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Jatinangor, 21 Oktober 2019

Resta Syafira Nurfiana

 Implementation Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions

Resta Syafira Nurfiana*

Abstract
International treaties are one source of transnational business law used by institutions or
states to be used in business transactions. The OECD Anti-Bribery Convention
(officially Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions) is an anti-corruption convention of the OECD
aimed at reducing political corruption and corporate crime in developing countries, by
encouraging sanctions against bribery in international business transactions carried out
by companies based in the Convention member countries. The problem discussed in this
paper is how to implement the Convention on Combating Bribery of Foreign Public
Officials as one of the Convention, which explains general provision regarding
combating bribery and relating in International Business Transaction. It can be proven
that International law does posses some significant points of contact with transnational
commercial law.1 as we know that, Law of Treaties provide guidance principle
profession how the law creates must be concluded. There is no police power, so the law
treaties are a solution to answer the state willing bound to observe the law. It is more
civilized to follow the law as our connections.

Keywords: Convention on Combating Bribery of Foreign Public Officials,

Transnational Business Law, countries.

1
Roy goode, Transnational Commerial Law, 3 August 2015, p. 90.
A. Literature Review
The Relation Between Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions
Historically, bribery has been a particular problem in countries that have
unstable economics and or governements. Bribery can occur in international business
transactions, and that has also been regulated in an agreement under the auspices of
an international organization, the OECD. OECD issued a convention named The
OECD Anti-Bribery Convention. The OECD Anti-Bribery Convention (officially
Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions) is an anti-corruption convention of the OECD aimed at
reducing political corruption and corporate crime in developing countries, by
encouraging sanctions against bribery in international business transactions carried
out by companies based in the Convention member countries. Its goal is to create a
truly level playing field in today's international business environment. The
Convention requires adherents to criminalise acts of offering or giving bribe, but not
of soliciting or receiving bribes. The OECD Convention is not a law that applies to
specific individuals or companies but rather an agreement between countries to be
established as domestic regulations.
Transnational bribery or foreign bribery is a bribe that occurs through a cross-
border legal jurisdiction involving foreign public officials. Transnational corruption
is the act of offering, promising, or giving undue money or other benefits, either
directly or through intermediaries to foreign public officials for the institution or
other third parties, in an effort to persuade the official to do or not do his job to
achieve or retain or other improper advantages in carrying out international business
(Article 1 OECD Anti-Bribery Convention).2 In business transactions, bribery is
unethical and has the effect of damaging the economic system and governance
because it shows the advantageous nature of those who pay bribes. 3

2
Fransiska Friska Intan Cahyani, Kebijakan Indonesia belum meratifikasi Konvensi OECD on
Combating Transnational Bribery Periode 2014-2017, Journal of International Relations,
Volume 4, Nomor 4, 2018, p. 878.
3
Carl, Pacini, Judyth A. Swingen, The Role of the OECD and EU Conventions in Combating
Bribery of Foreign Public Officials, Journal of Business Ethics, June, 2002.
 Implementation Convention on Combating Bribery of Foreign Public Officials
(OECD Anti-Bribery Convention) in International Business Transaction
The Convention is substantively focused instrument those who pay bribes to
public officials to win or maintain business abroad. The thirty-seven parties, which
include all thirty OECD countries and seven non member states, have ratified the
convention. 4 The Convention considers bribery as a widespread phenomenon in
international business transactions, including trade and investment, which raises
serious moral and political concerns, undermines good governance and economic
development, and distorts international competitive conditions. 5 The bribery is
furthermore deemed as a common method for companies to gain higher returns by
winning contracts or concessions on more profitable terms. According to
Osbourne30, the bribery is made by monopoly power, over regulation, discontent
with rewards, strong kinship ties and rapid change.
The Convention however only covers corruption to the extent it is related to
business transaction. Moreover, it only covers active corruption, which is the
promise, offering or giving of a bribe.
One of the Types of Corruption is Bribery. It would be stated as bribery when
committed intentionally, the promise, offering or giving to for the official himself or
herself or another person or entity, or to a foreign public official or an official of a
public International organization, directly or indirectly, of an undue advantage, for
the official act or refrain from acting in the exercise of his or her official duites, in
order to obtain or retain business or other undue advantage in relation to the conduct
of International business. It is included bribery in private sectors.6
As we know that, article 9 of the OECD Convention also determines cross-
border legal assistance in dealing with bribery cases. Paragraph XIII of the 2009
Recommendation for Further Combating Foreign Bribery also addresses MLA and,

4
Sabine Konrad, “International Law and the Fight against Corruption”, ASIL Proceedings,
2008, p.203.
5
OECD, (2011). Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions, OECD: OECD Publishing, p. 6.
6
UNCAC 2003, Art (21).
 inter alia, recommends that Parties consider ways to facilitate MLA in foreign
bribery cases, both between each other and with non-Parties.7
Even though the current Convention is a strong first step toward achieving
functional equivalence between the measures adopted by the Convention’s signatory
countries, more precise standards should be adopted for the statute of limitations and
sanction requirements in order to ensure the uniform implementation of the
Convention. The Convention’s signatory parties should adopt a minimum five-year
statute of limitations requirement, adopt a five-year maximum term of imprisonment
for natural persons convicted of bribery, and impose a fine of not less than $175,000
USD for individuals convicted of bribery. These amendments to the Convention will
aid the consistent application of the Convention’s principles and promote functional
equivalency between the measures enacted by signatory countries, without requiring
perfect uniformity or fundamental changes in parties’ legal systems. 8

B. Methodology
The Method of this research used specification of descriptive analysis, which
describes regulation between Convention Combating Bribery of Foreign Public
Officials in International Business Transaction. Data collection is carried out
through literature seeking expert references or articles from national or international
journals. In addition, in an effort to find information to support the substance of this
paper to access cases related to the Convention between Combating Bribes of
Foreign Officials and transnational business transactions.
C. Analysis
Under the function of the International Agreement where the agreement exists
based on harmonization and unification of the law that deliberately formed into a
universal rule. Parties who are part of the convention must comply with all articles

7
OECD, (2012), Typology on Mutual Legal Assistance in Foreign Bribery Cases, (OECD:
OECD Publishing,), p.3.
8
Christopher K. Carlberg, A Truly Level Playing Field For International Business: Improving
The OECD Convention on Combating Bribery Using Clear Standards, Volume 26, Issue 1,
hlm.111.
 in the agreement. The convention was born from a typical conflict of laws.
Therefore the application of this convention can be seen in the cases below, such as
In 2017, the former President Director of P.T. Garuda Indonesia 2005 - 2014
was allegedly taking bribes from the founder of P.T. Mugi Rekso Abadi in the
procurement of an Airbus A330 aircraft by Rolls Royce (Movanita, 2015). The
K.P.K. also named P.T. Mugi Rekso Abadi's founder as a suspect giving bribes to
the former Garuda Managing Director in the case of procuring aircraft and aircraft
engines from Airbus S.A.S. and Rolls Royce Plc to P.T. Garuda Indonesia. Rolls-
Royce gave the bribe to Emirsyah regarding the procurement of aircraft and 50
Airbus A330-300 aircraft engines for P.T. Garuda Indonesia (Persero) Tbk in the
period 2004-2015. From the results of the investigation, the bribe received by
Emirsyah reached € 1.2 million and the U.S. $ 180 thousand. Bribes in the form of
goods received by Emirsyah amounting to the U.S. $ 2 million spread in Indonesia
and Singapore. Since bribery of a foreign public official is the focus of this
Convention this phrase is defined in Art 1(4)46 and paras 12-19 of the
Commentaries.9
The OECD Convention is not a law that applies to particular individuals or
companies but rather an agreement between countries to be established as domestic
regulations. Indonesia, which is positioned as an observer in the OECD, does not
feel that it has an interest or obligation to ratify the convention. In OECD
conventions, countries that are unable to apply the agreements will have
consequences in the form of sanctions (OECD Council, 1996). The state and sub-
state actors must have the same view to be able to fulfill their commitments in
international law that have been adopted. Because at international conventions, the
government of a country is required to be able to influence the behavior of all public
entities in the country. The failure of the government will be seen if the decision
taken is not under the interests of the country and its people (Abraham Chayes,
1995).10

9
Indira Carr and Opi Outhwaite, The OECD Anti-Bribery Convention Ten Years On, Volume 5,
Manchester Journal of International Economic Law, Issue 1:3-35, 2008, hlm. 18.
10
Fransiska Friska Intan Cahyani, Kebijakan Indonesia belum Meratifikasi Konvensi OECD on
Combating Transnational Bribery Journal of International Relations, Volume 4, Nomor 4,
2018, hal 878-886.
 When can an international agreement be said to be successful? Relevant
factors include, an agreement might have universal participation and compliance,
but if it is “shallow” and asks little of parties, can it be said to be successful?
International agreements are not particularly successful if they are “flight control”
agreements.5 The success of an agreement must be measured in the context of the
breadth, depth of the challenge and demonstrating causality.
If we see that case, governments are more likely to conclude agreements if they
reinforce behavior that states are already active in. It is necessary to consider
whether a given international agreement on an issue changes parties’ behavior, or
merely reflects changed behavior.11
The scope and mounting costs of bribery in International business have reached
a critical point where they are havig a detrimental impact on international trade and
finance.
Public officials in commercial activities while serving as public officials is in the
absence of a permit from its supervisor, generally a public official may not
participate in commercial activities while serving as a public official. In addition to
the above, under the disciplinary regulation, public officials are prohibited from
working in foreign companies, foreign consultancy companies or foreign non-
governmental organisations. Public officials are also prohibited from engaging in
activities together with their superiors, peers, subordinates, or other persons inside
and outside their work environment for the purpose of personal, group, or others
benefits, directly or indirectly detrimental to the country.
In Indonesia, There are no formal regulations for private commercial bribery
below Indonesian law Measures covered by the Anti-Corruption Law will only
apply to private commercial bribery where there is a loss caused by state finance or
the economy.
Here are some areas that were released. The convention requires states parties to
Criminalize bribery on the supply side (active bribery) of a foreign public official in
International Business Transaction.

11
Beth Simmons, “Treaty Compliance and Violation”, Annual Review of Political Science,
2010, 13, p. 275.
D. Conclusion
Implementation of international agreements in international business
transactions can be seen in one of the international treaties, namely the Convention
on Combating Bribery of Foreign Public Officials in International Business
Transactions. The convention aims to protect international commercial activities.
Transnational bribery or foreign bribery is a bribe that occurs through a cross-border
legal jurisdiction involving foreign public officials.The Organisation for Economic
Co-Operation and Development's (OECD's) Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions is an important step
towards leveling the playing field for foreign companies competing for business
abroad.