For the third time, an Organisation for Economic Co-operation and Development’s Phase 3 working group has reported that a country and party to the OECD’s anti-corruption convention has failed to bring a single foreign bribery case to trial.
The working group acknowledged in its report that Chile had made progress, as evidenced by its recently proposed anti-corruption measures, which provide for value confiscation provisions, jurisdiction, corporate liability, and greater penalties for foreign bribery and a failure to report offenses.
It declined to consider the likely effectiveness of the proposed legislation, however, or to factor them in for the purpose of its Phase 3 evaluation.
The lead examiners recommended that Chile had to raise awareness of Article 5 of the anti-corruption convention among Chilean judges, prosecutors, investigators and relevant government officials.
Four particular concerns emerged about enforcement: inadequate investigation; the jurisdiction to prosecute Chilean companies for activities by non-Chilean nationals or residents; inaction when it came to seeking the co-operation of foreign authorities; and coordination among the Chilean authorities.
The lead examiners recommended that Chile improve its internal coordination and intelligence gathering in foreign bribery cases by ensuring that prosecutors and law enforcement authorities inform UNAC, the specialized anti-corruption agency, of any foreign bribery allegations as soon as they know them, along with mutual legal assistance requests; and by establishing a national database of all foreign bribery cases.
Considerable concerns were expressed about the lack of effective sanctions for the foreign bribery offences and the application of the two-year limitation period for foreign bribery offences, which generally require much longer to bring to trial.
They observed that Chile continued to depart from established international standards by not requiring professional non-financial entities, such as lawyers, accountants and auditors, to report suspected money laundering transactions, especially those related to foreign bribery.
Examiners showed concern regarding the reduced scope for external auditors of listed and special corporations to report crimes.
And they criticized the fact that bank secrecy rules inhibited not only Chile’s own bribery investigations but prevented it from complying with requests for mutual legal assistance in foreign bribery cases.
The working group recommended that there should be guidance on the elements of an effective model for preventing foreign bribery with an emphasis on anti-corruption reporting channels, protection for whistleblowers, policies on gifts and donations and effective compliance policies for small and medium-sized enterprises.
Although Chile was praised in a few areas, the overall evaluation suggests that such improvements only represent truly limited progess.
Alistair Craig is a commercial barrister practicing in London.