OECD Releases Important Update on Anti-Corruption Recommendations – Criminal Law
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On November 26, 2021, the Organization for Economic Co-operation and Development (the âOECDâ) updated its anti-corruption recommendation for the first time in over a decade. More than 44 countries have ratified the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the âConventionâ), which sets out the standards signatories must adhere to and the measures to be taken. ‘they must take to fight global corruption. This Revised Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions (the âRecommendation 2021â)1 updates the 2009 Recommendation on the Further Combating Bribery of Foreign Public Officials (the â2009 Recommendationâ). While the 2009 Recommendation retains its importance, the OECD explains that â[t]The 2021 Anti-Corruption Recommendation addresses key issues that have emerged or have significantly evolved in the global anti-corruption landscape since the adoption of the previous Anti-Corruption Recommendation in 2009. â
IMPORTANT ISSUES ADDRESSED BY RECOMMENDATION 2021
A key theme of the 2021 Recommendation is the need for greater cooperation between countries and their implementing agencies. The OECD highlights the increasingly multilateral nature of enforcement action, where agencies from different countries often work together to identify and investigate corruption and reach coordinated resolution. The OECD encourages this trend and suggests ways member countries can continue to develop a global anti-corruption framework. Nonetheless, the 2021 Recommendation warns that â[m]member countries should also pay due attention to the risk of prosecuting the same natural or legal person in different jurisdictions for the same criminal behavior. This is consistent with previous US Department of Justice policy announcements discouraging the disproportionate application of laws by multiple jurisdictions and stressing the need to avoid “stacking up” by imposing duplicate unfair penalties for law enforcement. same fault.2
Another focus of the 2021 Recommendation is the âdemand sideâ of corruption (ie the solicitation of bribes by foreign officials). While the 2009 Recommendation focused on controlling the offering and payment of bribes, the 2021 Recommendation urges member countries to publish regulations that govern the solicitation of inappropriate payments, gifts or expenses. by public officials. Member countries are also urged to review laws regarding âfacilitation paymentsâ and to prohibit or discourage their use.
The U.S. Foreign Corrupt Practices Act (“FCPA”) does not prohibit foreign public officials from soliciting or accepting bribes and contains an exception for facilitation payments, so the OECD recommendation 2021 suggests that the change to the FCPA is warranted. This emphasis on tackling corruption on the demand side is in line with recent proposals made by the Biden administration.3 Some degree of bipartisan support also appears to exist in Congress.4
In addition to encouraging more regulation and enforcement, the 2021 Recommendation specifically suggests that signatories develop procedural mechanisms to deal with allegations of corruption with an “obligation for the alleged offender to admit the facts and / or guilt.” , if applicable âwithout the need for a trial. Proposed non-trial resolutions could include the use of deferred prosecution agreements or similar agreements, such as those long used in the United States and more recently adopted in the United Kingdom.
Member countries are also encouraged to apply protections broadly to anyone who reports public corruption, known as âwhistleblowingâ. The OECD recommends that countries allow anonymous or confidential reporting and put in place safeguards to prevent retaliation. The 2021 Recommendation goes even further by recommending that countries consider offering âincentivesâ to qualified registrants. This recommendation complies with various laws and programs in the United States that provide protection and rewards to whistleblowers. Likewise, the European Union’s Whistleblower Directive comes into effect this month, which requires states to implement whistleblower protections, but does not mandate providing incentives to report.
Data protection is another important issue addressed by the 2021 recommendation. The OECD addresses the interplay between data protection laws and the increasingly digitized nature of large-scale enforcement actions. To this end, the new recommendations suggest member countries review data protection laws and enact regulations that âwould allow the processing of data as part of anti-corruption due diligence and internal investigation processesâ.
While some of these recommendations are consistent with existing practices in member countries, some changes are likely to occur. Companies operating in the international sphere should monitor these changes and revise their internal policies and practices as necessary.
CHANGES TO THE OECD GOOD PRACTICE GUIDELINES
The OECD includes with its recommendations a Guide to Good Practice on Internal Controls, Ethics and Compliance (the âGuidelinesâ), which it also updated last month (Annex II to the 2021 Recommendation) . The Guide is intended for businesses, including state-owned enterprises, to establish and ensure the effectiveness of internal control, ethics and compliance programs or measures to prevent and detect bribery of foreign public officials in their business transactions international. . .. “
The 2021 Guidelines stress that a compliance program should be tailored to ‘individual business circumstances’, which’ should be regularly monitored, reassessed and taken into account as necessary, to determine the allocation of compliance resources and ensure continuity the effectiveness âof compliance measures. The Guide offers a list of good practices to achieve this; to highlight a few:
- Companies need to ensure that those who oversee ethics and compliance programs have “sufficient authority and autonomy from management and other operational functions.”
- Companies should develop policies that govern relationships with third parties and include the following âessentialsâ:
- risk-based due diligence and regular monitoring of business partners;
- inform business partners of the company’s ethics and compliance programs;
- seek reciprocal commitment from business partners;
- implement mechanisms to ensure that contracts specifically describe the services to be performed and provide for appropriate payment terms in relation to the services rendered;
- guarantee the rights to audit the books and records of business partners; and
- provide adequate mechanisms to deal with incidents of foreign bribery committed by business partners.
- The Guide alerts companies to âinnovative technologiesâ that can be used âto identify patterns indicating foreign briberyâ.
- The Guide further recommends periodic reviews and testing of internal controls and compliance programs, including training, both regularly and on specific developments, such as changes in business activity, results monitoring and auditing, and the evolution of international and industry standards.
Although Recommendation 2021 is not binding, it identifies best practices that have received international recognition. Companies should therefore carefully review the new guidelines and ensure that their compliance programs, controls and practices incorporate as many suggestions as necessary based on their respective risk profiles.
1 The 2021 Recommendations are available here: https://www.oecd.org/daf/anti-bribery/2021-oecd-anti-bribery-recommendation.htm.
2 Remarks by Deputy Attorney General Rod Rosenstein (May 9, 2018), available at https://www.justice.gov/opa/speech/deputy-attorney-general-rod-rosenstein-delivers-remarks-new-york-city- bar-col-blanc.
3 The White House, United States Strategy on Countering Corruption (December 6, 2021), available at https://www.whitehouse.gov/wp-content/uploads/2021/12/United-States-Strategy-on-Countering- Corruption .pdf.
4 Earlier this year, a bipartisan group of members of the United States House of Representatives introduced the Foreign Extorsion Prevention Act, a bill aimed at foreign officials who demand or accept bribes. See HR 4737, 117th Cong. (2021). A similar bill has been introduced in the US Senate. See S. 3137, 117th Cong. (2021).
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