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Laws and law enforcement on bribery of foreign public officials: international practices and applications for Vietnam

4/6/18
Vietnam has increasingly been taking part in economic integration and globalization. In such a context, there is an emerging trend of investment by domestic investors in other countries, which may create risks of bribery of foreign public officials or international organizations to obtain commercial advantages in international investments. In 2015, Vietnam criminalized bribery of FPOs and officially recognized “giving bribes to FPOs, officials of international public organizations” is a criminal act. This shows Vietnam’s concern about maintaining fair competition in business, ensuring good governance, and promoting international co-operation in fighting against corruption.

The new provisions entered into force on January 1, 2018, despite a low level of knowledge as well as awareness of law practitioners and businesses on bribery of FPOs. To ensure that the new provisions are enforced, it is useful to provide recommendations and advice on mechanisms and solutions for the comprehensive and effective enforcement of the law on bribery of FPOs. It is the first time that the 2015 Penal Code imposes criminal liability on giving bribe to FPOs; therefore, it is essential to conduct a comparative study on international practices to identify solutions for effective law enforcement, including guidelines on law application and settlement of other related matters. Difficulties and challenges in law development and enforcement in terms of bribery of FPOs from other countries should be examined comprehensively for lessons learnt for Vietnam.

Before offering some recommendations, we reviewed the current legal framework on bribery of FPOs of some selected countries and analyzed their law enforcement mechanisms regarding how anti-foreign bribery law works and/or does not work and why. We selected the legal systems of different countries for comparative analysis. Five country cases are selected as they have criminalized bribery of FPOs. These include the United States (“the US” with the Foreign Corrupt Practices Act (FCPA) that addresses the problem of international corruption by criminalizing bribing foreign government officials very early since 1977); the United Kingdom (“the UK”, ratifying the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention) in 1998 and reforming its anti-corruption law by the enactment of the 2010 Bribery Act); Japan (which criminalized bribery of foreign public officials since 1998); South Korea (with the Act on Preventing Bribery of Foreign Public Officials in International Business Transactions (FBPA), taking effect on February 15, 1999); and, China (criminalizing bribery of FPOs through amending  the PRC Criminal Law, which came into force on May 2011).

Anti-bribery of FPOs with relevant considerations including the legal framework, elements of the offence, criminal liability of legal persons, jurisdiction of the law, the law enforcement has been analyzed and discussed from comparative perspectives with practices of the US, the UK, South Korea, Japan and China. Experiences from the five country cases with different levels of legal framework development and law enforcement on bribery of FPOs, however, show that strong institutional will to improve legal frameworks is key to combating bribery of FPOs.

From the experiences of the US (see Box 1 for example) and the UK, tools and practices such as a comprehensive legal framework, detailed guidance, case law, specialized units, detecting allegations through foreign requests for legal assistance, availability of concerned information, etc., are all important elements in determining the success of national efforts to prevent, detect and sanction bribery of FPOs. The lessons learnt from the US and the UK are to encourage whistleblowers to come forward, with good protections provided both under the law and in practice. Reporting channels are also made available and improved. (see Box 1)
 
The cases of South Korea and Japan show efforts in improving their systems to fight bribery of FPOs, although they still have some weaknesses such as unclear definition of foreign public officials, a lack of relevant case studies focusing on bribery of FPOs, a lack of effective mechanisms for self-reporting and whistleblowing. For China, the additional provision on foreign bribery seems to be have been added merely for compliance with UNCAC.

We acknowledged that criminalization of bribery of FPOs is not only an issue of criminal law but is also related to the problem of legal mechanisms to prevent and detect this offense in businesses. Therefore, to detect and handle bribery of FPOs, there is a need for comprehensive mechanisms and solutions, including international co-operation in the fight against bribery of FPOs. This study also contributes to enhancing the effectiveness of the legal framework on anti-corruption in general, and to reforming the Law on Anti-corruption in particular.

The 2015 Penal Code does reflect the special feature of foreign bribery through the element of “FPOs” or “officials of international public organization”. However, it does not define the concept of FPOs. In addition, through comparative analysis as well as opinions received from interviews, it can be concluded that the way of criminalizing giving bribes to FPOs under the Penal Code of Vietnam neither reflects all UNCAC’s special features nor fully complies with requirements of it. In particular, the combination of bribery of FPOs with domestic bribery in legislation is inappropriate to correctly determine what elements constitute bribery of FPOs. Further, such a combination does not show other differences between foreign bribery and domestic bribery, including the briber (often legal persons under the laws of other countries), some requirements of the intent and purpose (the scope as well) of the offense. 

Regarding the mechanism of detecting bribery of FPOs, it should be noted that although the Law on Anti-corruption recognizes awarding whistleblowers, giving bribe is not classified as corruption crime as provided in the Penal Code, so whistleblowing of foreign bribery has not fallen under the scope of this law. In addition, the Law on Anti-corruption has a provision on encouraging self-detection of corrupt acts in businesses, but it is not clear enough and it excludes the act of giving bribes. Unlike the other five countries’ legislations, the Law on Anti-corruption lacks provisions on self-reporting and detecting bribery of FPOs within businesses. These are key obstacles for Vietnam in the detection of bribery of FPOs.

Reviewing the current legal framework on mutual legal assistance (MLA) in criminal matters, extradition, joint investigation, transfer of criminal proceedings shows that the framework still has loopholes that may negatively affect the effectiveness of international cooperation in investigation, prosecution, adjudication and execution of judgment on bribery of FPOs. Current laws do not regulate in detail the competence and procedures for dealing with issues raised by the requests of MLA from other countries like, for example, urgent arrest of persons before receiving official requests of extradition; freezing assets or limitation of asset transfers, or seizing assets in Vietnam based on the orders of a foreign court. The Law on Mutual Legal Assistance and the treaties on MLA in criminal matters between Vietnam and other countries only mention transferring criminal proceedings but have not yet stipulated for general principles. The 2015 Criminal Procedural Code does not define this matter either. Although Vietnam has taken part in some bilateral, multilateral and regional cooperation, its actions are not adequate. Moreover, the fact that Vietnam does not directly apply international treaties, makes international cooperation even more difficult.

In summary, Vietnam still lacks necessary mechanisms to enforce provisions on bribery of FPOs and officials of international public organizations under the 2015 Penal Code. The capacity of law enforcement officials in criminal cases of transnational crimes is still limited. Mechanisms for cooperation in criminal proceedings, especially international cooperation in investigation, prosecution, and adjudication of criminal cases are also unclear and difficult to implement.
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