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Measures against corruption – Revised text proposal

WTO structured discussions on investment facilitation for development

Communication from Canada

Revised Proposal for Article 27 "Measures against corruption" under Section VI "Cross-cutting issues" of the Informal Consolidated Text

The following communication, dated 25 January 2021, is being circulated at the request of the delegation of Canada.

Following consultations with WTO Members and discussions in the Joint Statement Initiative on Investment Facilitation for Development, Canada submits for Members’ consideration the revised text proposal below for article 27 "Measures against corruption". The proposed text is included directly under the relevant section title of the Informal Consolidated Text.

The changes aim to streamline the text and provide more flexibility with respect to certain elements, which Members found prescriptive. In addition, the revised proposal clarifies that sub-section 27.4 (Application and enforcement of anti-corruption laws) would not be subject to WTO Dispute Settlement.

Canada reserves the right to table additional text proposals on this or other issues in the course of the negotiations.

1. SCOPE

foreign public official means an individual holding a legislative, executive, administrative or judicial office of a foreign country, at any level of government, whether appointed or elected, permanent or temporary, paid or unpaid, and irrespective of that person’s seniority; and an individual exercising a public function for a foreign country, at any level of government, including for a public agency or public enterprise;

official of a public international organisation means an international civil servant or an individual who is authorised by a public international organisation to act on its behalf; and

public official means an individual:

  1. holding a legislative, executive, administrative, or judicial office of a Member, whether appointed or elected, permanent or temporary, paid or unpaid, and irrespective of that person’s seniority;
  2. who performs a public function for a Member, including for a public agency or public enterprise, or provides a public service, as defined under that Member’s law and as applied in the pertinent area of that Member’s law; or
  3. defined as a public official under a Member’s law.

27. MEASURES AGAINST CORRUPTION

27.1 Scope

27.1.1. The scope of this Article is limited to measures to eliminate corruption with respect to any matter covered by this Agreement.

27.1.2. The Members recognise that the description of offences adopted or maintained in accordance with this Article, and of the applicable legal defences or legal principles controlling the lawfulness of conduct, is reserved to each Member’s law, and that those offences shall be prosecuted and punished in accordance with each Member’s law.

27.2 Measures to combat corruption

27.2.1. In complying with this Agreement, each Member should take into account relevant internationally agreed instruments that have been acceded to by that Member, such as the United Nations Convention against Corruption, done at New York on October 31, 2003, the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, with its Annex, done at Paris on November 21, 1997, or the Inter-American Convention Against Corruption, done at Caracas on March 29, 1996. Nothing in this Agreement shall affect the rights and obligations of the Members under those instruments.

27.2.2. Each Member shall adopt or maintain legislative and other measures as may be necessary to establish as criminal offences under its law, in matters that affect international investment, when committed intentionally, by any person subject to its jurisdiction:

  1. the promise, offering or giving to a public official, directly or indirectly, of an undue advantage, for the official or another person or entity, in order that the official act or refrain from acting in relation to the performance of or the exercise of his or her official duties;
  2. the solicitation or acceptance by a public official, directly or indirectly, of an undue advantage, for the official or another person or entity, in order that the official act or refrain from acting in relation to the performance of or the exercise of his or her official duties;
  3. the promise, offering or giving to a foreign public official or an official of a public international organisation, directly or indirectly, of an undue advantage,Footnote 1 for the official or another person or entity, in order that the official act or refrain from acting in relation to the performance of or the exercise of his or her official duties, in order to obtain or retain business or other undue advantage in relation to the conduct of international business; and
  4. the aiding or abetting, or conspiracy in the commission of any of the offences described in subparagraphs (a) through (c).

27.2.3. Each Member shall make the commission of an offence described in paragraph 27.2.2 or 27.2.6 liable to sanctions that take into account the gravity of that offence.

27.2.4. Each Member shall adopt or maintain measures as may be necessary, consistent with its legal principles, to establish the liability of legal persons for offences described in paragraph 27.2.2 or 27.2.6. In particular, each Member shall ensure that legal persons held liable for offences described in paragraph 27.2.2 or 27.2.6 are subject to effective, proportionate and dissuasive criminal or non-criminal sanctions, which include monetary sanctions.

27.2.5. A Member shall not allow a person subject to its jurisdiction to deduct from taxes expenses incurred in connection with the commission of an offence described in paragraph 27.2.2(a), (b), and (c).

27.2.6. In order to prevent corruption, each Member shall adopt or maintain measures as may be necessary, in accordance with its laws and regulations, regarding the maintenance of books and records, financial statement disclosures, and accounting and auditing standards, to prohibit the following acts carried out for the purpose of committing any of the offences described in paragraph 27.2.2:

  1. the establishment of off-the-books accounts;
  2. the making of off-the-books or inadequately identified transactions;
  3. the recording of non-existent expenditure;
  4. the entry of liabilities with incorrect identification of their objects;
  5. the use of false documents; and
  6. the intentional destruction of bookkeeping documents earlier than foreseen by the law.

27.2.7. Each Member shall consider adopting or maintaining measures to protect, against any unjustified treatment, any person who, in good faith and on reasonable grounds, reports to the competent authorities any facts concerning offences described in paragraph 27.2.2 or 27.2.6.

27.3 Promoting Integrity among Public Officials

27.3.1. To fight corruption in matters that affect investment, each Member should promote, among other things, integrity, honesty and responsibility among its public officials.

27.3.2. Each Member shall endeavour to adopt or maintain codes or standards of conduct, in accordance with the fundamental principles of its legal system, for the correct, honourable and proper performance of public functions, and measures providing for disciplinary or other measures, if warranted, against public officials who violate the codes or standards established in accordance with this paragraph.

27.3.3. Each Member, to the extent consistent with the fundamental principles of its legal system, shall consider establishing procedures through which a public official accused of an offence described in paragraph 27.2.2 may, where appropriate, be removed, suspended or reassigned by the appropriate authority, bearing in mind respect for the principle of the presumption of innocence.

27.3.4. Each Member shall, in accordance with the fundamental principles of its legal system and without prejudice to judicial independence, adopt or maintain measures to strengthen integrity, and to prevent opportunities for corruption, among members of the judiciary in matters that affect international investment. These measures may include rules with respect to the conduct of members of the judiciary.

27.4 Application and Enforcement of Anticorruption Laws

27.4.1. In accordance with the fundamental principles of its legal system, a Member shall not fail to effectively enforce its laws or other measures adopted or maintained to comply with paragraph 27.2.2 through a sustained or recurring course of action or inaction, after the date of entry into force of this Agreement for that Member, as an encouragement for investment.Footnote 2

27.4.2. In accordance with the fundamental principles of its legal system, each Member retains the right for its law enforcement, prosecutorial and judicial authorities to exercise their discretion with respect to the enforcement of its anti-corruption laws. Each Member retains the right to take bona fide decisions with regard to the allocation of its resources.

27.5 Participation of Private Sector and Society

27.5.1. Each Member shall take appropriate measures, within its means and in accordance with fundamental principles of its legal system, to promote the active participation of individuals and groups outside the public sector, such as enterprises, civil society, non-governmental organisations and community-based organisations, in the prevention of and the fight against corruption in matters affecting international investment, and to raise public awareness regarding the existence, causes and gravity of, and the threat posed by, corruption.

27.5.2. Each Member shall endeavour, in accordance with the fundamental principles of its legal system, to encourage investors, taking into account their structure and size, to:

  1. adopt or maintain sufficient internal auditing controls to assist in preventing and detecting offences described in paragraphs 27.2.2 and 27.2.6 in matters affecting international investment; and
  2. ensure that their accounts and required financial statements are subject to appropriate auditing and certification procedures.

27.5.3. Each Member shall take appropriate measures to ensure that its relevant anti-corruption bodies are known to the public and shall provide access to those bodies, if appropriate, for the reporting, including anonymously, of any facts concerning the offences described in paragraph 27.2.2.

31. DISPUTE SETTLEMENT

1. Members shall not have recourse to the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) of the World Trade Organization for matters arising under Sub-section 27.4 (Application and Enforcement of Anticorruption Laws).

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