5.3.2 International developments

In this section a series of recent international developments in anti-corruption laws will be explored. The first unilateral prohibition of the bribery of foreign public officers was the FCPA (the US Foreign Corrupt Practices Act, enacted in 1977).1 The FCPA is part of the US Securities Exchange Act, as amended, and thus is applicable to both American and foreign companies that have stock listed in the US. Section 5.3.3 will deal with the FCPA.

In the international arena, a series of anti-corruption treaties and policies have been enacted. These treaties aim to facilitate the cross-border enforcement of anti-corruption laws as well as the reinforcement of domestic law. Their impact is already apparent in recent prosecutions.2 The most relevant international instruments that have been ratified and implemented by States around the globe are:

Generally speaking, these international conventions provide for the criminalisa-tion of corrupt acts in the country where they occur, and of corrupt acts carried out in another country (i.e. extraterritorial effect). These treaties furthermore require that the States Parties establish criminal and civil liability for legal entities in their jurisdictions, with a view to prohibiting the tax deductibility of bribes, and in order to impose accounting requirements on companies. These treaties have been implemented in a large number of jurisdictions by both developed and developing countries. In emerging markets, where the opportunities for corruption have historically been high due to the weak rule of law, the situation is changing. In these countries corruption has become a political issue and there is an increased readiness to prosecute corrupt practices.

Transparency International Worldwide Governance Indicators (the Indicators) show that some developing countries, such as Georgia, Chile and Mexico, are making progress in governance and in fighting corruption. For example, in the period 2002-2007, the Indicators revealed marked improvements in governance and the control of corruption in Georgia.8 This country has taken various punitive and preventive steps against corruption, such as: (i) the arrest of several former ministers and high-ranking officials and the recovery of hidden and embezzled funds; (ii) the adoption of legislative changes aimed at suppressing unlawful income deviation, restricting conflicts of interest and applying strict measures of punishment for corruption offences; and (iii) the enhancement of transparency and the abolition of corrupt institutions.9 Furthermore, the Indicators show that Chile's public governance scores higher than industrialised countries such as Greece or Italy when it comes to the implementation of anti-corruption policies.10 Moreover, as acknowledged by Transparency International, the Mexican government has introduced a highly comprehensive anti-corruption plan. The most important measures taken during the Fox administration are (i) the passage of the Federal Law for Transparency and Access to Governmental Public Information of 12 June 2002 along with the creation of an implementing institution, the Instituto Federal de Acceso a Information (Federal Institute for Access to Information); and (ii) the Mexican Civil Service's plan to introduce a new and improved culture of public service in Mexico. These two initiatives, in contrast to other pressing issues of the Mexican public policy agenda, were passed unanimously by the legislature.11

In Mexico, and in other jurisdictions there have also been investigations into foreign (extraterritorial) bribery.12

Pursuant to the many new national anti-corruption laws, most forms of corruption are illegal in the country where they occur. In addition and as a result of the implementation of the OECD Corruption Convention, the bribery of foreign public officials has become a criminal offence in at least 26 European jurisdictions.13 Therefore, if for example a Dutch company is doing business in the Slovak Republic and Germany, countries which have amended their Criminal Code pursuant to the OECD Corruption Convention,14 the Dutch company risks multiple prosecutions: in the Netherlands for bribes paid in any of these jurisdictions; and also in the SlovakRepublic and Germany. If the Dutch company has shares listed on a US stock exchange, it also risks prosecution under the FCPA with parallel investigations by the US Department of Justice and by the SEC. Legal experts and case law show that a company is soon considered to fall within US FCPA jurisdiction, i.e. for instance when it sells products in the US or has an investor relationship there. Furthermore, experts confirm that asserting a 'lack of jurisdiction' is not a good defence in FCPA prosecutions, since this defence is hardly ever accepted by prosecutors and the defendant forfeits the opportunity of cooperating with the authorities.15 A clear example of the multi-jurisdictional prosecution risk is the Siemens case. As explainedinsection 5.1 supra, corrupt acts carried out by Siemens' employees in Russia, Nigeria and Libya triggered prosecution by the German as well as the US authorities.

This increasingly dynamic environment of anti-corruption laws, regulations and extra-territorial enforcement makes it uncertain for companies to assess and measure the legal risks to which they are exposed.16 For this and several other reasons it is in every company's best business interests to ensure that it does not engage in corrupt practices. In the following two sections, the US and Dutch anti-corruption laws will be discussed in more detail.