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Biggest Exporter Countries Still Turn a Blind Eye to Bribery

Biggest Exporter Countries Still Turn a Blind Eye to Bribery

Big exporter countries face greater challenges if they want to avoid that their enterprises resort to bribery in order to gain access to the market and to public orders in foreign investments, says Transparency International’s progress report Assessing Enforcement of the OECD Convention on Combating Foreign Bribery.

The Convention was ratified in 1997 by 40 countries including several significant exporters, with the aim to stop enterprises from bribing foreign governments and officials to obtain foreign public orders.

Progress Report 2013 Transparency International came to the conclusion that the majority of ratifying countries – 30 out of 40 – makes none or very little effort to bring to account their companies involved in foreign bribery. The interest in profit seems to be prevailing over justice and transparency.

“The 40 ratifying countries providing two thirds of global export would find themselves in a dire condition if the Convention on Combating Foreign Bribery was taken seriously and was put consistently into practice”, claims Transparency International Chair Huguette Labelle about the report.

Governments’ commitment against corruption still needs a great improvement

Only four countries (USA, Great Britain, Germany and Switzerland) meet fully the requirements of the Convention. Consequently, merely 26% of the global export is provided by countries successfully combating foreign bribery. Half of the ratifying states including G20 members such as Japan, Brazil and the Netherlands tolerate that their companies conduct business by bribing foreign government officials and functionaries.

As Transparency International reminds, this means that the majority of the countries cannot or do not want to strike on enterprises that are not squeamish about bribing foreign governments and officials if business and profit are at stake.

A survey that was conducted in 2012 referred to Hungary as a country barely applying the principles of the Convention, ranking it among the last countries. This year, however, Hungary climbed up to the category of Limited Enforcement within countries’ classification concerning foreign bribery enforcement. The promotion was due to the amendment of the law on penalties imposable on legal entities. Therefore, the accountability of bribing companies is legally possible. However, law enforcement is unfortunately feeble; traces of political manipulation in investigations and criminal procedures can still be detected.

In the study requested by OECD the international secretariat in Berlin pointed out that the operation of both the Hungarian police and the Hungarian public prosecutor’s office is yet to be improved. While the police lack professional independence, which means that the government may give them direct instructions, the main problem at the public prosecutor’s office is the lack of accountability. That is, the public prosecutor’s office has complete discretion in deciding whether to start investigation in cases of corruption and other felonies or not, and it is not obliged to justify its decisions.

Hungarian legislative system also needs serious improvement. The government is rather sluggish in enforcing its anti-corruption programme which is not very ambitious in itself. The law on the protection of whistle-blowers has not been enforced for three years; what is more, instead of the one approved in 2009, they now introduced a new bill to the Parliament. If passed, the bill would ultimately abandon those very few bold and honourable individuals who are willing to combat corruption. The corruption surveys conducted in 2012 and 2013 pointed out that 70% of Hungarians would not report a corruption case – this rate is shockingly high in the international context as well. The majority of people are afraid or are indifferent when it comes to corruption cases.

The report of TI’s international Berlin secretariat highlights that Hungary needs to be more effective in combating foreign bribery committed by its enterprises. In the report the secretariat claims that Hungarian authorities owe them an explanation as to why the exact circumstances of both the MOL-INA case and Magyar Telekom’s expansion in the Balkans have not been clarified.

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