New OECD recommendation on combating corruption

United States Publication December 3, 2021

In November 1997, the Organization for Economic Cooperation and Development (OECD) adopted its groundbreaking Anti-Bribery Convention, which created a powerful new instrument to drive the expansion of global anti-corruption enforcement. The OECD Working Group on Bribery in International Business Transactions was established to monitor the implementation and enforcement of the convention as well as later recommendations.

The OECD issued substantial recommendations in 2009 to update the original 1997 convention. As a culmination of the three-year review process that began in 2018, the OECD Working Group published its updated and revised guidance on November 26, titled Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions. The stated purpose of this effort was to address the challenges and issues that have emerged since the 2009 recommendation was issued, thereby incorporating the trends that have emerged during that time as multi-jurisdictional anti-corruption enforcement has expanded dramatically.

The new recommendation will undoubtedly spur further law enforcement coordination by OECD member states and promote the next wave of multi-jurisdictional investigations and prosecutions of companies and individuals alike. The 2021 recommendation notably places particular focus on the following key areas:

  • Promoting proactive seizure of suspected proceeds of corruption

The 2021 recommendation endorses aggressive use of enforcement tools designed to proactively identify, freeze, seize and confiscate corrupt payments and the proceeds of corruption. The US Department of Justice has made active use of forfeiture laws to seize assets associated with kleptocracy offenses and the new recommendation encourages similar efforts among OECD member states. The 2021 recommendation urges member states to focus on both the "demand-side" of bribery solicitation and the "supply-side" of corrupt payments, as well as invites more cooperation between governments and financial institutions to pursue the proceeds of corruption.

  • Creating and enforcing whistleblower protections

The 2021 recommendation places firm emphasis on the development and expansion of whistleblower protections and calls for broad protections of reporting persons. For example, the 2021 recommendation advocates for the "broadest possible" definition of reporting persons in a work-related context, including former employees, interviewees and thirdpersons connected to a reporting party who could face retaliation. Moreover, the proffered definition of retaliation includes not only workplace retaliation but also "reputational, professional, financial, social, psychological and physical harm." Such expansion of whistleblower protections would need to be factored into a corporate compliance program.

  • Encouraging non-trial resolutions

Following perhaps the most critical trend in anti-corruption enforcement since the initial OECD convention, the 2021 recommendation encourages member states to develop and expand the use of non-trial resolutions similar to deferred prosecution agreements used by the US Department of Justice and the US Securities and Exchange Commission. Such arrangements generally allow for the resolution of corruption cases outside of the normal judicial process. These agreements have been used widely in the US for years but have more recently emerged as critical tools for authorities in the United Kingdom, France and Canada. The 2021 recommendation broadly recommends the approach used in the US and the UK, where the option of a non-trial resolution for companies is based on such criteria as to whether the business self-disclosed the misconduct, cooperated with law enforcement authorities and remediated the compliance gaps that allowed the misconduct to occur.

  • Reducing barriers to cooperation between member states

The 2021 recommendation emphasizes the growing existence of international cooperation and the need to reduce barriers to cooperation between member states. For example, it encourages member states to aggressively share information with other member states by streamlining the process of responding to treaty-based requests for evidence-gathering. Indeed, the 2021 recommendation suggests that member countries take steps to ensure that their data protection laws are not unduly impeding international law enforcement cooperation efforts—which sends an important message about how to balance the sometimes competing interests of privacy laws and law enforcement. The Working Group further encourages member states to share information proactively, even in the absence of a formal request from another member state. The 2021 recommendation encourages direct coordination of concurrent or parallel investigations in different jurisdictions and further recommends that member states establish joint investigation teams when conducting bribery investigations.

The 2021 recommendation represents an aggressive push by the Working Group to encourage member states to take comprehensive approaches in fighting anti-corruption and increase the opportunities for multi-jurisdictional investigations. We expect that the recommendation will have ripple effects over time as the OECD member states incorporate these points of emphasis into their local regulations and enforcement policies.

Special thanks to law clerk Mikkaela Salamatin (New York) for her assistance in the preparation of this content.

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