In this year’s Corruption Perception Index (CPI) rankings, Denmark yet again topped the list (tied with New Zealand) as the world’s cleanest country. But the CPI has well-known limitations—including the fact that it focuses on corruption within countries while excluding how country’s nationals behave abroad. And in this latter context, Denmark performs rather poorly. Danish companies have faced numerous credible allegations of paying bribes worth hundreds of millions of dollars in dozens of countries (see, for example, here, here, here, here, here, here, and here). Several of those countries have been sanctioned by the World Bank and the European Union. Yet Danish companies have largely escaped suffering any consequence within Denmark for their corrupt practices abroad. Of the thirteen major allegations of foreign bribery brought in the last decade by Danish authorities against Danish companies, several closed without adequate investigation, and none resulted in any prosecution. No wonder that Denmark’s last report card on from the OECD’s Anti-Bribery Working Group—released in 2015—found Denmark’s performance in enforcing its laws against foreign bribery to be deeply wanting. Yet six years and many public commitments later, Denmark has done very little (other than publishing a three-page “How to avoid corruption” pamphlet) to address its shortcomings in this area.
So, what’s stopping the “least corrupt” country in the world (at least, according to the CPI) from tackling its foreign bribery problem? If allegations of foreign bribery are widespread and credible, why have Danish companies continued to enjoy effective domestic impunity? There are two ways to answer this question, one of which focuses on the legal deficiencies in Denmark’s criminal code, which make it hard for prosecutors to bring winning cases, and the other of which focuses on the reasons why Denmark hasn’t changed these laws, notwithstanding critical commentaries and advice from organizations like the OECD.
With respect to Danish law, there are three principal reasons why prosecutors find it so difficult to bring and win cases targeting foreign bribery by Danish corporations:
- First, Denmark’s criminal code, like that of many European countries, makes it difficult to attach criminal liability to corporations for the acts of their employees or subsidiaries. As a rule, companies are not directly liable for individual acts of bribery, even if the act was made to further the interest of the company, unless prosecutors can prove that the corrupt act was authorized at a higher level. Though this problem was identified in the 2015 OECD report, and Denmark pledged to update prosecutorial guidelines in a way that would make it easier to impose corporate liability, no such guidelines have been issued to date.
- Second, Danish law make it difficult to identify prosecutable bribes. The law defines an unlawful bribe as an undue gift or favor to ensure certain conduct by the receiver. “Undue” is left undefined, and the Danish Ministry of Justice has troublingly indicated that a payments that would considered bribes within Denmark might not be considered “undue” in certain foreign contexts. Also, Denmark’s law, like the U.S. Foreign Corrupt Practices Act, exempts “small facilitation payments,” but leaves that phrase vague, defining it in an unbinding addendum as “token gratuities.” As a result, Danish companies are able to classify illicit payments abroad as a “small facilitation payments” and escape the reach of the criminal code.
- Third, Denmark’s criminal code does not cover less obvious forms of bribery, especially those involving “agents of influence.” (An agent of influence is a person close to politician, who may be able to influence that politician’s decisions.) Danish law does not currently prohibit giving gifts to an agent of influence, even if there is an implicit understanding that the agent will exert his or her influence on the politician. Despite repeated requests from the OECD and Transparency International, Denmark has not amended its anti-bribery laws to categorize this sort of trading in influence as bribery.
These legal deficiencies can and should be solved. But they won’t be unless and until Denmark starts to see foreign bribery as an important political priority—which it currently does not. (The low priority given to this issue is reflected not only in Denmark’s failure to update the relevant statutes, but also in the chronic underfunding of the taskforces dedicated to foreign bribery, such as the Serious Economic and International Crimes unit (the SØIK).) The lack of political will may be at least partly attributable to how little public information Denmark makes available about foreign bribery allegations against its companies. Although surveys find nearly half of Danish companies believe bribes are necessary to conduct business abroad, Denmark does not publish any data on foreign bribery or investigations thereof. The public only has access through court decisions (which are often behind paywalls and bureaucratic barriers), and these are few and far between, given that foreign bribery cases never make it to court. This lack of transparency reduces public pressure on Danish politicians and companies to address Denmark’s foreign bribery problem.
Denmark’s under-performance in this area is not news for those who specialize in foreign bribery issues. Denmark has long been warned about its less than stellar efforts in this area. It is far past time for Denmark to remedy this situation—for starters, by finally following through on its existing commitments, and implementing the recommendations that the OECD review outlined more than six years ago. In addition to changes in its written law, Denmark must also dedicate adequate resources to the prosecutorial bodies that handle foreign bribery cases. The CPI may assess Denmark as the world’s cleanest country, but if Denmark is to live up to the reputation that the ranking implies, it must finally take steps to halt its export of corruption to the rest of the world.