By IPS Correspondents
BONN, Jul 20 2000 (IPS)

The global watchdog, Transparency International (TI), has asked Japan to implement the Anti- Corruption Convention, and deplored a small group of countries holding back its effective functioning.

The Berlin-based TI’s appeal came in the run-up to the summit meeting of the seven major industrial nations – and Russia – in Okinawa, Friday to Sunday.

In a statement forwarded to IPS Thursday, Transparency’s chair, Peter Eigen, said: “The G8-summit in Japan must squarely address the issue of corruption and urge their summit host, Japan, to fully implement the landmark OECD Anti-Bribery Convention.”

Japan is among a small group of G7-countries lagging behind in the process of translating the OECD Convention into adequate domestic law.

The Convention requires signatories to make it a crime to bribe foreign officials.

The seven countries – Britain, France, Germany, Italy, Canada, the United States and Japan – are economic and political heavyweights in the 29-member Organisation for Economic Co- operation and Development, based in Paris.

Eigen said: “Corruption will be high on the agenda of the summit…But the G8 summit must not remain silent on the fact that four of the participants – Italy, France and the United Kingdom as well as Japan – can be seen as effectively blocking full implementation of the OECD Convention.”

The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, went into effect on February 15 last year – nearly two years after it was signed by all 20 OECD member countries and five non-members – Argentina, Brazil, Bulgaria, Chile and the Slovak Republic.

All signatories committed themselves to ensuring that their national parliaments approve the Convention and pass legislation necessary for its ratification and implementation into national law.

The Convention makes it a crime to offer, promise or give a bribe to a foreign public official in order to obtain or retain international business deals.

A related text effectively puts an end to the practice of according tax deductibility for bribe payments made to foreign officials.

The Convention commits 34 signatory countries, including all the world’s biggest economies, to adopt common rules to punish companies and individuals who engage in bribery transactions.

So far, 21 countries have been subjected to close monitoring to determine the adequacy of their implementing legislation.

These include Austria, Australia, Belgium, Britain, Bulgaria, Canada, the Czech Republic, Finland, Germany, Greece, Hungary, Iceland, Japan, Korea, Mexico, Norway, the Slovak Republic, Spain, Sweden, Switzerland and the US.

For each country reviewed, the Working Group on Bribery has adopted a report, including an evaluation, which was published on June 27.

The report noted that Japan had signed the Convention on December 17, 1997, and deposited the instrument of acceptance with the OECD on October 13, 1998.

On September 18, 1998, it enacted implementing legislation in the form of amendments to the Unfair Competition Prevention Law, which came into force on February 15, 1999.

According to the OECD report, the amendments to the Unfair Competition Prevention Law establish the offence of bribing a foreign public official, define “foreign public official” and provide sanctions.

Other existing laws, including the Penal Code, the Code of Criminal Procedure and the Commercial Code contain provisions relevant to the other obligations under the Convention.

The Japanese authorities explained to the OECD working group that the foreign bribery offence was placed in the Unfair Competition Prevention Law as opposed to the Penal Code, which contains the domestic bribery offences, because the foreign bribery offence has a different objective.

The report added: “The objective of the domestic offences (in Japan) is to maintain public trust in a fair and honest public service.”

“On the other hand, the foreign offence is aimed at ensuring fair competition in international business transactions. Japan believes it is therefore reasonable to implement the Convention through amendments to the Unfair Competition Prevention Law.”

Eigen said: “The OECD Convention is the most powerful tool to achieve lasting progress in curbing a plight that has devastated economies all around the globe.”

The Convention – negotiated and brought into effect in record time – makes it a crime in the home country of a company to make bribe payments abroad.

Yet, the working mechanism of the Convention rests on the basic assumption that the same rules will apply to all major exporters.

“This makes it all the more troubling that Japan, France, Italy and the United Kingdom are all lagging behind their partners in the G7-group in fully implementing the ban on bribery,” Eigen added.

Britain recently published a White paper pledging effective legislation. But Eigen noted that this may not get onto the statue books ahead of the next general election so that effective laws may be years, rather than months, away.

In Italy, implementing legislation has been repeatedly amended and still needs final approval by the Senate.

TI deplored the scant resources at the OECD to monitor whether member countries have not only translated the Convention into domestic law but are also actually applying and enforcing it.

“It seems all the more incredible that, with a staff of 1,800, the OECD cannot assign more than three (sic!) people to make sure that the Convention achieves its objectives,” noted Eigen.

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