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Playing by the Rules When Rules Don’t Exist

By Neal Asbury
Thursday, 28 Apr 2011 08:09 AM Current | Bio | Archive

The Organization for Economic Cooperation and Development (OECD) was founded in 1947 to make individual governments recognize the interdependence of their economies.

In a world devastated by World War II, this helped pave the way for a new era of world cooperation. The OECD recently held its Anti-Bribery Convention and released a new study that found “most governments are not meeting their international commitments to clamp down on bribery and corruption in international business, with only five signatories to the OECD Anti-Bribery Convention having sanctioned individuals or companies in the past year.”

It will not surprise you to learn that the U.S. “continues to set the benchmark in the fight against corruption that more countries must follow.” Germany also was singled out for their anti-bribery standards.

Five of the 38 nations that are signatories to the convention imposed penalties on individuals or firms last year; the U.S. sanctioned eight individuals and 11 companies; Germany sanctioned three individuals; the U.K. sanctioned two individuals and one company and France and Switzerland each sanctioned one individual. A total of 260 investigations are currently ongoing in convention countries.

Before we congratulate ourselves, the truth is when we play by the rules and the rest of the world doesn't, the U.S. is at a huge disadvantage and often loses out on foreign trade and investment opportunities.

When countries look the other way when government officials consider bribes as a normal way of doing business, it undermines the precepts of free and fair trade. When ethical business dealings put nations at a disadvantageous, the system is broken.

Corruption is a difficult subject to get your arms around and is even more complicated when discussing it in the context of the developing world. As corruption occurs in the shadows, it isn't easily probed.

However, it is omnipresent and overwhelming. The World Bank believes corruption costs the global economy more than $1 trillion per year.

As an exporter to more than 100 countries, it is hard to break the inescapable gravity of corruption. It’s not right, and it’s not fair, but until more countries stop ignoring corruption, the world economy can never reach its full potential and the scourge of poverty will be an incurable disease.

It is encouraging the U.S. government is using its intelligence community to investigate suspicions of foreign corruption. And for at least a decade, pressed by industry, it has mustered those resources to uncover and try to defeat foreign attempts to win deals from American companies through bribery.

The U.S. Department of Commerce released a report suggesting U.S. companies have lost billions of dollars in deals because of foreign bribery in the last year. About 70 percent of the suspected bribery, it says, was done by companies from countries that, like the United States, signed an international convention to prohibit corruption just three years ago.

The U.S. Justice Department has prosecuted more than 30 people for violation of the Foreign Corrupt Practices Act (FCPA) which in 1977 made it illegal for U.S. companies to bribe foreign officials, political parties and candidates. Unfortunately our trading partners and competitors are not nearly as committed to rooting out corruption as they should. This means lost opportunities for American companies and lost job opportunities for American workers.

While the Somalia pirates have gotten their share of attention on the world stage, there is another form of piracy that deserves greater attention – it is corruption and bribery condoned by foreign governments.

I have an idea to improve the situation. If President Barack Obama wants to meet his commitment to double U.S. exports during the next five years, instead of apologizing and bowing to foreign governments’ maybe he can make it clear that if they want U.S. help, they must play by the rules. This means making a serious attempt to tackle corruption.

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The Organization for Economic Cooperation and Development (OECD) was founded in 1947 to make individual governments recognize the interdependence of their economies. In a world devastated by World War II, this helped pave the way for a new era of world cooperation. The...
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2011-09-28
 

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