EXPORTING CORRUPTION Progress report 2020: Assessing enforcement of the OECD Anti-Bribery Convention Transparency International is a global movement with one vision: a world in which government, business, civil society and the daily lives of people are free of corruption. With more than 100 chapters worldwide and an international secretariat in Berlin, we are leading the fight against corruption to turn this vision into reality. www.transparency.org Exporting Corruption Progress Report 2020: Assessing Enforcement of the OECD Anti-Bribery Convention Lead author: Gillian Dell Contributors: Guilherme France (lead researcher), Jane Ellis, Jen Pollakusky, Andrew McDevitt and all the country experts Reviewers: Adam Földes, Sara Brimbeuf, Susan Hawley, Julius Hinks, Aram Khaghaghordyan, Anna Lutz, Maira Martini, Teresita Chavez Rodriguez, Johannes Wendt Text editor: Stephanie Debere Cover: Travel mania/Shutterstock.com Thanks to Thomas Chalaux, OECD and the International Lawyers Project A sentence on page 86 (third para) about an investigation in Spain was amended on 24 November 2020 Every effort has been made to verify the accuracy of the information contained in this report. All information was believed to be correct as of October 2020. Nevertheless, Transparency International cannot accept responsibility for the consequences of its use for other purposes or in other contexts. Full report ISBN: 978-3-96076149-5 2020 Transparency International. Except where otherwise noted, this TABLE OF CONTENTS Costa Rica 51 Executive summary 6 Czech Republic 52 Map and enforcement table 11 Denmark 54 Global highlights 14 Estonia 56 Transparency of enforcement information 16 Finland 58 Beneficial ownership transparency 19 France 59 Compensation of victims 21 Germany 62 International cooperation 25 Greece 64 Parent company liability for subsidiaries 27 Hungary 66 Trends in legal frameworks and enforcement systems 29 Ireland 68 China and other major exporters (non-OECD) 32 Israel 70 Country briefs: OECD Convention Countries 33 Italy 73 Argentina 33 Japan 76 Australia 35 Korea (South) 78 Austria 37 Latvia 80 Belgium 39 Lithuania 82 Brazil 41 Luxembourg 84 Bulgaria 44 Mexico 85 Canada 45 The Netherlands 87 Chile 48 New Zealand 90 Colombia 49 Norway 92 Peru 94 Poland 95 Portugal 98 Russia 100 Slovakia 102 Slovenia 104 South Africa 106 Spain 107 Sweden 110 Switzerland 113 Turkey 116 United Kingdom 118 United States 120 Country briefs: non-OECD convention countries 125 China 125 Hong Kong, SAR 129 India 131 Singapore 132 Methodology 136 National and regional experts 141 Endnotes 145 4 Photo: Alex Kolokythas/Shutterstock.com TRANSPARENCY INTERNATIONAL EXECUTIVE SUMMARY Bribery of foreign public officials has huge costs and consequences for countries across the globe and those costs have become more severe during the COVID-19 pandemic. With so many cases of foreign bribery occurring in health care, we cannot afford for corruption to cost any additional lives. Transparency International’s 2020 report, Exporting The report shows how well – or poorly – countries Corruption, rates the performance of 47 leading are following the rules. global exporters, including 43 countries that are More than 20 years after the Convention was signatories to the Organisation for Economic Co- adopted, most countries still have a long way to go operation and Development (OECD) Anti-Bribery in meeting their obligations. In fact, active Convention, in cracking down on bribery of foreign enforcement has significantly decreased since our public officials by companies operating abroad. last report in 2018. IN A NUTSHELL 6 EXPORTING CORRUPTION enforcement and international cooperation and Top cases of foreign bribery coordination. More than a decade ago, increased enforcement against foreign bribery, especially in the United About the report States, exposed egregious, multi-country bribery Exporting Corruption is an independent assessment schemes of companies like Siemens and BAE of the enforcement of the OECD Anti-Bribery Systems to the detriment of the people in the Convention (short for OECD Convention on countries affected. Combating Bribery of Foreign Public Officials in Enforcement uncovered large-scale bribery of high- International Business Transactions), which requires level officials by companies like Halliburton, parties to criminalise bribery of foreign public enabling them to win major infrastructure projects. officials and introduce related measures. This is the These cases sent shockwaves worldwide. thirteenth edition of the report. Yet, despite these scandals, bribery continues to be Country implementation of the Convention is used by companies from major exporting countries monitored in successive phases by the OECD to win business in foreign markets.1 In recent years, Working Group on Bribery (OECD WGB), which is multinationals like Airbus, Ericsson, Odebrecht, Rolls made up of representatives of the 44 signatories to Royce and many more have been caught red- the OECD Anti-Bribery Convention. The reviews also handed in systematic and widespread bribery cover implementation of the 2009 Recommendation schemes. of the OECD Council for Further Combating Bribery of Foreign Public Officials in International Business Corruption in international business transactions Transactions (2009 Recommendation). The 2009 undermines government institutions, misdirects Recommendation is being updated by the OECD public resources, and slows economic and social WGB. development. It distorts cross-border investment, deters fair competition in international trade and discriminates against small and medium-sized Classification enterprises. The report classifies countries into four enforcement Foreign bribery during COVID-19 categories: Active, Moderate, Limited and Little or no Enforcement. Those costs have increased during the COVID-19 Countries are scored based on enforcement pandemic. The pervasive cross-border corruption in performance at different stages, namely the number health care will cost additional lives unless robustly of investigations commenced, cases opened and countered. cases concluded with sanctions over a four-year period (2016-2019). But the dangers of corruption during COVID-19 go beyond the health sector. Triggered by the Different weights are assigned according to the pandemic, a global economic crisis is also depleting stages of enforcement and the significance of cases. public treasuries. Country share of world exports is also factored in. Wasting precious public resources on corruption- fuelled deals with unscrupulous companies and intermediaries is even more deadly and damaging than before. The report covers 43 of the 44 parties to the As companies’ profits shrink, the temptation will Convention. Iceland is not included, due to its small grow for them to win business in foreign markets at share of global exports. In addition, the report any cost and by any means. The states where assesses foreign bribery enforcement in China, multinationals are headquartered may hold back Hong Kong SAR, India and Singapore. foreign bribery enforcement on short-sighted While not part of the OECD Convention, China is the economic grounds. world’s leading exporter, with nearly 11 per cent of The need for robust foreign bribery enforcement is global exports. The others are also major exporters, as urgent today as when the OECD Anti-Bribery each with a share of approximately 2 per cent of Convention was first adopted in 1997. Now more global trade. than ever, we need stronger foreign bribery 7 TRANSPARENCY INTERNATIONAL All four countries are also signatories of the UN against foreign bribery, more than double the Convention against Corruption (UNCAC), which four countries in 2018. This represents an requires countries to criminalise foreign bribery. The increase in share of world exports from 3.8 per analysis of Hong Kong SAR is separate from China, cent to 20.2 per cent since 2018. as it is an autonomous territory, with a different legal system and its export data is compiled 3. No country is immune to exporting foreign separately. bribery. Nearly every country has companies, employees, agents, intermediaries and The OECD Convention was adopted in 1997 to facilitators involved in foreign bribery or related address the fact that: money laundering. 4. Most countries fail to publish adequate enforcement information. Most countries do Bribery is a widespread not publish national statistics on foreign bribery phenomenon in enforcement. Courts often do not publish international business judgements and information on non-trial resolutions is frequently inadequate. transactions…which raises serious moral and political 5. Lack of public information on beneficial concerns, undermines ownership hinders enforcement. Results show very slow progress in establishing central public good governance and beneficial ownership registers of companies and economic development, trusts. Such registers are key to prevention, and distorts international detection and investigation of foreign bribery. competitive conditions. 6. Compensation of victims is rare. The countries, groups and individuals harmed by OECD Convention preamble foreign bribery rarely receive compensation, and most confiscated proceeds of foreign bribery wind up in the state treasuries of the countries exporting corruption. The report assesses enforcement performance and 7. International cooperation is increasing, but highlights key gaps in information about significant obstacles remain. Insufficient or enforcement, as well as slow country