Updates to OECD Anti-Bribery Recommendation call on countries to increase cooperation and give credit for effective compliance programmes

On 26 November, the Organization for Economic Cooperation and Development (OECD) adopted a revised Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions (the 2021 Anti-Bribery Recommendation).

This succeeds several earlier recommendations, in particular the 2009 Anti-Bribery Recommendation, and seeks to reflect recent bribery and corruption trends and compliance challenges. OECD recommendations are not legally binding; but the OECD Working Group on Bribery evaluates member states’ implementation of the OECD Anti-Bribery Convention, including subsequent OECD guidance and recommendations, and will report on the progress of the 2021 Anti-Bribery Recommendation every five years.

Some of the key concepts highlighted in the preamble to the 2021 Anti-Bribery Recommendation includes calling on countries to recognise the link between gender and corruption, and to evaluate the potential role of innovative technologies in combatting and enforcing corruption. In particular, countries should seek to understand how corruption affects genders differently and the importance of promoting gender equality to further the fight against corruption.

The OECD does not however provide specific recommendations on this point. The revised preamble also highlights the importance of vigorous implementation of the Anti-Bribery Convention in times of crisis – as revealed by experience throughout the COVID-19 pandemic. Certain elements from the 2009 Anti-Bribery Recommendation remain, in particular calls for awareness raising, training, and increased enforcement.

Key changes

There are, however also several key changes from the 2009 version. The first of which is to add focus to the “demand” side of corruption. That is, the 2021 Anti-Bribery Recommendation urges countries to promulgate laws targeting public officials who demand improper payments, gifts, entertainment and hospitality, in addition to those who offer or make such payments. The 2021 Anti-Bribery Recommendation also encourages countries to review their approach to small facilitation payments – some countries continue to permit facilitation payments under their national corruption legislation.

Some of the other key changes which could impact companies operating globally include a new section on “non-trial resolution” which suggests member countries should implement procedures to resolve bribery investigations through negotiated agreement. According to the 2021 Anti-Corruption Recommendation, any such resolutions should still follow the principles of due process and accountability. 

While a deferred prosecution agreement (DPA) mechanism already exists in countries such as the United States and United Kingdom, this new guidance may encourage countries to establish similar mechanisms. DPA-style mechanisms may help increase the number of global resolutions of corruption matters as they typically require less time and resource than a full prosecution.

Somewhat relatedly, the 2021 Anti-Corruption Recommendation expands guidance relating to international cooperation, calling for mutual legal assistance procedures, direct and early cooperation in investigations and concurrent and parallel investigations where possible. Recent years have seen an increase in multilateral enforcement efforts.

The OECD aims to minimise risks and burdens of multiple prosecutions of the same persons or entities for the same conduct. There is also a new section on data protection, and member countries are reminded to comply with applicable data protection laws. They are also, however, urged to consider issuing regulations that allow “for the processing of data in conducting anti-corruption related due diligence and internal investigation processes.”

Countries are also encouraged to apply broad protections to anyone reporting public corruption, reflecting a global trend towards encouraging “whistleblowing”. The OECD recommends that countries permit anonymous reporting and/or provide confidentiality and provide other protections in the law to prevent retaliation. More strikingly, the OECD also recommends that countries consider introducing “incentives” to qualifying reporting persons.

The United States offers rewards to whistleblowers under several different programmes, and there have been indications from the current administration that these will receive renewed support. The European Union Whistleblowing Directive is coming to force mid-December 2021; while it requires states to implement protections for whistleblowers, it does not mandate rewards or incentives for reporting.

Finally, the 2021 Anti-Corruption Recommendation calls on member countries to implement laws and regulations regarding risk-based compliance programmes and to incentivise companies with effective internal controls and compliance programs, e.g. through reduced risk of enforcement or penalty.

Guidance for companies

While some of the latest OECD recommendations are in line with already existing trends in global anti-corruption regulation, companies should be alert to any regulatory changes in their areas of operation. Moreover, companies operating in areas of risk for public corruption should evaluate OECD’s Good Practice Guidance on Internal Controls, Ethics and Compliance, set out in Annex II to the 2021 Anti-Corruption Recommendation. It provides detailed guidance for companies on setting up risk-based anti-bribery and corruption compliance programmes including:

• “[S]trong, explicit and visible support and commitment” from the board and senior management (commonly known as “tone from the top”) as well as external communication of ethics and compliance culture
• Clearly articulated and visible/accessible (e.g. translated if necessary) policy prohibiting bribery, which is:
  • Applicable to all employees including foreign subsidiaries; and
  • Includes measures (among others) related to: gifts; hospitality, entertainment and expenses; travel, including customer travel; political contributions; charitable donations and sponsorships; facilitation payments; solicitation and extortion; conflicts of interest; hiring processes; risks associated with the use of intermediaries, especially those interacting with foreign public officials; and processes to respond to public calls for tender, where relevant.
• Oversight over the ethics and compliance programme by board/senior management/equivalent body including senior compliance officer with sufficient autonomy from management and other operational functions, and “access to relevant sources of data, experience, qualification, and authority”.
• Periodic reviews of the effectiveness of the compliance programme and/or monitoring and testing;
• Internal reporting mechanisms (i.e. whistleblowing), measures to address suspected violations and measures to provide advice and guidance to employees on anti-corruption issues;
• Training; and
• Third party and M&A-related anti-bribery and corruption measures.

These principles reflect similar concepts as set out in the guidance to the UK Bribery Act as well as the DOJ’s Guidance for Evaluation of Corporate Compliance Programs (DOJ Guidance). Companies should pay particular attention to the new elements relating to testing programme effectiveness, including using data and incorporating lessons learned from internal and external actions to re-assess compliance controls.

This mirrors the most recent DOJ Guidance (see our previous alert here), which similarly emphasises the need for compliance and control personnel to have meaningful access to data, and for companies to have a process for tracking and incorporating “lessons learned” from risk assessments and previous misconduct.