Article 5 of the OECD Anti-Bribery Convention provides that the policing of foreign bribery by Convention Parties shall not be influenced by (1) “considerations of national economic interest,” (2) “the potential effect upon relations with another State,” or (3) “the identity of the natural or legal persons involved.” Collectively, these mandates are known as the “Article 5 factors.” Article 5 is intended as a safeguard against the politicization or instrumentalization of foreign bribery laws. It is therefore vital to impartial foreign bribery enforcement, as well as to the integrity of foreign bribery enforcement generally.
The most well-known instance of an alleged Article 5 breach is the United Kingdom’s decision in 2006 to stop investigations into bribes paid by BAE Systems to public officials in Saudi Arabia. Then-Attorney General Peter Goldsmith argued that this decision was justified because the investigation could have damaged national security interests, as Saudi Arabia had threatened to end counterterrorism cooperation with the UK if the investigation continued. Goldsmith expressly denied that terminating the investigation for this reason constituted a breach of Article 5 because, as he put it, the decision to join the OECD Convention didn’t mean that the UK had “agreed to abandon any consideration of national security. [The Convention] certainly doesn’t say that and I don’t believe that’s what we could have intended or any other country could have intended.” The UK’s decision to suspend the BAE investigation, though challenged in court, was ultimately upheld.
More recently, the OECD has called attention to two other potential Article 5 breaches. First, an OECD news release stated that Turkey’s Article 5 compliance was in doubt due to inexplicably low level of foreign bribery enforcement, which the release suggested might be partly due to improper economic or political considerations. Second, another OECD news release raised concerns that Canada may have breached Article 5 by cancelling investigations into allegations that SNC Lavelin had bribed Libyan officials—a decision that observers believed was motivated by a desire to protect Canada’s national economic interests.
While it is encouraging to see the OECD adopt a more assertive approach to recognizing Article 5 breaches than it has in the past, these statements serve as stark reminders that there is not really an effective means for enforcing Article 5. And unfortunately, the uncertainty surrounding the meaning of Article 5 complicates the task of achieving Article 5 compliance.
Neither the Convention text nor the accompanying commentary provide sufficient guidance regarding Article 5’s meaning. As noted above, Article 5 bars consideration of “national economic interest” and of “the potential effect upon relations with another State,” but these phrases are not altogether clear. The official commentary to the Convention states that Article 5 recognizes “the fundamental nature of national regimes of prosecutorial discretion,” but also acknowledges that “in order to protect the independence of prosecution, such discretion is to be exercised on the basis of professional motives and is not to be subject to improper influence by concerns of a political nature.” This does not provide much in the way of additional guidance. We can learn a bit more about what the OECD Convention members think that Article 5 means by looking to the Convention’s Phase 3 Reports on specific countries’ implementation of the Convention. Those reports consistently mention several factors as relevant to Article 5 compliance, including: whether enforcement agencies are politically independent and have sufficient resources, whether all credible allegations are investigated without scope for political veto, and whether judges and prosecutors are educated about the requirements of Article 5 and instructed to police it. While this is somewhat helpful, the Reports seem to be operating under the misplaced assumption that the substantive requirements of Article 5 are clear to all Parties, and the only issue is how to ensure proper enforcement. But this is not so. Because the substantive meaning of Article 5 is uncertain, Parties cannot always be sure what may constitute a breach.
For example, there has been uncertainty and debate regarding whether Article 5 permits prosecutors to take into account national interests that are not “economic,” such as national security. Some scholars have argued that Article 5 does not permit security interests to influence foreign bribery enforcement—a reasonable position in light of the broad prohibition on taking into account how a foreign bribery prosecution might affect “relations with another State.” Yet several governments have echoed Peter Goldsmith’s insistence that national security interests can justify a decision to decline to pursue a case—a position that may also be defensible in light of both the background recognition, acknowledged in the official commentary on Article 5, of the principle of prosecutorial discretion (which traditionally allows prosecutors to consider whether a given prosecution would be in the public interest), and the fact that, by specifying that national economic interests may not influence decisions on foreign bribery cases, Article 5’s text might be read as implying that other kinds of (non-economic) national interests might be permissibly considered.
The OECD seems to have adopted the former position, and clarified that national security is not a legitimate consideration under Article 5. In its 2017 Phase 4 Report on the UK, the OECD indicated that the fact that the UK Attorney General retains the power to direct specific investigations pursuant to national security interests is inconsistent with Article 5. Yet while the OECD has made its position on national security interests relatively clear, the inherent ambiguity of phrases like “national economic interest” and “relations with another State” make it likely that future grey areas will emerge.
To achieve better Article 5 compliance, then, the OECD needs to clarify the meaning of each of the Article 5 factors. The OECD’s decision to call attention to apparent Article 5 violations in Turkey and Canada is a good start, but the OECD can and should supplement this approach by publishing definitions to accompany concepts such as “influence,” “national economic interest,” and “relations with another State.” For example, the OECD could clarify whether “national economic interest” refers to both short and long term economic interests, as well as whether authorities are allowed to consider whether particular defendants have the resources to pay large fines—and thus to offset the costs associated with investigation and prosecution—or whether this would constitute impermissible consideration of “national economic interest.” Another issue in potential need of clarification is whether “relations with another state” is intended to capture political and diplomatic relations as well as trade relations (I strongly suspect that it is given the broad and inclusive wording of Article 5, but clarification would still be desirable.) Another issue in need of clarification is whether particular interests, such as national security, will always fall within the scope of “relations with another state.” The OECD should also address the possible tension between Article 5 and the Convention’s recognition that prosecutorial authorities ought to be able to take into account the “public interest” as laid out in Parties’ national prosecutorial guidelines. It would be helpful to know the OECD’s position on when and how Article 5 curtails the otherwise permissible consideration of “public interest” as a ground for exercising discretion.
In addition to these questions about the meaning of the specific terms that comprise the Article 5 factors, it would also be useful for the OECD to explain whether an Article 5 factor must be the dominant or sole motivation behind a particular (non-)enforcement decision in order for that decision to contravene Article 5, or whether the mere presence of one or more of the Article 5 factors as an influence on the decision renders the decision illegitimate.
Because reputational sanctions issued by the OECD may be all that we have to respond to abuses of political influence in foreign bribery enforcement, the OECD needs to be clear in explaining the requirements of Article 5 and how breaches might occur. Once the requirements of Article 5 have been pronounced more comprehensively, the anticorruption community will be more able to scrutinize potential breaches and suggest methods for improved enforcement.