LAW & ECONOMICS: CARTEL - PUBLIC PROCUREMENT - CORRUPTION - COMPENSATION

Deterring corruption and cartels: In search of a coherent approach

This article addresses how the rules intended to protect consumers and taxpayers from economic crime, namely leniency and cartel settlements in competition law, criminal sanctions and debarment of suppliers from participation in public tenders for bribery, work together. While the economic reasoning behind these rules makes sense when considering each one of them in isolation, their impact is weakened when they are opposing each other. Competition authorities are narrowly mandated to control competition, and they do not seek out corruption. For criminal law investigators problems are created if they interfere (because it would undermine the leniency program); conversely, there are problems if they stay away (because that would undermine enforcement of corruption and other economic crimes). We propose to strengthen the regulation of corporate misconduct through better collaboration and integration of the other law enforcement functions and institutions that exist. The first step is to maintain and share a centralized database on firms’ offenses and settlements with antitrust and procurement authorities. The second step is to expand the mandate and competence of competition authorities to search for, and react against, corruption.

I. Introduction 1. Since the 1990s, governments have approved and implemented radical tools for the sake of protecting markets from illegal business behaviour. International conventions on corruption made it impossible for firms to justify their bribery for contracts by pointing to a foreign business culture. Most jurisdictions can prosecute and sanction suppliers for the bribes they pay in foreign markets, expenses that suppliers previously deducted from their taxes. Across the globe, politicians proclaim zero tolerance towards corruption, and at present, most countries have rules mandating that procurement agencies exclude corrupt suppliers from participating in tenders for public contracts. At the same time, competition authorities’ enforcement against secret cartels has hardened,

Access to this article is restricted to subscribers

Already Subscribed? Sign-in

Access to this article is restricted to subscribers.

Read one article for free

Sign-up to read this article for free and discover our services.

 

PDF Version

Authors

Quotation

Emmanuelle Auriol, Erling Hjelmeng, Tina Søreide, Deterring corruption and cartels: In search of a coherent approach, February 2017, Concurrences Review N° 1-2017, Art. N° 82670, www.concurrences.com

Visites 228

All reviews