Israel among few countries preventing foreign bribery, watchdog says
BERLIN, Germany — An anti-corruption watchdog on Tuesday ranked Israel as one of the top four countries in the world in enforcing rules meant to prohibit companies from paying bribes in foreign markets, and said most other countries are doing next to nothing.
Berlin-based Transparency International said only four of 47
countries — the United States, United Kingdom, Switzerland and Israel — making
up 16.5 percent of global exports — were actively enforcing legislation against
foreign bribery in 2019.
That’s down from seven countries, making up 27% of exports,
that were conducting active enforcement in 2018.
“Our research shows that many countries are barely
investigating foreign bribery,” said Gillian Dell, the lead author of the
Transparency report. “Unfortunately, it’s all too common for businesses in
wealthy countries to export corruption to poorer countries, undermining
institutions and development.”
The 1997 Organization for Economic Cooperation and
Development convention prohibits bribes to win contracts and licenses or to
dodge taxes and local laws.
In the report, TI noted that “Between 2016 and 2019, Israel
opened 10 investigations and one case, and concluded three cases with
sanctions.”
But it also noted that Israel did not publish statistics
related to investigations or pending cases and does not have a central register
of beneficial ownership information.
In 2018, Israel moved from TI’s lowest rung, where it was
placed in 2015, to its highest, as it successfully concluded its first-ever
foreign bribery case and opened a slew of new ones.
In December 2016, the Tel Aviv Magistrate’s Court convicted
Israeli security company NIP Global of bribing a government official in Lesotho
and levied a fine of NIS 4.5 million ($1.15 million) on the firm.
State prosecutor Jonathan Tadmor at the time said the
first-ever ruling against an Israeli company operating abroad sent a message
that the country was dedicated to “fight[ing] against economic delinquency and
the phenomenon of corruption worldwide.”
Later that year, Israel arrested diamond-mining magnate Beny
Steinmetz on suspicion of money laundering and bribing public officials in
Africa, but he was later released. Authorities in the US, Switzerland, Guinea
and Israel suspected that Steinmetz bribed the president of Guinea and his wife
for metal mining licenses that generated hundreds of millions of dollars in
profits for his company, BSGR Resources.
Steinmetz is due to stand trial over the affair, but only in
Switzerland.
China, the world’s largest exporter and not a signatory to
the convention, was found to conduct “little or no enforcement,” in a category
that also includes India and convention members Japan and Korea.
Germany, the world’s third-largest exporter and also a
signatory to the convention, only conducts “moderate enforcement,” as do other
major exporters like France, Italy and Spain.
Germany and Italy both pursued fewer cases in 2019 than in
the previous year, while France and Spain improved their performance.
The Netherlands, Canada and Austria — all signatories to the
convention — are the biggest exporters in the category of those showing only
“limited enforcement.”
“Too many governments choose to turn a blind eye when their
companies use bribery to win business in foreign markets,” Transparency
International head Delia Ferreira Rubio said. “G-20 countries and other major
economies have a responsibility to enforce the rules.”
Transparency’s recommendations include ending secrecy in
ownership of companies, which makes investigating foreign bribery difficult,
and exploring increased liability of parent companies for the actions of their
foreign subsidiaries.
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