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[Senate Treaty Document 105-43]
[From the U.S. Government Publishing Office]



105th Congress                                              Treaty Doc.
                                SENATE

 2d Session                                                      105-43
_______________________________________________________________________


 
    CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN 
                  INTERNATIONAL BUSINESS TRANSACTIONS

                               __________

                                MESSAGE

                                  FROM

                   THE PRESIDENT OF THE UNITED STATES

                              TRANSMITTING

    CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN 
 INTERNATIONAL BUSINESS TRANSACTIONS, ADOPTED AT PARIS ON NOVEMBER 21, 
 1997, BY A CONFERENCE HELD UNDER THE AUSPICES OF THE ORGANIZATION FOR 
ECONOMIC COOPERATION AND DEVELOPMENT (OECD). CONVENTION SIGNED IN PARIS 
    ON DECEMBER 17, 1997, BY THE UNITED STATES AND 32 OTHER NATIONS





May 4, 1998.--Convention was read the first time and, together with the 
accompanying papers, referred to the Committee on Foreign Relations and 
            ordered to be printed for the use of the Senate.

                         LETTER OF TRANSMITTAL

                              ----------                              

                                      The White House, May 1, 1998.
To the Senate of the United States:
    With a view to receiving the advice and consent of the 
Senate to ratification, I transmit herewith the Convention on 
Combating Bribery of Foreign Public Officials in International 
Business Transactions (the ``Convention''), adopted at Paris on 
November 21, 1997, by a conference held under the auspices of 
the Organization for Economic Cooperation and Development 
(OECD). The Convention was signed in Paris on December 17, 
1997, by the United States and 32 other nations.
    I transmit also, for the information of the Senate, 
interpretive Commentaries on the Convention, adopted by the 
negotiating conference in conjunction with the Convention, that 
are relevant to the Senate's consideration of the Convention. I 
transmit also, for the information of the Senate, the report of 
the Department of State with respect to the Convention.
    Since the enactment in 1977 of the Foreign Corrupt 
Practices Act (FCPA), the United States has been alone in 
specifically criminalizing the business-related bribery of 
foreign public officials. United States corporations have 
contended that this has put them at a significant disadvantage 
in competing for international contracts with respect to 
foreign competitors who are not subject to such laws. 
Consistent with the sense of the Congress, as expressed in the 
Omnibus Trade and Competitiveness Act of 1988, encouraging 
negotiation of an agreement within the OECD governing the type 
of behavior that is prohibited under the FCPA, the United 
States has worked assiduously within the OECD to persuade other 
countries to adopt similar legislation. Those efforts have 
resulted in this Convention that once in force, will require 
that the Parties enact laws to criminalize the bribery of 
foreign public officials to obtain or retain business or other 
improper advantage in the conduct of international business.
    While the Convention is largely consistent with existing 
U.S. law, my Administration will propose certain amendments to 
the FCPA to bring it into conformity with and to implement the 
Convention. Legislation will be submitted separately to the 
Congress.
    I recommend that the Senate give early and favorable 
consideration to the Convention, and that it give its advice 
and consent to ratification.

                                                William J. Clinton.

                          LETTER OF SUBMITTAL

                              ----------                              

                                       Department of State,
                                         Washington, April 9, 1998.
The President,
The White House.
    The President: I have the honor to submit to you, with a 
view to transmittal to the Senate for its advice and consent to 
ratification, the Convention on Combating Bribery of Foreign 
Public Officials in International Business Transactions. The 
Convention was adopted on November 21, 1997 by a conference 
held in Paris under the auspices of the Organization for 
Economic Cooperation and Development (OECD). It was signed in 
Paris on December 17, 1997 on behalf of 33 countries, including 
the United States: 28 of the 29 OECD Member States (all except 
Australia) and five non-OECD Members who are participants in 
the OECD's Working Group on Bribery in International Business 
Transactions.
    The signatories include Argentina, Austria, Belgium, 
Brazil, Bulgaria, Canada, Chile, the Czech Republic, Denmark, 
Finland, France, Germany, Greece, Hungary, Iceland, Ireland, 
Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New 
Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, 
Switzerland, Sweden, Turkey, the United Kingdom, and the United 
States.
    I transmit also, for the information of the Senate, 
interpretive Commentaries on the Convention that were adopted 
by the negotiating conference in conjunction with the 
Convention. Although not submitted for the advice and consent 
of the Senate, the Commentaries are relevant to the Senate's 
consideration of the Convention.
    The Convention is a historic achievement in the fight 
against bribery. It represents the fruit of many years of 
efforts by the United States to persuade other industrialized 
countries to adopt laws, similar to the U.S. Foreign Corrupt 
Practices Act (FCPA), to criminalize the business-related 
bribery of foreign public officials. In May 1997 the OECD 
Council approved the opening of negotiations of this 
Convention, with a view to its signature by the end of 1997 and 
its entry into force by the end of 1998. The Council also 
recommended that Member States submit relevant legislative 
proposals to their parliaments by April 1, 1998, and seek the 
enactment of such laws by the end of 1998.
    Article 1(1) of the Convention requires each Party to 
establish bribery of a foreign public official as a criminal 
offense under its laws. Such bribery is defined as the 
intentional offer, promise, or giving of any undue pecuniary or 
other advantage by any person, whether directly or through 
intermediaries, to a foreign public official, for that official 
or for a third party, to induce that official to act or to 
refrain from acting in relation to the performance of official 
duties in order to obtain or retain business or other improper 
advantage in the conduct of international business. Such 
bribery is further defined in Article 1(2) to include 
complicity in, including incitement, aiding and abetting, or 
authorization of an act of bribery of a foreign public 
official. Attempt and conspiracy to bribe a foreign public 
official must also be criminalized by each Party to the same 
extent that attempt and conspiracy to bribe a public official 
of such Party are criminal offenses. This language is generally 
consistent with U.S. law. However, to comply fully with the 
Convention, which covers bribes by ``any person,'' the United 
States will have to expand the scope of the FCPA to encompass 
bribes paid by foreign persons who are not affiliated with 
issuers that have securities registered under the Exchange Act.
    ``Foreign public official'' is defined by Article 1(4) as 
any person holding a legislative, administrative, or judicial 
office of a foreign country, whether appointed or elected; any 
person exercising a public function for a foreign country, 
including for a public agency or public enterprise; and any 
official or agent of a public international organization. 
Paragraph 14 of the Commentaries states that a ``public 
enterprise'' is any enterprise, regardless of form, over which 
a government, or governments, may, directly or indirectly, 
exercise a dominant influence. Under Paragraph 15 of the 
Commentaries, an official of a public enterprise is deemed to 
perform a public function unless the enterprise operates on a 
normal commercial basis in the relevant market, i.e., on a 
basis which is substantially equivalent to that of a private 
enterprise, without preferential subsidies or other privileges. 
Paragraph 17 of the Commentaries notes that ``public 
international organization'' includes any international 
organization formed by states, governments, or other public 
international organizations, including a regional economic 
integration organization such as the European Community. The 
FCPA does not cover bribery of officials of ``public 
international organizations.'' To conform with the Convention, 
the FCPA will have to be amended to encompass bribery of such 
officials.
    The Convention does not apply to bribes to foreign 
political parties or party officials per se, although it would 
cover, by its terms, business-related bribes to foreign public 
officials made through political parties or party officials, as 
well as bribes directed by corrupt foreign public officials to 
political parties or party officials. Paragraph 16 of the 
Commentaries notes that persons that hold de factor public 
authority, such as political-party officials in single-party 
states, may be considered to be foreign public officials under 
the legal principles of some countries. The United States has 
urged that bribes paid to foreign political parties and party 
officials be covered under the Convention, as they are under 
the FCPA, and such coverage will be a topic of future 
negotiations within the OECD Working Group on Bribery.
    ``Foreign country'' is defined by Article 1(4) to include 
all levels and subdivisions of government, from national to 
local. ``Act or refrain from acting inrelation to the 
performance of official duties'' is defined to include any use of the 
public official's position, whether or not within the official's 
authorized competence.
    Article 2 provides that each Party shall take such measures 
as may be necessary, in accordance with its legal principles, 
to establish that legal persons are liable for the bribery of 
foreign public officials. Paragraph 20 of the Commentaries 
explains that Parties are not required to establish such 
criminal responsibility (as opposed to civil liability) if 
legal persons cannot be subjected to criminal responsibility 
under a given Party's legal system.
    Article 3(1) provides that bribery of foreign public 
officials shall be punishable by ``effective, proportionate and 
dissuasive criminal penalties.'' If a Party's legal system does 
not provide for criminal responsibility of legal persons, under 
Article 3(2) that Party must ensure that legal persons are 
subject to effective, proportionate and dissuasive non-criminal 
sanctions, including monetary sanctions, for bribery of foreign 
public officials. Under Article 3(3), the bribe and the 
proceeds of the bribery of a foreign public official, or 
property corresponding in value to that of such proceeds, are 
subject to seizure and confiscation, or comparable monetary 
sanctions are applicable. Parties are required by Article 3(4) 
to consider imposing additional civil or administrative 
sanctions upon persons subject to sanctions for bribery of 
foreign public officials.
    Article 4(1) requires that each Party take necessary 
measures to establish its jurisdiction over bribery of a 
foreign public official when such offense is committed in whole 
or in part in its territory. Paragraph 25 of the Commentaries 
states that the territorial basis for jurisdiction should be 
interpreted broadly so that an extensive physical connection to 
the act of bribery is not required. Under Article 4(2), those 
Parties that have jurisdiction to prosecute their nationals for 
offenses committed abroad must take the necessary measures to 
establish such jurisdiction, according to the same principles, 
with respect to the bribery of foreign public officials. 
Article 4(3) provides that the concerned Parties shall, at the 
request of one, consult with a view to determining the most 
appropriate jurisdiction for prosecution if more than one Party 
has jurisdiction over an offense covered by the Convention. 
Parties are required, under Article 4(4), to review whether 
their current basis for jurisdiction are effective with regard 
to bribery of foreign public officials and, if not, to take 
remedial steps. Current U.S. law governing foreign bribery 
contains a territorial element and is generally limited to 
bribery by U.S. persons and foreign persons affiliated with 
issuers that have securities registered under the Exchange Act. 
To implement fully the Convention, the United States will have 
to expand the FCPA to encompass acts within its territory by 
other foreign persons. The United States also proposes to 
assert jurisdiction over the acts of U.S. persons outside the 
United States.
    Article 5 states that investigation and prosecution of the 
bribery of a foreign public official is subject to the 
applicable rules and principles of each Party. It further 
provides that considerations of national economic interest, the 
potential effect upon relations with another State, or the 
identity of the persons involved shall not influence such 
investigation and prosecution.
    Article 6 provides that any statute of limitations 
applicable to bribery of foreign public officials shall allow 
an adequate period of time for the investigation and 
prosecution of the offense.
    Article 7 requires that each Party that has made bribery of 
its own public officials a predicate offense under its money 
laundering legislation do so on the same terms for bribery of 
foreign public officials, without regard to the place where the 
bribery occurred. The United States has already enacted such 
legislation.
    Article 8(1) requires that each Party take necessary 
measures, within the framework of its laws and regulations 
regarding the maintenance of books and records, financial 
statement disclosures, and accounting and auditing standards, 
to prohibit the following acts by companies for the purpose of 
bribing foreign public officials or of hiding such bribery: 
establishment of off-the-books accounts, the making of off-the-
books or inadequately identified transactions, the recording of 
non-existent expenditures, the entry of liabilities with 
incorrect identification of their object, or the use of false 
documents. Each Party must, under Article 8(2), provide 
effective, proportionate and dissuasive civil, administrative 
or criminal penalties for such omissions and falsifications. 
This provision is consistent with the books and records and 
reporting requirements under U.S. securities laws.
    Article 9(1) requires that each Party, to the fullest 
extent possible under its laws and relevant treaties and 
arrangements, provide prompt and effective legal assistance to 
another Party for the purpose of criminal investigations and 
proceedings brought by a Party concerning offenses within the 
scope of the Convention, as well as for the purpose of non-
criminal proceedings within the scope of the Convention brought 
by a Party against a legal person. Pursuant to Article 9(2), 
where a Party makes mutual legal assistance conditional upon 
the existence of dual criminality, dual criminality is deemed 
to exist if the offense for which the assistance is sought is 
within the scope of the Convention. Article 9(3) states that a 
Party may not, on the ground of bank secrecy, decline to render 
mutual legal assistance for criminal matters within the scope 
of the Convention. This provision is particularly important, 
because U.S. prosecutions have sometimes been frustrated by 
difficulty in obtaining foreign evidence because of lack of 
dual criminality.
    Article 10(1) provides that bribery of a foreign public 
official shall be deemed to be included as an extraditable 
offense under the laws of the Parties and the extradition 
treaties between them. Under Article 10(2), a Party that 
receives a request for extradition regarding bribery of a 
foreign public official from another Party with which it has 
noextradition treaty may consider the Convention to be the legal basis 
for such extradition. Each Party must, pursuant to Article 10(3), 
ensure that it can either extradite or prosecute its nationals for 
bribery of a foreign public official. If a Party declines to extradite 
a person for bribery of a foreign public official solely on the ground 
that the person is its national, that Party is required to submit the 
case to its competent authorities for the purpose of prosecution. 
Article 10(4) states that extradition for bribery of a foreign public 
official is subject to the conditions set out in the domestic law and 
applicable treaties and arrangements of each Party. Where a Party makes 
extradition conditional upon the existence of dual criminality, dual 
criminality shall be deemed to exist if the offense for which 
extradition is sought is within the scope of Article 1 of the 
Convention.
    Article 11 provides that each Party shall designate an 
authority or authorities responsible for making and receiving 
requests and serving as a channel of communication regarding 
consultations on overlapping jurisdiction under Article 4, 
mutual legal assistance under Article 9, or extradition under 
Article 10. The United States intends to designate the 
Department of Justice as the relevant authority for purposes of 
Articles 4 and 9, and the Department of State as the relevant 
authority for purposes of Article 10.
    Article 12 states that the Parties shall cooperate in 
carrying out a program of systematic follow-up to monitor and 
promote implementation of the Convention. Unless the Parties 
decide otherwise by consensus, this is to be done within the 
framework of the OECD Working Group on Bribery in International 
Business Transactions or any successor to its functions, and 
the Parties will bear the costs of the program in accordance 
with the rules applicable to that body.
    Article 13(1) provides that the Convention shall be open, 
until its entry into force, for signature by OECD members and 
by non-members that have been invited to become full 
participants in the Working Group on Bribery in International 
Business Transactions. Under Article 13(2), after the 
Convention enters into force, it shall be open to accession by 
any non-signatory that is an OECD member or that has become a 
full participant in the Working Group on Bribery in 
International Business Transactions or any successor to its 
functions. For each such non-signatory, the Convention shall 
enter into force on the sixtieth day following the date of the 
deposit of its instrument of accession. OECD members 
contemplate an active outreach program to encourage non-members 
to accede to the Convention.
    Article 14(1) provides that the Convention is subject to 
acceptance, approval or ratification by signatories in 
accordance with their respective laws. Article 14(2) states 
that instruments of acceptance, approval, ratification, or 
accession shall be deposited with the OECD Secretary-General.
    Article 15 sets forth a two-track process for entry into 
force of the Convention. Under Article 15(1), the Convention 
will enter into force on the sixtieth day following the date on 
which five of the ten OECD countries with the ten largest 
export shares for 1990-1996, as set forth in the Annex, and 
which by themselves represent at least sixty percent of the 
combined total exports of those ten countries, deposit their 
instruments of acceptance, approval or ratification. For each 
signatory depositing its instrument after such entry into 
force, the Convention will enter into force on the sixtieth day 
following the date of deposit.
    If, after December 31, 1998, the foregoing requirement has 
not been satisfied, under Article 15(2) any signatory that has 
deposited its instrument of acceptance, approval, or 
ratification may declare in writing to the OECD Secretary-
General its readiness to accept entry into force of the 
Convention. For such a signatory, the Convention will enter 
into force on the sixtieth day following the date on which such 
declarations have been deposited by at least two signatories. 
For each signatory depositing its declaration after such entry 
into force, the Convention will enter into force on the 
sixtieth day following the date of deposit.
    Article 16 provides that any Party may propose, through 
submission to the OECD Secretary-General, an amendment of the 
Convention. The Secretary-General shall communicate the 
proposed amendment to the other Parties at least sixty days 
before convening a meeting of the Parties to consider it. An 
amendment adopted by consensus of the Parties, or by such other 
means as the Parties may determine by consensus, shall enter 
into force for all Parties sixty days after the deposit of an 
instrument of ratification, acceptance, or approval by all 
Parties, or in such other circumstances as the Parties may 
specify at the time of adoption of the amendment.
    Article 17 provides that a Party may withdraw from the 
Convention, effective one year after the OECD Secretary-
General's receipt of written notification thereof. After 
withdrawal, cooperation shall continue between the withdrawing 
Party and other Parties on all pending requests for assistance 
or extradition made before the effective date of withdrawal.
    The final clauses of the Convention do not contain a 
provision prohibiting reservations. However, the Preamble 
recognizes that achieving equivalence among measures to be 
taken by the Parties is an essential object and purpose of the 
Convention, and that this requires that the Convention be 
ratified ``without derogations affecting this equivalence.'' 
This is a call upon Parties to refrain from entering 
reservations that would affect such equivalence, and it is 
consistent with the international practice that States may not 
formulate a reservation that is incompatible with the object 
and purpose of the treaty.
    The Annex includes OECD and International Monetary Fund 
(IMF) statistics, in absolute and percentage terms, on the 
value of exports for each OECD member for the period 1990-96. 
These figures will be used in determining whether the entry 
into force requirements of Article 15(1) have been satisfied.
    The Convention is largely consistent with existing U.S. 
law. However, as set forth above, certain amendments to the 
FCPA are proposed in order to conform with and to implement the 
Convention. Proposed legislation is being prepared and is 
expected to be submitted to the Congress at an early date.
    The Department of Justice, the Department of Commerce, the 
Department of the Treasury, the Securities and Exchange 
Commission, and the Office of the United States Trade 
Representative join the Department of State in recommending 
that the Convention be transmitted to the Senate at an early 
date for its advice and consent to ratification.
    Respectfully submitted,
                                                     Strobe Talbot.