This document summarizes the status of bribery in international business. It discusses that bribery has political, social and economic consequences. It then outlines international efforts by various countries and organizations since the 1970s to criminalize bribery of foreign officials. These include the Foreign Corrupt Practices Act (FCPA), the OECD Anti-Bribery Convention, and the UN Convention against Corruption. Private organizations have also implemented principles to prevent bribery. While progress has been made, ongoing enforcement and transparency efforts are still needed to fully address this issue.
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Causes and Effects of Bribery in International Business
1. Bribes in International Business
“Buy Bribes or Bye-Bye Bribes: the Future Status
of Bribery in International Commerce”
by James Weber and Kathleen Getz-2004
by Andrea Hunt
ieved on 11-20-12 wwwlossprevention.blogspot.com
2. Is it only unethical or does bribery in international
business have other consequences? *
Retrieved on 11-19-12 http://aquapour.com/global-corruption-barometer-2010-results/554397/
3. • Corruption is Linked to Bribery *
• 1)procurement fraud
• 2) money laundering
• 3) embezzlement of public money
• 4) abuse of inside information *
• Payer (supplier) and Receiver (demander)
• Bribe-If Payer initiates transaction
• Extortion-if receiver demands payment
4. Causes?
• Culture? Links between culture and bribery prevalence?
• Complex bureaucracies- 1) Firms may feel legitimate channels too complex 2)
Unclear lines of accountability-3) Little transparency
• Extortion driven by economic factors (low-mid level civil servant demanding side
payment) -Petty bribery (grease payment)
• A result of firms who feel non-competitive otherwise. Receiver usually an official
seeking more power-Grand Bribery
• A result of developing countries’ governments? *
ved on 11-20-12 http://www.economist.com/node/8401139
5. Three Effects?
• Politically- bribing is anti-democratic. Officials aren’t
acting for public good
• Socially-corruption spreads moral decay, feelings of
hopelessness
• Economically- Money used for bribery not put to good
use. Leads to increased uncertainty and risks for firms
due to distorted competitiveness.
6. International Efforts
Country/Organization Year Action
• FCPA (Foreign Corrupt Practices Act)-
• 1) no bribing government officials
US Congress 1977 • 2)record keeping to increase transparency
• Amended 1988-required president to seek
international cooperation-
1994
• Issued Recommendations on Bribery in International
OECD Organization for Economic
Business Transactions
Cooperation and Development
• 34 countries had ratified
2002
Convention on Combating Bribery
of Foreign Public Officials in • Member countries signed making it a crime to offer,
1997-
International Business promise, or give bribe to foreign public official
Transactions
Organization of American States
(OAS) signed Inter-American into effect 1997 • 25 of 35 Western Hemisphere countries signed
Convention Against Corruption
• ‘Requires State Parties to criminalise domestic and
United Nations Convention foreign bribery, and sets guidelines on punishment and
2005
against Corruption (the UNCAC) enforcement including confiscation of assets’
• 150 State members as of 2011
Retrieved on 11-20-12 http://www.unodc.org/eastasiaandpacific/en/topics/governance/index.html
7. Private and Civil Society Efforts*
• Caux Roundtable- (1994) made of business leaders from Japan, European and
North American countries
• Global Sullivan Principles-Rev Leon Sullivan *--support economic, social and
political justice by companies where they do business
• C2 Principles-Hess and Dunfee *- 12 Statements‘emphasize developmental
systems to monitor business activities in an effort to prevent bribery’
• Transparency International (TI)-country specific. Public Reports
• PWYP-Publish What You Pay-targeted specific companies
8. Did it help?*
Retrieved on 11-20-12 http://kimedia.wordpress.com/2012/04/11/ki-media2-ki-media-widespread-corruption-now-systemic-transparency-international/
9. Conclusion
Ongoing effort required and more transparency
Up to the Self-regulation and compliance of firms
Punishment: confiscation, fines, compensations for damages
Global Enforcement Report:
US, UK, Germany, S. Korea *
Retrieved on 11-20-12 unodc.org
10. Source
Buy Bribes or Bye-Bye Bribes: The Future Status of
Bribery in International Commerce
James Weber and Kathleen Getz
Business Ethics Quarterly, Vol. 14, No. 4, Business
Ethics in a Global Economy (Oct., 2004), pp. 695-711