World Losing Fight Against Foreign Bribery, Corruption Unstoppable

In their recent report, Transparency International demonstrates persistent gaps in the global fight against foreign bribery, saying only four of 47 countries surveyed were enforcing legislation aimed at combating the phenomenon.

These were the United States, Israel and Switzerland, but also the United Kingdom, which had admitted a decade ago that the British defense firm BAE's paying of bribes to Saudi princes was in the national interest for trade.

The report said the other countries are doing next to nothing to stop payments by companies to pay foreign officials to assure contracts and other favors. The four cited for their efforts make up 16.5 percent of global exports.

That's down from seven countries, making up 27% of exports, that were conducting active enforcement in 2018.

“Our research shows that many countries are barely investigating foreign bribery,” said Gillian Dell, the lead author.

“Unfortunately, it’s all too common for businesses in wealthy countries to export corruption to poorer countries, undermining institutions and development,” she said.

While the 1997 Organization for Economic Cooperation and Development (OECD) convention prohibits bribes to win contracts and licenses, or to dodge taxes and local laws, its introduction is rendered irrelevant by a lack of enforcement. The Paris-based organization operates without a legal enforcement framework.

China, the world's largest exporter and not a signatory to the convention, was found to conduct “little or no enforcement,” in a category that also includes India, as well as Korea and China, who applaud themselves for honor.

Germany, the world's third-largest exporter, only conducts “moderate enforcement,” as do other major exporters like France, Italy and Spain.

Germany and Italy both pursued fewer cases in 2019 than 2018, while France and Spain improved their performance slightly, but not significantly.

More than 15 years ago, German engineering giant Siemens was caught up in a global corruption scandal, after executives created a multi-million-euro slush fund to win contracts abroad.

The company is alleged to have bribed officials approximately 4,000 times to the tune of 1.3 billion euros ($1.53 billion) from 2000-06 to win foreign contracts but wound up paying 1 billion euros ($1.17 billion), according to Deutsche Welle.

The Netherlands, Canada and Austria were the biggest exporters in the category of those showing only “limited enforcement.”

“Too many governments choose to turn a blind eye when their companies use bribery to win business in foreign markets," Transparency International head Delia Ferreira Rubio said.

“G-20 countries and other major economies have a responsibility to enforce the rules,” she said, adding that, "Money lost to foreign bribery wastes millions of dollars that could otherwise go to lifesaving services like health care," during COVID-19.

The report recommended ending secrecy in ownership of companies, which makes investigating foreign bribery difficult, and exploring increased liability of parent companies for the actions of their foreign subsidiaries.