The OECD Antibribery Convention requires its 43 state parties to levy “effective, proportionate and dissuasive criminal penalties” on individuals or corporations who have bribed a foreign official. Since the convention took effect February 15, 1999, through June 1, 2014, when data was last compiled, the OECD Secretariat reports that more than two-thirds of all prosecutions have ended in a pre-trial settlement. Settlements are permitted under the convention, but they must still impose “effective, proportionate and dissuasive” sanctions on the settling defendant.
Developing nations, the World Bank/UNODC’s StAR Program, and civil society groups say many of these settlements have let corporate bribe payers off too easy. They also say that, where a case involved bribery of a developing country official, settlement has made it harder for the developing state to collect the fine and other monies due from the bribe payer under its laws.
The OECD is considering issuing a guide on settlement terms. To help its drafters ensure they appreciate developing nations’ concerns, Norway’s Agency for Development Cooperation asked I write a paper on settlements from their perspective. Last week I posted a draft that focused on settlement strategy. Thanks to several very helpful comments and discussions, the final paper covers much different ground. Among the points it makes:
- Fears that OECD settlements will bar prosecution for the same acts in developing nations seem to be misplaced given current law, but concerns a settlement could compromise a developing state’s ability to recover — i) profits the defendant realized from corrupting its officials or ii) sufficient funds to compensate citizens injured by the corruption — are genuine.
- Developing states with weak criminal justice systems face a dilemma when weighing whether to settle or try their own cases for corruption. As last week’s post explained, a weak judicial system means a tough settlement is out of reach, for the system’s very weakness tells defendants if they go to trial they will prevail — or equivalently, be able to delay resolution for decades. If a government loses a string of corruption cases, it risks encouraging more corruption as those tempted to commit acts of corruption see they are very likely to get off scot-free.
When, as in the case of transnational bribery, two sovereigns both have the legal right to try the perpetrators, tension is inevitable. The paper offers several recommendations for if not eliminating the tension at least managing it. What in internationla law would be termed advancing principles of comity. Click on Settlements of Criminal Corruption Cases — Developing States’ Issues to download it. Comments earnestly solicited. Thanks to those who commented on last week’s version.