On Friday, November 26, 2021, the Organisation for Economic Co-operation and Development (OECD) adopted a new Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions, discussing the bribery of foreign public officials. While the Recommendation is not legally binding, it is recommended that OECD member countries implement it and the OECD Working Group on Bribery will now focus on how different members implement the Recommendation in the context of its country-by-country evaluation of the OECD Anti-Bribery Convention.
Updates in the New Recommendation
The Recommendation includes a brand-new section entirely focused on addressing the “demand” side of corruption, that is, the government official who is either demanding or accepting the bribe. OECD urges all member countries to raise awareness of their public officials on domestic bribery and solicitation laws and publish (on a publicly available website) their own rules and regulations governing gifts, hospitality, entertainment, and expenses for domestic public officials. This is new in guidance from OECD and its Working Group on Bribery, as the OECD Convention has typically focused just on the supplier or the bribe. Additionally, in 2018, the OECD published a study that found public officials on the receiving end of corruption were five times less likely to be reprimanded or sanctioned than the bribing party.
The Recommendation also has a new section on “non-trial resolutions,” that includes things like settlement procedures. OECD encourages these non-trial resolutions be be made public, including the main facts (including who was involved), the relevant considerations for resolving the case with a non-trial resolution, the nature of sanctions imposed and the rationale behind those sanctions, and any remediation measures implemented. This makes it the first international guidance on how to resolve a foreign bribery matter based on a negotiated agreement between a prosecuting authority and an offending individual person or company. It is likely that this new guidance will lead to more countries establishing similar mechanisms, which may result in an increased number of global resolutions.
Additionally, new provisions on the protections afforded to whistleblowers (“reporting persons”) and how to incentivize compliance has been added to the Recommendation. Specifically, OECD recommends countries consider recognizing efforts by companies with effective internal controls and compliance programs. Such companies should be considered for “public advantages, including public subsidies, licenses, public procurement contracts, contracts funded by official development assistance, and officially supported export credits.”
The Recommendation also provides additional guidance on international cooperation and how multi-jurisdictional cases should be handled, including encouragement to “direct coordination in concurrent or parallel investigations and prosecutions” and pay “due attention” to the risk of prosecuting the same person in different jurisdictions for the same conduct.
The existing OECD Good Practice Guidance (Annex 1) on internal controls, ethics, and compliance has also been revised. The revision includes changes made based on lessons learned in the past years and will serve as a helpful benchmark for companies that are trying to discern different guidance from multiple enforcement agencies.
An Eye To the Future
These changes are quite substantive and may result in a “dramatic shift” in the enforcement environment. Compliance and legal departments should evaluate and consider this new framework in their own internal controls and compliance programs.