Whistleblowing to a Latin Tune: The Adaptation Problems of the OECD/FCPA Paradigm in Environments with Disseminated Corruption through the Lenses of the Odebrecht Case in Latin America

This paper discusses the adaptation and feasibility of some of the tools shared by the OECD Convention and the U.S. Foreign Corrupt Practices Act. The article highlights three of them: incentives and protection to whistleblowers, prosecutorial discretion, and different forms of negotiated justice, including plea bargaining. We call these tools the OECD/FCPA paradigm. We claim that the OECD/FCPA paradigm hardly reconciles criminal punishment needs in Latin American countries. We offer three primary reasons for this inadaptation. The first reason is that most Latin American countries have what the literature calls “disseminated corruption as a point of equilibrium” for grand corruption. In an environment with disseminated corruption (as described in the plea agreement in the Odebrecht case), all actors have incentives to accept or offer bribes. It creates a pragmatic incompatibility with prosecutorial discretion and plea bargaining, as some politicians or businesspersons would suffer anti-bribery enforcement, while many others - including the former’s competitors - would not. The second reason is that the OECD/FCPA paradigm weakens the system of control implemented in many countries, as it reserves the power to a limited number of agencies and prosecutors. Considering environments with disseminated corruption, the concentration of power - and discretion - over a limited number of agents creates the institutional design for the lack of accountability and perhaps collusion. The third reason is mainly connected to Latin America's political history. We argue that collaboration agreements, whistleblowers, and discretion are prone to magnify certain cases of corruption. Considering the traditional connection between corruption scandals and political instability in Latin America, we argue that the OECD/FCPA paradigm offers deleterious tools to political exploitation of anti-bribery enforcement.

OECD acts as instruments of soft international law

A characteristic feature of the modern system of international relations is that the not only the international legal norms, but alsothe rules of soft international law are the regulators, with the constantly growing share of the latter. There is a great variety of conceptsregarding the nature of soft international law in modern doctrine of international law. However, it is indisputable fact that internationalorganizations play significant role in its development. One of such international organizations is the Organization for Economic Cooperationand Development, whose rule-making activities are largely implemented through the adoption of legally non-binding documentsbut at the same time they have a significant impact on the behavior of the international law subjects. The organization unites 36 industrializedcountries. Thus, of the total number of regulations of various legal force adopted or developed under the auspices of the OECDduring the entire period of existence of this international organization, acts of soft international law account for approximately 78 percent. In total, the OECD adopted 454 regulations, including 13 international treaties, 87 decisions, 300 recommendations, 36 declarationsand 18 other legally non-binding international instruments. Recommendations are adopted in accordance with Art. 5, 6 and 7 ofthe OECD Convention and paragraph 18B of the Rules of Procedure of the Organization and are transferred to the Member States forconsideration. So the Member States may, if they deem it appropriate, implement them in their national law. OECD Declarations arelegally optional framework documents establishing the general principles and long-term goals of cooperation between states within theframework of this international organization. In general, declarations are not acts of the OECD within the meaning of Art. 5 of theOECD Convention, but in practice their implementation is monitored by OECD bodies. Apart from recommendations and declarationsOECD also practices the following types of legal non-binding regulations: Arrangement and Understanding which can be described asgentleman’s agreements and also the recommendations of the Development Assistance Committee (DAC) OECD. With all these do -cuments, the OECD regulates international cooperation on a wide range of socio-economic issues, including the fight against corruption,taxation, regional development, environmental protection, finance and investment, trade, industry, social policy, consumer protection,science and education, shipbuilding and transport, energy, etc.

OECD acts as instruments of soft international law

A characteristic feature of the modern system of international relations is that the not only the international legal norms, but alsothe rules of soft international law are the regulators, with the constantly growing share of the latter. There is a great variety of conceptsregarding the nature of soft international law in modern doctrine of international law. However, it is indisputable fact that internationalorganizations play significant role in its development. One of such international organizations is the Organization for Economic Cooperationand Development, whose rule-making activities are largely implemented through the adoption of legally non-binding documentsbut at the same time they have a significant impact on the behavior of the international law subjects. The organization unites 36 industrializedcountries. Thus, of the total number of regulations of various legal force adopted or developed under the auspices of the OECDduring the entire period of existence of this international organization, acts of soft international law account for approximately 78 percent. In total, the OECD adopted 454 regulations, including 13 international treaties, 87 decisions, 300 recommendations, 36 declarationsand 18 other legally non-binding international instruments. Recommendations are adopted in accordance with Art. 5, 6 and 7 ofthe OECD Convention and paragraph 18B of the Rules of Procedure of the Organization and are transferred to the Member States forconsideration. So the Member States may, if they deem it appropriate, implement them in their national law. OECD Declarations arelegally optional framework documents establishing the general principles and long-term goals of cooperation between states within theframework of this international organization. In general, declarations are not acts of the OECD within the meaning of Art. 5 of theOECD Convention, but in practice their implementation is monitored by OECD bodies. Apart from recommendations and declarationsOECD also practices the following types of legal non-binding regulations: Arrangement and Understanding which can be described asgentleman’s agreements and also the recommendations of the Development Assistance Committee (DAC) OECD. With all these do -cuments, the OECD regulates international cooperation on a wide range of socio-economic issues, including the fight against corruption,taxation, regional development, environmental protection, finance and investment, trade, industry, social policy, consumer protection,science and education, shipbuilding and transport, energy, etc.

Anti-Corruption Protection of Russian Companies in Foreign Jurisdictions

The article is devoted to existing problems and prospective tasks of preventing corruption risks and fraudulent threats that domestic public organizations conducting foreign economic activity in the countries of their presence may encounter. The globalization of anti-corruption standards of business conduct rules imposed on business structures around the world is due to the cross-border nature of the laws of several states of the Anglo-Saxon legal system, as well as the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. These circumstances require the actualization of the tasks of the anti-corruption policy of every public company, regardless of the country of its affiliation, legal form and type of ownership. Most business organizations in the world are developing their own tactical preventive measures against corruption abroad. The content of these measures is different. In the absence of a unity of approaches to organizational, methodological, regulatory support, as well as legal regulation and application of such measures, the article presents the results of monitoring national and multinational companies’ practices aimed at prevention of corruption risks that may arise in interaction with foreign contractors. The monitoring results are proposed to be considered in the methodological positions of the prospective development of a unified strategy for the prevention of corruption risks for domestic companies operating abroad

When Bribery is Considered an Economic Necessity: Facilitation Payments, Norm Translation, and the Role of Cognitive Beliefs

Abstract: Since the 1990s, when a global anti-corruption norm emerged which in part targeted the use of bribery in international business activities, international support has been growing for a related norm against the use of facilitation (or “grease”) payments. Despite ambiguous language in the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and despite the lack of material enforcement mechanisms, many OECD convention signatories have explicitly banned facilitation payments. Among the few remaining holdouts, Canada and New Zealand recently addressed this omission in their anti-corruption legislation; only Canada opted to eliminate its legal exception for facilitation payments. Building on recent models on norm translation, this article foregrounds the differential roles of normative and cognitive beliefs to explain the different outcomes in these similar cases. Drawing on elite interviews and primary documents, this article argues that select Canadian business representatives helped shape the cognitive beliefs of policymakers through institutionalized consultations in the legislative process, thus facilitating the adoption of the new norm. Resumen: Desde la década de 1990, cuando surgió una norma anticorrupción mundial que abordaba, en parte, el uso del soborno en las actividades comerciales internacionales, se ha observado un mayor apoyo internacional de una norma relacionada contra el uso de los pagos de facilitación (o «dádivas»). Pese a la ambigüedad de la redacción de la Convención para Combatir el Cohecho de Servidores Públicos Extranjeros en Transacciones Comerciales Internacionales de la Organización para la Cooperación y el Desarrollo Económicos (OCDE) y pese a la falta de mecanismos de aplicación materiales, muchos signatarios de la Convención de la OCDE han prohibido explícitamente los pagos de facilitación. Entre los pocos disidentes restantes, Canadá y Nueva Zelanda recientemente corrigieron esta omisión en su legislación anticorrupción; solo Canadá optó por eliminar su excepción legal para los pagos de facilitación. Con base en modelos recientes de traducción de normas, en este artículo se ponen en primer plano los roles diferenciales de las creencias normativas y cognitivas para explicar los diferentes resultados en estos casos similares. A partir de entrevistas elitistas y documentos primarios, en este artículo se sostiene que selectos representantes empresariales canadienses ayudaron a moldear las creencias cognitivas de los encargados de la formulación de políticas a través de consultas institucionalizadas en el proceso legislativo, lo que facilitó la adopción de la nueva norma. Résumé: Depuis les années 1990, lorsqu'une norme mondiale contre la corruption est apparue, visant en partie à lutter contre l'utilisation de pots-de-vin dans les activités commerciales internationales, une demande grandissante s'est fait entendre à l’échelle mondiale pour la création d'une norme contre l'utilisation des paiements de facilitation (servant à « graisser la patte des représentants »). Malgré les ambiguïtés présentes dans la Convention de l'OCDE sur la lutte contre la corruption d'agents publics étrangers dans les transactions commerciales internationales, et malgré le manque de moyens contraignants, de nombreux signataires de la convention de l'OCDE ont explicitement interdit les paiements de facilitation. Parmi les pays retardataires en la matière, le Canada et la Nouvelle-Zélande ont récemment comblé cette lacune dans leur législation anti-corruption. Seul le Canada a choisi de supprimer son exception juridique pour les paiements de facilitation. S'appuyant sur des modèles récents en matière de traduction des normes, cet article met en avant les rôles différentiels de croyances normatives et cognitives pour expliquer les différents résultats dans ces cas similaires. Basé sur des entretiens avec l’élite et des documents de base, cet article soutient que des représentants commerciaux canadiens hauts placés ont contribué à modeler les croyances cognitives des responsables politiques à travers des consultations institutionnalisées dans le processus législatif, facilitant ainsi l'adoption de la nouvelle norme.

Private Sector Response to Corruption

This chapter focuses on what has been done to combat corruption in the private sector starting in the United States with the Foreign Corrupt Practices Act (FCPA) in 1977: the first law that criminalized foreign bribery. The OECD Convention, which internationalized the FCPA, became effective in 1999; it prohibits foreign bribery of public officials by over forty countries. The UN Convention against Corruption (UNCAC) became effective in 2005; it deals with domestic as well as foreign bribery, bribery of public officials as well as bribery in the private sector. Corporate responses have also evolved with anticorruption compliance programs applied by US companies now for more than three decades. This chapter covers common problem areas such as gifts, entertainment, and travel expenses; lobbyists and sales representatives; political contributions; facilitation payments; foreign subsidies and joint ventures. This chapter also covers the psychology of corrupt conduct and factors to change the corporate culture.