The laws against corruption

Handling Corruption in International Sales Legal and Ethical Aspects of Corruption
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Transcript

Welcome back. You need to be aware of what can happen if you ignore the laws against corruption. This is from Canada's financial post in December 2018. A hospital manager who accepted a bribe in return for awarding a contract got more than three years in jail. Britain Serious Fraud Office, one convictions against five men who bribed officials and politicians in Lithuania, to win contracts worth 240 million euros. Apart from jail sentences for the five men.

The company they work for, which results to was fine more than 6 million British pounds and had to pay compensation of nearly 11 million British pounds to the Lithuanian government The FBI and the Internal Revenue Service combined to win convictions against 14 people involved in taking bribes to influence where FIFA tournaments will be held, and who would have sponsorship contracts. These are just three cases. There are many more I could have shown you. In the first video, I talked about ethics, and what your attitude needs to be if you want to do profitable export business. Ethics and the law are two different things. 50 years ago, Sonny Curtis wrote a song called I fought the law.

The refrain went, I fought the law and the law won. And that's how it is. If you decide to break the law in a western country, sooner or later, you're going to be cold. And when that happens, you'll wish you hadn't done it. So what is the law on corruption? Well, it's not as straightforward as you might imagine.

A great deal of anti bribery legislation has been brought in in the last 20 years, in theory that produces a more level playing field. But actually the reverse is true. Why? Because not all countries have introduced a bribery law, and of those that have not all enforce it. There is something everyone calls the OECD convention. Its actual title is the Convention on combating bribery of foreign public officials in international business transactions.

Just the title alone should tell you where the biggest corruption problem is. It's with public officials. There are countries in which the only reason for working for the government is to enrich yourself, not from your salary, from what you induce people to pay you for doing what is supposed to be your job. If you'd like an example, I did business some years ago, with a middle ranking government official in Indonesia. He complained to me that his salary at 450 US dollars a month wasn't enough to live on. As far as I could see, it didn't need to be.

He had a five bedroom house. He and his wife both had BMWs. His children were in private schools. And the family took expensive international holidays every year. He didn't get on last on 450 US dollars a month. A study carried out in 2017 by Nathan Jensen and Edmund molesky.

Found that companies based in countries that had signed the OECD convention were less likely to attempt to bribe officials, then companies from countries that had not signed Unfortunately, that's a minority. There are 197 countries in the world, or at least there are 197 countries that belong to the United Nations. As of 2017, only 43 of them had signed the convention. China hasn't signed. And if there's a country in the world with a larger number of corrupt public servants, reaching right up to the very highest level, I haven't come across it. Russia isn't a member either.

India signed only recently, an Indian politicians and public servants could give anyone lessons on how to fill their pockets at the public expense. But Ireland is also a signatory. And anyone who's ever done business with a public official in Ireland will simply laugh when they hear that when I said that, in some countries, the only reason for working in the public sector was to enrich yourself with others expense. Ireland was the example for Most in my mind, as well as the OECD convention, a number of countries have introduced their own legislation, either by passing a specific Act, or by adding articles to their criminal codes. Some of them mean it. In some cases, it's a joke.

In the Czech Republic for example, the Criminal Code gives this definition of a bribe, offering giving requesting or accepting directly or indirectly in the public or private sector, an unauthorized benefit consisting in a direct material enrichment or other advantage, which is obtained or is intended to be obtained by the bribed person or another person with his or her agreement, and to which that person has no right. According to the Criminal Code, if you breach that definition, you're subject to up to 12 years in prison fines for have assets and not just assets acquired criminally, and to be disqualified from ever again holding office. Now that is scary. Am I right? Well, just you go to Prague, apply for a license to set up business there. We used to bribe the official and see how far you get.

You get the get the British government on your back for breaking the Bribery Act, or the American government when you fall foul of the Foreign Corrupt Practices Act, and you'd better hire the very best lawyer you can afford. You're going to need some pretty good legal representation. The same goes for Canada, Australia and New Zealand. South Africa has a number of laws that make corruption a criminal act, but whether they are enforced depends on who broke them. And that's true in a number a large number of countries. Transparency International monitors corruption levels throughout the world.

If you Google them, you'll find that that website gives a country by country analysis. It's sobering. I was a little rude a couple of minutes ago about the Czech Republic. But the whole of Eastern Europe comes out very badly, most of it worse than South Africa, Canada and New Zealand, by the way, both do better than America, France, Portugal and Ireland. And as for Spain, so what can you do to protect yourself? I'll talk about that in the next video.

See you there.

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