but that there are considerable challenges remaining to achieving full compliance.

First, this Note will examine the background of the Convention, specifically the FCPA, followed by an examination of the Convention itself and each of its provisions, including the 2009 Recommendations, with particular emphasis on how compliance is monitored and enforced. This Note will critique the effectiveness of these monitoring provisions and will then turn to assessing the success of the Convention's implementation and identifying reasons for both the Convention's successes and failures. While acknowledging the notable achievements of the Convention, this Note will show that the Convention still has a considerable distance to travel to achieve full compliance and has weaknesses that will make it difficult to get there. …

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