OECD Convention

The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions


The OECD Convention was adopted in 1997. The OECD Convention is ratified by 38 countries. It requires the signatory countries to make the practice of bribing foreign officials by businesses illegal.

The Main Elements of the OECD Convention:

  • The prohibition of bribery of foreign officials
  • An obligation for ratifying countries to prosecute companies suspected of bribery of public officials abroad
  • An obligation for ratifying countries to establish liability of legal persons on bribery
  • International monitoring of the implementation of the convention
  • A ban on tax deductibility of bribes to foreign public officials (recommendation related to the convention)

The OECD Convention is so far the most effective international convention. It is supported by businesses in the ratifying countries and by BIAC, The International Business and Industry Advisory Committee, accredited to the OECD and the International Chamber of Commerce (ICC) and others.

The adoption of the OECD Convention created a level playing field between US business and business in the other OECD countries. The American Foreign Corrupt Practices Act (FCPA) from 1977 made bribery abroad a criminal offence.

 

Unsettled Questions

Although the OECD Convention established level playing field in a number of areas, it left other questions unregulated in international law. These questions are generally covered by national legislation. These areas are:

  • Private business bribery
  • Solicitation of bribes of facilitation payments (see Grey Area Questions)
  • Contribution to political parties and candidates running for political office
  • The use of offshore financial centres
  • Whistleblower protection
  • Practices that block effective investigation and prosecution of corruption cases