Israel’s lack of enforcement actions on foreign bribery and corruption is
“worrying,” according to Alexandra Wrage, president of TRACE International, a
nonprofit organization that helps companies set up anti-corruption
“I worry a little because it isn’t until there’s a
prosecution that [companies] take things seriously,” Wrage told the The
on Thursday at an Anti-Bribery workshop in Tel Aviv.
October report by Transparency International found that, despite having adequate
laws on the books outlawing businesses from bribing foreign officials, Israel
was among the 26.9 percent of OECD countries that followed through with little
or no enforcement.
Of the 20 countries in the same classification, Israel
stood only with Russia, Ireland, New Zealand, Estonia and Mexico as the
countries that had no enforcement actions to speak of, having commenced no major
investigations and launched no cases on the matter.
A Justice Ministry
representative at the conference sought to push back on the figure, playing down
the importance of prosecutions.
“‘Zero’ does not represent the efforts
that the government and the police are making at enforcement,” said Deputy State
Attorney Yehuda Shaffer, arguing that mechanisms outside of criminal prosecution
were equally important.
“Enforcement is not only criminal. As we see in
other areas of the law, unfortunately, criminal law has become somewhat
ineffective in dealing with financial crime.”
Israel, he said, tries to
root out corruption and bribery through strict rules on licensing, encouraging
internal compliance programs and encouraging tough industry
Furthermore, Israel cannot devote intelligence capabilities to
suss out sketchy business transactions the way countries such as the United
States, the top enforcer of anti-corruption and anti-bribery laws,
“We’re not America that can intercept phone calls of foreign
leaders. If we do it’s not for criminal code, but for issues of our mere
existence,” he said.
Wrage dismissed the explanations as
“I wasn’t encouraged by the government comments. It was actively
discouraging to hear that the likelihood of prosecution here is very low,” Wrage
said of his assertions. The stance of “‘Yes we take it seriously but no we’re
not going to prosecute’ breeds cynicism,” she added.
Though it’s true
that Israel’s laws are more recent than that of the United States, many
countries with recent anti-bribery laws at least point to cases that are “in the
“There’s a legitimate lag, but that’s undermined when the
government says ‘don’t expect anything soon,’” Wrage continued.
can’t stand up and say these cases are hard to make.”
Even with Israel’s
nonexistent record of prosecutions in Israel, businesses that have operations
abroad or trade internationally would be wise to set up anti-bribery
Several major companies around the world, from fashion house
Ralph Lauren to French energy giant Total, have faced legal action from
international players that claimed jurisdiction on their
“It’s important to make Israeli industry aware of the new
rules of the industry that are developing,” said Dan Catarivas, the director of
Foreign Trade and International Relations at the Manufacturer’s Association of
Simply having a system of compliance in place can help companies
navigate difficult situations in the still-evolving field of international
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