by Michael Connor
Export credit agencies, which finance large amounts of international trade, must strengthen their enforcement of anti-bribery measures, according to a new report from Transparency International, a non-profit organization that focuses on global anti-corruption programs.
The report found that while most export credit agencies (ECAs) have formal policies that prohibit support for bribe-tainted transactions, they do not require applicants to have management controls to deal with bribery and none have issued guidance to applicants describing elements of an appropriate anti-bribery program.
Export credit agencies underwrote more than US $1.5 trillion in transactions in 2008, according to Transparency International, and have been “key drivers” in recovery from the recent global economic downturn. In 2009, the Group of 20 committed US$250 billion to ECAs and multilateral development banks to spur economic activity.
The report is based on responses from 14 participating ECAs from Belgium, Canada, France, Germany, Hungary, Japan, Norway, Slovakia, Republic of Korea, Sweden, Switzerland, the United Kingdom and the United States of America.
The report found that while all ECAs require no‐bribery declarations from financing applicants, there are “notable differences” in practices affecting corporate affiliates, joint ventures and other business partners. In addition, “reported practice varies for sanctions for false statements, verification and updating.”
Anti-corruption advocates say bribery is a major hindrance to sustainable development and especially hurts the economies of developing countries. The World Bank estimates that more than one trillion dollars in bribes are paid each year out of a world economy of 30 trillion dollars
“Proper staff training, meaningful due diligence and effective management controls help to prevent and detect bribery, which in turn ensures that both exporting and importing countries get the most value for their money,” said Marcela Rozo, Programme Manager, Public Contracting at Transparency International.
Transparency International said it intends to issue a set of “benchmark” recommendations that build on the information gathered in this report.
The report – Export Credit Agencies Anti-Bribery Practices 2010 – was prepared by consultant Michael Fine of NXG Global Law & Compliance under the direction of Transparency International’s Michael Wiehen and Marcela Rozo.