Israel failing to combat bribery of foreign officials - report

Transparency International covers 37 of the 39 signatories of the 1997 anti-bribery convention, and lists Israel as one of eight countries that undertakes no enforcement of the convention.

Israel is not acting as required to enforce the ban on bribing public officials of foreign countries, states Transparency International in its eighth annual "Country Enforcement of the OECD Anti-Bribery Convention, Progress Report" for 2012. The report, which covers 37 of the 39 signatories of the 1997 convention, lists Israel as one of eight countries that undertakes no enforcement of the convention. The other countries are the Czech Republic, Greece, Estonia, Ireland, New Zealand, Poland, and South Africa.

The seven countries listed as undertaking "active enforcement" of the convention are Denmark, Germany, Italy, Norway, Switzerland, the UK, and the US. The twelve countries which undertake "moderate enforcement are Argentina, Australia, Austria, Belgium, Canada, Finland, France, Japan, the Netherlands, Spain, South Korea, and Sweden. The ten countries which undertake "little enforcement" are Brazil, Bulgaria, Chile, Hungary, Luxembourg, Mexico, Portugal, Slovakia, Slovenia, and Turkey.

Transparency International concludes that the overall level of enforcement remains inadequate, due to inadequate government support, and that rigorous monitoring of countries by the OECD Working Group must continue.

Transparency International says that the cumulative number of cases of bribery by all the 37 countries in the 2012 report rose by 144 cases from 564 cases in 2010 to 708 cases in 2011. The number of investigations underway rose to 286 cases at the end of 2011 from 234 cases a year earlier.

According to OECD, 66 people were jailed for foreign bribery and criminal or civil sanctions were levied against more than 250 individuals at 100 companies.

As for Israel, Transparency International says, "There are no cases and there were no investigations in 2011. The Israeli Police indicated that with regard to charges of foreign bribery brought in the FBI’s "FCPA sting operation" in the US, it is conducting a preliminary examination into allegations involving an Israeli businessman and an Israeli company. In the framework of this preliminary examination, the Israeli police have requested information on the case from US authorities. (According to the information published by the US Department of Justice and reported by the media, three of the four Israelis involved in this case reside in the US and conduct business there.) In February 2012, it was reported that the US Department of Justice had abandoned this foreign bribery case, dropping the prosecution of 16 businessmen who had been charged."

It continued, "According to a leading Israeli newspaper Israeli Police launched at least four investigations in December 2008 into bribery allegations against defense establishment officials. The first such probes reportedly started after the introduction five months earlier of the Israeli law that outlawed bribing foreign public officials. Another leading newspaper reported at the time that one investigation involved alleged bribes of six to nine per cent paid out by two state-owned Israeli companies to Indian officials in a $1.5 billion missile contract. According to this report, the Indian media had previously reported allegations about bribes paid in the sale of Barak missiles to India, including accusations against Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Tafal. The Israeli companies denied any wrongdoing. None of the investigations resulted in criminal charges, apparently because the alleged bribery occurred before the law took effect."

Transparency International says, "In 2010, the Ministry of Defense introduced a declaration and a commitment regarding foreign bribery required from exporters in defense marketing and export license applications." Companies had until the end of 2010 to adopt and implement corporate anti-bribery compliance programs. "The Ministry of Defense reports that currently more than 80% of these exporters have committed to adopting anti-corruption compliance programs," says Transparency International.

Transparency International also mentions the blacklisting by India of Israel Military Industries Ltd. (IMI) for ten years over its involvement in a corruption scandal there. The case was not investigated by the Israeli authorities because it took place before the law came into effect.

Transparency International says that ASHRA - The Israel Foreign Trade Risks Insurance Corporation Ltd. became a member of the OECD Export Credit Group in April 2011.

Transparency International recommends, "Establish the foreign bribery offences as an enforcement priority, and develop new methods and tools that will allow for actual enforcement. Raise awareness about the foreign bribery offence and the responsibility of boards of directors. Provide additional guidelines to companies for countering bribery and implementation."

Published by Globes [online], Israel business news - - on September 9, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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