The Sleazy State: Britain 'resisting moves to halt bribes to officials': Policing trade

BRITAIN is resisting international efforts to outlaw the payment of bribes by Western companies to foreign government officials to secure lucrative contracts in developing countries.

A 'working party on illicit payments', set up by the Organisation for Economic Co-operation and Development, representing the main industrialised nations, is drafting a recommendation for all members to adopt a joint strategy to eliminate corruption in international trade. But the British and Japanese delegations have refused to accept a recommendation to force all 24 OECD countries to adopt measures to help stamp out such illicit payments.

The draft OECD statement states that all companies should review a range of national laws. But the working party is split over what happens next.

The United States delegation is pressing for a statement that all countries will adopt all measures and that the OECD should then monitor progress in each country. The two toughest proposals are that all countries should pass legislation to make the payment of a bribe in a foreign country illegal, and to change the law to prevent such illicit payments being tax deductible. Britain has counter-proposed that countries should have the flexibility to take action only where they consider it necessary.

The French and German delegations are also resistant to criminalising bribery overseas and stopping tax deductibility, but only the British and Japanese delegations have stated categorically they will not accept them.

The working group is meeting in April to try to achieve a consensus. The statement which is finally adopted will be put to a meeting of all OECD finance ministers in June.

The US is the only country to have made the payment of bribes to foreign nationals illegal under the Foreign and Corrupt Practices Act. In the UK, companies can claim tax relief on bribes, entering the amount under a heading such as 'commissions' or 'cost of sales'.

According to Transparency International, an international group formed last year to campaign for the creation of a code of business ethics to eliminate or minimise bribery, Britain and Japan have been the most 'recalcitrant' since the working party was set up in 1990.

Laurence Cockcroft, secretary of TI in the UK, said: 'Strong opposition from the UK and Japan has impeded the group's ability to reach an agreement which can be recommended to OECD finance ministers in June. There is little doubt that member states have been pressed by their national confederations of large corporations not to support this initiative, or at least to ensure it is watered down to the extent where it is ineffective.'

One of the most vocal supporters of the OECD initiative, Daniel Tarullo, the US Assistant Secretary for Economic and Business Affairs, said: 'International co-operation on this issue is vital and the OECD is an appropriate forum to foster it. All OECD countries should take specific concrete actions to deter commercial-related bribery.'

The Department of Trade and Industry denied Britain was dragging its feet. It said: 'The UK Government strongly supports the discussions in the OECD on combating bribery in international trade and investment and we are working hard to secure a meaningful agreement.'