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Phase 3 Report on Implementing the OECD Anti-Bribery Convention In

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Phase 3 Report on Implementing the OECD Anti-Bribery Convention In PHASE 3 REPORT ON IMPLEMENTING THE OECD ANTI-BRIBERY CONVENTION IN ISRAEL June 2015 This Phase 3 Report on Israel by the OECD Working Group on Bribery evaluates and makes recommendations on Israel’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 11 June 2015. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. 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. Summary of the monitoring steps leading to Phase 3 ........................................................................... 7 3. Outline and methodology of the report ................................................................................................. 7 4. Economic background .......................................................................................................................... 8 5. Cases involving the bribery of foreign public officials ........................................................................ 9 B. IMPLEMENTATION AND APPLICATION BY ISRAEL OF THE CONVENTION AND THE 2009 RECOMMENDATIONS ..................................................................................................................... 10 1. Foreign bribery offence ...................................................................................................................... 10 2. Responsibility of legal persons ........................................................................................................... 11 (a) Standard of liability ................................................................................................................... 11 (b) Enforcement against legal persons in practice ........................................................................... 16 (c) Proposed legislative amendments to criminal legal person liability regime.............................. 16 3. Sanctions ............................................................................................................................................. 18 (a) Sanctions for natural persons ..................................................................................................... 18 (b) Sanctions for legal persons ........................................................................................................ 18 (c) Dual penalty requirement under article 14(c) of the PL ............................................................ 19 (d) Relevant prosecution and sentencing principles regarding sanctions ........................................ 19 (e) Additional sanctions - debarment .............................................................................................. 20 4. Confiscation of the bribe and the proceeds of bribery ........................................................................ 20 (a) Operational and legislative framework ...................................................................................... 21 (b) Confiscation in practice ............................................................................................................. 21 5. Investigation and prosecution of the foreign bribery offence ............................................................. 22 (a) Enforcement agencies, coordination, resources and training .................................................... 22 (b) Opening and terminating foreign bribery cases ......................................................................... 25 (c) Investigative tools and challenges in the investigation of foreign bribery ................................ 28 (d) Plea bargaining / Settlements .................................................................................................... 30 (e) Considerations under Article 5 of the Convention and Independence of the Police and Prosecution ............................................................................................................................................. 31 (f) Jurisdiction ................................................................................................................................ 34 (g) Statute of limitations .................................................................................................................. 36 6. Money laundering ............................................................................................................................... 37 (a) The money laundering offence and enforcement ...................................................................... 37 (b) Anti-money laundering measures .............................................................................................. 39 7. Accounting requirements, external audit, and company compliance and ethics programmes ........... 42 (a) Accounting requirements ........................................................................................................... 42 (b) External audit ............................................................................................................................. 44 (c) Company internal controls, ethics and compliance programmes or measures .......................... 46 8. Tax measures for combating bribery .................................................................................................. 47 (a) Non-deductibility of bribes ........................................................................................................ 47 3 (b) Awareness-raising and detection ............................................................................................... 49 (c) Reporting foreign bribery and sharing tax information with law enforcement ......................... 49 9. International cooperation .................................................................................................................... 51 (a) Mutual legal assistance .............................................................................................................. 51 (b) Extradition ................................................................................................................................. 53 10. Public awareness and the reporting of foreign bribery ................................................................... 53 (a) Awareness of the Convention and of the foreign bribery offence ............................................. 53 (b) Reporting suspected acts of foreign bribery .............................................................................. 56 (c) Whistleblower protection .......................................................................................................... 57 11. Public advantages ............................................................................................................................ 59 (a) Public procurement .................................................................................................................... 59 (b) Officially supported export credits ............................................................................................ 59 (c) Defence exports ......................................................................................................................... 60 (d) Official development assistance (ODA) .................................................................................... 62 C. RECOMMENDATIONS AND ISSUES FOR FOLLOW-UP ........................................................... 63 1. Recommendations of the Working Group .......................................................................................... 63 Recommendations for ensuring effective investigation, prosecution and sanctioning of foreign bribery .................................................................................................................................................... 63 Recommendations for ensuring effective prevention and detection of foreign bribery ......................... 64 2. Follow-up by the Working Group ...................................................................................................... 66 ANNEX 1: SUMMARIES OF ISRAEL’S FOREIGN BRIBERY ENFORCEMENT ACTIONS .............. 68 (a) Ongoing formal investigations .................................................................................................. 68 (b) Ongoing preliminary examinations ........................................................................................... 68 (c) Closed preliminary examinations .............................................................................................
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