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International Relations

Asian export nations soft on corporate bribes of foreign officials

Report shows 'little or no' enforcement of anti-graft laws on home companies

OECD's Anti-Bribery Convention is largely ignored in Asia.   © AP

TOKYO -- Asia's largest export countries show scant interest in holding their companies accountable for bribing foreign civil servants, according to a recent report.

Released by Transparency International, a Berlin-based nongovernmental organization, the paper showed that five Asian countries and one territory practice "little or no" enforcement against companies suspected of paying off officials.

The report, "Exporting Corruption -- Progress Report 2018," shows that Japan, South Korea, India, Singapore, China and Hong Kong rarely prosecute cases of their own nationals suspected of bribing officials overseas.

TI's paper evaluates how vigorously signatories to the Anti-Bribery Convention, formulated by the Organization for Economic Cooperation and Development, pursue bribery cases. There are four categories of enforcement: active, moderate, limited, and little or no.

This year, it evaluated all 40 signatories to the OECD convention, as well as nonsignatories India, Singapore, China and Hong Kong.

Seven exporters outside the region, including the U.S., Germany and the U.K., were the most active in going after suspected bribery. The U.S., for instance, began investigating 73 cases during a four-year period through 2017, while South Korea commenced one and Japan, along with the four nonsignatories, none.

Corruption remains entrenched in many emerging Asian economies, putting multinationals in a bind. For example, customs officials may intentionally hinder clearance of goods, then offer to speed things for a bribe.

The total amount of bribes paid to government officials worldwide is estimated to be in excess of 100 trillion yen ($883 billion) annually.

Some of the countries that ranked lowest in enforcement have the legal framework to pursue this form of bribery, but rarely -- if ever -- employ it. Japan has its Unfair Competition Prevention Act, but few cases come to light due to lack of investigative and enforcement personnel.

"You could say that Japan is lenient on bribery compared to international standards," said a spokesperson of Transparency International Japan.

Tadashi Kunihiro, an attorney versed in compliance issues, noted that top management "needs to inform their staff that they are firmly determined not to engage in bribery."

A good way to avoid corrupt local officials, according to experts, is to demand receipts, or have logistics timelines that take into account foot-dragging civil servants.

"Once you've been caught, everybody -- from your company and employees to your family -- will suffer," said TI Japan Chairperson Aki Wakabayashi.

"It's essential that employees assigned overseas be trained on the latest laws and regulations, and learn how to fend off requests for bribes," Wakabayashi said.

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