In relation to business integrity, primary State functions are to establish the legal framework for preventing and countering corruption, to provide further guidance on the application and assessment of adherence to legislative tools, and to enforce the law. Creating a fair and competitive business environment is the responsibility of governments. Companies that feel disadvantaged compared to peers in other jurisdictions may be reluctant to put in place integrity standards if they see others not being held accountable for unethical behaviour. On the contrary, where States require integrity standards to operate in their jurisdiction, this incentivizes business integrity.
Governments must also lead by example. By ensuring a culture of integrity within, this sends a signal to the private sector and other stakeholders that promoting ethical conduct is of primary importance. Furthermore, governments are responsible for ensuring that State agencies and authorities have policies and procedures in place for preventing private sector corruption and that their personnel receive the necessary training.
Government authorities are responsible for establishing a national legal framework for preventing corruption, consistent with relevant international standards such as UNCAC and the OECD Anti-Bribery Convention. Although not mandated by these Conventions, a comprehensive approach that illuminates the relationship between prohibited conduct, consequences and protections is most helpful to the private sector. It is also important that legal measures contain sufficient detail to inform the private sector of the law’s applicability and requirements, especially as concerns corporate liability for corruption offences and beneficial ownership transparency.
Ensuring consistency with relevant international standards such as UNCAC and the OECD Anti-Bribery Convention also strengthens the ability of the private sector to navigate sound and coherent legal frameworks. Governments can also be proactive in coordinating, where possible, with other jurisdictions to avoid that companies operating in different markets face incoherent requirements in relation to their compliance programmes. A 2023 study published by the French Anti-Corruption Agency compares anti- corruption legal frameworks and practices of France, the United States, the United Kingdom, as well as the World Bank Group, and outlines the requirements that apply to companies in these jurisdictions22.The study aims at ensuring that “the French framework allows companies that comply with it, to deploy an effective and useful anti-corruption compliance programme in their growth and development strategy abroad and thus limit the risks of exposure to corruption by meeting the highest levels of international standards”.
Ensuring corporate liability for corruption offences is a key feature of governments’ efforts to prevent and fight corruption. Article 26 of UNCAC and Article 2 of the OECD Anti-Bribery Convention requires States Parties to establish the liability of legal persons for corruption offences23.The 2021 OECD Anti-Bribery Recommendation, more specifically, recommends that member countries should either take a “flexible” approach for establishing the liability of legal persons for foreign bribery based on acts committed by any relevant person or, for those countries that limit companies’ responsibilities to acts and omissions of specific corporate officers, a “functionally equivalent” approach that will establish liability when:
Robust corporate liability frameworks send a strong deterrent message to corporations, discouraging them from engaging in corrupt practices as the parent company could be held liable for the actions of any of its affiliates, employees or agents. It also incentivizes the implementation of a risk-based anti-corruption programme covering related legal persons and third parties operating in different countries and markets. This tool will vary in its applicability among States as it is dependent on the particularities of individual legal systems and legal customs.
Beneficial ownership transparency can be an integral part of a legal framework that strives to counter corruption. Over the past several years, more than 100 States have made commitments24 to implementing beneficial ownership transparency measures as a means to combat the use of corporate vehicles to engage in money laundering and corruption. A beneficial owner is generally defined as the natural person who can be found at the end of an ownership chain25. A beneficial owner is a person who ultimately has the right to some share of a legal entity’s income or assets, or the ability to control its activities. Beneficial ownership transparency reveals how companies and other legal entities or arrangements, such as trusts, are owned and controlled by their beneficial owners 26.
Governments should consider providing the private sector with guidance on its anti-corruption responsibilities under the law. While many aspects of a State’s anti-corruption framework may be apparent based on the plain language of a statute, others will be less easily discernible or difficult to apply in practice. For example, a company may understand that bribery to obtain new business is prohibited but not necessarily recognize that payments to secure a license or other regulatory advantages are as well, especially when they may seem like simple administrative fees for service. Similarly, it may not always be clear when a company will be held accountable for violations by an affiliate, third-party or business partner. Guidance is also useful in helping companies come forward to report violations when they understand the incentives for cooperation.
Guidance on these types of common anti-corruption issues helps to raise private sector awareness and thereby strengthen business integrity. This is also important for effective enforcement when offences occur. Guidance can also be used to alert companies of a State’s minimum expectations for the design and implementation of an effective anti-corruption programme, or of recommended practices.
