Risk Management and Crisis Response Blog

OECD releases report confirming non-trial resolutions represent the main mechanism used to combat transnational corruption issues

Mar 27, 2019 3 MIN READ
Stéphane Eljarrat

Partner, Disputes
Head: White-Collar Defence, Toronto

Lawrence E. Ritchie

Partner, Disputes, Toronto

Malcolm Aboud

Counsel, Disputes, Toronto

The seventh annual Global Anti-Corruption and Integrity Forum of the Organisation for Economic Co-operation and Development (OECD) was held in Paris on March 20, 2019. Among other things, the OECD submitted and distributed a report entitled Resolving Foreign Bribery Cases with Non-Trial Resolutions (the Report).

The Report provides revealing statistics on the use of non-trial resolution mechanisms as part of the tools available for repressive action since the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Convention) came into effect. The Report highlights the fact that non-trial settlements have become the main mechanism through which countries are combating serious economic infractions like the corruption of foreign public officials.

Since the Convention came into effect, 78% (695 out of 890) of transnational corruption issues in the countries studied have resulted in non-trial resolutions. The Report refers to at least three non-trial resolutions in Canada that led to sanctions against corporations for corruption of foreign public officials.

The Report also highlights the following:

  • The number of multijurisdictional non-trial settlements has risen significantly due to increased co-operation between OECD members.
  • Although the possibility of lower monetary sanctions is one of the main attractions of non-trial settlements,
    • the way the sanction is reduced varies significantly from one OECD member country to another. The report lists several mechanisms, including the existence in some regimes of a “maximum sanction” to be reached as part of a non-trial settlement and the existence in other regimes of reduction mechanisms that are percentage based. The Report lists sanctions that vary from one Swiss franc to US$3.23B;
    • the Report points out that, by far, the highest monetary sanctions were imposed as part of non-trial settlements — knowing that the highest sanction ever awarded as part of a trial on the merits, to date, is around US$29 million in constant dollars. This is partly due to the fact that non-trial settlements can allow corporations to avoid even more severe consequences, such as debarment or ineligibility for contracts or having to go out of business.
  • Canada’s introduction of a deferred prosecution agreement (referred to under Canadian legislation as a “remediation agreement”) regime in September 2018 (based on existing regimes in Great Britain and the United States) follows a similar approach by allowing corporations to defer and settle certain specific economic crimes (including corruption) without criminal conviction. The Report points out that non-trial settlements have had the effect of improving the balance of power between the authorities tasked with enforcing the law and delinquent businesses, giving them negotiating powers that extend beyond normal trial procedures.

The Report, published 20 years after the Convention came into effect, shows that the challenge of combating transnational corruption has not abated for OECD members. The Report makes it clear, however, that non-trial settlements (including the new Canadian remediation agreement) have become key tools in that regard for combating serious economic infractions.

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