Bribes in International Business 11-22-12


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International business and bribing

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  • Bribes in International Business 11-22-12

    1. 1. Bribes in International Business “Buy Bribes or Bye-Bye Bribes: the Future Status of Bribery in International Commerce” by James Weber and Kathleen Getz-2004 by Andrea Huntieved on 11-20-12
    2. 2. Is it only unethical or does bribery in international business have other consequences? *Retrieved on 11-19-12
    3. 3. • Corruption is Linked to Bribery *• 1)procurement fraud• 2) money laundering• 3) embezzlement of public money• 4) abuse of inside information *• Payer (supplier) and Receiver (demander)• Bribe-If Payer initiates transaction• Extortion-if receiver demands payment
    4. 4. Causes? • Culture? Links between culture and bribery prevalence? • Complex bureaucracies- 1) Firms may feel legitimate channels too complex 2) Unclear lines of accountability-3) Little transparency • Extortion driven by economic factors (low-mid level civil servant demanding side payment) -Petty bribery (grease payment) • A result of firms who feel non-competitive otherwise. Receiver usually an official seeking more power-Grand Bribery • A result of developing countries’ governments? *ved on 11-20-12
    5. 5. Three Effects?• Politically- bribing is anti-democratic. Officials aren’t acting for public good• Socially-corruption spreads moral decay, feelings of hopelessness• Economically- Money used for bribery not put to good use. Leads to increased uncertainty and risks for firms due to distorted competitiveness.
    6. 6. International Efforts Country/Organization Year Action • FCPA (Foreign Corrupt Practices Act)- • 1) no bribing government officials US Congress 1977 • 2)record keeping to increase transparency • Amended 1988-required president to seek international cooperation- 1994 • Issued Recommendations on Bribery in International OECD Organization for Economic Business Transactions Cooperation and Development • 34 countries had ratified 2002 Convention on Combating Bribery of Foreign Public Officials in • Member countries signed making it a crime to offer, 1997- International Business promise, or give bribe to foreign public official Transactions Organization of American States (OAS) signed Inter-American into effect 1997 • 25 of 35 Western Hemisphere countries signed Convention Against Corruption • ‘Requires State Parties to criminalise domestic and United Nations Convention foreign bribery, and sets guidelines on punishment and 2005 against Corruption (the UNCAC) enforcement including confiscation of assets’ • 150 State members as of 2011Retrieved on 11-20-12
    7. 7. Private and Civil Society Efforts*• Caux Roundtable- (1994) made of business leaders from Japan, European and North American countries• Global Sullivan Principles-Rev Leon Sullivan *--support economic, social and political justice by companies where they do business• C2 Principles-Hess and Dunfee *- 12 Statements‘emphasize developmental systems to monitor business activities in an effort to prevent bribery’• Transparency International (TI)-country specific. Public Reports• PWYP-Publish What You Pay-targeted specific companies
    8. 8. Did it help?*Retrieved on 11-20-12
    9. 9. Conclusion Ongoing effort required and more transparency Up to the Self-regulation and compliance of firms Punishment: confiscation, fines, compensations for damages Global Enforcement Report: US, UK, Germany, S. Korea *Retrieved on 11-20-12
    10. 10. SourceBuy Bribes or Bye-Bye Bribes: The Future Status ofBribery in International CommerceJames Weber and Kathleen GetzBusiness Ethics Quarterly, Vol. 14, No. 4, BusinessEthics in a Global Economy (Oct., 2004), pp. 695-711