Generally how serious are organisations in your country about preventing bribery and corruption?
Bribery & Corruption (2nd edition)
The prevention of bribery and corruption has been a very significant working step, running throughout the continuous efforts taken by China. It has been explicitly stated by President Xi Jinping that China is on the progress of establishing a safeguard mechanism in preventing corruption and bribery, by building up the deterrent against corruption, disabling the opportunities for corruption, and increasing the cost of corruption. This is also reflected in the latest legislation and enforcement trend of the Chinese government.
The Ninth Amendment to the Criminal Law extends the scope of bribery taking parties and increases the severity of punishment for bribery and corruption related cases. The supervisory commissions at the national, provincial, and county levels have been established to ensure that supervision covers everyone who exercises public power. All these aforementioned instruments are expected to contribute to preventing bribery and corruption.
In the past, French domestic organisations tended to be less proactive in preventing corruption than international entities, which were already subject to foreign norms such as the Bribery Act or the FCPA. However, throughout all organisations, there is now a growing concern to prevent bribery which has been further reinforced by:
- The implementation of a legal and regulatory framework by the Sapin II Act (e.g. obligation to set up a comprehensive compliance program);
- Ongoing administrative controls operated by the AFA.
Preventing bribery and corruption has recently become a major issue for both the government and corporate entities. Companies and their legal representatives do not want to be held responsible under the Administrative Offences Act (OWiG). Therefore, companies are investing in the personnel and organisational structures of their compliance departments. Due to the introduction and improvement of compliance systems over the last few years, the amount of criminal offences in relation to corruption registered by the police has drastically decreased in the past three years.
The need to comply with stricter regulations and the changes taking place in all aspects of corporate activities have led to significant changes in the way organizations deal with such acts realizing that detecting and exposing corruption practices help to reduce and/or eliminate market distortions and improve business practices.
Following a series of amendments in the tax legislation, which provide for stricter rules in book keeping, payments and money transfers combined with changes in AML legislation, organisations are making a serious effort to comply with such obligations. In addition, certain industries have been more active in promoting best practices guidelines and monitoring of the market. Most medium to large scale businesses have in place an internal control program, train their employees on anti-corruption procedures on a regular basis and during the last 3-4 years more businesses are intergrading procedures for encouraging reporting of corruption (whistle-blowing).
Since the introduction of the 2018 Act there has been a renewed focus among Irish organisations in relation to tackling bribery and corruption and organisations are keen to ensure that they have sufficient measures in place in order to detect and prevent instances of bribery and corruption. This can present challenges for organisations but the key focus for organisations has been to ensure that they have clear unambiguous policies in place, that training in relation to such policies has been provided, and that all employees are aware of their obligations under the policies and their involvement in the detection, prevention and reporting of instances of bribery and corruption.
Nowadays Italian companies (as well as foreign companies which operate also in Italy) seem to be very serious about preventing bribery and corruption. This is mainly a result of the legislation on criminal liability of corporations, provided by Legislative Decree no. 231, dated 8th June 2001. In fact, the failure to comply with said legislation (e.g. the commission of a bribery crime) may result in the imposition of very high penalties (up to several million Euros) and disqualifying measures (such as the suspension or revocation of licenses and concessions, the prohibition to contract with government and public agencies, the suspension of business activities, the exclusion or revocation of loans or contributions and the prohibition from advertising goods and services).
We are aware that companies doing business in countries listed rather high on the Corruption Perceptions Index of Transparency International, give extensive attention to undertaking the necessary measures to prevent bribery and corruption (in 2018, Belgium was ranked 17th out of the 180 countries according to that index. It is an indicator of public sector corruption where number 1 is considered the least corrupt country and number 180 is considered the most corrupt country).
In addition, the prevention of bribery and corruption is an important point of attention for companies that derive a significant part of their turnover from public work contracts. Trainings and a code of conduct with specific provisions regarding bribery and corruption is usually foreseen in these companies.
As explained in the METI Guidelines, in general, ‘[s]ocial responsibility of business is becoming increasingly weighty as consumer awareness increases and business operations become more and more internationalized, etc. Companies across the board are making active efforts in the area of internal controls, in their attempt to ensure statutory compliance and to add more efficiency to their operations, etc.’ However, in terms of implementation of preventive measures for bribery and corruption, it appears that the majority of organisations in Japan are in the process of implementing effective preventive measures, including the adoption of global compliance programs and global whistleblowing systems, and the establishment of global audit systems and so forth.
Organizations are very serious about preventing bribery and corruption. In the recent past we have seen Banks and other institutions at the forefront of complying with corruption related legislation. Other organisations have engagement terms which provide for anti-bribery and anti- corruption policies. However, the payment of ‘facilitation fees’ is still rampant in many organizations.
Because violators of the FCPA have faced large fines, significant reputational risk and, in some cases, collateral consequences such as debarment from government contracting, many organisations are serious about preventing bribery and corruption and investigating any allegations of violations. Large organisations typically devote significant resources to their compliance programs and some have enacted policies that are more stringent than the FCPA and local laws.
Government organisations are giving a paramount importance to the subject; however, hitherto, results and implementation has not been successful. From a private organisation perspective, there is a serious approach to the prevention of corruption. Several recognized academic institutions, NGO’s, observatories and business organizations (such as Transparencia Mexicana, Mexicanos Contra la Corrupción, Instituto Mexicano para la Competitividad, Mexicanos Primero, Ciudadanos por la Transparencia, COPARMEX, Consejo Coordinador Empresarial) have played a lead role in achieving latest milestones on anti-corruption polices development, including the LGRA, which was originally conceived from a citizen initiative drafted by a group of NGO’s, known as the “Ley 3 de 3” which demanded public officers to disclose their assets and income.
In general, there are corporations in the most varied spectrums. Entities that are subject to the FCPA or UK Bribery Act tend to have mature Compliance Programs.
Brazilian companies are still adapting to a new scenario of enforcement and regulation. Some opt to implement “shelf” programs and other are willing to get out of their comfort zones. In a country were corruption has been considered endemic, changes are intense – both positively and negatively. The speed with which compliance has been absorbed in Brazil is transforming behaviors dramatically. These are real transition times. That which was well tolerated just a while ago is no longer accepted.
Large organisations will take the matter seriously, particularly if involved in the import or export of goods or where there is a significant amount of interaction with overseas businesses or government officials.
China is now one of, if not, New Zealand’s largest trading partner and Asia is an area where there has been a significant amount of concern around corruption and bribery.
Many companies have made an effort to implement bribery policies and related policies about employees accepting gifts from clients and service providers.
Large private organisations handle corruption based on international best practice and are generally serious about their compliance and anti-corruption efforts. For smaller organisations, the lack of enforcement generally leads to a lack of attention and investment. In public organisations the attention on anti-corruption is generally low, particularly at the regional and municipal level.
Currently, in Romania there is an increasingly common practice regarding the establishment within the organizations of internal anti-corruption policies which, on one hand, aim at preventing the perpetration of illicit acts by the members of the organization and, on the other hand, tend to limit the criminal liability of the organization in the hypothesis that corruption acts were committed by its members.
In light of Singapore’s zero-tolerance approach to corruption, organisations in Singapore are generally serious about preventing bribery and corruption. Companies in Singapore know that no one is above the law and organisations will not be spared the full brunt of the law if the company, management or employees are caught for corruption or corrupt practices.
To combat corruption in the private sector, CPIB launched the Anti-Corruption Partnership Network (ACPN) in September 2018. It aims to encourage firms to adopt anti-corruption measures and inculcate a culture of integrity and business ethics among their staff through sharing sessions and discussions.
The large majority of Swiss businesses takes the prevention of bribery and corruption seriously and invests in compliance programmes that either meet the legal requirements or even strive to reach the current compliance gold standard. This is in particular the case for large multinationals that have implemented a global compliance standard that applies throughout the group.
However, we also observe that a minority of Swiss businesses still has not implemented a sufficient anti-corruption compliance framework, and needs to further strengthen its compliance to avoid incurring a potential liability for failing to implement adequate procedures.
UK organisations are governed by some of the toughest anti-corruption legislation in the world. The SFO is relatively well-funded (a budget of £53 million in 2018-9) and has a team of more than 400 staff including lawyers, investigators and forensic accountants. The SFO has had some high profile success in recent years.
In our experience, UK organisations are increasingly aware of their anti-corruption obligations and generally take a responsible approach to corporate risk. However, standards may vary depending on the type of company. Most large UK public companies now have compliance programs in place, backed by dedicated compliance teams. However, small to medium sized enterprises are sometimes less committed or simply less-well resourced, and here standards are more mixed.
There appears to be greater organisational commitment to preventing bribery and corruption, likely because of both social pressure and the fear of law enforcement (if not by Canadian authorities, than by foreign agencies). Businesses are increasingly working to introduce or improve their policies, controls and risk management processes.
We consider that the last 5 years have shown that bribery and corruption are becoming more and more sophisticated and involving high-proﬁle persons. So the public opinion is strongly mobilized to prevent bribery and corruptions and both public and private entities are making an effort to achieve better results by creating co of conduct and enforcing awareness campaigns.
Until the entering into force of Law 27401, on Legal Persons Liability for Corruption Offenses, compliance programs were implemented mainly by the local subsidiaries of multinational companies, which amount to around 25% of Argentina’s GDP.
The convergence of heightened enforcement of anticorruption law at the local level against not only public officials but also local business people (specially at the construction and energy sectors; e.g. with the Notebooks Scandal) –which is quite unprecedented, and the entering into force of Law 27401 on corporate criminal liability for corruption, have wakened the local business groups’ interest in adopting compliance programs as well (integrity programs, as referred to by Law 27401).
Grand state contractors are requested to implement compliance programs following Law 27401, and the new compliance programs adopted by national SOEs impacts their value chain, generating the need for a vast universe of SMEs that are SOEs suppliers to implement integrity programs in turn.
Thus far, in lack of corporate enforcement actions in application of Law 27401, paper-based compliance programs represent an important proportion of the market. In any case, the emergence of compliance as a new discipline, and an actual business need in Argentina was hard to predict a few years ago, and constituters a major step forward in the creation of a corporate culture of corruption prevention.
Unfortunately, our organisations are not familiar with certain types of crimes due to the fact that we do not have specific means to deal with such crimes. Apart from that, we do not have specialized staff to investigate crimes and to present evidences that can lead to the effective responsibility of the infringer. However, Angola is creating conditions to train experts on corruption matters.