Corruption-free exports and financing
The corruption-free transaction of export business and its financing is of great importance to the Federal Government because it considers this to be a crucial aspect of sustainability. Accordingly, the absence of corruption is also a major criterion for a transaction’s eligibility for support. In connection with the granting of export credit guarantees, this means that:
- no export credit guarantees will be provided for transactions which were arranged through corrupt acts
- in the event that corrupt acts become known after cover has been granted, the Federal Government is released from its liability pursuant to the General Terms and Conditions of cover
The OECD plays a key role in establishing and enhancing uniform standards for the prevention of bribery in international trade. This also applies to state export credit agencies (ECAs). For them, the OECD sets the framework for the granting of state export credit guarantees with the so-called Recommendation of the Council on Bribery and Officially Supported Export Credits. The Federal Government has always been actively involved at the OECD in shaping the principles on which the fight against corruption is based and thus helped to establish fair international trading conditions and a level playing field and promote responsible corporate behaviour between the parties involved.
The Federal Government explicitly recommends the implementation of a suitable Compliance System that makes an effective prevention of bribery possible to exporters and banks doing foreign business. When, in connection with granting and handling of a state export credit guarantee, it comes to determining whether an export contract and/or an export loan agreement was transacted by the parties involved free of corruption, the respective applicable law is always relevant.
Two-stage implementation of the recommendations
1. Anti-Corruption Declaration
Exporters and banks must sign an anti-corruption declaration in connection with each application for an export credit guarantee they submit.
Key elements of this declaration are:
- confirmation that the contract, which is to be covered, has been brought about free of corruption
- information on any criminal charges, (criminal) investigations, sentences, official measures and arbitral awards in connection with corrupt actions not linked to the contract in question
2. In-depth examination of individual cases
If there is any indication that there may have been corruption-related incidents, either in this anti-corruption declaration or from other sources, an enhanced due diligence will be performed in a second step. In the course of this in-depth examination, the Compliance Management System of the company in question (inter alia, in-house measures, processes and structures implemented to prevent and combat bribery) will be analysed on the one hand. On the other hand, a closer look will be taken at the circumstances under which the concrete contract underlying the cover was concluded and any indications of corruption will be examined.
You will find additional information on the subject prevention of corruption under the following links:
- The Federal Ministry for Economic Affairs and Energy has published a small booklet on the subject “Preventing corruption – Guidelines for German companies operating abroad” (as of November 2018/in German only). It gives an overview over the most important regulations of the German criminal and regulatory offences law sanctioning corrupt acts in connection with business activities abroad. Besides, recommendations for the prevention of corruption and the establishment of a Compliance Management System are also included.
- A collection of further information on the subject corruption can be found on the Internet page of Germany Trade & Invest.
- The OECD’s basic documents and information on the subject prevention of Corruption can be found here: OECD’s Internet page on the subject “bribery and export credits” with further links.