On 9 December, to mark International Anti-Corruption Day, the OECD launched the snappily-named 2021 Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions (“the Recommendation”).
Unlike the OECD Anti-Bribery Convention (“the Convention”), which it is designed to support, the Recommendation is not legally binding. However, it provides an interesting insight into the likely direction of travel in the international enforcement and monitoring of anti-bribery legislation, with an emphasis on the demand side of bribery and encouragement for more countries to adopt legislation to resolve bribery allegations outside the trial process.
A Holistic Approach
According to the OECD, the Convention is “the first and only international anti-corruption instrument focused on the ‘supply side’ of the bribery transaction”, meaning the crosshairs are pointing at the person or entity providing the bribe, rather than the recipient or soliciting party.
Recognising that the supply side bribe is only half of the picture, the Recommendation proposes a renewed focus on the demand side, encouraging member countries to raise awareness of bribery risks among their public officials posted abroad, improve training provided to public officials posted abroad, engage with host countries to address solicitation risks, and encourage companies to prohibit or discourage the use of facilitation payments.
This shift in focus is significant in its recognition of the responsibility that the state has to restrict the risk of bribery involving public officials at source. Current enforcement trends of anti-bribery legislation such as the UK Bribery Act 2010 involve the assumption that bribery risks arise only among companies and individuals willing to pay to secure a commercial advantage. The demand side focus of the Recommendation makes clear that such risks do not exist in a vacuum and that equal weight should be given to state efforts to foster a culture among their public officials and among their international partners that disincentivises the solicitation or receipt of corrupt payments.
The domestic side of this recommendation in uncomplicated and could lead to stricter enforcement of public procurement rules and renewed efforts to increase awareness of the risks among domestic public officials posted abroad. The more difficult aspect is the recommendation for engagement with host countries to limit the risk of the solicitation of bribes by foreign public officials. States have limited means by which to incentivise stricter enforcement in third countries and it is unlikely that the Recommendation will have any significant impact upon the risk of foreign public officials accepting or soliciting bribe payments.
The previous iteration of the Recommendation was published in 2009. Since then, some countries, including the UK, have introduced non-trial resolution measures such as Deferred Prosecution Agreements to promote accountability and encourage corporate cooperation with investigators. The Recommendation encourages more widespread adoption of such measures.
The Recommendation enjoins member states to “consider using a variety of forms of resolutions when resolving criminal, administrative, and civil cases with both legal and natural persons, including non-trial resolutions.” At the same time, the Recommendation acknowledges the risk that DPAs could be perceived by the public as opaque and a way for corporate offenders to avoid the reputational harm of a conviction or guilty plea by means of a negotiated settlement. Accordingly, the Recommendation encourages member countries to require alleged offenders to admit certain facts and/or guilt.
The Recommendation also suggests that member countries make public the main facts and the natural or legal persons involved, within the constraints of the law. This touches upon one of the more contentious issues within the existing DPA regime – the fairness of identifying key individuals in corporate admissions of misconduct without giving those individuals a right to reply and often in circumstances where those individuals are later acquitted or not even prosecuted. It is consistent with this recommendation to anonymise individuals identified within statements of facts, but it is unclear that the benefits of the kind of full transparency recommended outweigh the potential reputational harm suffered by named individuals who are subsequently cleared of wrongdoing.
As far as the UK is concerned, this is old ground and will not result in any changes to domestic law or enforcement. However, if the bugle call for more widespread adoption of non-trial resolutions is answered, there will be more opportunities, as discussed further below, for the UK to work with other countries on co-ordinated non-trial resolutions.
The enforcement of anti-bribery legislation is an increasingly international endeavour. This is particularly apparent in non-trial resolutions, as exemplified by recent co-ordinated international resolutions involving Airbus SE (UK, US and France), Amec Foster Wheeler Energy Limited (UK, US and Brazil), and Rolls Royce PLC (UK, US and Brazil).
Multi-jurisdictional investigations are complex and evidence-gathering efforts are complicated by the negotiation of mutual legal assistance agreements and local laws preventing the disclosure of information to foreign enforcement agencies. The Recommendation seeks to address both issues. Specifically, it encourages countries to assist foreign investigating states by proactively sharing information and evidence, including a recommendation to ensure that data and banking protection laws do not “unduly impede effective international co-operation in investigations and prosecutions of foreign bribery and related offences”.
It seems unlikely that these recommendations will persuade countries that impose blocking statutes designed to restrict the sharing of information with foreign enforcement agencies to loosen such restrictions, although we can expect the use of mutual legal assistance to be an increasingly routine part of international investigations. This should, other things being equal, improve their speed and efficiency and perpetuate the trend towards multi-jurisdictional investigations.
The proposals outlined in the Recommendation will not have a significant impact on UK legislation because they are broadly already reflected in the UK anti-bribery regime. However, if UK enforcement agencies take on board the suggestion to adopt a more balanced approach to the supply and demand sides of bribery, we could start to see public officials coming under greater scrutiny during bribery investigations. Additionally, if the Recommendation is heeded by OECD members, we can expect to see an increase in the number of investigations that result in multi-jurisdictional non-trial resolutions.