Combating Bribery and Corruption

OECD

DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS

NEW ZEALAND: PHASE 2

REPORT ON THE APPLICATION OF THE CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS TRANSACTIONS AND THE 1997 RECOMMENDATION ON COMBATING BRIBERY IN INTERNATIONAL BUSINESS TRANSACTIONS  

EXECUTIVE SUMMARY

The Phase 2 Report on New Zealand by the Working Group on Bribery evaluates New Zealand’s implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Overall, the Working Group finds that New Zealand has engaged in significant efforts to implement the Convention including the establishment of nationality jurisdiction over the foreign bribery offence and recent efforts to improve awareness about the Convention, but that stronger efforts are necessary in several key areas. The Working Group finds that New Zealand should broaden the criteria for the criminal liability of legal persons for foreign bribery.

The Working Group finds that prosecution and conviction of companies that engage in bribery is unlikely because applicable case law sets very high barriers to any corporate criminal liability. It recommends that the laws be changed to make companies more accountable. The Working Group also recommends that New Zealand clarify and expand the role of the Serious Fraud Office in the investigation and prosecution of foreign bribery cases and that it allow for the sharing of information about suspected criminal offences between the tax and law enforcement authorities. New Zealand should also ensure that the foreign bribery offence does not require the interpretation of any foreign law for its application and clarify the scope of the facilitation payments exception so that it complies with the narrow exception in the OECD Convention. New Zealand does not yet have a conviction for foreign bribery, but it has some investigative activity underway.

The Report also highlights a number of positive aspects in New Zealand’s fight against foreign bribery including New Zealand’s current proposed legislation to facilitate seizure and confiscation of the proceeds of crime, including bribery, its efforts to make the extradition system easier to use by requesting states and its efforts to encourage whistleblowing in appropriate cases. The Working Group also welcomed New Zealand’s adoption of tax legislation expressly prohibiting the deduction of bribes, but recommended that it apply to all foreign bribe payments, including bribes paid through intermediaries.

The Report, which reflects findings of experts from Australia and Korea, was adopted by the OECD Working Group along with recommendations. Within one year of the Working Group’s approval of the Phase 2 Report, New Zealand will report to the Working Group on the steps that it will have taken or plans to take to implement the Working Group’s recommendations, with a further report in writing within two years. The Report is based on the laws, regulations and other materials supplied by New Zealand, and information obtained by the evaluation team during its on-site visit to Wellington and Auckland. During the five-day on-site visit in May 2006, the evaluation team met with representatives of New Zealand government agencies, the private sector, civil society and the media. A list of these bodies is set out in an annex to the Report.