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Belgium: Phase 2 DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS BELGIUM: PHASE 2 REPORT ON THE APPLICATION OF THE CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS TRANSACTIONS AND THE 1997 RECOMMENDATION ON COMBATING BRIBERY IN INTERNATIONAL BUSINESS TRANSACTIONS This report was approved and adopted by the Working Group on Bribery in International Business Transactions on 21 July 2005. TABLE OF CONTENT EXECUTIVE SUMMARY ............................................................................................................................ 4 INTRODUCTION .......................................................................................................................................... 5 a) Belgium, an open economy......................................................................................................... 5 b) Raising awareness of corruption in Belgium .............................................................................. 6 c) Methodology and structure of the report..................................................................................... 7 A. PREVENTING AND DETECTING THE OFFENCE OF BRIBERY OF A FOREIGN PUBLIC OFFICIAL................................................................................................................................................... 8 1. Preventing the bribery of foreign public officials....................................................................... 8 a) Awareness raising and preventive measures in the public administration.................................. 8 b) Organisational preventive measures in the commercial sector ................................................. 11 2. Detecting acts of bribery of foreign public officials and related offences................................ 14 a) Reporting by private individuals or the business community................................................... 15 b) Disclosures by the public service.............................................................................................. 17 B. PROSECUTION OF THE OFFENCE OF ACTIVE BRIBERY OF A FOREIGN PUBLIC OFFICIAL AND RELATED OFFENCES ............................................................................................... 21 1. The conduct of public proceedings ........................................................................................... 21 a) Instituting public proceedings................................................................................................... 21 b) Structures that support public proceedings ............................................................................... 23 c) Forms of evidence and investigative techniques....................................................................... 27 d) Mutual legal assistance granted by Belgium in transnational bribery cases ............................. 29 2. Proving the offence of bribery of a foreign public official ....................................................... 32 a) Offences partly committed on Belgian territory or outside it ................................................... 32 b) Elements of the offence of bribery of a foreign public official................................................. 34 3. Liability of legal persons........................................................................................................... 36 a) Factual imputation and imputation of intent............................................................................. 37 b) Subsidiaries............................................................................................................................... 39 C. SANCTIONING THE OFFENCE OF ACTIVE BRIBERY OF FOREIGN PUBLIC OFFICALS AND RELATED OFFENCES .................................................................................................................. 40 1. Convictions and sentences handed down for acts of corruption ............................................... 40 a) Applicable sanctions and their determination by the judges..................................................... 40 b) Convictions and sanctions handed down by Belgian courts ..................................................... 41 c) Confiscation of property ........................................................................................................... 44 2. Sanctions for laundering the proceeds of bribery of foreign public officials............................ 46 3. Persons found guilty of accounting and tax offences................................................................ 47 a) Prosecution of accounting offences .......................................................................................... 47 b) Enforcement of the non-deductibility of undue payments to foreign public officials .............. 48 RECOMMENDATIONS .......................................................................................................................... 51 ANNEX 1: LIST OF ABBREVIATIONS............................................................................................... 54 ANNEX 2: CRIMINAL SANCTIONS APPLICABLE TO THE OFFENCE OF BRIBING FOREIGN PUBLIC OFFICIALS................................................................................................................. 56 ANNEX 3: CONVICTIONS SINCE 1995.............................................................................................. 57 2 ANNEX 4: PERTINENT LEGAL PROVISIONS (EXTRACTS).......................................................... 59 ANNEX 5: LIST OF INSTITUTIONS VISITED DURING THE ON-SITE VISIT .............................. 66 ANNEX 6: COMPOSITION OF THE EXAMINING TEAM ................................................................ 68 3 EXECUTIVE SUMMARY 1. The Phase 2 Report on Belgium by the Working Group on Bribery evaluates Belgium’s implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Overall, the Working Group finds that Belgium has made commendable efforts in this regard. For example, as of the date of the evaluation, four cases of possible foreign bribery were either under preliminary inquiry or under investigation. Nevertheless, the Working Group has noted some problems and recommended that some areas could be strengthened. In particular, the Group found that Belgian law allows under certain conditions the tax deductibility of undue advantages given to public officials. The Working Group considers it a matter of fundamental importance that Belgium expeditiously adopt a general ban on the deductibility of benefits of all kinds provided to foreign public officials, and notes that this issue was previously signified to Belgium during the Phase 1 review in 1999. 2. The Group also stressed Belgium's obligation to provide for an autonomous definition of the notion of foreign public official in order to cover the full scope of the application of the Convention. In the same vein, the Group recommended that Belgium take remedial legislative measures in order to ensure the full effectiveness of Belgium's extraterritorial and universal jurisdiction over foreign bribery offences committed outside Belgium. 3. Belgium should also provide increased support to those involved in criminal prosecution (police, prosecutors and examining magistrates) to ensure that they have the capacity necessary to ensure that the offence of bribery of foreign public officials is effectively prosecuted. In this regard, the Group notably recommended the creation of a specialised service for the prosecution of economic crime. In order to improve detection and prosecution of offences, the Group also suggested that Belgium consider imposing an obligation on auditors to report to the prosecuting authorities any suspicions of bribery detected, in cases where the management organs of the company have failed to act after being notified. 4. The Report also highlights positive aspects of Belgium’s fight against transnational bribery. For instance, Belgium recently amended its legislation to facilitate the confiscation of the bribe or the proceeds of bribery, including confiscation of assets derived from bribery or connected with it. Belgium has also strengthened the investigative methods available to magistrates in cases of serious crime, including foreign bribery. Furthermore, the Belgian authorities are devoting particular attention to the subject of criminal liability of legal persons and have embarked on a major review of the existing law, which should encompass the problems encountered when applying that law to cases of transnational bribery. 5. The Report, which details the findings of experts from Argentina and Switzerland, was adopted by the OECD Working Group along with recommendations. Within one year of the Group’s approval of the Phase 2 Report, Belgium will report to the Working Group on the steps that it will have taken or plans to take to implement the Working Group’s recommendations, with a further report in writing within two years. The report is based on the laws, regulations and other materials supplied by Belgium, and information obtained by the evaluation team during its on-site visit to Brussels. During this visit, which lasted for five days in January 2005, the evaluation team met with representatives of several Belgian government agencies, the private sector and civil society. A list of these bodies is set out in an Annex to the Report. 4 INTRODUCTION a) Belgium, an open economy 6. Belgium today is among the world’s most open economies, measured
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