Phase 3 Report on Implementing the Oecd Anti-Bribery Convention in Luxembourg

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Phase 3 Report on Implementing the Oecd Anti-Bribery Convention in Luxembourg PHASE 3 REPORT ON IMPLEMENTING THE OECD ANTI-BRIBERY CONVEN TION IN LUXEMBOURG June 2011 This Phase 3 Report on Luxembourg by the OECD Working Group on Bribery evaluates and makes recommendations on Luxembourg’s implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions. It was adopted by the Working Group on 23 June 2011. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 2 TABLE OF CONTENTS EXECUTIVE SUMMARY ............................................................................................................................. 5 A. INTRODUCTION ...................................................................................................................................... 7 1. The on-site visit ................................................................................................................................. 7 2. Structure of the report ....................................................................................................................... 8 3. Economic situation ............................................................................................................................ 8 4. Bribery of foreign public officials ..................................................................................................... 9 (a) Luxembourg's exposure to bribery .............................................................................................. 9 (b) Luxembourg's approach to cases of transnational bribery ........................................................... 9 B. IMPLEMENTATION AND APPLICATION BY LUXEMBOURG OF THE CONVENTION AND THE 2009 RECOMMENDATION ............................................................................................................... 10 1. The offence of transnational bribery ............................................................................................... 10 (a) Definition of foreign public official .......................................................................................... 11 (b) Issues identified in Phase 2 as needing specific monitoring by the Working Group ................ 11 (c) Bribery through intermediaries .................................................................................................. 12 (d) Dual criminality ......................................................................................................................... 13 (e) Exemption from liability in case of coercion ............................................................................ 13 2. Liability of legal persons ................................................................................................................. 14 (a) Introduction into Luxembourg law of rules on the liability of legal persons ............................ 14 (b) Number of cases ........................................................................................................................ 15 (c) Scope of the law ........................................................................................................................ 15 (d) Rules and principles relating to the liability of legal persons .................................................... 15 (e) Requirements relating to the liability of the natural person....................................................... 17 3. Sanctions ......................................................................................................................................... 19 (a) Sanctions applicable to natural persons ..................................................................................... 19 (b) Sanctions against legal persons ................................................................................................. 23 4. Confiscation of the bribe and of the proceeds of bribery ................................................................ 25 (a) Applicable law ........................................................................................................................... 25 (b) Examples of confiscations ordered ............................................................................................ 26 5. Investigation and prosecution of transnational bribery offences..................................................... 27 (a) Means of investigation and prosecution .................................................................................... 27 (b) Discretion as to prosecution, independence of prosecutors, factors prohibited by Article 5 ..... 31 (c) Importance of prosecuting transnational bribery cases ............................................................. 32 (d) Resources and training............................................................................................................... 34 (e) Statistics ..................................................................................................................................... 35 (f) Limitation period ....................................................................................................................... 35 6. Money laundering ........................................................................................................................... 36 7. Accounting standards, external audit and corporate compliance and ethics programmes .............. 39 (a) Accounting standards ................................................................................................................ 39 (b) External audit ............................................................................................................................. 40 (c) Corporate compliance and ethics programmes .......................................................................... 42 8. Tax measures to combat bribery ..................................................................................................... 44 3 (a) Non-deductibility of bribes ........................................................................................................ 44 (b) Detection and reporting of suspicions of transnational bribery ................................................. 45 (c) Guidance to taxpayers and tax authorities ................................................................................. 47 (d) Bilateral treaties and information sharing by the tax authorities ............................................... 47 9. International cooperation ................................................................................................................ 48 10. Raising public awareness and the reporting of transnational bribery ............................................. 51 (a) The Corruption Prevention Committee (COPRECO) ............................................................... 51 (b) Awareness of the Convention and of transnational bribery in the public and private sectors ... 51 (c) Reporting of transnational bribery ............................................................................................. 53 (d) Whistleblower protection .......................................................................................................... 54 11. Public benefits ................................................................................................................................. 56 (a) Official development aid ........................................................................................................... 56 (b) Export credits ............................................................................................................................. 57 (c) Public procurement .................................................................................................................... 58 C. RECOMMENDATIONS AND ASPECTS TO BE MONITORED ......................................................... 59 1. Recommendations of the Working Group .......................................................................................... 60 Recommendations to ensure the effectiveness of investigations, prosecutions and sanctions with regard to offences involving the bribery of foreign public officials .................................................................. 60 Recommendations to ensure effective prevention and detection of transnational bribery ..................... 61 2. Monitoring by the Working Group ..................................................................................................... 63 ANNEX 1: TABLE OF PHASE 2 RECOMMENDATIONS ....................................................................... 64 ANNEX 2: TABLE OF PHASE 2BIS RECOMMENDATIONS ................................................................. 68 ANNEX 3: LIST OF PARTICIPANTS ........................................................................................................ 70 ANNEX 4: ABBREVIATIONS, TERMS AND ACRONYMS ................................................................... 75 ANNEX 5: LEGAL TEXTS ......................................................................................................................... 78 4 EXECUTIVE SUMMARY The Phase 3 report on the Grand Duchy of Luxembourg, by the Working Group on Bribery, assesses
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