Spotlight: Gaining World Support

The United States was the first country in the world to make bribing foreign officials a crime when it passed the Foreign Corrupt Practices Act (FCPA) in 1977. But it took 20 years before other developed nations followed suit to adopt an anti-bribery convention in 1997 under the auspices of the Organization for Economic Cooperation and Development (OECD).

Why it took so long is a story that spans Watergate, the collapse of the Soviet Union and the increasing globalization of the world economy. Despite U.S. overtures to the United Nations to follow its lead, a movement to ban international bribery went nowhere. Then 11 years after the FCPA was passed, the law faced its first crisis. In 1988, under pressure from U.S. businesses, the Republican administration, under President Reagan, considered watering down the anti-bribery law arguing that it put U.S. companies at a competitive disadvantage. But instead of weakening the law, the U.S. reached out to its international competitors to find out if they were prepared to level the proverbial playing field by implementing their own anti-bribery laws. It proved to be a good time to ask.

The Eastern bloc was beginning to crumble and new markets were opening up. Businesses all over the world feared that bribery and unfair business practices would determine who could sell soft drinks to Russia or computers to Latvia. This growing unease about unfair, corrupt competition, particularly in accessing these new markets, led 37 countries, including most of the European Union, Canada, Australia and Japan, to sign the original OECD Anti-Bribery Convention, which all member countries ratified between 1999 and 2001.

Even though a broader legal framework is in place, many officials in charge of investigating international corruption cases report that enforcing the convention continues to be uneven. Japan, Canada and Britain, in particular, have been repeatedly criticized by watchdog groups for being too lax on their own corporations and their practices overseas to secure lucrative contracts. Economic powerhouses such as China and India have refused to join the convention. Despite setbacks, the U.S. Department of Justice has been aggressively pursuing more than 100 corruption cases under the FCPA, and the OECD currently has over 200 ongoing investigations worldwide.