FACT SHEET: SECOND ANNUAL REPORT TO CONGRESS
IMPLEMENTATION OF THE OECD ANTI-BRIBERY
Major Findings of the Report to Congress
- There has been progress on implementation of the OECD Convention
on Combating Bribery of Foreign Public Officials in International
Business Transactions, with the number of countries depositing
an instrument of ratification with the OECD increasing from 15
to 21 since last year's report. The ratification process is advancing
in the remaining signatories, and most countries should become
parties to the Convention by the end of 2000 or early 2001. Many
signatories have also taken steps to implement the OECD recommendation
to disallow the tax deductibility of bribes to foreign public
- It is still too early to make judgments about the effectiveness
of countries' enforcement of anti-bribery laws. The United States,
which enacted the Foreign Corrupt Practices Act (FCPA) more than
20 years ago, appears to be the only country to have prosecuted
persons for bribery of foreign public officials. U.S. representatives
are urging the Working Group on Bribery to begin the review of
enforcement mechanisms in 2000.
- Bribery of foreign public officials has been a widespread practice
in international commerce. From May 1994 through April 2000, information
available to the U.S. government indicates that the outcome of
353 foreign contracts valued at approximately $165 billion may
have been affected by bribes to public officials. U.S. firms are
alleged to have lost 92 of these contracts worth about $26 billion.
- The U.S. agencies that prepared this report also have concerns
about the legislation of several countries, including Japan and
the United Kingdom. As currently drafted, these countries' laws
appear inadequate to accomplish the goals of the Convention.
- The United States has succeeded in keeping issues related to
strengthening the Convention on the OECD's agenda. U.S. officials
continue to raise the need for coverage of bribes to political
parties, party officials, and candidates for public office, all
of which are included in the FCPA. Developing a consensus on broadened
coverage will require a longer-term effort as other signatories
strongly disagree on the need to expand the scope of the Convention.
- The Department of Commerce and other U.S. agencies are involving
the private sector in efforts to monitor implementation of the
Convention and promote its goals. U.S. business associations and
non-governmental organizations, such as Transparency International,
are playing a key role in educating the business community and
the public generally on the need to enact and enforce effective
Background on Bribery and the OECD Convention
- Business-related bribery of public officials is not just a commercial
concern. This corrupt practice retards economic development, results
in lost tax revenues, and undermines democracy and good governance.
The damaging effects of bribery are the greatest in the world's
- The Foreign Corrupt Practices Act (FCPA) of 1977 made it a crime
for U.S. companies to bribe foreign public officials. Up until
recently, however, foreign companies were free to bribe without
fear of penalty and could even deduct the bribes from their taxes.
Consequently, firms that tried to compete fairly and ethically
were often disadvantaged.
- The OECD Convention on Combating Bribery of Foreign Public Officials
in International Business Transactions entered into force in February
1999. All 29 OECD members and five nonmembers signed the Convention.*
As of June 10, 2000, 21 countries have deposited an instrument
of ratification with the OECD and taken steps to criminalize the
bribery of foreign public officials. Several significant exporting
countries, however, including Brazil, Italy, and the Netherlands,
are among the 13 signatories that have yet to complete their internal
processes and formally ratify the Convention.
- U.S. support for implementation of the OECD Convention is part
of broader effort to promote ethical business practices and good
governance around the world. Under the leadership of Vice President
Gore, the United States sponsored a global anti-corruption conference
in February 1999 and will co-sponsor with the Netherlands a second
global conference in May 2001. The United States is supporting
anti-corruption initiatives in Eastern Europe, Asia, and Africa,
and urging international organizations and international financial
institutions to continue strengthening their anti-bribery programs
and help member countries combat corruption.
- The July 2000 report to Congress is the second of six annual
reports mandated by the International Anti-Bribery and Fair Competition
Act of 1998 (IAFCA). The IAFCA authorized changes in U.S. law
to implement the Convention.
The report and more information on the IAFCA, the Convention, and
bribery issues can be found on the following websites:
www.mac.doc.gov/tcc/ and trade.gov/legal.
Businesses can report complaints concerning bribery of foreign public
officials on www.mac.doc.gov/tcc/tcc2/hotline/index.html.
* OECD members are: Australia, Austria, Belgium, Canada,
the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary,
Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands,
New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland,
Turkey, the United Kingdom, and the United States. The five nonmember
signatories are: Argentina, Brazil, Bulgaria, Chile, and the Slovak