The Implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the enforcement of the Corruption of Foreign Public Officials Act
Report to Parliament: the Implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the enforcement of the Corruption of Foreign Public Officials Act
Table of Contents
In May 1997, the OECD Ministerial meeting called for the negotiation of a binding convention to address the bribery of foreign public officials by the end of 1997, and recommended that Member States submit legislative proposals to their national legislatures to criminalize such bribery and seek their enactment by the end of 1998. On June 21, 1997, leaders of the G-7 countries (including Prime Minister Chrétien) issued a statement in Denver endorsing this approach and timetable for the OECD.
Negotiations of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Convention) concluded on November 21, 1997. Canada participated actively in the negotiations and signed the Convention on December 17, 1997. Bill S-21, An Act respecting the corruption of foreign public officials and the implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and to make related amendments to other Acts, was introduced in the Senate on December 1, 1998, and received Royal Assent on December 10 (as S.C. 1998, c.34). Canada ratified the Convention on December 17, 1998, and the Corruption of Foreign Public Officials Act ("the Act") entered into force on February 14, 1999.
The Act is intended to meet the obligations set out in the Convention and to be in compliance with the Convention. The main offence of bribery of foreign public officials represents an effort to marry the Convention wording and requirements with wording that was found already in paragraph 121(1)(a) of the Criminal Code. The Act calls for an annual report by the Minister of Foreign Affairs, the Minister for International Trade, the Minister of Justice and the Attorney General of Canada on the implementation of the Convention and on the enforcement of the Act.
The OECD Convention came into force after five of the ten countries with the largest share of OECD exports, representing among them at least 60 percent of the combined total exports of the ten, deposited their instruments of acceptance, approval or ratification. Canada's ratification triggered the Convention's entry into force on February 15, 1999, 60 days after the deposit of Canada's instrument of ratification. To date, all 34 members of the OECD Working Group on Bribery in International Business Transactions have signed the Convention, and 20 have ratified it. (The Working Group comprises the 29 member states of the OECD and five non-members of the OECD: Argentina, Brazil, Bulgaria, Chile and the Slovak Republic) More ratifications are expected this year.
The Corruption of Foreign Public Officials Act features three offences: bribing a foreign public official, laundering property and proceeds, and possession of property and proceeds. In addition, the Act would make it possible to prosecute, for example, a conspiracy or an attempt to commit the offences. It would also cover aiding and abetting in committing these offences, an intention in common to commit them, and counselling others to commit the offences.
The Corruption of Foreign Public Officials Act came into force as part of Bill S-21, which also amended other federal laws to combat corruption, notably the Income Tax Act and the Criminal Code.
The offence of bribing a foreign public official is added to the list of offences found in subsection 67.5(1) of the Income Tax Act to deny claiming bribe payments as a deduction. Similarly, all the offences in the Act are defined as an "enterprise crime offence" in the Criminal Code. The following sections of the Code are also added to the definition of an "enterprise crime offence": section 123, on municipal corruption; section 124, on selling or purchasing office; and section 125, on influencing or negotiating appointments or dealing in offices.
In addition, by adding the Corruption of Foreign Public Officials Act offences to the list of offences under section 183 of the Criminal Code, it will be possible for police, through the lawful use of a wiretap and other electronic surveillance, to gather evidence in the bribery of foreign public officials cases, and in the possession and laundering of proceeds from these cases. This will assist in the investigation of these new offences.
By creating a new separate Act to deal with corruption of foreign public officials, the federal government has allowed for federal, as well as provincial enforcement. There are some practical reasons for carrying out prosecutions federally: the Act is a federal government response to an international initiative and demonstrates Canada's commitment to its trading partners. It is also likely that prosecutions will be infrequent and require specialized knowledge in this area which could, for practical reasons, be obtained and maintained by Justice Canada. Notwithstanding the foregoing, provincial authorities have been requested to inform Justice Canada of any provincial prosecutions under the Act. None have yet to be recorded, either federally or provincially.
Justice Canada officials have been active in the business and legal community in publicizing the existence of the Act. Considerable efforts made to make persons aware of Bill S-21 and the Corruption of Foreign Public Officials Act:
Press releases and backgrounders were distributed on the date of introduction of Bill S-21 (December 1, 1998) and just prior (February 12, 1999) to the coming into force of the Act and the Convention. Documents were broadly distributed and posted on web sites of the Department of Justice and the Department of Foreign Affairs and International Trade (e.g. sent to business associations). Subsequent mailings were also provided to interested persons.
Officials have made presentations at conferences and at various meetings in Canada
Consultations have taken place with the provinces and territories.
The Department of Justice issued a publication: The Corruption of Foreign Public Officials Act: A Guide. The Guide was distributed and was posted on the Department of Justice web site.
The Convention aims to stop the flow of bribes and, among other benefits, to remove bribery as a non-tariff barrier to trade. The Convention and the 1997 Revised Recommendation of the Council on Combatting Bribery in International Business Transactions provide for self- and mutual evaluation by Members of the OECD Working Group on Bribery in International Business Transactions (the Working Group). The aim of the review exercise is to ensure the effectiveness of national instruments to combat bribery and a level playing field. The evaluation takes place in 2 phases. The first is designed to evaluate whether the legal texts through which participants implement the Convention meet the standard set by the Convention, as well as initial actions to implement the 1997 Revised Recommendation. Phase I is due to be completed by Spring 2000. Sixteen Members of the Bribery Working Group were evaluated in 1999. Phase II evaluations will study and assess the structures put into place to enforce national laws and the application of the laws and rules in practice. Phase II should begin in the second half of 2000, and should be completed by 2005.
Canada's implementing legislation was reviewed by the Working Group July 8-9, 1999. The Working Group found that the Act fully conforms to the standards set by the Convention. The Working Group also noted that some issues may benefit from further examination during the Phase II evaluation, such as the exemption of reasonable expenses incurred in good faith and payments to secure performance of any act of a routine nature from the purview of the offence. The Working Group noted that these issues, and sentencing courts' discretion in imposing fines, would benefit from discussion in phase II of the evaluation.
Twenty Members of the OECD Working Group on Bribery had ratified the Convention as of the date of preparation of this report. Nineteen Members of the Working Group (including Canada) have had their implementing legislation evaluated as part of the peer review process. The other Members who have been evaluated include: Australia, Austria, Belgium, Bulgaria, Finland, Germany, Greece, Hungary, Iceland, Japan, Korea, Mexico, Norway, Slovak Republic, Sweden, Switzerland (ratification pending expiration of referendum period), the United Kingdom, and the United States. Spain and the Czech Republic are the only Members which have ratified the Convention that have not yet been evaluated. The Working Group has prepared draft evaluation reports of each country's implementing legislation that has gone through the Phase I monitoring process. These will be finalized by the Working Group in Spring 2000, and at present are confidential. The reports and more detailed reviews of Members' implementing legislation on which they are based will be part of a Report to Ministers for the June 2000 Ministerial meeting. The Report to Ministers will be derestricted at the Ministerial and will then be available to the general public. Following is a chart, based on Member submissions to the OECD, of steps taken and planned future actions by other participating countries to ratify and implement the Convention, current as of March 2, 2000 (except for those marked with *):
On 12 November 1999, the Executive Power sent the Convention to parliament. Since 16 November 2000, the Convention has been under consideration by the Chamber of Senators (Committee on Foreign Relations), which is expected to take action during the first quarter of 2000. On 7 January 2000, the Ministry of Justice and Human Rights sent a letter to the Chairman of the Senate soliciting that preferential attention be given to the process of ratification of the Convention. The Ministry of Justice is reviewing the draft bill to ratify and implement the Convention, which will be submitted to Parliament in order to adapt national legislation.
On 26 October 1999, the Congress enacted the law on "Ethics in the exercise of public function" (Law 25.188) which modifies several articles in the criminal code and incorporates a new article 258 bis which incriminates "transnational bribery" following the lines of the Inter-American Convention Against Corruption.
Legislation to implement the Convention has been passed by the Australian Parliament and received Royal Assent on 17 June 1999. The instrument of ratification was deposited with the OECD Secretariat on 18 October 1999. The legislation came into effect on 18 December 1999.
The legislation implementing the Convention has been in force in Austria since 1 October 1998. The First Chamber of Parliament passed the bill for ratification on 24 March 1999. The ratification process was finalised and the instrument of ratification deposited with the OECD Secretariat on 24 May 1999.
Ratification and implementation of the Convention involved two different steps. With respect to revision of penal law to comply with the obligations under the Convention, the legislative proposal was passed by Parliament at the beginning of February 1999, was published on 23 March 1999, and entered into force on 3 April 1999. The ratification bill was adopted by Parliament on 22 April and received royal sanction on 9 June 1999. The instrument of ratification was deposited with the OECD Secretariat on 23 July 1999.
The Brazilian Government has adopted a two track approach concerning implementation and ratification of Convention by the Chamber of Deputies. The text of the ratification bill has been approved by the Chamber of Deputies and is now being examined by the relevant commissions. It is expected that the Convention will be ratified by Congress in a few months. The draft implementing legislation has already been submitted to Congress. Once approved, both texts will go to the Senate and to the President for signature. Both the Ministry of Foreign Affairs and the Ministry of Justice have stated the importance of ratification; it is hoped that regional elections will not delay the procedures for implementation and ratification and that they will be completed by early 2000. At the domestic level, bribery is a predicate offence of money laundering.
Bulgaria ratified the Convention on 3 June 1998 and deposited its instrument of ratification on 22 December 1998. A Law on Amendment to the Penal Code was passed by Parliament on 15 January 1999 and came into force on 29 January 1999. An explanation of the term of "foreign public official", in line with the terms of the Convention, has been incorporated into Art. 93 of the Penal Code and a new paragraph 2 to Article 304 of the Code has been inserted. The text of the Convention was published in the Official State Gazette on 6 July 1999. From this date on, it is considered part of the domestic legislation.
Subsequently, additional relevant amendments to the Penal Code have been submitted to Parliament, notably the criminalisation of "promising" and "offering" of a bribe; the concept of "provocation" as defence should be abolished and the offence of national and international bribery should be penalised by heavier penalties.
The draft law for ratification and implementation of the Convention was presented to the Chamber of Deputies on 5 January 1999 in order to inform the commission for external relations. Following the December 1999 Presidential elections a new government was constituted in January 2000 which started reviewing the draft law. It is expected that the law will be submitted to Parliament in March 2000. Ratification is expected in early 2000.
The draft amendment to the Criminal Code was adopted by Parliament and came into force on1 July 1999. Regarding ratification, the draft law was approved by both Chambers of Parliament and submitted for signature to the President at the end of 1999. The ratification process was finalised and the instrument of ratification deposited with the OECD Secretariat on 21 January 2000.
Denmark has prepared draft legislation on both ratification and implementation of the Convention. The Government submitted this to Parliament in Spring 1999. The draft legislation was re-submitted to Parliament in October 1999 and went through the first reading on 27 October. It is now under consideration in the Parliamentary Committee. The second reading of the draft legislation was to have taken place on 9 March 2000. The third and last reading which will provide for adoption of the draft, is scheduled for 30 March 2000. The draft legislation is publicly available, including on the Internet.
The legislation for ratification and implementing legislation were approved by Parliament on 9 October 1998 and Finland deposited its instrument of ratification on 10 December 1998. The amended Penal Code entered into force on 1 January 1999. The Convention entered into force internally on 15 February 1999.
The Council of Ministers (Conseil des Ministres) has approved the drafts on ratification and implementing legislation, after consideration by the State Council (Conseil d'Etat), and submitted them to Parliament. The law authorizing the ratification of the Convention was adopted on 25 May 1999. (law n° 99-424 of 27 May 1999). Subsequent to a first reading of the implementing legislation by the Senate and the National Assembly at the end of 1999, the draft was re-examined in a second reading by the Senate and National Assembly in February 2000 (8 and 29 respectively). A third reading will have to be scheduled following a consultation by a joint commission. It is hoped that the implementation and ratification process will be completed before the June Ministerial.
Germany ratified the Convention on 10 November 1998. The implementing legislation contained in the Act on Combating International Bribery of 10 September 1998 entered into force together with the Convention on 15 February 1999.
The Convention was ratified by Parliament on 5 November 1998. The implementing legislation was passed by Parliament the same day. Greece deposited its instrument of ratification on 5 February 1999.
The texts of ratification of the Convention and implementing legislation (the Amendment of the Criminal Code) were submitted to Parliament in May 1998. The texts for ratification were approved on 29 September 1998 and Hungary deposited its instrument of ratification on 4 December 1998. The Amendment of the Criminal Code was passed in December 1998 and came into force on 1 March 1999.
The Icelandic government deposited its instrument of ratification on 17 August 1998 and the implementing legislation was passed by Parliament on 22 December 1998.
The Government has approved the drafting of legislation to enable ratification of the OECD Convention on Bribery as well as the anti-corruption Conventions of the EU and Council of Europe. In Ireland's view, the current law, in large measure, meets the requirements of the Convention. However there are one or two areas where additional legislation has been considered necessary and these issues are being addressed in the bill entitled the Prevention of Corruption Bill 2000, which was published on 6 January 2000. The Bill was submitted to the Oireachtas (Parliament) in January and its second reading by the lower house is scheduled for May 2000. It is expected that all stages in both houses will be completed before the end of 2000.
The Italian Chamber of Deputies approved on 24 March 1999 the bill for the ratification and enforcement of the OECD Convention, together with various EU instruments against fraud and corruption. The Chamber amended the bill reinforcing the framework for imposing non-criminal sanctions against legal persons under Art. 3.2 of the Convention, a new feature in the Italian legal system. The Government has been delegated to introduce these sanctions - including fines up to Euro 1.5 million - within six months from the final approval of the bill. The bill was transmitted to the Senate before summer 1999. Approval by the Senate Justice and Foreign Affairs Committee, which started examination of the bill in December 1999, is likely by mid March and approval by the full Senate is expected by the end of March 2000. Subsequently, the draft bill will have to be submitted for a second reading to the Chamber of Deputies, which is expected to take place speedily. The entire ratification procedure might be completed by April 2000.
On 10 April 1998, the Government of Japan formally submitted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, along with its implementing legislation (amendments to the Unfair Competition Prevention Law) to the National Diet. The National Diet approved the conclusion of the Convention on 22 May 1998. The implementing legislation was adopted on 18 September 1998. The instrument of acceptance was deposited on 13 October 1998.
The Korean Government formally submitted the bill to ratify the Convention along with its implementing legislation to the National Assembly in October 1998. Both bills were approved by the National Assembly on 17 December 1998. Korea deposited its instrument of ratification on 4 January 1999. Korea's implementing legislation - the Act on Preventing Bribery of Foreign Public Officials in International Business Transactions-- went into effect on 15 February 1999, at the time of the entry into force of the OECD Convention.
After 13 months of consideration, the Conseil d'Etat gave its opinion on the draft bill to ratify and implement the Convention on 15 February 2000. It is foreseen that the legislative bill will be adopted during the second half of the year 2000.
The Convention was approved by the Mexican Senate as an international treaty on 22 April1999; on 12 May, the promulgation decree was published in the "Official Gazette of the Federation"(D.O.F.). The implementing legislation was approved by the two Chambers in Congress at the end of April, as part of a comprehensive package of reforms to the Criminal Code in Mexico. The respective decree was promulgated on the D.O.F. on 17 May 1999. The instrument of ratification was deposited with the OECD Secretariat on 27 May 1999.
Bills to ratify and implement the Convention were sent to Parliament in April 1999, together with three EU treaties. The implementing bill has been amended in order to be able to take account of questions raised by the parliamentary Justice Committee. A full reading of the implementing legislation is still awaiting to be scheduled. The bills will first have to be adopted by both Chambers of Parliament - after approval by the second chamber, the first chamber will take another two to three months to approve it. It is hoped that the ratification process will be completed during 2000.
New Zealand *
In early 1999, the former New Zealand Government approved the policy to amend New Zealand law to enable it to ratify the Convention. Legislation implementing the Convention was introduced to the New Zealand Parliament in September 1999. New Zealand's treaty-making procedure required the Convention to be examined by a Parliamentary Committee. This step was taken. The Bill introduced in September is one of a number which were still under consideration by a Parliamentary Committee at the time of dissolution of Parliament for elections which were held in November 1999.
The new government, which took office in the first week of December, has been informed of New Zealand's committments in relation to the Convention. Subject to the decisions of the new government, the Bill is likely to be taken up again by the relevant Parliamentary Committee in 2000, with a view to passage at an early opportunity.
After consultation with the relevant private and public authorities, at the end of May 1998, the Government submitted to Parliament the bills to ratify and implement the Convention. The amendments to the Penal Code were passed on 27 October 1998 and came into force on 1 January 1999. The instrument of ratification was deposited on 18 December 1998.
The ratification bill, which was approved by the lower chamber of Parliament (Sejm) and the Senate (upper chamber of Parliament) in January 2000, is awaiting Presidential signature. It is expected that the instrument of ratification will be deposited in early May.
The implementation bill was submitted to Parliament on 15 February 2000. Enactment of the implementing legislation might take approximately six months, unless the Parliament takes advanced action following the Prime Minister's request that the draft be submitted under the so called "quick legislation path" to the Parliament. It is envisaged that the implementing legislation will be adopted before the summer recess.
The ratification procedure has nearly been completed, the Convention having been approved for ratification by Parliament in December 1999, and has been submitted to the President of the Republic for signature. As well, the draft legislation necessary to amend the criminal law in order to implement the OECD Convention has been prepared and submitted to Parliament. The implementing legislation is under consideration by the relevant Parliamentary Committees. Subsequently, the implementing legislation will be submitted to Parliament for approval.
The Slovak Parliament approved the ratification of the Convention on February 11, 1999. The implementing legislation, which included the amendment of the Penal Code, entered into force on 1 September 1999. On 1 November 1999, the amendment to the Code of Criminal Procedure came into effect. Furthermore, the amendment of the penal code is under preparation, notably to provide for criminal corporate liability. The instrument of ratification was deposited with the OECD on 24 September 1999.
The draft legislation for ratification, as approved by the Council of Ministers, was submitted to Parliament in fall 1998. Since then, the Parliament has given permission to the Government to ratify the Convention. The parliament approved the implementing legislation at the end of 1999. The ratification procedure was finalised and the instrument of ratification deposited with the OECD Secretariat on 14 January 2000.
The bill embracing the necessary amendments of Swedish legislation in order to be able to ratify and implement the Convention was passed by Parliament on 25 March 1999. The instrument of ratification was deposited with the OECD on 8 June 1999. The implementing legislation entered into force on 1 July 1999.
Draft ratification and implementing legislation was approved by the larger Chamber of Parliament on 7 October 1999 and by the smaller Chamber of Parliament on 9 December 1999. The ratification can take place once the mandatory three month period for possible referenda, which started on 22 December, has expired and publication requirements are fulfilled. The law should enter into force on 1 May 2000 and the Convention will be ratified subsequently.
The Convention was ratified on 1 February 2000 by the Turkish Grand Nation Assembly and the ratification bill entered into force on 6 February 2000.
The draft bill on the implementation of the Convention elaborated by an Intra-ministerial Committee was conveyed to the Ministry of Justice for review. Subsequent to the Cabinet's approval, the bill will be sent to Parliament.
The United Kingdom deposited its instrument of ratification on 14 December 1998. Although internal consultations have confirmed that in the UK's view the scope of existing laws allows the United Kingdom to meet the requirements of the Convention, the UK is currently considering the formulation of a new public statute on corruption. A public discussion document on proposals for new legislation on corruption is expected to be published in Spring 2000.
Steps are being taken to bring the Channel Isles and the Isle of Man within the scope of the Convention. Whilst these territories have indicated their willingness to do this, they need to enact new legislation to ensure their domestic laws match the provisions of the Convention.
Also, the process to bring UK's Overseas Territories under the scope of the Convention is beginning. This will involve a bilateral consultative process with each Territory. The intention is for these Territories to adhere to the Convention via the UK's own ratification. The Territories will not adhere individually.
In relation to the Overseas Territories, a White Paper entitled 'Partnership for Progress' was published on 17 March 1999. One element of this refers to the requirement for the Overseas Territories to match the best international standards in financial regulations and stipulates that, by the end of 1999, they will be required to meet, in full, international standards on money laundering, transparency and co-operation with law enforcement authorities and independent financial regulations.
On 31 July 1998 the Senate approved both the Convention and the implementing legislation. Congress completed action on implementing legislation in October 1998. The implementing legislation was signed by the President on 10 November 1998; the ratification instrument was signed by the President on 20 November 1998. The US deposited its instrument of ratification with the OECD on 8 December 1998. The legislation is available on the Internet at International Trade Administration