Freshfields research highlights significant differences in largest economies’ approach to fighting bribery
Companies doing business with G20 nations face real challenges to be compliant with anti-bribery regimes, according to research by international law firm Freshfields Bruckhaus Deringer. An examination of anti-bribery legislation and enforcement activity shows substantial differences in how G20 countries approach the fight against bribery.
As expected, the UK and US score highly within the G20 group, but there are some surprises. South Africa has good anti-bribery laws but little enforcement activity; Italy and Japan have good or moderate enforcement activity but less well developed anti-bribery laws. Meanwhile Indonesia scores poorly in both areas.
There are a number of significant differences in the scope of legislation amongst G20 countries. The USA, Mexico, Indonesia, Canada, Australia do not prohibit facilitation payments for example, and Argentina, Australia, Canada, France, Japan have no specific rules regarding liability of board members in connection with bribery. And in Saudi Arabia, India and Indonesia it is not an offence to bribe a foreign public official.
The research was undertaken to examine how the world’s leading economies, representing upwards of 80% of global GDP, vary in their approaches to tackling bribery in their domestic markets. Coming at a time of increasingly broad anti-bribery regulation in key markets such as Europe and the USA the findings highlight how the differing approaches to anti-bribery legislation and enforcement activity pose a real problem for companies looking to do business with G20 nations. Companies face a double-whammy of increased risk from non-compliance with individual states’ regulations and high costs to monitor compliance for each separate market in which they operate.
Each of the G20 nations was assessed against 16 key indicators which were used to benchmark the strength of their Anti Bribery & Corruption legislation. These scores were then put together to give an overall anti-bribery legislation rating for each country. A second assessment was then made of enforcement levels in each jurisdiction, with each being rated as having either active, moderate or little enforcement.
Geoff Nicholas, Partner at Freshfields commented, “Our rankings demonstrate just how tough the anti-bribery laws are in each G20 country, and the degree to which these are enforced. They highlight some surprising rankings amongst the world’s leading economies. Although few eyebrows will be raised at the UK coming top, with a score above 90%, it is a surprise to see that major trading partners such as Japan and Italy have relatively weak legislative regimes”.
“European countries do score well in their level of enforcement - all are ranked Active or Moderate in their efforts, but enforcement agencies can only be as effective as the legislation they have to work with. Differing levels of regulation versus enforcement serve to further complicate what is already an inconsistent playing-field across the G20. For international firms, this patchwork quilt of bribery regimes presents a real challenge, with huge potential for falling foul of one of the many different rules in each jurisdiction”, he added.
Freshfields’ clients are addressing ever more stringent regulation, including the Bribery Act in the UK and the FCPA in the US. Other countries are also stepping up their fight against bribery and corruption by changing their laws – recent examples include Russia, China, India and Spain. Other countries – Nigeria, for example, have increased their enforcement activity.
In response Freshfields has developed Bribery Watch, which provides a summary and comparison of anti-bribery and corruption laws and enforcement across 100 countries.
(Press Release by Freshfields Bruckhaus Deringer)
