Corruption and International Enforcement

You may also like...

2 Responses

  1. Myron Betshanger says:

    Hi Micheal, as always your contributions are greatly appreciated. Although I am uncertain what the OECD Working Group on Bribery would define as an “Enforcement Program” it should be noted that the Republic of South Africa has in terms of its international obligations under the UN Convention Against Corruption enacted The Prevention and Combating of Corrupt Activities Act 12 of 2004. This Act, otherwise than in the case of the FPCA and the OECD Convention on Bribery, prohibits the making of facilitation payments. Moreover the said Act, under Section 5 contains pertinent provisions prohibiting the bribery of foreign public officials and reads as follow:

    “Offences In Respect Of Corrupt Activities Relating To Foreign Public Officials”

    5 (1) “Any person who, directly or indirectly gives or agrees or offers to
    give any gratification to a foreign public official, whether for the
    benefit of that foreign public official or for the benefit of another
    person, in order to act, personally or by influencing another person
    so to act, in a manner-
    (a) that amounts to the-
    (i) illegal, dishonest. unauthorised, incomplete, or biased; or
    (ii) misuse or selling of information or material….
    (b) that amounts to-
    (i) the abuse of a position of authority
    (ii) a breach of trust; or
    (iii) the violation of a legal duty or a set of rules
    (c) designed to achieve an unjust result; or
    (d) that amounts to any other unauthorised or improper inducement
    to do or not to do anything,
    is guilty of the offence of corrupt activities relating to foreign public
    officials.
    (2) Without derogating from the generality of section 2 (4) “to act” in
    subsection (1) includes –
    (a) the using of such foreign public official’s or such other person’s
    position to influence any act or decision of the foreign state or
    public international organisation concerned; or
    (b) obtaining or retaining a contract, business or an advantage in the
    conduct of business of that foreign state or public international
    organisation.

    The said Act goes further laying done provisions in respect of agents and intermediaries and a few other activities relating to corruption. It is under these provisions that the Turkcell allegations against MTN in connection with the Iranian cellular operating license are currently being investigated by law enforcement agencies in South Africa.

    No doubt that, as also remarked by Tom Fox of tfoxlaw, the statistics contained in the OECD Working Group on Bribery are not that accurate and often an under- or overstatement of reality. As a point of further illustrating this, the OECD Working Group ranks New Zealand as having “No Enforcement Program” yet in terms of Transparency International’s Corruption Perception Indices (CPIs) over the past few years New Zealand remains one of the countries with the lowest level of corruption incidences or at least a very low perception on the prevalence of corruption. The main question therefore is how do one reconcile this conflicting reports. Whereas one, (e.g. the OECD Report) may influence government relations, the other (e.g. TI’s CPIs) may influence investor confidence and decisions and thus FDIs into a particular country.

    If a report contains information that is skewed it may have a direct adverse impact on a particular country and its economy, particularly in today’s sensitive economic markets.

  1. June 21, 2013

    […] and suspension of Deloitte (who sponsors this page) from consulting work in New York. Mike Volkov discusses international cooperation and enforcement. The FCPAmericas blog reflects on the BizJet […]