Is foreign bribery an attractive proposition in some countries?
Is foreign bribery an attractive proposition in some countries?
June 2016

One of the most basic legal principles is that crime should not pay. Yet, in many jurisdictions with weak sanctions, foreign bribery may be an attractive investment. In others, foreign bribery is subject to strong penalties, although some of these penalties exist only on paper because they are not backed up by effective enforcement. Only a few countries combine strong sanctions with active enforcement of anti-bribery laws. This report paints a picture of fragmented deterrence across the Parties to the Anti-Bribery Convention. This patchwork of incentives and disincentives for foreign bribery is explored using simulations of “net present value” for “investments in foreign bribery” under assumptions of both certainty and uncertainty. The simulations draw on sanctions data and on the cash flows – including both bribes and benefits – associated with a real-world bribery scenario. They show, in particular, that in many countries having low fines for paying bribery, a company would still be willing to “invest” in a foreign bribery scheme even if it knew in advance that it would be caught and fined at the end of the bribery scenario. This implies that fines for bribery are set too low in many jurisdictions.

Key findings
Fragmentation of fines and enforcement effectiveness creates both strong incentives and disincentives for foreign bribery across the countries Party to the Anti-Bribery Convention
Low sanctions in many jurisdictions mean companies would still have an interest in investing in the bribery scheme, even if they knew with certainty that they would be caught at the end of the scheme
An appropriate balance between enforcement effort and levels of sanctions needs to be found in order to establish an effective system of deterrence