PHASE 3 REPORT ON IMPLEMENTING THE OECD ANTI-BRIBERY CONVENTION IN DENMARK MARCH 2013 This Phase 3 Report on Denmark by the OECD Working Group on Bribery evaluates and makes recommendations on Denmark’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 15 March 2013. 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 of the Report ............................................................................................................................ 7 4. Economic Background.......................................................................................................................... 8 5. Overseas Territories .............................................................................................................................. 8 6. Cases Involving the Bribery of Foreign Public Officials...................................................................... 8 (a) Concluded Cases Resulting in Sanctions ..................................................................................... 9 (b) Terminated Cases without Sanctions or Prosecutions ................................................................. 9 (c) Ongoing Foreign Bribery Cases ................................................................................................ 11 (d) Concluded Oil-for-Food Cases .................................................................................................. 11 B. IMPLEMENTATION AND APPLICATION BY DENMARK OF THE CONVENTION AND THE 2009 RECOMMENDATIONS ..................................................................................................................... 12 1. Foreign Bribery Offence ..................................................................................................................... 12 (a) Defence of Small Facilitation Payments.................................................................................... 13 (b) Definition of a Foreign Public Official ...................................................................................... 15 (c) Application of the Convention in Greenland and the Faroe Islands .......................................... 16 2. Responsibility of Legal Persons ......................................................................................................... 17 3. Sanctions for Foreign Bribery and Related Offences ......................................................................... 19 (a) Maximum Sanctions Available for Foreign Bribery ................................................................. 19 (b) Sanctions Imposed in Practice ................................................................................................... 20 (c) Sanctions for False Accounting ................................................................................................. 20 4. Confiscation of the Bribe and the Proceeds of Bribery ...................................................................... 21 5. Investigation and Prosecution of the Foreign Bribery Offence .......................................................... 22 (a) Enforcement Agencies and Co-ordination................................................................................. 22 (b) Prosecutorial Discretion and the Prosecution of Related Natural Persons ................................ 23 (c) Absence of Corporate Prosecutions ........................................................................................... 25 (d) Out-of-Court Settlements .......................................................................................................... 25 (e) Additional Issues Concerning Specific Foreign Bribery Enforcement Actions ........................ 27 (f) Statute of Limitations ................................................................................................................ 30 (g) Jurisdiction to Prosecute ............................................................................................................ 30 (h) Priority, Resources and Expertise .............................................................................................. 32 (i) Investigative Techniques ........................................................................................................... 33 (j) Article 5 of the Convention ....................................................................................................... 34 6. Money Laundering.............................................................................................................................. 34 (a) The Money Laundering Offence ............................................................................................... 34 (b) Money Laundering Reporting ................................................................................................... 35 (c) Authorities and Expertise to Combat Money Laundering ......................................................... 35 (d) Anti-Money Laundering in Greenland and the Faroe Islands ................................................... 36 7. Accounting Requirements, External Audit, and Corporate Compliance and Ethics Programmes ..... 37 (a) Accounting Standards ................................................................................................................ 37 (b) Detection of Foreign Bribery by External Auditors .................................................................. 37 (c) Reporting of Foreign Bribery by External Auditors .................................................................. 37 (d) Corporate Compliance, Internal Controls and Ethics ................................................................ 39 3 8. Tax Measures for Combating Bribery ................................................................................................ 40 (a) Non-Tax Deductibility of Bribes ............................................................................................... 40 (b) Detection and Awareness-Raising ............................................................................................. 40 (c) Reporting and Sharing of Information by SKAT of Foreign Bribery ....................................... 41 9. International Co-operation .................................................................................................................. 42 (a) Mutual Legal Assistance ........................................................................................................... 42 (b) Extradition ................................................................................................................................. 43 10. Public Awareness and the Reporting of Foreign Bribery ............................................................... 43 (a) Awareness of the Convention and the Offence of Foreign Bribery .......................................... 43 (b) Reporting Suspected Acts of Foreign Bribery ........................................................................... 44 (c) Whistleblowing and Whistleblower Protection ......................................................................... 46 11. Public Advantages ........................................................................................................................... 47 (a) Official Development Assistance .............................................................................................. 47 (b) Prevention and Detection within the Danish International Investment Funds .......................... 48 (c) Public Procurement ................................................................................................................... 48 (d) Officially Supported Export Credits .......................................................................................... 49 C. RECOMMENDATIONS AND ISSUES FOR FOLLOW-UP ........................................................... 50 1. Recommendations of the Working Group .......................................................................................... 51 2. Follow-up by the Working Group ...................................................................................................... 54 ANNEX 1 PREVIOUS WORKING GROUP RECOMMENDATIONS TO DENMARK AND WORKING GROUP ASSESSMENT OF THEIR IMPLEMENTATION ................................................... 55 ANNEX 2 PARTICIPANTS AT THE ON-SITE VISIT ........................................................................ 58 ANNEX 3 LIST OF ABBREVIATIONS AND ACRONYMS .............................................................. 60 ANNEX 4 EXCERPTS OF