DOING BUSINESS WITHOUT BRIBERYInternational Standards and the Myanmar Context

Making the Change in Myanmar: A Practical Workshop on how Businesses can Combat CorruptionYangon, Myanmar16 March 2016

- 2 -

I. Overview of the United Nations Convention against Corruption and Its Implications for Business

II. Preliminary Observations on Myanmar’s UNCAC Implementation Review

III. Foreign Bribery Laws (i.e. US FCPA, UK Anti-Bribery Act): Why Should Myanmar Care?

IV. UN Anti-Bribery Toolkits and Training Materials for Businesses

Presentation Outline

- 3 -

United Nations Convention against Corruption: In a Nutshell

• First and only legally-binding universal anti-corruption instrument;

• Contains 8 chapters and 71 articles (both mandatory and non-mandatory provisions): Chapter II : Prevention Chapter III : Criminalization and

Law Enforcement Chapter IV : International Cooperation Chapter V : Asset Recovery

• Recognizes the need to combat and prevent corruption through a multi-sectoral, multi-disciplinary approach which engages and empowers a broad range of stakeholders including the public sector, private sector and civil society

- 4 -

UNCAC Signature and Ratification Status (as of 1st December 2015)

- 5 -

UNCAC Provisions Relating to Businesses

Articles 15,16: Bribery of domestic and foreign public officials; Article 18: Trading in Influence: bribe public officials to abuse real/supposed influence to obtain undue advantageArticle 21, 22: Bribery and Embezzlement in the private sectorArticle 23, 24: Laundering and concealment of proceeds of corruptionArticle 26: Liability of legal persons/corporate liabilityArticle 32: Protection of witness and victimsArticle 33: Protection of Reporting Persons/whistleblowersArticle 37: Encourage cooperation with law enforcement authorities

through mitigated punishment or immunityArticle 39: Cooperation between authorities and the private sector

Chapter III: Criminalization and Law Enforcement (Articles 15-42)

- 6 -

UNCAC Provisions Relating to Businesses

Article 9: Establish public procurement system based on transparency, competition and objective criteria in decision-making:

public distribution of information pertaining to procurement procedures/ invitation to tender/ contracts;

Establish an effective system of review and/or appeal to ensure legal recourse and remedies if pre-determined rules are not followed;

Declaration of conflicts of interest and screening procedures for personnel responsible for procurement.

Chapter II: Prevention (Articles 5-14)

Article 12: Take measures to prevent corruption involving the private sector:

Promote the development of standards and procedures design to safeguard integrity of private entities and prevent conflict of interests;

Sufficient internal controls, enhanced accounting & auditing standards, proper maintenance of books and records

- 7 -

UNCAC Implementation Review: Engaging the Private Sector in all Phases

Phase 1:Self-Assessment Review

Phase 2:Peer Review

Phase 3:Final Report and Follow-Up

• Designated public authority engages representatives of relevant public and private sectors, as well as civil society to collect input for

“Self-Assessment Checklist (SACL)”

• Two other countries will review SACL and requests country under review to provide clarification or supporting documents;

• Reviewing countries conduct in-depth country-visit to meet with stakeholders.

• Publish Executive Summary of review (10-15 pages);

• May choose to also make public available the full Country Review Report (200-500 pages);

• Follow-up on recommendations of review.

start 2 months 4 months 6 months

- 8 -

ASEAN Countries and their UNCAC Implementation Review

6 of 10 ASEAN countries have completed their 1st cycle review:

PhilippinesViet NamMalaysia

Brunei Darussalam

Indonesia Lao PDR

Preliminary common observations across the region:

Do not criminalize foreign bribery [Art. 16] Do not comply with Article 26 (liability of legal

persons/corporate liability) Article 33 [protection of whistleblowers)

ASEAN countries are revising criminal codes and anti-corruption laws in accordance with the recommendations made in their UNCAC Country Review Reports.

Cambodia (ES published) Singapore (ES published) Thailand Myanmar

4 ASEAN countries are expected to complete their review within 2016:

- 9 -

- 10 -

From the US Watergate Scandal to Today’s Global Anti-Corruption Drive: A Brief Timeline of US Foreign Corrupt Practices Act and UK Bribery Act

1977 1998

US Congress enacted the FCPA in the wake of the Watergate scandal, in which over 400 US companies were found to have used secret ‘slush funds’ to make illegal campaign contributions in the US and corrupt payments to foreign public officials and falsifying their corporate financial records to conceal these payments.

The US FCPA’s jurisdictional reach greatly amended to include non-US firms and individuals who make a corrupt payment within the US territory;

The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention) came into force in March 1999. The convention aims to reduce corruption by encouraging sanctions against bribery in international business transactions carried out by companies based in OECD member countries. As of 2015, there are 41 member countries.

1999

Between 2007 and 2009, DOJ and SEC brought a combined 111 FCPA enforcement actions.

In 2008, German Siemens engineering conglomerate paid $US 800 million to DOJ and SEC to settle FCPA charges involving illegal payments to foreign public officials through its subsidiaries in 34 countries.

20112007

From the US Watergate Scandal to Today’s Global Anti-Corruption Drive: A Brief Timeline of US Foreign Corrupt Practices Act and UK Bribery Act

Coming into force in July 2011, the UK Bribery Act (2010) is regarded as “the toughest AC law in the world”. Penalties for committing a crime under the Act are a maximum of 10 year imprisonment, along with unlimited fines, and the potential for the confiscation of property, as well as disqualification of directors. The UK Bribery Act Guidance published in early 2013 outlines six principles to prevent corruption.

2014

In December 2014, the UK Serious Fraud Office (SFO) successfully prosecuted its first series of Bribery Act convictions.

Making it to the top ten of the FCPA Chart:

Top 10 monetary penalties paid for violation of the FCPA: (combined USD 4.65 bln)

67

8

910

VimpelCom Holland Telecommunications 397.6

Source: fcpablog.com

Fines? That’s just the tip of the iceberg

Estimated FCPA-related costs(excluding shareholders lawsuits):

Fines paid (US and German authorities combined):

Lawyers fee:

Independent Monitor:

$ 3 Billion

$850 Million$ 1.6 Billion

$52 Million

5% Wal-Mart's market cap lost few days after FCPA allegations broke

$ 18 Billion

FCPA-related costs: FY 2013 = $157 million.FY 2014 = $282 million.FY 2015 = $173 million.FY 2016 = $160 – $180 million (projected)source: www.fcpalawyer.com

2015

source: Steptoe and Johnson LLP US FCPA Enforcement

- 16 -

UN Global Compact / UNODC: e-Learning Tool

- 17 -

UNODC Southeast Asia Regional Plan Sub-Programme 2: Anti-Corruption

UNODC’s anti-corruption efforts in the region focus on supporting countries to meet the requirements of UNCAC by providing technical assistance and facilitating regional exchanges to translate the provisions of the Convention into effective legal frameworks, policies and practices.

Thank you for your attention!

Akharakit (Ryan) KeeratithanachaiyosAnti-Corruption Specialist

Akharakit.keeratithanachaiyos@unodc.org, akharakit@gmail.com

Regional Office for Southeast Asia and the PacificUnited Nations Office on Drugs and CrimesTel: (+66-2) 288-1907Fax: (+66-2) 281-2129