NGO hits Israel on foreign bribery prosecution record

Despite adequate laws on its book outlawing businesses from bribing foreign officials, Israel was among 26.9% of OECD countries that follows through with little or no enforcement.

Diamond Exchange 311 (photo credit: Wikimedia Commons)
Diamond Exchange 311
(photo credit: Wikimedia Commons)
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 compliance.
“I worry a little because it isn’t until there’s a prosecution that [companies] take things seriously,” Wrage told the The Jerusalem Post on Thursday at an Anti-Bribery workshop in Tel Aviv.
An 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 standards.
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, can.
“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 excuses.
“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 pipeline.”
“There’s a legitimate lag, but that’s undermined when the government says ‘don’t expect anything soon,’” Wrage continued.
“Israel 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 mechanisms.
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 businesses.
“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 Israel.
Simply having a system of compliance in place can help companies navigate difficult situations in the still-evolving field of international anti-corruption laws.