The OECD Convention
To combat the practices of bribery of foreign public officials in international transactions, the OECD Member States have adopted the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Poland ratified the Convention in 2000. The Convention obliges the OECD Member States to penalize bribery, which has been defined not only as the acceptance of illegal financial benefits in one´s own country but also outside of its borders.
The OECD Council Recommendation
On 13 March 2019 the OECD Council adopted the Recommendation of the Council on Bribery and Officially Supported Export Credits.
The OECD Recommendation obliges the Member States to undertake decisive steps to countermeasure bribery and recommends certain actions with respect to official support provided by the export credit insurance agencies. As such, the agencies have been obliged to obtain from exporters and insured parties, and in some cases from other entities, information allowing them to assess whether the crime of bribery has been committed in relation to transactions that have been submitted for official (public) support. Therefore, the export credit agencies are to refuse official (public) support if it has been proven that bribery took place in connection with the transaction.
The definition of bribery relates to bribery of a local or foreign public official that has been convicted based on regulations of any given country, as well as bribery in the private sector if it applies in the country where the ECA operates.
The OECD Recommendation dated 13 March 2019 repeals and replaces the current recommendation on the same subject dated 14 December 2006.
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Procedures employed by KUKE
The rules on combating bribery in officially supported export credits that have been set out in the OECD Council Recommendation of 13 March 2019 have been reflected in the Resolutions of the Export Insurance Policy Committee, regulating the activities of KUKE in the scope of export credit insurance guaranteed by the State Treasury.
In accordance with the procedures laid down in the Resolutions of the Export Insurance Policy Committee, KUKE is required to undertake the following activities:
- obtain declarations on bribery from the exporter and/or financing institution of the export contract, including information on whether:
- the export contract or credit agreement to be covered by the insurance protection of KUKE were concluded as a result of bribery;
- the persons acting on behalf of the exporter and/or financing institution are listed on debarment lists and if such persons have been convicted of bribery within the period preceding the submission of an insurance application, as well as whether such persons are not involved in proceedings in respect of alleged bribery;
- obtain information from the exporter or financing institution of the export contract, on the identity of the persons acting on their behalf in connection with the export contract or credit agreement, and the amount, the aim of the commission, as well as the jurisdiction under which its payment was made;
- verify whether corrective and preventive measures were taken in relation to the persons acting on behalf of the exporter or financing institution of the export contract, who in the five years preceding the date of submission of the insurance application were convicted of the offence of bribery.
Furthermore, KUKE is actively encouraging exporters and financing institutions of export contracts to introduce and apply management and control systems to ensure transparency of processes relating to the export contract and limit the risks associated with bribery.
The recommendations formulated by the OECD Council have also been reflected in the Resolutions of the Export Insurance Policy Committee laying down the special rules on the activities of KUKE in the scope of export insurance guaranteed by the State Treasury and insurance guarantees, as well as the general terms and conditions of insurance applicable thereto.
The general terms and conditions of insurance require KUKE to obtain declarations on bribery from exporters and financing institutions of the export contract and, in justified circumstances, also from other persons. Failure to submit the required declarations results in a refusal to provide insurance cover under the insurance agreement or a refusal to grant an insurance guarantee. Should the insured receive information throughout the duration of the insurance agreement on the initiation of criminal proceedings for bribery relating to the export contract, they are required to advise KUKE of this fact. In the event of a final conviction handed down by a national or foreign court, a publicly accessible arbitral award or sanctions equivalent in nature being indicative of committing bribery in relation to a transaction covered by insurance protection, KUKE shall refuse to disburse compensation or shall demand its reimbursement if the compensation was already disbursed.
Following the OECD Council recommendations, the general terms and conditions of insurance provide a policy for the protection of rights of persons not responsible for bribery, which means that if bribery was committed in relation to an export contract and the subject of insurance is a credit agreement, the insured creditor does not lose their right to compensation.
According to the Recommendation of the OECD Council, Export Credit Agencies (ECAs) monitor the application of recommendations on the national level and carry out exchanges of practices with other agencies.