Generally how serious are organisations in your country about preventing bribery and corruption?
Bribery & Corruption
There is a wide range of approaches amongst Australian companies to the prevention of bribery and corruption. Many large listed companies, particularly those with overseas operations in high-risk jurisdictions, have sophisticated compliance policies and procedures and a zero tolerance to any corrupt conduct. For other companies, particularly those which only have local operations, bribery and corruption is not a key issue in their compliance agenda, particularly given the relatively low risk of bribery enforcement when compared with other jurisdictions and other enforcement areas, such as competition law. When the Australian government sought consultation in relation to proposed changes to the bribery laws in Australia, the responses from corporates indicated a wide divergence of views.
The perception of corruption both in business-to-business relations as well as in cooperation with the public authorities is in decline (which is reflected in opinion polls). There is also a steadily growing compliance culture in Poland and awareness of corruptive behaviour in the private sector is much higher than even a few years ago.
The Warsaw Stock Exchange promotes compliance in its best practices for listed companies, and good practices are implemented in companies that are not publicly traded.
The draft Act on Transparency in the Public Sphere and the new draft Act on Criminal Liability of Collective Entities for Punishable Offences will be a further incentive to develop compliance systems in Poland. It will be no longer a best practice, but for a majority of entities their statutory obligation. The effectiveness of such compliance systems combined with cooperation with the law enforcement agencies could limit the liability of corporate entities.
The publication of the Criminal Justice (Corruption Offences) Bill 2017 is focusing organisations’ minds on the necessity to put in place adequate policies and procedures to prevent their officers and agents etc. engaging in corrupt practices on their behalf. This is currently not, nor has it been, a factor for domestic businesses to deal with until now. However, organisations in Ireland that carry out business internationally, and in particular in the UK since the passage of the Bribery Act 2010, have had a focus on putting in place such policies and procedures to mitigate against the risk of derivative liability falling on the company for the acts of its officers and agents.
In the Brazilian corporate scenario it is possible to find organizations in different stages with respect to the adoption of measures to prevent bribery and corruption.
Brazilian subsidiaries of multinational companies, especially North-American and European, tend to have developed and mature compliance programs, already fully implemented, and which are in the process of reviewing those programs to assure that they comply with Brazilian laws and regulations. Although the main principles of the Brazilian Anticorruption Law are consistent with the principles of the FCPA and UK Bribery Act, certain adjustments may be required, including with respect to labour issues that may arise from the application of the rules of a compliance program. As an example, while US regulations may allow that an employee is demoted in case of a violation of compliance rules, Brazilian laws and regulations would not allow such demotion (a termination for cause may apply, depending on the case, but not demotion).
When analysing Brazilian companies, the compliance function is still a recent matter to be developed. Certain company have adopted “shelf” compliance programs in the past, which proved to be not sufficient to prevent the occurrence of wrongdoings and leading to the conclusion that an effective compliance program takes time and effort to be built.
Regardless of the stages of each company in Brazil, compliance is currently one of the most relevant topics for corporate entities. A so-called “compliance wave”, initiated by the investigations and disclosure of corruption schemes, has moved forward to the need of adaptation to a new way of doing business, and has further evolved to a stage where bigger corporate entities are requesting from their suppliers the adoption of effective compliance programs, so that they can continue to engage in business relationships.
In the same direction and for similar purposes, certain public entities and government have enacted rules that require that a compliance program is adopted by corporate entities willing to engage in businesses with those entities and government.
UK organisations are governed by some of the toughest anti-corruption legislation in the world. The SFO is relatively well-funded (a budget of £45 million in 2017-8) and has a team of more than 500 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.
The UAE is very serious about corruption and bribery and the obligation to prevent it is placed on public offices, private companies and individuals alike. The penalties for committing bribery and corruption are serious and in the case of private companies, if the board consented to the bribery, the entire board can be found guilty which encourages companies to prevent bribery and corruption. As such all companies have developed their own internal mechanisms in line with the law to deal with corruption. They have instituted platforms that will restrict the chances of bribery and corruption occurring and will punish the occurrence of either very strictly.
Singapore's status as a hub for the ASEAN region – which overall ranks fairly poorly on the CPI – does expose multinationals with regional headquarters in the city-state to fairly significant corruption risks, both in terms of private sector bribery and in the context of bribery of foreign public officials. Corporations operating in the region can often encounter some form of bribery and/or corruption in their day-to-day business – whether it be in the form of requests from government officials for small facilitation payments or larger commercial bribes paid by competitors to secure lucrative contracts for which they themselves are bidding.
Against this background – notwithstanding the broader economic opportunities that ASEAN offers – many multinationals operate in the region in challenging environments from an anti-bribery compliance perspective. Increasingly corporates (particularly those exposed to potential FCPA or UK Bribery Act liability) are looking to tackle these challenges head on by implementing robust anti-bribery systems and procedures. However, this is not universal and some corporates are still bucking the trend in this regard.
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.
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.
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).
Mere allegation of corruption typically impacts the brand reputation of an organization owing to the negative publicity. Since India recognizes the principle of corporate criminal liability, most entities have internal policies to ensure gratifications are neither offered nor given to public servants in order to avoid any potential liability.
The interest has been increasing, within Angolan organisations, in obtaining foreign investment. Therefore, and given the global displays of concern related to these matters, Angolan organisations are increasingly aware of such problems and consequently more engaged in fighting them.
We believe that there is a relevant awareness of the organizations in our country for the importance of anti-bribery and corruption policies.
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.
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.
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 millions of 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).
Despite of what was said in the reply to the previous question, we believe that the focus of the authorities have been more on the investigation and repression of corruption activities, rather than on the prevention of such activities. In fact, we believe that there is a lack of anti-corruption regulations that would impose on the entities operating in Macau the implementation of compliance programs and policies that could help preventing such practices.
HRA: Unfortunately, organisations are not fully aware of the need to prevent bribery and corruption and, hence, do not take serious precautions.
In the trends of establishing an effective compliance system, Japanese corporations are generally tackling hard to prevent bribery offences.
Corruption is a growing concern not only for governments, but for all types of businesses in all jurisdictions.
In parallel with legislative changes, French companies especially those engaged in cross-border activities have a strong interest in developing internal behaviour that proves their willingness to prevent or detect corruption offences before they are examined by the courts.
Several Non-Governmental Organisations are also mobilising against corruption and acting to promote business ethics. Anticor or Transparency International’s publications are very valuable in the implementation and the understanding of the rules.
For example, the so-called ‘Polls of the Elysée’ case was initiated by a complaint filed in 2010 by Anticor for favouritism under article 432-14 of the criminal code. The Criminal Division had ordered that the case be returned to the investigating judge, finding that there were no constitutional, legal or treaty provisions providing for the immunity or criminal irresponsibility of members of the President's office.
Anti-corruption compliance has mainly emerged in France to prevent the criminal risk of conviction for bribery by Anglo-Saxon authorities on the basis of their extraterritorial jurisdiction. The burdensome financial penalties incurred in these jurisdictions have been a strong incentive to adopt compliance programs.
But it would be ‘simplistic’ to claim that the current implementation of these programmes is due to the mere fear of criminal prosecution or strictly financial considerations. Companies' compliance is also the result of their ethical commitments and the desire to adopt a responsible behaviour in the conduct of their economic activities. In this respect, the implementation of compliance programmes accompanies the development of corporate social responsibility.
Following the example of the American authorities who do not hesitate to impose heavy sanctions (BNP, Volkswagen, Deutsche Bank) France has become aware that strong sanctions were needed to ensure real change. It is to this end that the AFA has been given significant sanctioning powers.
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.
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.