[Senate Treaty Document 105-43]
[From the U.S. Government Publishing Office]
105th Congress Treaty Doc.
SENATE
2d Session 105-43
_______________________________________________________________________
CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN
INTERNATIONAL BUSINESS TRANSACTIONS
__________
MESSAGE
FROM
THE PRESIDENT OF THE UNITED STATES
TRANSMITTING
CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN
INTERNATIONAL BUSINESS TRANSACTIONS, ADOPTED AT PARIS ON NOVEMBER 21,
1997, BY A CONFERENCE HELD UNDER THE AUSPICES OF THE ORGANIZATION FOR
ECONOMIC COOPERATION AND DEVELOPMENT (OECD). CONVENTION SIGNED IN PARIS
ON DECEMBER 17, 1997, BY THE UNITED STATES AND 32 OTHER NATIONS
May 4, 1998.--Convention was read the first time and, together with the
accompanying papers, referred to the Committee on Foreign Relations and
ordered to be printed for the use of the Senate.
LETTER OF TRANSMITTAL
----------
The White House, May 1, 1998.
To the Senate of the United States:
With a view to receiving the advice and consent of the
Senate to ratification, I transmit herewith the Convention on
Combating Bribery of Foreign Public Officials in International
Business Transactions (the ``Convention''), adopted at Paris on
November 21, 1997, by a conference held under the auspices of
the Organization for Economic Cooperation and Development
(OECD). The Convention was signed in Paris on December 17,
1997, by the United States and 32 other nations.
I transmit also, for the information of the Senate,
interpretive Commentaries on the Convention, adopted by the
negotiating conference in conjunction with the Convention, that
are relevant to the Senate's consideration of the Convention. I
transmit also, for the information of the Senate, the report of
the Department of State with respect to the Convention.
Since the enactment in 1977 of the Foreign Corrupt
Practices Act (FCPA), the United States has been alone in
specifically criminalizing the business-related bribery of
foreign public officials. United States corporations have
contended that this has put them at a significant disadvantage
in competing for international contracts with respect to
foreign competitors who are not subject to such laws.
Consistent with the sense of the Congress, as expressed in the
Omnibus Trade and Competitiveness Act of 1988, encouraging
negotiation of an agreement within the OECD governing the type
of behavior that is prohibited under the FCPA, the United
States has worked assiduously within the OECD to persuade other
countries to adopt similar legislation. Those efforts have
resulted in this Convention that once in force, will require
that the Parties enact laws to criminalize the bribery of
foreign public officials to obtain or retain business or other
improper advantage in the conduct of international business.
While the Convention is largely consistent with existing
U.S. law, my Administration will propose certain amendments to
the FCPA to bring it into conformity with and to implement the
Convention. Legislation will be submitted separately to the
Congress.
I recommend that the Senate give early and favorable
consideration to the Convention, and that it give its advice
and consent to ratification.
William J. Clinton.
LETTER OF SUBMITTAL
----------
Department of State,
Washington, April 9, 1998.
The President,
The White House.
The President: I have the honor to submit to you, with a
view to transmittal to the Senate for its advice and consent to
ratification, the Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions. The
Convention was adopted on November 21, 1997 by a conference
held in Paris under the auspices of the Organization for
Economic Cooperation and Development (OECD). It was signed in
Paris on December 17, 1997 on behalf of 33 countries, including
the United States: 28 of the 29 OECD Member States (all except
Australia) and five non-OECD Members who are participants in
the OECD's Working Group on Bribery in International Business
Transactions.
The signatories include Argentina, Austria, Belgium,
Brazil, Bulgaria, Canada, Chile, the Czech Republic, Denmark,
Finland, France, Germany, Greece, Hungary, Iceland, Ireland,
Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New
Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain,
Switzerland, Sweden, Turkey, the United Kingdom, and the United
States.
I transmit also, for the information of the Senate,
interpretive Commentaries on the Convention that were adopted
by the negotiating conference in conjunction with the
Convention. Although not submitted for the advice and consent
of the Senate, the Commentaries are relevant to the Senate's
consideration of the Convention.
The Convention is a historic achievement in the fight
against bribery. It represents the fruit of many years of
efforts by the United States to persuade other industrialized
countries to adopt laws, similar to the U.S. Foreign Corrupt
Practices Act (FCPA), to criminalize the business-related
bribery of foreign public officials. In May 1997 the OECD
Council approved the opening of negotiations of this
Convention, with a view to its signature by the end of 1997 and
its entry into force by the end of 1998. The Council also
recommended that Member States submit relevant legislative
proposals to their parliaments by April 1, 1998, and seek the
enactment of such laws by the end of 1998.
Article 1(1) of the Convention requires each Party to
establish bribery of a foreign public official as a criminal
offense under its laws. Such bribery is defined as the
intentional offer, promise, or giving of any undue pecuniary or
other advantage by any person, whether directly or through
intermediaries, to a foreign public official, for that official
or for a third party, to induce that official to act or to
refrain from acting in relation to the performance of official
duties in order to obtain or retain business or other improper
advantage in the conduct of international business. Such
bribery is further defined in Article 1(2) to include
complicity in, including incitement, aiding and abetting, or
authorization of an act of bribery of a foreign public
official. Attempt and conspiracy to bribe a foreign public
official must also be criminalized by each Party to the same
extent that attempt and conspiracy to bribe a public official
of such Party are criminal offenses. This language is generally
consistent with U.S. law. However, to comply fully with the
Convention, which covers bribes by ``any person,'' the United
States will have to expand the scope of the FCPA to encompass
bribes paid by foreign persons who are not affiliated with
issuers that have securities registered under the Exchange Act.
``Foreign public official'' is defined by Article 1(4) as
any person holding a legislative, administrative, or judicial
office of a foreign country, whether appointed or elected; any
person exercising a public function for a foreign country,
including for a public agency or public enterprise; and any
official or agent of a public international organization.
Paragraph 14 of the Commentaries states that a ``public
enterprise'' is any enterprise, regardless of form, over which
a government, or governments, may, directly or indirectly,
exercise a dominant influence. Under Paragraph 15 of the
Commentaries, an official of a public enterprise is deemed to
perform a public function unless the enterprise operates on a
normal commercial basis in the relevant market, i.e., on a
basis which is substantially equivalent to that of a private
enterprise, without preferential subsidies or other privileges.
Paragraph 17 of the Commentaries notes that ``public
international organization'' includes any international
organization formed by states, governments, or other public
international organizations, including a regional economic
integration organization such as the European Community. The
FCPA does not cover bribery of officials of ``public
international organizations.'' To conform with the Convention,
the FCPA will have to be amended to encompass bribery of such
officials.
The Convention does not apply to bribes to foreign
political parties or party officials per se, although it would
cover, by its terms, business-related bribes to foreign public
officials made through political parties or party officials, as
well as bribes directed by corrupt foreign public officials to
political parties or party officials. Paragraph 16 of the
Commentaries notes that persons that hold de factor public
authority, such as political-party officials in single-party
states, may be considered to be foreign public officials under
the legal principles of some countries. The United States has
urged that bribes paid to foreign political parties and party
officials be covered under the Convention, as they are under
the FCPA, and such coverage will be a topic of future
negotiations within the OECD Working Group on Bribery.
``Foreign country'' is defined by Article 1(4) to include
all levels and subdivisions of government, from national to
local. ``Act or refrain from acting inrelation to the
performance of official duties'' is defined to include any use of the
public official's position, whether or not within the official's
authorized competence.
Article 2 provides that each Party shall take such measures
as may be necessary, in accordance with its legal principles,
to establish that legal persons are liable for the bribery of
foreign public officials. Paragraph 20 of the Commentaries
explains that Parties are not required to establish such
criminal responsibility (as opposed to civil liability) if
legal persons cannot be subjected to criminal responsibility
under a given Party's legal system.
Article 3(1) provides that bribery of foreign public
officials shall be punishable by ``effective, proportionate and
dissuasive criminal penalties.'' If a Party's legal system does
not provide for criminal responsibility of legal persons, under
Article 3(2) that Party must ensure that legal persons are
subject to effective, proportionate and dissuasive non-criminal
sanctions, including monetary sanctions, for bribery of foreign
public officials. Under Article 3(3), the bribe and the
proceeds of the bribery of a foreign public official, or
property corresponding in value to that of such proceeds, are
subject to seizure and confiscation, or comparable monetary
sanctions are applicable. Parties are required by Article 3(4)
to consider imposing additional civil or administrative
sanctions upon persons subject to sanctions for bribery of
foreign public officials.
Article 4(1) requires that each Party take necessary
measures to establish its jurisdiction over bribery of a
foreign public official when such offense is committed in whole
or in part in its territory. Paragraph 25 of the Commentaries
states that the territorial basis for jurisdiction should be
interpreted broadly so that an extensive physical connection to
the act of bribery is not required. Under Article 4(2), those
Parties that have jurisdiction to prosecute their nationals for
offenses committed abroad must take the necessary measures to
establish such jurisdiction, according to the same principles,
with respect to the bribery of foreign public officials.
Article 4(3) provides that the concerned Parties shall, at the
request of one, consult with a view to determining the most
appropriate jurisdiction for prosecution if more than one Party
has jurisdiction over an offense covered by the Convention.
Parties are required, under Article 4(4), to review whether
their current basis for jurisdiction are effective with regard
to bribery of foreign public officials and, if not, to take
remedial steps. Current U.S. law governing foreign bribery
contains a territorial element and is generally limited to
bribery by U.S. persons and foreign persons affiliated with
issuers that have securities registered under the Exchange Act.
To implement fully the Convention, the United States will have
to expand the FCPA to encompass acts within its territory by
other foreign persons. The United States also proposes to
assert jurisdiction over the acts of U.S. persons outside the
United States.
Article 5 states that investigation and prosecution of the
bribery of a foreign public official is subject to the
applicable rules and principles of each Party. It further
provides that considerations of national economic interest, the
potential effect upon relations with another State, or the
identity of the persons involved shall not influence such
investigation and prosecution.
Article 6 provides that any statute of limitations
applicable to bribery of foreign public officials shall allow
an adequate period of time for the investigation and
prosecution of the offense.
Article 7 requires that each Party that has made bribery of
its own public officials a predicate offense under its money
laundering legislation do so on the same terms for bribery of
foreign public officials, without regard to the place where the
bribery occurred. The United States has already enacted such
legislation.
Article 8(1) requires that each Party take necessary
measures, within the framework of its laws and regulations
regarding the maintenance of books and records, financial
statement disclosures, and accounting and auditing standards,
to prohibit the following acts by companies for the purpose of
bribing foreign public officials or of hiding such bribery:
establishment of off-the-books accounts, the making of off-the-
books or inadequately identified transactions, the recording of
non-existent expenditures, the entry of liabilities with
incorrect identification of their object, or the use of false
documents. Each Party must, under Article 8(2), provide
effective, proportionate and dissuasive civil, administrative
or criminal penalties for such omissions and falsifications.
This provision is consistent with the books and records and
reporting requirements under U.S. securities laws.
Article 9(1) requires that each Party, to the fullest
extent possible under its laws and relevant treaties and
arrangements, provide prompt and effective legal assistance to
another Party for the purpose of criminal investigations and
proceedings brought by a Party concerning offenses within the
scope of the Convention, as well as for the purpose of non-
criminal proceedings within the scope of the Convention brought
by a Party against a legal person. Pursuant to Article 9(2),
where a Party makes mutual legal assistance conditional upon
the existence of dual criminality, dual criminality is deemed
to exist if the offense for which the assistance is sought is
within the scope of the Convention. Article 9(3) states that a
Party may not, on the ground of bank secrecy, decline to render
mutual legal assistance for criminal matters within the scope
of the Convention. This provision is particularly important,
because U.S. prosecutions have sometimes been frustrated by
difficulty in obtaining foreign evidence because of lack of
dual criminality.
Article 10(1) provides that bribery of a foreign public
official shall be deemed to be included as an extraditable
offense under the laws of the Parties and the extradition
treaties between them. Under Article 10(2), a Party that
receives a request for extradition regarding bribery of a
foreign public official from another Party with which it has
noextradition treaty may consider the Convention to be the legal basis
for such extradition. Each Party must, pursuant to Article 10(3),
ensure that it can either extradite or prosecute its nationals for
bribery of a foreign public official. If a Party declines to extradite
a person for bribery of a foreign public official solely on the ground
that the person is its national, that Party is required to submit the
case to its competent authorities for the purpose of prosecution.
Article 10(4) states that extradition for bribery of a foreign public
official is subject to the conditions set out in the domestic law and
applicable treaties and arrangements of each Party. Where a Party makes
extradition conditional upon the existence of dual criminality, dual
criminality shall be deemed to exist if the offense for which
extradition is sought is within the scope of Article 1 of the
Convention.
Article 11 provides that each Party shall designate an
authority or authorities responsible for making and receiving
requests and serving as a channel of communication regarding
consultations on overlapping jurisdiction under Article 4,
mutual legal assistance under Article 9, or extradition under
Article 10. The United States intends to designate the
Department of Justice as the relevant authority for purposes of
Articles 4 and 9, and the Department of State as the relevant
authority for purposes of Article 10.
Article 12 states that the Parties shall cooperate in
carrying out a program of systematic follow-up to monitor and
promote implementation of the Convention. Unless the Parties
decide otherwise by consensus, this is to be done within the
framework of the OECD Working Group on Bribery in International
Business Transactions or any successor to its functions, and
the Parties will bear the costs of the program in accordance
with the rules applicable to that body.
Article 13(1) provides that the Convention shall be open,
until its entry into force, for signature by OECD members and
by non-members that have been invited to become full
participants in the Working Group on Bribery in International
Business Transactions. Under Article 13(2), after the
Convention enters into force, it shall be open to accession by
any non-signatory that is an OECD member or that has become a
full participant in the Working Group on Bribery in
International Business Transactions or any successor to its
functions. For each such non-signatory, the Convention shall
enter into force on the sixtieth day following the date of the
deposit of its instrument of accession. OECD members
contemplate an active outreach program to encourage non-members
to accede to the Convention.
Article 14(1) provides that the Convention is subject to
acceptance, approval or ratification by signatories in
accordance with their respective laws. Article 14(2) states
that instruments of acceptance, approval, ratification, or
accession shall be deposited with the OECD Secretary-General.
Article 15 sets forth a two-track process for entry into
force of the Convention. Under Article 15(1), the Convention
will enter into force on the sixtieth day following the date on
which five of the ten OECD countries with the ten largest
export shares for 1990-1996, as set forth in the Annex, and
which by themselves represent at least sixty percent of the
combined total exports of those ten countries, deposit their
instruments of acceptance, approval or ratification. For each
signatory depositing its instrument after such entry into
force, the Convention will enter into force on the sixtieth day
following the date of deposit.
If, after December 31, 1998, the foregoing requirement has
not been satisfied, under Article 15(2) any signatory that has
deposited its instrument of acceptance, approval, or
ratification may declare in writing to the OECD Secretary-
General its readiness to accept entry into force of the
Convention. For such a signatory, the Convention will enter
into force on the sixtieth day following the date on which such
declarations have been deposited by at least two signatories.
For each signatory depositing its declaration after such entry
into force, the Convention will enter into force on the
sixtieth day following the date of deposit.
Article 16 provides that any Party may propose, through
submission to the OECD Secretary-General, an amendment of the
Convention. The Secretary-General shall communicate the
proposed amendment to the other Parties at least sixty days
before convening a meeting of the Parties to consider it. An
amendment adopted by consensus of the Parties, or by such other
means as the Parties may determine by consensus, shall enter
into force for all Parties sixty days after the deposit of an
instrument of ratification, acceptance, or approval by all
Parties, or in such other circumstances as the Parties may
specify at the time of adoption of the amendment.
Article 17 provides that a Party may withdraw from the
Convention, effective one year after the OECD Secretary-
General's receipt of written notification thereof. After
withdrawal, cooperation shall continue between the withdrawing
Party and other Parties on all pending requests for assistance
or extradition made before the effective date of withdrawal.
The final clauses of the Convention do not contain a
provision prohibiting reservations. However, the Preamble
recognizes that achieving equivalence among measures to be
taken by the Parties is an essential object and purpose of the
Convention, and that this requires that the Convention be
ratified ``without derogations affecting this equivalence.''
This is a call upon Parties to refrain from entering
reservations that would affect such equivalence, and it is
consistent with the international practice that States may not
formulate a reservation that is incompatible with the object
and purpose of the treaty.
The Annex includes OECD and International Monetary Fund
(IMF) statistics, in absolute and percentage terms, on the
value of exports for each OECD member for the period 1990-96.
These figures will be used in determining whether the entry
into force requirements of Article 15(1) have been satisfied.
The Convention is largely consistent with existing U.S.
law. However, as set forth above, certain amendments to the
FCPA are proposed in order to conform with and to implement the
Convention. Proposed legislation is being prepared and is
expected to be submitted to the Congress at an early date.
The Department of Justice, the Department of Commerce, the
Department of the Treasury, the Securities and Exchange
Commission, and the Office of the United States Trade
Representative join the Department of State in recommending
that the Convention be transmitted to the Senate at an early
date for its advice and consent to ratification.
Respectfully submitted,
Strobe Talbot.