On 26 November, the OECD adopted new recommendations against bribery in international business transactions which replace the existing ones from 2009. The recommendations complement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and are addressed to the convention-affiliated countries, including Sweden. Although the recommendations are not binding, they set an expectation standard for Member States. They also form the basis when the OECD evaluates compliance with the OECD Convention in different countries. The recommendations also include guidelines for the anti-corruption work ('Good Practice Guidance on Internal Controls, Ethics and Compliance'). These have also been updated.
Read below about some of the biggest changes and what these may mean for Sweden.
Focus Also on the Demand Side of Bribes
The new recommendations include a new section highlighting the responsibility for ensuring that public officials do not ask for bribes. They include the issue of training officials and to increase awareness of the devastating effect even small bribes have on sustainable development and the rule of law.
The amendment marks a shift in focus as the OECD Convention and previous recommendations focused solely on action on the donor side.
Introduction of Alternatives to Court Proceedings
An increasing international trend is that corruption violations are handled in ways other than through court proceedings, such as settlement agreements with public prosecutors. This is reflected in the new recommendations. A new section has been added under which Member States will consider different procedures for dealing with corruption offences, including alternatives to court proceedings.
Incentives for Companies to Prevent Corruption
As has been the case in the past, Member States should encourage companies to work preventively against corruption through the establishment of a compliance programme. However, the new recommendations also state that Member States should create incentives for companies to work preventively against corruption in international business transactions.
Member States must, for example, take into account the ethics and compliance work of companies in the context of public procurement and when granting export credits. How companies work with ethics and compliance must also be given importance in a mitigating direction when sanctions are imposed for bribery violations.
Data Protection Rules Must Not Hinder Effective Anti-Corruption Work
Member States must ensure that data protection rules prohibiting the transmission of financially or commercially sensitive information do not prevent the effective prosecution of bribery or the effectiveness of internal compliance programmes.
The recommendations also state that Member States must provide guidance to companies and consider introducing legislation to ensure that personal data can be processed in the conduct of anti-corruption due diligence and in internal investigations.
Updated Guidelines for Businesses
The guidelines for corporate compliance programs have been supplemented and now constitute an even clearer benchmark for companies in terms of the requirements that can be placed on the program.
New elements include that the program will include risk-based due diligence on employment, expanded recommendations for the management of third parties to avoid and manage corruption risks, and that anti-corruption due diligence must be carried out in case of acquisitions.
What do the New Recommendations Mean for Sweden?
Although the new recommendations are not mandatory, they raise expectations for Member States to review their legislation on the basis of what is stated in them.
For Sweden, we are one of increasingly fewer countries that do not yet have alternatives to court proceedings to deal with corruption violations by companies. The recommendation for Member States to review this option is therefore of particular interest.
The new wording on the relationship between data protection rules and anti-corruption work is also highly interesting. The limited possibilities for processing personal data relating to violations of the law in whistleblowing systems and the absence of exceptions for processing such data for anti-corruption due diligence have long caused problems in Sweden. The new recommendations will hopefully bring about a changed approach from Sweden in this matter.
The updated corporate guidelines provide a benchmark to control their compliance program against and further reinforce the importance of implementing anti-corruption prevention measures – which also need to work in practice.
Do you want to know more about this topic, or did the article raise other questions? Please feel free to contact Natali Engstam Phalén – anti-corruption expert, or your regular contact at Lindahl.