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UK’s global partners failing to punish corporate bribery

UK’s global partners failing to punish corporate bribery
UK must build anti-corruption provisions into all post-Brexit trade deals

12th September 2018, London – Six states out of the UK’s current top ten trading partners are not adequately punishing companies that pay bribes overseas, according to Transparency International’s latest “Exporting Corruption” report. Whilst countries that could become key partners in a post-Brexit environment such as China, India and Singapore should be urged by to join the OECD Anti-Bribery Convention as part of striking new trade agreements.

Published today, the 2018 Exporting Corruption report found most of the world’s biggest exporters are failing to punish corporations that pay bribes overseas. Of the 44 countries rated, three-quarters were found to have either limited or little to no enforcement against bribe paying companies. These 33 states account for over half of world exports, underlying the bribery risk associated with so much of the world’s trade. Austria, Canada, South Korea and Finland experienced declining levels of enforcement, the latter witnessing the biggest decline.

Seven states were found to have active enforcement against bribery, including the US, Germany and the UK. Since the introduction of the Bribery Act in 2010 the UK has made steady improvements in its score, although new post-Brexit trade deals with states that score poorly will provide a strong test of the UK’s robustness against bribery. The House of Lords is currently reviewing the Bribery Act, and if the UK is to maintain a positive record, the Government will need to resist any moves to water down the Act, and instead strengthen the areas in which it is weak.

 

Robert Barrington, Executive Director of Transparency International UK, said:

“Bribery undermines the free market and the rule of law, creating unfair competition and resulting in poor quality goods and services gaining an undeserved advantage. If that is in areas such as healthcare or infrastructure, it can have a devastating effect on the victims.”

“The UK’s strong legislation, reinforced by above average levels of enforcement, has helped this country to score well in TI’s global league table. But the UK only looks this good because other countries are doing so badly.  The UK could still be doing much more, and at a time when new trade deals are being established, Britain cannot afford to rest on its laurels. Attempts to water down the Bribery Act must be resisted and we hope that the positive statements issued by the new Serious Fraud Office Director are followed through with real action against British companies that break the law.”

“The relatively poor level of enforcement globally underlines just how important leadership is combatting the scourge of bribery. The UK has an opportunity to provide that leadership by building robust anti-corruption provisions into new trade agreements, in particular with those states such as China, India and Singapore that have little to no enforcement against bribery. The OECD Anti-Bribery Convention has proven to be an effective tool in raising anti-bribery standards and expectations and it is no surprise that many of the worse performing states are not signatories to the Convention. The UK should consider making this a condition of any future trade deals.”

 

Delia Ferreira Rubio, Chair of Transparency International, said:

“It is unacceptable that so much of world trade is susceptible to consequence-free corruption. Governments have promised to implement and enforce laws against bribing foreign officials under the OECD and UN conventions. Yet many aren’t 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.”

 

In addition to 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.

*** ENDS ***

 

Notes to editors:

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.

 

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.

 

Contact:

London
Dominic Kavakeb
dominic.kavakeb@transparency.org.uk
020 3096 7695
079 6456 0340

Berlin:
+49 30 34 38 20 999
press@transparency.org

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