Over Half of Global Exports Come from Countries that Fail to Punish Foreign Bribery, Including Bulgaria

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Bulgaria: Over Half of Global Exports Come from Countries that Fail to Punish Foreign Bribery, Including Bulgaria

Berlin, 12 September 2018 – Most of the world’s biggest exporters are failing to punish corporations paying bribes overseas, Transparency International revealed today. 

The anti-corruption organisation has released the 2018 edition of its Exporting Corruption report, rating countries based on their enforcement against foreign bribery under the OECD Anti-Bribery Convention.

The report finds that only 11 of the 44 jurisdictions rated conduct active or moderate enforcement against companies bribing abroad. These are Germany, Israel, Italy, Norway, Switzerland, the United Kingdom and the United States (active enforcement); and Australia, Brazil, Portugal and Sweden (moderate enforcement). Together, these countries are responsible for 30.8 per cent of world exports.

Brazil and Israel have dramatically improved their ratings, up from little or no enforcement in 2015.

Four countries, accounting for 6.7 per cent of world exports, have declining levels of enforcement – Austria, Canada, Finland and South Korea – with the biggest slide in Finland.

For the first time, this year’s report evaluates China, the world’s largest exporter, as well as India, Singapore and Hong Kong, which are each responsible for more than two per cent of global exports but are not signatories to the OECD Convention. They are, however, parties to the UN Convention against Corruption, which also calls for enforcement against foreign bribery. Transparency International urges them to join the OECD Anti-Bribery Convention.

These four exporters, all non-signatories to the OECD Convention, are in the “Little or No Enforcement” category. All together, the 33 countries in the “Limited” and “Little or No Enforcement” categories account for approximately 52 per cent of world exports. China alone contributes 10.8 per cent of the total.

“It is unacceptable that so much of world trade is susceptible to consequence-free corruption,” said Delia Ferreira Rubio, Chair of Transparency International. “Governments have promised to implement and enforce laws against bribing foreign officials under the OECD and UN conventions. Yet many are not even investigating major cases of grand corruption, which involve state owned enterprises and senior politicians. These have an especially corrosive effect, and ultimately impact the ordinary citizens of the country the hardest.”  

The OECD Convention requires signatory countries to criminalise bribery of foreign public officials and introduce related measures. Transparency International examined the countries’ enforcement according to available data from the past four years, relative to their share of global exports, and ranked them in four categories: “Active,” “Moderate,” “Limited,” and “Little or No” enforcement. The countries reviewed are responsible for more than 80 per cent of world exports. 

Gillian Dell, author of the report, said: “Authorities not only need a strong legal framework for going after businesses that pay bribes abroad, but proper resources for the agencies responsible. In many countries, the courts, as well as investigators and prosecutors of cross-border corruption crimes, have inadequate means to do their job.” 

Besides stepping up enforcement efforts, Transparency International recommends that governments:

  • improve accountability and deterrence, by publishing up-to-date data and case information
  • facilitate cross-border investigations with improved mutual legal assistance to other countries
  • ensure even-handed, dissuasive sanctions by applying transparency, accountability and due process in settlements of foreign bribery cases

In addition, the OECD Working Group on Bribery should make greater use of public announcements to name and shame countries that are not enforcing against foreign bribery, related money laundering offences and false accounting violations.

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Transparency International is the global civil society organisation leading the fight against corruption.

 

Notes to editors:

The OECD Anti-Bribery Convention was adopted in 1997 to address the supply side of international corruption. There are now 44 parties to the Convention, 36 of them members of the OECD.

This is the twelfth Exporting Corruption report from Transparency International. It was produced in the organisation’s Secretariat in Berlin, in collaboration with national chapters and experts in 41 OECD Convention countries, as well as China, Hong Kong SAR, India and Singapore.  

Countries are scored based on enforcement performance at different stages, i.e. number of investigations commenced, cases opened (charges filed), and cases concluded with sanctions over a four-year period (2014-2017). Based on this data and the countries’ share of world exports, they are placed in four enforcement categories: “Active”, “Moderate”, “Limited” and “Little or No” Enforcement. Costa Rica, Iceland and Latvia are not included in the classification because their small share of world exports makes it impossible to make distinctions between enforcement categories. A country assessment for Costa Rica was prepared for the report, as it is a new party to the Convention and can benefit from an early assessment of progress to date. Peru is not included in the report as it only joined in July 2018.

 

Annex – Jurisdictions by category of enforcement:

Active Enforcement: Seven countries with 27 per cent of world exports

Germany, Israel, Italy, Norway, Switzerland the United States and the United Kingdom

Moderate Enforcement: Four countries with 3.8 per cent of world exports

Australia, Brazil, Portugal and Sweden 

Limited Enforcement: Eleven countries with 12.3 per cent of world exports

Argentina, Austria, Canada, Chile, France, Greece, Hungary, Lithuania, Netherlands, New Zealand and South Africa

Little or No Enforcement: Twenty-two countries with 39.6 per cent of world exports

Belgium, Bulgaria, Colombia, Czech Republic, Denmark, Estonia, Finland, Ireland, Japan, Luxembourg, Mexico, Poland, Russia, South Korea, Spain, Turkey, Slovakia and Slovenia. We also include here China, Hong Kong, India and Singapore.

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