Bribery in International Business Transactions

The U.S. has undertaken a multifaceted effort to combat bribery in international business transactions because it distorts national economies, particularly those of developing countries, by diverting scarce resources; undermines the creation and legitimacy of democratically accountable institutions; and unfairly disadvantages companies which, because of legal constraints or corporate practice, refuse to pay bribes. While anti-bribery initiatives are underway in the Organization for Economic Co-operation and Development (OECD), the Organizations of American States (OAS) and international financial institutions, the challenge is to secure full implementation of these core initiatives and devise an action place for expanding these initiatives.

The U.S. State Department is playing a leading role in a broad interagency effort to eliminate bribery in international business transactions. Most countries have laws against bribery of their own officials, but only a few, including the U.S., have laws prohibiting its nationals and corporations from bribing foreign officials. The focus of U.S. efforts has been the OECD, which joins together our major economic partners and competitors.

There has been substantial progress since the1994 OECD Recommendation Against Bribery in International Business Transactions which called on members to "take concrete and meaningful steps. . .to deter, prevent and combat bribery." In April 1996 the OECD further recommend that members deny the tax deductibility of bribes. More recently, in May, OECD Ministers committed to criminalize foreign bribery. They requested proposals for consideration at the Spring 1997 Ministerial from the OECD Bribery Working Group on how to do so in an effective and coordinated manner.

The State Department's efforts have not only been in the OECD. In March 1996 the OAS completed the Inter-American Convention Against Corruption (signed by the U.S. on June 2, 1996) which criminalizes the bribery of foreign officials. The United States has also proposed, and obtained support for, an initiative at the Singapore World Trade Organization Ministerial for an interim arrangement to increase transparency, openness and due process in government procurement. At the July 1996 UN Economic and Social Council session the U.S. proposed a draft Declaration on Corruption and Bribery in International Business Transactions which condemns these activities and urges members to take specific measures to combat these practices. We are also working with multilateral development banks on tightening their procurement procedures and with developing countries in good governance programs to have them enforce their existing laws against government officials taking bribes.