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December 10, 2009 

OECD Recommends That Facilitating Payments Be Prohibited or Discouraged

In connection with the marking of December 9th as International Anti-Corruption Day (see previous post) and the 10th Anniversary of the Entry into Force of the Organization of Economic Cooperation and Development (OECD) Anti-Bribery Convention, the OECD held a program yesterday in Geneva, Switzerland on anti-bribery efforts that included some high level speeches by a number of U.S. officials, including Secretary of State Clinton and Commerce Department Locke.

One of the main features of the program was the release of the OECD’s new Recommendation for Further Combating Bribery of Foreign Public Officials which, among other things, recommends that OECD member countries prohibit or discourage the use of small facilitation payments.

Specifically, the OECD recommendation is as follows:

RECOMMENDS, in view of the corrosive effect of small facilitation payments, particularly on sustainable economic development and the rule of law that Member countries should:

i. undertake to periodically review their policies and approach on small facilitation payments in order to effectively combat the phenomenon;

ii. encourage companies to prohibit or discourage the use of small facilitation payments in internal company controls, ethics and compliance programmes or measures, recognising that such payments are generally illegal in the countries where they are made, and must in all cases be accurately accounted for in such companies’ books and financial records.

URGES all countries to raise awareness of their public officials on their domestic bribery and solicitation laws with a view to stopping the solicitation and acceptance of small facilitation payments.

Of course, this is only a recommendation and any changes in law must be implemented by OECD member countries. Nevertheless, this OECD statement is an important one and it will be interesting to see how the U.S. Government will react to this recommendation. At a minimum, it reaffirms the position that companies must closely review their policies regarding facilitating payments.

Some of the other OECD recommendations include:

  • Ensuring companies cannot avoid sanctions by using agents and intermediaries to bribe for them;
  • Improve co-operation between countries on foreign bribery investigations and the seizure, confiscation and recovery of the proceeds of transnational bribery;
  • Provide effective channels for reporting foreign bribery to law enforcement authorities and for protecting whistleblowers from retaliation; and
  • Working more closely with the private sector to adopt more stringent internal controls, ethics and compliance programs and measures to prevent and detect bribery.

Secretary Clinton’s remarks made at the OECD program can be found here.

Secretary Locke’s remarks can be found here.




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