Israel has received a high mark for its enforcement of laws against international bribery offenses.The Transparency International organization has for the first time given Israel the best rating in its index for corruption in international transactions, published today. The ranking constitutes recognition of Israel as a country actively countering corruption in the international business arena. In 2015, Israel received the lowest ranking in this category.
Israel was awarded the highest ranking because of its recent stepped-up enforcement and large number of investigations against Israeli companies and businesspeople for bribery of public servants in foreign countries in which they operate. Bribing a foreign public servant has been listed in Israeli law as an offense for a decade (since 2008), but the law enforcement authorities have taken action in such cases only in the past two years. Enforcement has reached a peak in recent months with breakthroughs taking place in three out of five investigations.
In one of these cases, Arison group subsidiary Shikun & Binui allegedly bribed a public servant in Kenya to promote projects in the country. Several months later, "Globes" broke the story of Romanian politician who allegedly received a bribe from Shapir Engineering & Industry Ltd. (TASE:SPEN) to ensure that the company won a €10 million contract. A new affair is under investigation involved alleged bribery in the defense industries. Senior executives in Israel Shipyards and a leading figure in the defense sector were arrested for alleged bribery in Africa designed to ensure defense deals amounting to tens of millions of dollars.
These affairs follow the alleged bribe paid by Israeli billionaire businessperson Beny Steinmetz to the then-president of Guinea and his wife for metal mining licenses that generated hundreds of millions of dollars in profits and the dramatic settlement recently signed by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), in which the company paid $75 million to have a criminal case closed against it for making corrupt payments to public servants in Russia, Ukraine, and Mexico.
Transparency International is a global non-profit organization for combating governmental and business corruption. The organization operates through a worldwide coalition with over 100 member countries. Its main goal is to take action against corruption by instituting norms of ethics and transparency. Its Israeli branch, Transparency International Israel, is headed by former National Labor Court President Judge (ret.) Nili Arad.
Among other things, Transparency International's report is based on the auditing procedures conducted for Israel by a working group for prevention of corruption in international transactions of OECD, which was successfully concluded in November 2017. Representatives of the organization visited Israel, and the Israeli branch of Transparency International presented to them the measures being taken in Israel to combat bribery of foreign public servants.
In the framework of the comprehensive report published today by the organization, Israel's efforts in recent years through an inter-ministerial team headed by the criminal division manager in the State Attorney's Office to enforce the law against bribing foreign public servants are recognized. This team includes various lawyers in the State Attorney's Office and representatives from Israel Police, Israel Tax Authority, and Israel Money Laundering and Terror Financing Prohibition Authority in the Ministry of Justice. Cases of bribing a foreign public servant are investigated by Israel Police national fraud squad Lahav 433 and handled by the Tel Aviv District Attorney's Office (Taxation and Economics).
The report noted the stepped-up enforcement and improvement in international cooperation in enforcement of laws against bribery of foreign public servants; measures taken by the Tax Authority and the Money Laundering and Terror Financing Prohibition Authority; and increased awareness of offenses of bribery of foreign public servants and criminal responsibility of corporations in the public and business sectors.
The report mentions the first case in which the law against bribing overseas governmental authorities was enforced - against NIP Nikuv International Projects. The company confessed and was convicted of promoting a NIS 33 million deal in Lesotho by paying a $500,000 bribe. The company paid NIS 4.5 million in fines and confiscations under a plea bargain.
The report also mentions the conditions settlement with Teva under the Securities Law and the various investigations being conducted by Lahav 433, accompanied by the State Attorney's Office Taxation and Economics Division, including the case of Shikun & Binui.
Other countries sharing Israel's high rating include the US, Germany, UK, Italy, Switzerland, and Norway.
Steinmetz, all of the suspects in the Shikun & Binui affair, Shapir Engineering, and Israel Shipyards are only suspected of bribing a foreign public servant. The criminal proceedings are at a preliminary investigatory stage and have not yet been sent to the State Attorney's Office for a decision about whether to file indictments. All of these suspects, who have not been tried, are innocent until proven guilty.
Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2018
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