International Trade Law News

Published by Jacobson Burton Kelley PLLC

Transparency International (TI) recently released the organization's 2006 Bribe Payers Index (BPI) which shows that overseas bribery by companies from the world'’s export giants is still common, despite the existence of international anti-bribery laws.

TI's BPI is a ranking of 30 leading exporting countries according to the propensity of their firms to bribe abroad. The BPI, which looks at the use of bribes by companies with headquarters in 30 of the world's leading exporting countries, is based on the responses of business executives from companies in 125 countries to questions about the business practices of foreign firms operating in their country.

Of the 30 exporting countries reviewed, Switzerland received the highest score and India received the lowest score.

The BPI's analysis report grouped the 30 countries into four clusters (or groups) of countries. Cluster 1 comprises the countries from which companies are least likely to bribe when doing business abroad, and cluster 4 comprises those that are most likely to bribe. According to the BPI 2006, the four clusters are:

Cluster 1: Switzerland, Sweden, Australia, Austria, Canada, UK, Germany, Netherlands, Belgium, U.S., Japan;

Cluster 2: Singapore, Spain, United Arab Emirates, France, Portugal, Mexico;

Cluster 3: Hong Kong, Israel, Italy, South Korea, Saudi Arabia, Brazil, South Africa, Malaysia;

Cluster 4: Taiwan, Turkey, Russia, China, India.

The BPI found that while companies from the wealthiest countries generally rank in the top half of the Index, they still routinely pay bribes.

Based upon the results of the 2006 BPI, TI recommends the following measures should be taken:

• OECD countries should step up enforcement of the OECD Anti-Bribery Convention's prohibition on foreign bribery and commit the necessary resources to monitor one another's enforcement.
• China, India and Russia should voluntarily adopt the provisions of the OECD Anti-Bribery Convention.
• Multilateral development banks must debar companies found guilty of foreign bribery.
• Companies must conduct due diligence when engaging in partnerships or acquisitions, and adopt and enforce strict internal no-bribes policies that include their agents, subsidiaries and branches.
• Developing countries should vigorously prosecute foreign companies found to have bribed on their soil, and must be supported in these prosecutions by the legal and financial cooperation of the host countries.