In response to the ever growing international focus on enforcing the crime of bribery of foreign public officials in international business transaction, Shibolet & Co. has expanded and recently added an Anticorruption Compliance Practice. This is one of the first dedicated Anticorruption Compliance practices in a First Tier Israeli law firm.
This practice should serve all existing and future Shibolet clients involved in international transactions that may bring them into contact with foreign government officials (national or municipal), whether directly or through the use of third parties, in their capacity as customers, clients, regulators, customs and tax officials or as the grantors of license, permits, visas and the like.
What is the risk? The Organization for Economic Co-operation and Development (OECD) has placed a focus on combating these types of bribery and requires all of its members to ratify the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions as a condition to joining the OECD. As a prerequisite to its admission to the OECD, in July 2008, Israel enacted Section 291A of the Penal Law-1977, which made bribery of a foreign public official a criminal offense for individuals and corporate entities in Israel. The focus of this crime by both the Israeli authorities and the OECD is on the corporate entities that committed the offence and not only the individual employees. This is best reflected by recent enforcement action in Israel, where the prosecution dropped charges against individuals in order to get a company to plead guilty to the criminal offence of foreign bribery. Penalties for this offence can include multiple year prison sentences for individuals, multimillion dollar corporate fines, forfeitures and debarments of corporations from future business.
So what can be done? The worldwide recognized best practice for defense against allegations of corruption in international transactions is the adoption and implementation of a robust internal anticorruption policy and relevant procedures. This has been recognized as a legal defense under law by several countries, is a main consideration in sentencing leniency in many others and is recommended in the OECD’s Good Practice Guidance on Internal Controls, Ethics, and Compliance.
Does my organization need such policy? If your organization is involved in international transactions it is widely accepted best practice to implement an Anticorruption Compliance Program. Such program should be specifically tailored to meet the exposure to corruption your organization is facing, taking into account amongst other issues the extent of interaction with Foreign Government Officials. Some of the questions you should ask yourself are:
- Does my organization interact with foreign government officials as Customers/Clients?
- Does my organization require governmental permits or license to carry out its foreign business?
- Does my organization interact with government officials in the receipt of visas for its employees or with customs officials to clear its goods?
If the answer to any of these questions is positive, whether such interaction is done directly or through third parties (agents, suppliers, subcontractors, partners, lobbyists, lawyers, accountants), then it is recommended your organization would contemplate establishing and implementing an Anticorruption Compliance Program.