UNITED NATIONS: U.N. Joins War Against Bribery and Corruption

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Nov 28 1996 (IPS) - Amid strong misgivings from the 15- member European Union (EU), the United Nations has fired the first shot in a global war against bribery and corruption in international trade and commerce.

The U.N.’s Economic and Social Council (ECOSOC) has approved a declaration urging the 185 member states to criminalise all acts of bribery in international transactions and deny tax deductions for bribes, as currently practiced in some Western nations.

Speaking on behalf of the EU, Conor Murphy of Ireland said the criminalisation of corruption, particularly in its international aspects, had serious political, economic, social and legal implications.

“The matter must therefore be considered by legal experts to determine various methods of dealing with the problem, as well as to consider the possible negotiations of appropriate international instruments,” he noted.

Murphy proposed an amendment that would bar member states from enacting legislation with extra-territorial implications. But since he did not press for a vote, the declaration was adopted unanimously.

All actions by member states against bribery and corruption, the EU said, should be confined to their own territory or to acts committed by their own citizens.

The declaration will be formally ratified by the General Assembly early next month.

In April the 26-member Organisation for Economic Cooperation and Development (OECD), under intense U.S. pressure, decided that it should outlaw bribery in international business dealings.

The Paris-based OECD committed its members to rewrite tax rules that have long encouraged bribery of foreign officials. The new rules, for example, would make illegal payoffs ineligible for tax deductions.

“This is a sea change, a very important step in breaking the international chain of corruption,” David Aaron, the U.S. representative in OECD, said. “It takes governments out of the business of subsidising corruption by giving tax breaks for bribery.”

Currently, the U.S. is perhaps the only major Western nation that bars companies from paying bribes to foreign officials. Bribery has been declared a crime under the U.S. Foreign Corrupt Practices Act of 1977.

The U.S. move to outlaw bribery is being interpreted as an attempt to remove the “unfair” advantage most Western nations have over U.S. companies on international business deals.

“Last year, from April 1994 to May 1995, the U.S. government learned of almost 100 cases in which foreign bribes undercut U.S. firms’ ability to win contracts valued at 45 million dollars,” U.S. Trade Representative Mickey Kantor said recently.

Washington, he said, wants “to level the playing field and make the rules fair by eliminating this pernicious practice.”

“Bribery distorts markets and hinders economic development,” says Ambassador Victor Marrero, a senior diplomat with the U.S. delegation.

The U.S. has proposed criminal penalties for bribery in addition to its efforts to ban tax deductions for bribes paid to foreign public officials.

Marrero told delegates that the U.N. declaration was part of his country’s initiative to combat the widespread practice of commercial bribery the world over.

“Bribes undermine democratic accountability,” he said, pointing out that the declaration should help encourage member states to deal with such unethical practices.

The declaration includes a call for transparent accounting standards and practices, as well as codes of conduct prohibiting bribery or even soliciting bribes.

The declaration also seeks accurate records of payments for transnational commercial activities and urges multilateral cooperation on criminal investigations relating to bribery.

In March Washington also succeeded in its campaign to establish an Inter-American Convention against Corruption. The Convention was set up by the Organisation of American States (OAS).

Washington has said it plans to put the issue of bribery and corruption on the agenda of a major ministerial meeting of the newly-established World Trade Organisation (WTO) in Singapore next month.