• ADA
  • BIS
  • BMZ
  • Danish Ministry
  • Norwegian Ministry
  • Swedish Ministry
  • Dutch Ministry
Frontpage » About » About Corruption » OECD

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

The OECD Convention was adopted in 1997 and it is ratified by 38 countries including all 30 OECD member states plus 8 non-members.

The adoption of the OECD Convention created a level playing field between US companies and those from other OECD countries by subjecting all companies to the same criminal standards. Since the passing of the Foreign Corrupt Practices Act (FCPA) in 1977 and until 1997 in fact, the US was the only OECD country prohibiting its domestic companies from winning business abroad by means of bribing foreign public officials, thereby putting US companies at competitive disadvantage compared to companies from more lenient countries.  

Together with the Recommendation on Tax Deductibility of Foreign Bribes and the Recommendation for Further Combating Bribery of Foreign Public Officials in International Business, the Convention constitutes the OECD framework for fighting bribery.

The OECD Convention and Recommendations are so far the most effective international instruments against corruption. The OECD in fact carries out a very thorough monitoring of signatory countries’ level of implementation. The OECD framework is supported by businesses in the ratifying countries and by BIAC, The International Business and Industry Advisory Committee, accredited to the OECD, the International Chamber of Commerce (ICC) and others.

The Convention requires signatory countries to criminalise the practice of bribing foreign officials in the conduct of international business transactions. The Recommendations complement the Convention by urging OECD countries to consider additional actions to ‘deter, prevent and combat’ such kind of bribery. The Recommendation for Further Combating Foreign Bribery has been revised in 2009 to include some main novelties, such as a strong condemnation of ‘small facilitation payments’ (see Grey Area Questions), an exhortation to collaborate with the business community in the adoption of strict ethics and control mechanisms, and an exhortation to enforce companies’ liability for acts of corruption perpetrated by agents and/or foreign subsidiaries.

 

The Main Elements of the OECD Convention and the Recommendations:

  • 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
  • Enhanced collaboration between law enforcement authorities of signatory countries
  • The recommendation to set up effective and safe whistle-blowing mechanisms
  • International monitoring of the implementation of the convention and th Recommendations
  • A ban on tax deductibility of bribes to foreign public officials

 

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: