When the U.S. passed a law in 1977 called the Foreign Corrupt Practices Act, many American companies were not happy. The act made it punishable for American companies to bribe foreign officials. In contrast, many European countries allowed their companies to write off these payments when paying taxes. Rightly or wrongly, American companies complained that this would put them at an unfair disadvantage when competing abroad.
None of that really mattered, though, because few resources were ever put into enforcing the Foreign Corrupt Practices Act. It wasn't until many European countries changed their tune with the 1997 passage of the OECD Anti-Bribery Convention that an international anti-corruption regime became credible. And today the Wall Street Journal reports that the many OECD countries have gotten serious about dealing with corruption. The U.S. federal government was investigating over 80 companies last year, up from three in 2002. U.S. firms have been made to pay large fines in connection with bribery in Nigeria and Kazakhstan. The key, though, is that it is not the U.S. alone that is prosecuting bribery. Siemens AG was fined some 201 million euros for slush funds used for bribes. Perhaps now the developed world's calls for greater transparency will sound a little less hypocritical.
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