The combat against corruption is a relatively new, but increasingly important, aspect of the rule-setting and policy-making activity of the International Chamber of Commerce (ICC). This article discusses the initiatives that have been taken not only by the ICC but also by other international organizations in pursuing that combat and their impact on arbitration. The first part of the article reviews the ICC's pioneering work in the field of anti-corruption. It discusses the self-regulatory rules and other ethics and compliance instruments prepared by the ICC for companies. The second part of the article lists the principal international legal instruments that have been adopted in the field at both worldwide and regional levels. They include the OECD Anti-Bribery Convention and the United Nations Convention against Corruption and relate not only to the measures required of states to ensure that corruption is outlawed, but also the practices that should be developed within business to prevent corruption. The author concludes that the combat against corruption is now firmly part of international public policy. Claims related to corruption can no longer be considered incapable of settlement by arbitration. Arbitrators will need to decide how to rule on issues relating to corruption. This will depend on the available evidence and the extent of the infringement, so as to avoid upsetting contractual relationships where the alleged corruption is non-existent or insignificant. When considering circumstantial evidence, arbitrators may find it helpful to take account of a party's corporate ethics and compliance programme and its practices in relation to the hiring and remuneration of agents and intermediaries.

La lutte contre la corruption est un aspect relativement nouveau, mais de plus en plus important, du travail d'élaboration de règles et de politiques générales de la Chambre de commerce internationale (CCI). Cet article étudie les initiatives qui ont été prises non seulement par la CCI mais aussi par d'autres organisations internationales dans le cadre de cette lutte, ainsi que leurs effets sur l'arbitrage. La première partie examine l'œuvre pionnière de la CCI dans ce domaine et analyse les règles d'autodiscipline et les autres instruments d'éthique et de conformité anticorruption qu'elle a développés à l'intention des entreprises. La seconde partie de l'article répertorie les principaux instruments juridiques internationaux adoptés en la matière, tant au niveau mondial que régional. Ceux-ci, qui comprennent notamment la Convention de l'OCDE sur la lutte contre la corruption et la Convention des Nations unies contre la corruption, ne visent pas seulement les mesures exigées des États afin de proscrire la corruption, mais aussi les pratiques que devraient adopter les entreprises afin de la prévenir. L'auteur conclut que la lutte contre la corruption fait maintenant solidement partie de l'ordre public international. Les demandes relatives à des questions de corruption ne peuvent plus être considérées comme n'étant pas arbitrables. Les arbitres devront donc se prononcer sur la manière de les trancher. Leurs décisions dépendront des éléments de preuve dont ils disposeront et de la portée de l'infraction, afin d'éviter de perturber des relations contractuelles dans lesquelles la corruption est inexistante ou insignifiante. Lorsqu'ils auront à examiner des preuves circonstancielles, les arbitres pourraient trouver utile de tenir compte des programmes d'éthique et de conformité des parties ainsi que de leurs pratiques en matière d'engagement et de rémunération des agents et intermédiaires.

La lucha contra la corrupción es un aspecto relativamente nuevo, aunque cada vez más importante, de la actividad de fijación de normas y de formulación de políticas de la Cámara de Comercio Internacional (CCI). El presente artículo describe las iniciativas que han sido tomadas por la CCI, pero también por otras organizaciones internacionales, para continuar esta lucha, así como su efecto sobre el arbitraje. La primera parte del artículo analiza el trabajo pionero de la CCI en materia de anticorrupción y examina las normas de autorregulación y otros instrumentos éticos y de cumplimiento elaborados por la [Page6:] CCI para las empresas. La segunda parte del artículo enumera los principales instrumentos jurídicos internacionales adoptados en este ámbito tanto a escala regional como mundial. Estos instrumentos, entre los que se encuentran el Convenio de la OCDE contra el Soborno y el Convenio de las Naciones Unidas contra la Corrupción, se refieren no solo a las medidas requeridas a los Estados para garantizar que la corrupción está proscrita, sino también a las prácticas de negocios que deberían desarrollarse para prevenir la corrupción. El autor llega a la conclusión de que actualmente la lucha contra la corrupción está firmemente establecida como parte integrante del orden público internacional. Las reclamaciones relacionadas con la corrupción ya no pueden considerarse como no susceptibles de solucionarse por arbitraje. Los árbitros se verán en la necesidad de decidir cómo pronunciarse sobre las cuestiones relativas a la corrupción. Ello dependerá de las pruebas disponibles y de la amplitud de la infracción, a fin de evitar afectar las relaciones contractuales cuando la supuesta corrupción no existe o es insignificante. Al considerar las pruebas circunstanciales, a los árbitros puede resultarles útil tener en cuenta la ética corporativa de la parte y el programa de cumplimiento, además de sus prácticas en relación con la contratación y la remuneración de los agentes e intermediarios.

I. The anti-corruption work of the ICC

1. Introduction

The International Chamber of Commerce (ICC) has three main pillars of activity: rule-setting, policy advocacy and dispute resolution. Its rule-making activity is performed within its policy commissions, which also contribute to its advocacy work. Over the years, ICC policy commissions have produced rules and other instruments that have left an indelible imprint on international trade, industry and finance. They are private rules, applied on a voluntary basis as a means of self-regulation.1 They do not replace, but rather complement, international conventions and national statutes. The following brief chronology lists some of the most important and shows the wide range of sectors involved.2 These cover international trade, international finance, advertising and marketing, antitrust matters and, more recently, anti-corruption.

•The ICC Banking Commission (now called Commission on Banking Technique and Practice) pioneered the ICC's work in the field of self-regulation with the promulgation in 1933 of the Uniform Customs and Practice for Documentary Credit (commonly called UCP). UCP apply to almost all documentary credits issued around the world. The sixth revision - UCP 600 - took effect on 1 July 2007 and has been endorsed by UNCITRAL.

•1936 saw the publication of normalized commercial terms for international contracts, commonly called INCOTERMS®, under the auspices of the ICC Commission on Commercial Law and Practice. The 2010 revision came into force on 1 January 2011 and was quickly endorsed by UNCITRAL.

•In 1937, the ICC introduced an ethics code for the advertising industry. Now published in consolidated form as the 'Code of Advertising and Marketing Communication Practice', it is used by marketing practitioners worldwide.

•An international code on fair treatment for foreign investments was promulgated in 1949, and in 1972 was transformed into the Guidelines for International Investment. In 2012, the ICC Trade and Investment Policy Commission revised the Guidelines and included chapters on anti-corruption and corporate responsibility.

•In 1975, the ICC set up an ad hoc committee on extortion and bribery in international business transactions, which issued a set of guidelines in 1977.

•In 1991, prior to the 1992 UN Earth Summit in Rio de Janeiro, the ICC published a tool for environmental management by businesses entitled 'Business Charter for Sustainable Development: the Management Principles'.

•In 2002, the ICC extended its activity to corporate responsibility with the adoption of a document entitled 'Business in society: Making a positive and responsible contribution, a voluntary commitment by business to manage responsibly' listing nine practical measures for responsible entrepreneurial conduct.

•In April 2013, the ICC Task Force on Antitrust Compliance and Advocacy launched the ICC Antitrust Compliance Toolkit for companies that wish to implement robust antitrust compliance programmes. [Page7:]

2. Rule-setting and policy work in the field of anti-corruption

As mentioned above, the ICC's first anti-corruption initiative was to set up an ad hoc committee on extortion and bribery in international commercial transactions in 1975.3 It was referred to as the Shawcross Committee after its Chairman, Sir Hartley William Shawcross (1902(2003), British barrister and politician who was the chief British prosecutor at the Nuremberg War Crime Trials. Two other notable members of the Shawcross Committee were Lloyd Cutler (1917(2005), a US attorney who served as White House Counsel during the Democratic administrations of Presidents Carter and Clinton; and Sten Tengelin (1921(2006), a Swedish lawyer particularly active in the Swedish anti-corruption institute Institutet mot Mutor established in 1923.

The Rules of Conduct on Extortion and Bribery, issued by the Shawcross Committee in 1977, were drafted at the same time as the US Foreign Corrupt Practices Act4 and were the first rules ever to be issued on this sensitive subject by a non-governmental organization. The report containing the Rules was generally welcomed as a breakthrough, although reservations were expressed in some quarters.5 With hindsight, the Rules can be seen to have had a positive effect judging by the number of corporate documents, such as corporate codes of conduct and corporate integrity programmes, that either refer to them or use similar terminology.6 The report7 strongly condemned all forms of corruption while encouraging companies to draw up their own codes of conduct8 and corporate compliance programmes as a shield against extortion and bribery.9

In June 1994, a new ad hoc committee on extortion and bribery was created, which I was asked to chair. The committee's mandate was twofold: first, the Expert Panel that had been set up in the 1970s to examine alleged infringements of the Rules at the request of ICC members and national committees was to be shelved, as it had never become operational; and second, the Rules were to be completely overhauled to bring them into line with recent changes in society. Indeed, since 1977 'corruption ha[d] been transformed from a predominantly national or regional preoccupation to an issue of global revolutionary force, […] there had been a simultaneous, though largely peaceful, public revolt on five continents against one of the world's oldest part-time professions: proffering and accepting bribes'.10

The decision to create the ad hoc committee was influenced by the fact that in 1989 the OECD set up its Working Group on Bribery in International Business11 (then known as the ad hoc Working Group)12 and in the spring of 1994 OECD ministers agreed on a Recommendation13 calling on OECD Member States to 'take effective measures to deter, prevent and combat the bribery of foreign public officials'.14 On 11 April 1996, the OECD Council of Ministers approved a second Recommendation,15 in which Member States were invited to re-examine their laws to ensure that payments made as bribes were not tax deductible. On 23 May 1997, the OECD approved the Revised Recommendation on Combating Bribery in International Business Transactions, to which Agreed Common Elements of Criminal Legislation and Related Action were annexed. These Agreed Common Elements would form the basis for the 1997 OECD Convention discussed further below.

The ICC ad hoc committee set up in 1994 issued a new report and new Rules by the end of 1995, which were adopted in March 1996. Known as the ICC Rules of Conduct, Extortion and Bribery in International Business Transactions,16 they dovetailed with the work done by the OECD Working Group on Bribery and foreshadowed the OECD Anti-Bribery Convention, which was then in the making. The new Rules insisted that businesses were under an obligation and should make a commitment to fight corrupt practices in all their forms - both active and passive, direct and indirect, in national as well as international affairs and in both the public and the private sectors.17[Page8:]

After the introduction of the new Rules, the business community continued its fight against corruption. The ICC wished to create conditions in which corporate ethics and business practices would be structured on a model of transparency and lawfulness. An ambitious work programme was drawn up in which the newly named Anti-Corruption Commission sought to promote the Rules through various channels, including ICC national committees, and increase awareness of anti-corruption by organizing and participating in seminars and conferences. Over the years, the Rules were amended to keep them aligned with legal and economic reality. After amendments in 1999 to adapt them to the OECD Anti-Bribery Convention, they were again amended in 2005 to take into account innovations in the field of ethics and compliance and in 2011 were completely rewritten to take account of the UN Convention against Corruption and the priorities formulated by the G20 and the B20, and were rebaptized ICC Rules on Combating Corruption.

At the same time close ties were forged with a number of international organizations in order to put across the business world's points of view. The OECD Working Group on Bribery regularly invited delegates from the ICC Commission on Corporate Responsibility and Anti-Corruption to consultative meetings,18 while OECD delegates participated in the Commission's meetings, leading to frank and fruitful exchanges. Although less regular, contacts with the UN Office on Drugs and Crime, the Council of Europe and the European Union were nonetheless intense and productive. The Commission also often invited representatives of other organizations to participate in its activities.

Another aspect of the Commission's work programme was to offer practical and concrete guidance to enterprises through a regularly updated handbook.19 Written by practitioners for practitioners, the handbook does not present brilliant legal or economic theories but rather down-to-earth and practical advice for use by company managers and ethics and compliance officers in their daily business. To offer focused guidance on particularly vexing issues, the Commission produced guidelines on whistleblowing in 2008 and on agents, intermediaries and other third parties in 2010.

Although ICC members were ready to make the effort of complying with the new regulations and implementing appropriate preventive measures, they were (and still are) disappointed and frustrated by the lack of action to prevent requests for bribes by public officials and politicians.

To address this need, the ICC teamed up with the United Nations Global Compact, Transparency International and the Partnering against Corruption Initiative of the World Economic Forum to produce the learning tool 'Resisting Extortion and Solicitation in International Transactions', better known by its acronym RESIST. It describes 22 real-life situations illustrating how a company should react to solicitation and extortion, and is intended to serve as an educational tool to teach employees how to react when faced with illicit demands.

Meanwhile, the fight against corruption found its place on the G20 and B20 agendas. At the 2003 G8 summit in Evian, France,20 world leaders declared their willingness to 'encourage the private sector to develop, implement and enforce corporate compliance programs relating to [G8] domestic laws criminalizing foreign bribery'. At the 2010 G20 summit in Seoul, South Korea,21 world leaders expressed their wish 'to strengthen corporate efforts, by extending an invitation to the private sector to meet during the … Presidency, to examine best practices and other forms of business engagement in combating corruption and to consider how G20 corporations could share their on-going efforts'. At the 2011 G20 summit in Cannes, France,22 world leaders made the following statement: 'We commend the enhanced engagement of the private sector to fight against corruption. We welcome the commitments by the B20 to build on our Action Plan and urge them to take concrete action.'

These declarations were a powerful endorsement of the business community's campaign to create a level playing field in international trade relations. The companies in the B20 Task Force on Transparency and Anti-Corruption pooled their ideas on how to achieve this aim. The ICC proposed to devote its attention to two objectives: the development of anti-corruption tools and instruments for SMEs and the preparation of teaching material for the training and education of employees.

To fulfil the first objective, two ICC policy commissions - the Commission on Corporate Responsibility and Anti-Corruption and the Commission on Commercial Law and Practice - worked jointly to prepare the ICC Anti-Corruption Clause, which was issued in 2012. Based on best practice, it is a neutral provision which no contractual partner can consider one-sided. It should have a particular appeal to smaller companies, as it is an off-the-shelf clause, ready for use.[Page9:]

The second objective led to the publication on 9 December 2013 of the ICC Ethics and Compliance Training Handbook, including contributions by 17 members of the ICC Commission on Corporate Responsibility and Anti-Corruption. The purpose of the book is to build a training programme for ethics and compliance officers in order to equip companies with the necessary in-house expertise to build ethics and compliance systems commensurate with their needs.

II. International legal instruments to combat corruption

1. Organization of American States (OAS)

The Inter-American Convention against Corruption was adopted on 29 March 1996 and entered into force on 6 March 1997.23 Thirty-three nations have ratified the Convention. It was the first legal instrument to recognize the transnational reach of corruption and the need for cooperation between States in combatting it. Implementation of the Convention is overseen and measured by the Mechanism for Follow-Up on the Implementation of the Inter-American Convention against Corruption (MESICIC).

2. Council of Europe

Several anti-corruption instruments have been drawn up under the auspices of the Council of Europe:24

•Twenty Guiding Principles for the Fight against Corruption, adopted on 6 November 1997.

•Criminal Law Convention. Opened for signature on 27 January 1999, the Convention entered into force on 1 July 2002 and has been ratified by 45 states. Its implementation is monitored by the Group of States against Corruption (GRECO).

This Convention is noteworthy for the large number of corruptive practices it criminalizes. It requires all states that are parties to the Convention to establish as criminal offences: (i) active bribery of domestic public officials, (ii) passive bribery of domestic public officials, (iii) active or passive bribery of members of domestic public assemblies, (iv) active or passive bribery of foreign public officials, (v) active or passive bribery of members of foreign public assemblies, (vi) active bribery in the private sector, (vii) passive bribery in the private sector, (viii) active or passive bribery of officials of international organizations, (ix) active or passive bribery of members of international parliamentary assemblies, (x) active or passive bribery of judges and officials of international courts, (xi) active or passive trading in influence, (xii) money laundering of proceeds from corruptive offences and (xiii) accounting offences.

The Convention requires all parties to provide for legal persons to be held liable for the criminal offences of active bribery, trading in influence and money laundering.

•Resolution establishing the Group of States against Corruption (GRECO), adopted on 1 May 1999.

GRECO was created to monitor, by mutual evaluation and peer-pressure, the implementation of and compliance with the international instruments adopted by the Council of Europe to combat corruption.25

•Civil Law Convention on Corruption, which was opened for signature on 4 November 1999 and entered into force on 1 November 2003. It contains some provisions of particular interest to arbitral proceedings.

This Convention requires each party to the Convention to (i) 'provide in its internal law for persons who suffered damage as a result of corruption to have the right to initiate an action to obtain full compensation for such damage' (Art. 3);26 (ii) 'to provide in its internal law for any contract or clause of a contract providing for corruption to be null and void' (Art. 8(1)) and (iii) 'to provide in its internal law for the possibility for parties to a contract whose consent has been undermined by an act of corruption to be able to apply to the court for the contract to be declared void, notwithstanding their right to claim for damages' (Art. 8(2)). The Convention also requires each party to the Convention to 'provide in its internal law for effective procedures for the acquisition of evidence in civil proceedings arising from an act of corruption' (Art. 11).

•Additional Protocol to the Criminal Law Convention on Corruption, which was opened for signature on 15 May 2003 and entered into force on 1 February 2005. [Page10:]

The Protocol makes the provisions of the Criminal Law Convention on active and passive corruption applicable to domestic and foreign arbitrators (and domestic and foreign jurors) exercising their functions under the national arbitration law of a state that is a party to the Protocol or the national arbitration law of any other state (Arts. 2, 3, 4 and 5). Article 8(2) of the Protocol states that: 'The provisions of the [Criminal Law] Convention shall apply to the extent that they are compatible with the provisions of this Protocol.'

3. Organization for Economic Cooperation and Development (OECD)

•Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention).27

The ground-breaking OECD Anti-Bribery Convention was signed on 17 December 1997 and entered into force on 15 February 1999. This Convention marked an irreversible turning point in the fight against corruption and contributed significantly to creating a level, corruption-free playing field for international trade and investment. It is all the more important as the vast majority of multinationals are based in OECD member states28 and these states represent over 75% of world exports and an even larger share of world investment.29 At present, 40 states are parties to the Convention; they include all 34 OECD member states.

Like the US Foreign Corrupt Practices Act (FCPA),30 the short OECD Anti-Bribery Convention seeks to criminalize the bribing of foreign public officials, thereby focusing on the giving of bribes.31 The OECD noted at the time that pursuing officials for receiving, soliciting or the extortion of bribes would raise irresolvable jurisdictional issues and expose contracting States to the accusation of interfering with the sovereignty of other states.32

The OECD Anti-Bribery Convention is not self-executing, but requires implementing legislation,33 the aim being to achieve functional equivalence34 among the measures taken by parties rather than uniformity or changes in the fundamental principles of their legal systems.35 For this purpose, rigorous and systematic monitoring, based on peer-pressure, was put in place.36 The OECD Working Group on Bribery is responsible for monitoring the implementation and enforcement of the Convention as well as the 2009 OECD Recommendation mentioned below. The results of the monitoring are recorded in country reports published on the OECD website. The OECD monitoring system is very highly regarded and its country reports are extremely thorough and highly professional.37

According to the global anti-corruption coalition, Transparency International, the progress of foreign bribery enforcement by parties to the OECD Anti-Corruption Convention is uneven but continuing to improve. According to Transparency International's 2013 annual progress report,38 there was active enforcement in four countries with 26.2% of world exports; moderate enforcement in four countries with 6.1% of world exports; limited enforcement in ten countries with 11.3% of world exports and little or no enforcement in twenty countries with 26.9 of world exports. The four countries in which enforcement of the Convention was pursued most actively were the USA, Germany, the United Kingdom and Switzerland.

•Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions, released on 9 December 2009.

It includes important recommendations on the criminalization of bribery of foreign public officials. In a noteworthy development of its thinking, the OECD 'encourages companies to prohibit or discourage the use of small facilitation payments', which 'must in all cases be accurately accounted for in [the] companies' books and financial records'. Prior to establishing the Recommendation, stakeholders were consulted, including the ICC.

•Good Practice Guidance on Internal Controls, Ethics, and Compliance, adopted on 18 February 2010 as Annex II to and an integral part of the 2009 OECD Recommendation mentioned above. Annex II lists the practices that should be included in a corporate ethics and compliance programme, namely (i) a clear and visible anti-bribery policy that is strongly supported by senior management, (ii) a policy to instill a sense of responsibility for compliance with the corporate policy at all levels, as well as independent compliance structures, (iii) a regular communications and training policy on foreign bribery for all employees and with business partners; (iv) encouragement of compliance with anti-bribery measures, and (v) disciplinary procedures to address violations. The Good Practice Guidance has become a blueprint for all effective corporate ethics and compliance programmes. [Page12:]

4. United Nations

The United Nations Convention against Corruption (often referred to as UNCAC) was adopted by the General Assembly of the United Nations on 31 October 2003. No less than 140 states signed the Convention, which entered into force on 14 December 2005. At present 170 states are parties to the Convention.39

The UN Convention is a milestone in anti-corruption, for two principal reasons: it is the first and only global legal anti-corruption instrument and it prohibits all forms of corruptive practices. Its adoption was applauded by the ICC and is of particular relevance to international business as it provides a truly global framework for combating corruption and contains the promise of a level playing field on a worldwide scale.40 The parties to the Convention number industrialized, emerging, developing and least-developed economies including almost all OECD countries. Germany, Japan and New Zealand have not ratified at this stage. As its scope is much broader than that of the OECD Anti-Bribery Convention, the UN Convention is capable of tackling many issues that cannot be effectively dealt with by the OECD Convention or regional anti-corruption conventions.41

This UN Convention covers a vast spectrum of corruptive practices. It requires parties to establish as offences: (i) active bribery of national public officials, (ii) passive bribery of national public officials, (iii) active bribery of foreign public officials, (iv) passive bribery of foreign public officials, (v) active bribery of officials of public international organizations, (vi) passive bribery of officials of public international organizations, (vii) embezzlement, misappropriation or other diversion of property by a public official, (viii) active trading in influence, (ix) passive trading in influence, (x) abuse of functions, (xii) illicit enrichment, (xiii) active bribery in the private sector, (xiv) passive bribery in the private sector, (xv) embezzlement of property in the private sector, (xvi) laundering of proceeds of crime, (xvi) concealment, (xvii) obstruction of justice, and (xviii) certain accounting offences. The Convention also requires parties to ensure that legal persons can be held liable for participating in the offences it establishes.

In addition, the UN Convention contains important, and in some cases innovative, preventive measures to strengthen the capability of states to combat corruption. They relate to international cooperation (e.g. mutual legal assistance, extradition and joint investigations), asset recovery, technical assistance and the exchange of information.42

Not all of the criminalization provisions are mandatory. The wording of some provisions (parties 'shall consider adopting such legislative and other measures as may be necessary to establish a certain practice as a criminal offence') leaves some discretion to the parties. This is the case for (i) passive bribery of foreign public officials and officials of public international organizations, (ii) abuse of functions, (iii) illicit enrichment, (iv) active and passive bribery in the private sector, (v) embezzlement of property in the private sector and (vi) concealment.

Articles 34 (Consequences of acts of corruption)43 and 35 (Compensation for damage)44 are of particular interest in the present context. The first calls on parties to 'consider corruption a relevant factor in legal proceedings to annul or rescind a contract, withdraw a concession or other similar instrument or take any other remedial action'.45 The second calls on parties to 'ensure that entities or persons who have suffered as a result of an act of corruption have the right to initiate legal proceedings against those responsible for that damage in order to obtain compensation'.46

The Convention has been equipped with an Implementation Review Mechanism, which was adopted at the third Conference of the States Parties in Doha, Qatar, in 2009. The ICC, together with the World Economic Forum, the United Nations Global Compact and Transparency International, played an active role in pressing for effective monitoring of the Convention. At the invitation of these organizations, 24 CEOs sent a letter to the United Nations Secretary General expressing their strong support for the United Nations Convention and calling for action to establish an implementation review mechanism.47

5. European Union

The various legal instruments that the European Union48 has adopted in relation to corruption have their origins in the fight against fraud (in particular fraud related to agricultural funds in the context of the Common Agricultural Policy) and were therefore first aimed at protecting the financial interests of the Union. Only gradually did the focus move from the fight against fraud to the fight against corruption.

•Convention on the Protection of the European Communities' Financial Interests, drawn up by Act of the Council of the European Union dated 26 July 1995.49 The Convention entered into force on 17 October 2002, together with the two protocols listed immediately below.

•Protocol to the Convention on the Protection of the European Communities' Financial Interests,50 drawn up by Council Act of 27 September 1996. The Protocol focuses on the definition of 'official' and of 'active and passive corruption', and on the harmonization of penalties for corruption offences.

•Protocol on the interpretation, by way of preliminary rulings, by the Court of Justice of the European Communities of the Convention on the Protection of the European Communities' Financial Interests, drawn up by Council Act of 29 November 1996.51

•Second Protocol of the Convention on the Protection of the European Communities' Financial Interests, drawn up by Council Act of 19 June 1997.52 This Protocol entered into force on 19 May 2009. It relates to the liability of legal persons, confiscation, money laundering and cooperation between European Union countries and the Commission for the purpose of protecting the European Communities' financial interests and related personal data.

•Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union,53 drawn up by Council Act of 26 May 1997. The Convention entered into force on 28 September 2005 and requires Member States to take the necessary measures to ensure that conduct constituting an act of active or passive corruption by officials is a punishable criminal offence. In addition, Member States must ensure that legal persons can be held liable in cases of active corruption by a person acting on behalf of the legal person.

•Council Framework Decision of 22 July 2003 on combating corruption in the private sector.54 The Framework Decision entered into force on the day of its publication in the Official Journal, i.e. 31 July 2003. Its purpose is to ensure that both active and passive corruption in the private sector are criminal offences in all Member States, that legal persons may be held responsible for such offences, and that effective, proportionate and dissuasive penalties are imposed for these offences. It was the first legal instrument explicitly to address corruption in the private sector only.

6. Africa

•African Union Convention on Preventing and Combating Corruption, adopted on 11 July 2003.55 It has been signed by 48 countries and ratified by 34. It entered into force on 5 August 2006.

The Convention requires parties to establish as offences (i) active bribery of officials, (ii) passive bribery of officials, (iii) abuse of functions, (iv) diversion of state or state agencies' property, (v) active corruption in the private sector, (vi) passive corruption in the private sector, (vii) active and passive trading in influence in the public and private sectors, (viii) illicit enrichment, (ix) concealment of proceeds derived from the preceding acts, (x) laundering of the proceeds of corruption and (xi) the use of funds acquired through illegal and corrupt practices to finance political parties.

III. Impact of anti-corruption on arbitration

1. Has the fight against corruption become part of international public policy?

In 2003, at the end of a seminar organized by the ICC Institute of World Business Law, Professor Mark Pieth, the then chairman of the OECD Working Group on Bribery, remarked that 'even though corruption is still widespread in many regions of the world, an internationally agreed ordre public banning bribery is emerging'.56 Where do we stand in 2013?

Although the prohibition of transnational corruption is relatively recent, an impressive list of mandatory legal provisions criminalizing a broad spectrum of corruptive practices have been adopted at global, regional and national levels. In many instances they are accompanied by [Page13:] mechanisms to ensure the thorough, systematic and continuous monitoring of their implementation. Perhaps even more importantly, anti-corruption has not only taken its place on the statute books, but also in the public opinion. It is generally recognized that corruption 'threatens the rule of law, democracy and human rights, undermines good governance, fairness and social justice, distorts competition, hinders economic development and endangers the stability of democratic institutions and the moral foundations of society'.57 It can be firmly stated that anti-corruption is here to stay and now belongs to the moral, economic and political principles common to all nations and to be respected in all circumstances.58 In the words of Robert Briner, former chairman of the ICC International Court of Arbitration:59

Of course, corruption has become something which is now considered to be against public order and therefore falls under article V(2)(b) of the New York Convention.

The fact that the combat against corruption forms part of international public policy places a duty on an arbitral tribunal to raise issues of corruption with the parties whenever it becomes aware of such issues, to obtain the necessary evidence to the extent possible, and to decide those issues. To the extent that corruption may impact upon the enforceability of the award, arbitrators also have a duty to do so under Article 41 of the ICC Rules of Arbitration. Bernardo M. Cremades and David J. Cairns see four reasons why an arbitral tribunal should investigate the bribery of a foreign official irrespective of the wishes of the parties: (i) the obligation to make every effort to ensure that the award is enforceable; (ii) the public responsibility of arbitrators in the administration of justice; (iii) the need for international arbitrators to support the considerable efforts of states and businesses to develop and implement rules and systems to eliminate bribery and (iv) to avoid the risk of international arbitration being seen as weak and a complicit supporter of corruption.60

2. How to deal with corruption in arbitral proceedings?

a) Jurisdiction

Does the fact that corruption is proscribed by international public policy mean that when an arbitrator suspects or discovers signs of corruption, the dispute must be considered non-arbitrable due to the illegality of the contract from which it arises and the arbitrator must consequently refuse to take jurisdiction? The prevailing view today, based on the principle of the separability of the arbitration clause from the contract giving rise to the dispute, is that arbitrators 'do have jurisdiction and have to decide the merits of the case and take any illegality resulting from the criminal activity into consideration when they decide the case'.61

b) Consequences of corruption

Arbitrators will need to consider the effects of Article 34 of the UN Convention against Corruption and Article 8 of the Council of Europe Civil Law Convention on Corruption, allowing for the annulment of contracts where they involve corruption. These provisions are not self-executing so it will be necessary to analyse the legislative measures taken by the relevant state(s) to implement them. Yet, irrespective of the implementing measures taken, arbitrators will be justified in considering that insofar as corruption is contrary to international public policy, any contracts or clauses providing for corruption should be considered void. Where a contract or a concession has been won through corruption, arbitrators will want to analyse the manner in which corruption allowed it to be won. If the link between the corruptive act and the contract, concession or other similar instrument is sufficiently evidenced and substantiated, the option of (total or partial) annulment or rescission will be available.

c) Extent of the infringement

Corruptive practices may appear under various guises and vary in size and extent (facilitation payments, grease money, tokens of symbolic value, luxurious gifts and lavish hospitality or large amounts of money). The question arises as to whether, given that corruption is a concern of international public policy, all undue advantages, no matter how small or isolated, should lead to the annulment or rescission of the contract, concession or other instrument in question.

The ICC Anti-Corruption Clause discussed above is relevant here. It provides that the non-infringing party has the right to suspend or terminate a contract on the grounds of 'material or several repeated breaches [by the other party] of the provisions of Part I of the ICC Rules on Combating Corruption 2011'.62 In other words, it is not sufficient to allege and provide evidence that a contractual party has committed a small or isolated breach of the ICC Rules to justify the harsh civil penalty of suspension or termination. The requirement of 'material or several repeated breaches' reflects the fact that '[w]hile there is a [Page14:] need to ensure that corrupt practices do not bear fruit, there is also a need to maintain trust in the binding nature of the contractual undertakings (pacta sunt servanda), as it is a core component of successful business life'.63 No contractual party should use an isolated or minute infringement of the anti-corruption provisions as a lever to break what might well be a large-scale contract. Insignificant manifestations of corruption should not serve as a pretext for upsetting a contractual relationship.

d) Compensation of damage

Arbitrators should also give attention to Article 35 of the UN Convention against Corruption and Article 3 of the Council of Europe Civil Law Convention on Corruption, which provide for private rights of action to obtain compensation for damage as a result of corruption.

e) Evidence

It is quite understandable that the question of evidence of corrupt practices should be problematic for arbitrators. Corruption, by its very nature, occurs in obscure and hidden circumstances and leaves no or scant traces behind. Bribe-givers and bribe-takers all use schemes to disguise their transactions. Consequently, bringing evidence of corruption is often a probatio diabolica.

It should first be recalled that, pursuant to Article 25(1) of the ICC Rules on Arbitration, arbitrators have an obligation to 'proceed within as short a time as possible to establish the facts of the case by all appropriate means'. It will be no easy task to fulfil this obligation where there are signs of corruption, especially as arbitral tribunals do not have the same investigative powers as state courts.64

The Council of Europe Civil Law Convention on Corruption requires parties to provide 'effective procedures for the acquisition of evidence in civil proceedings arising from an act of corruption'.65 This provision is not self-executing, so depends on the relevant legislation implemented by a particular state. Arbitrators will therefore have to use the means available to them to acquire evidence in relation to alleged or suspected acts of corruption.

It may be noted that the instruments discussed above do not require there to be a pact between the giver and the receiver of a bribe. There is bribery as soon as an undue advantage is promised, even if that advantage is never paid or received.66 So there is no requirement to provide evidence of a corruption agreement or the giving or receipt of an undue advantage.

It is difficult to define the required standard of proof of corruption. The Commentary on the ICC Anti-Corruption Clause (2012) may be helpful in this respect:67

the requirement to bring evidence does not necessarily mean that corroborative evidence should be produced or that all evidence be disclosed to the other Party in every case. Evidence should, however, be sufficient to prove that suspicions of corruption are not invoked in a vexatious or otherwise unjustified manner.

It may be necessary to look for new sources of circumstantial evidence. The ICC Rules on Combating Corruption lists measures that should be implemented to create an efficient corporate compliance programme. When a suspicion is raised against a party, an arbitral tribunal could request the party concerned to produce documents relating to its compliance programme as a means of assessing its integrity. These documents could serve as circumstantial evidence, by providing a valuable indication of a company's readiness to resist corruption or, on the contrary, its inclination to bribe even if they give no firm assurance of an actual offence.

In appropriate circumstances, the arbitral tribunal may also wish to look at the suspected party's due diligence practices in vetting, selecting, retaining and remunerating its agents, intermediaries and other third parties, who may be (but are not necessarily) a conduit for paying bribes. The ICC guidelines on this subject mentioned earlier list factors to be taken into account when hiring an agent or intermediary. Companies should keep records of how these factors were taken into account. Arbitrators could usefully request a party suspected of having hired an agent who has committed bribery to provide them with these records.

1
See F. Vincke 'Putting in Place Integrity Programs to Fight Economic Crime, ICC's Role' [2007:5] IBLJ/RDAI 681. Unlike the World Economic Forum's Partnering Against Corruption Initiative (PACI) and the United Nations Global Compact, the ICC Commission on Corporate Responsibility and Anti-Corruption does not require ICC members to sign under its Rules for Combating Corruption or other anti-corruption documents.

2
Readers are referred to the ICC website for more information on these products - http://www.iccwbo.org.

3
F. Heimann & M. Hirsch, 'How International Business Combats Extortion and Bribery: Anti-Corruption Efforts by the International Chamber of Commerce' in OECD, No Longer Business as Usual, Fighting Bribery and Corruption (Paris, 2000) 170.

4
Pub. L. 95-213, 91 Stat 1494 (1977).

5
e.g. U. Draetta, 'The European Union and the Fight Against Corruption in International Trade' [1995:6] IBLJ/RDAI 713; S.F. Black & R.M. Witten, Complying with the Foreign Corrupt Practices Act (New York: M. Bender, 1997), ch. 9 'International Developments', § 9.01; M. Pieth, 'Introduction' in M. Pieth, L.A. Low, P.J. Cullen, The OECD Convention on Bribery, A Commentary (Cambridge University Press, 2007) 9.

6
F. Vincke, 'La communauté des affaires face à la corruption, un nouveau rapport de la CCI' (1996) Revue de droit international et de droit comparé 119.

7
ICC, 'Extortion and Bribery in Business Transactions', Report adopted by the 131th session of the Council of the ICC on 29 November 1977.

8
J.-Y. Trochon & F. Vincke, eds., L'entreprise face à la mondialisation : opportunités et risques (Brussels: Bruylant/Forum International de la Communication, 2006) at 309.

9
F. Heimann, 'Combating International Corruption: The Role of the Business Community' in K.A. Elliott, ed., Corruption and the Global Economy (Washington: Institute for International Economics, 1997).

10
P. Glynn, S.J. Kobrin, M. Naim, 'Globalization of Corruption' in Corruption and the Global Economy, supra note 9 at 7.

11
G. Sacerdoti, 'The 1997 OECD Convention Against Transnational Bribery: Effective Monitoring and Implementation' in K. Karsten & A. Berkeley, eds., Arbitration - Money Laundering, Corruption and Fraud, Dossier of the ICC Institute of World Business Law (Paris: ICC Publishing, 2003) 47.

12
G. Sacerdoti, 'To Bribe or not to Bribe?' in OECD, No Longer Business as Usual, Fighting Bribery and Corruption, supra note 3 at 31.

13
OECD, Recommendation of the Council of the OECD on Bribery in International Business Transactions, released 27 May 1994.

14
See M. Pieth, 'International Cooperation to Combat Corruption' in Corruption and the Global Economy, supra note 9 at 119(131.

15
OECD, Recommendation of the Council of the OECD on the tax deductibility of bribes paid to foreign public officials, approved 11 April 1996.

16
Extortion and Bribery in International Business Transactions (revisions of the 1977 Report and Rules of Conduct to Combat Extortion and Bribery) adopted by the ad hoc Committee on Extortion and Bribery in International Business Transactions, ICC, Document No. 193/15.

17
F. Vincke, supra note 6 at 119; A. Argandona, 'The 1996 ICC Report on Extortion and Bribery in International Business Transactions' in Business Ethics, vol. 6, no. 3 (July 1997); F. Heimann, supra note 9 at 150-152.

18
During these consultations, the ICC continuously requested action on corruption in the private sector (see I. Zerbes, 'Article 1. The Offence of Bribery of Foreign Public Officials' in M. Pieth, L.A. Low, P.J. Cullen, eds., The OECD Convention on Bribery, A Commentary (Cambridge University Press, 2007) at footnote 17) and on solicitation and extortion.

19
The Handbook was first published in 1999 under the title 'Fighting Bribery, A corporate practices manual' edited by F. Vincke, F. Heimann and R. Katz. The second edition, entitled 'Fighting Corruption, A corporate practices manual' and edited by F. Vincke and F. Heimann, came out in 2003. The third, again edited by F. Vincke and F. Heimann, was published in 2008.

20
http://www.g8.fr/evian

21
http://www.g20.utoronto.ca

22
http://www.g20.utoronto.ca

23
http://www.oas.org

24
http://hub.coe.int

25
For the most recent annual report by GRECO, see GRECO Thirteenth General Activity Report (2012), adopted 18-22 March 2013.

26
Compare with Article 35 of the United Nations Convention against Corruption, discussed below.

27
http://www.oecd.org

28
F. Heimann, 'International Anti-Corruption Conventions' in F. Vincke & J. Kassum, eds., ICC Ethics and Compliance Training Handbook (Paris: ICC Services, 2013) at 19.

29
Ibid at 19.

30
http://www.justice.gov/criminal/fraud/fcpa

31
M. Pieth, supra note 5 at 20.

32
G. Sacerdoti, supra note 12 at 34.

33
See M. Pieth, supra note 5 at 25.

34
F. Vincke, 'Le rôle et le potentiel de la Chambre de Commerce International (CCI) dans le domaine de l'anti-corruption' in La corruption, un risque actuel pour les entreprises, Hors-série, Secure Finance (Paris: Leprince, 2006) 175.

35
Official commentaries on the OECD Anti-Bribery Convention, § 2.

36
M. Pieth, supra note 5 at 30-37; G. Sacerdoti, supra note 12 at 35.

37
F. Heimann, supra note 28 at 24.

38
http://www.transparency.org

39
http://www.treaties.un.org

40
See the press releases issued by the ICC in relation with the adoption of the UN Convention: (i) 9 January 2003 (no. 194/14), 'Comments from the ICC Commission on Anti-Corruption on the draft United Nations Convention against Corruption'; (ii) 8 August 2003, 'Letter to the sixth session of the United Nations ad hoc committee for the negotiation of a convention against corruption'; (iii) 1 October 2003 'Letter to the seventh session of the United Nations ad hoc committee for the negotiation of a convention against corruption' and (iv) 22 June 2005 (no. 194/44), 'The ICC views on the United Nations Convention against Corruption'.

41
F. Heimann, supra note 28 at 27.

42
Ibid.

43
Compare with Article 8 of the Council of Europe Civil Convention.

44
Compare with Article 3 of the Council of Europe Civil Convention.

45
See below.

46
See below.

47
http://www.iccwbo.org/advocacy-codes-and-rules/document-centre

48
http://europa.eu/eu-law

49
Official Journal C 316 of 27 November 1995.

50
Official Journal C 313 of 23 October 1996.

51
Official Journal C 151of 20 May 1997.

52
Official Journal C 221 of 19 July 1997.

53
Official Journal C 195 of 25 June 25 1997.

54
Official Journal L 192 of 31 July 2003, 0054-0056.

55
See http://www.au.int/en/treaties.

56
M. Pieth, 'Transnational Commercial Bribery: Challenge to Arbitration' in K. Karsten & A. Berkeley, supra note 11, 41 at 45.

57
Preamble to the Council of Europe Criminal Law Convention on Corruption.

58
See B.M. Cremades & D.J. Cairns, 'Transnational Public Policy in International Arbitral Decision-Making: The Cases of Bribery, Money Laundering and Fraud' in K. Karsten & A. Berkeley, supra note 11, 65 at 68 ('There is no doubt today that corruption and money laundering are not to be tolerated or condoned in international commerce or that the suppression of corruption and money laundering is an established part of international public policy to which international arbitrators must have regard. The place of fraud in international public policy is complicated by difficulties in definition, but certainly some manifestations of fraud, particularly those that might conceal illegal activities such as corruption and money laundering, are without doubt pr[o]scribed by international public policy.')

59
R. Briner, 'Final remarks' in K. Karsten & A. Berkeley, supra note 11, 157 at 158.

60
B.M. Cremades & D.J. Cairns, supra note 58 at 80.

61
A. Philip, 'Arbitration, Corruption, Money Laundering and Fraud: The Role of the Tribunals' in K. Karsten & A. Berkeley, supra note 11, 147 at 147-148.

62
ICC Anti-Corruption Clause, A, Option 1, Paragraph 3.

63
Commentary on the ICC Anti-Corruption Clause, Options I and II, Paragraph 1, § 1.

64
A. Crivellaro, 'Arbitration Case Law on Bribery: Issues of Arbitrability, Contract Validity, Merits and Evidence' in K. Karsten & A. Berkeley, supra note 11, 109 at 112.

65
Article 11 of the Civil Law Convention. See part B(ii) above.

66
I. Zerbes, supra note 18 at 116.

67
Commentary on the ICC Anti-Corruption Clause, Options I and II, Paragraph 3, § 1.