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Regulating transnational corporate bribery: Anti-bribery and corruption in the UK and Germany

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Abstract

Recent large-scale cases involving multi-national corporations such as the BAE Systems and Siemens bribery scandals illustrate the difficulties faced by the UK and German sovereign states in controlling complex trans-national and multi-jurisdictional crimes. This article analyses the mixture of enforcement, self-regulatory and hybrid mechanisms that are emerging as part of UK and German responses to controlling transnational corporate bribery. This regulatory landscape incorporates a diverse array of direct and indirect state and non-state ‘regulatory’ actors of varying levels of formality. Mechanisms of a self-regulatory nature vary in terms of their mandatory/voluntary requirements and manufactured/organic formation. However, there is an assumption that the emergence of a variety of enforcement, self-regulatory and innovative hybrid mechanisms is sufficient but in reality this is not the case. Instead, the key argument of the article is that while these mechanisms are aiding the response, they are likely to fail leading to the default position of accommodation by state agencies, even where the will to enforce the law is high.

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Notes

  1. See Transparency International’s discussion of ‘costs of corruption’: http://archive.transparency.org/news_room/faq/corruption_faq#faqcorr4. Accessed 18 February 2013.

  2. BBC: ‘Q & A: The NatWest Three’, 29/11/2007: http://news.bbc.co.uk/1/hi/business/5164652.stm. Accessed 18 February 2013.

  3. BBC: ‘Extradition law review to consider US-UK treaty’, 8 September 2010: http://www.bbc.co.uk/news/uk-11226673. Accessed 18 February 2013.

  4. For example, the Organisation for Economic Cooperation and Development and the United Nations.

  5. Specifically England and Wales, and Northern Ireland – Scotland not included as it constitutes a separate jurisdiction in relation to transnational corporate bribery.

  6. Report available at: http://www.transparency.org/whatwedo/pub/exporting_corruption_country_enforcement_of_the_oecd_anti_bribery_conventio . Accessed 18 February 2013.

  7. ‘Active enforcers’ refers to those countries with a share of world exports over 2% and with at least 10 major cases on a cumulative basis, at least three of which were initiated in the last 3 years and resulted in substantial sanctions. The category ‘active enforcer’ can also be given to those countries with less than 2% world export shares but these countries must have brought at least three major cases, at least one of which resulted in substantial sanctions and at least one case pending that was initiated in the last 3 years – these thresholds are arbitrary and are not premised on any logical foundation (it is unclear why the threshold is 10 major cases, for example).

  8. For enforcement statistics see Transparency International’s progress reports on the OECD Anti-Bribery Convention. See note 6 (above) for latest report.

  9. Mabey and Johnson paid bribes in Jamaica, Ghana and Iraq and received a total financial penalty (including a criminal fine) of £6.6m. SFO press release: http://www.sfo.gov.uk/press-room/press-release-archive/press-releases-2009/mabey--johnson-ltd-sentencing-.aspx. Accessed 18 February 2013.

  10. Innospec paid bribes in Indonesia and were sanctioned to financial penalties and monitoring. See SFO press release: http://www.sfo.gov.uk/press-room/press-release-archive/press-releases-2010/innospec-limited-prosecuted-for-corruption-by-the-sfo.aspx. Accessed 18 February 2013.

  11. BAE Systems engaged in corruption in Tanzania and received criminal and civil financial penalties. See SFO press release: http://www.sfo.gov.uk/press-room/press-release-archive/press-releases-2010/bae-fined-in-tanzania-defence-contract-case.aspx. Accessed 18 February 2013.

  12. Full text of the Directive: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004L0018:En:HTML. Accessed 18 February 2013.

  13. See Ministerial statement on the UKBA from Ken Clarke: http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110330/wmstext/110330m0001.htm#11033059000255. Accessed 18 February 2013.

  14. See Article 5 of the Convention: http://www.oecd.org/dataoecd/4/18/38028044.pdf. Accessed 18 February 2013.

  15. SFO guidance on self-reporting: http://www.sfo.gov.uk/bribery--corruption/the-sfo%27s-response/self-reporting-corruption.aspx. Accessed 9 August 2012.

  16. Financial Times: ‘SFO toughens stance on bribery’ 09/10/2012: http://www.ft.com/cms/s/0/996d051e-120d-11e2-bbfd-00144feabdc0.html#axzz2I9e4hnm9. Accessed 18 February 2013.

  17. Financial Times ‘Rolls-Royce adds to SFO’s in-tray’ 06/12/2012: http://www.ft.com/cms/s/0/f9f76a28-3fb7-11e2-b0ce-00144feabdc0.html#axzz2I9e4hnm9. Accessed 18 February 2013.

  18. See paragraph 50 of Lord Justice Thomas’ sentencing remarks on Innospec: http://www.judiciary.gov.uk/Resources/JCO/Documents/Judgments/sentencing-remarks-thomas-lj-innospec.pdf. Accessed 18 February 2013.

  19. Financial Times:“Plea bargaining uncertainty” hits SFO drive’ 07/08/2011: http://www.ft.com/cms/s/0/c55f88e6-bf6f-11e0-898c-00144feabdc0.html#axzz1WWTWzWSA. Accessed 18 February 2013.

  20. SFO press release: http://www.sfo.gov.uk/about-us/our-views/director%27s-speeches/speeches-2012/enforcing-the-law-on-fraud-and-corruption-does-self-reporting-pay.aspx. Accessed 9 August 2012.

  21. SFO press release on OUP: http://www.sfo.gov.uk/press-room/latest-press-releases/press-releases-2012/oxford-publishing-ltd-to-pay-almost-19-million-as-settlement-after-admitting-unlawful-conduct-in-its-east-african-operations.aspx. Accessed 18 February 2013.

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Lord, N. Regulating transnational corporate bribery: Anti-bribery and corruption in the UK and Germany. Crime Law Soc Change 60, 127–145 (2013). https://doi.org/10.1007/s10611-013-9445-y

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