Foreign bribery

What is foreign bribery?

Foreign bribery is when a foreign public official is offered something (directly or indirectly, for example, offered to a member of their family) in return for doing something they should not or refraining from doing something they should.  

A bribe is anything of value offered, given, or promised to influence a decision, action, or outcome. It can include money, hospitality, employment opportunities, travel, gifts, confidential information, favourable treatment, or other direct or indirect benefits.

The purpose of foreign bribery may be to obtain or retain business, or to gain an improper advantage. It can also occur when a foreign person offers, gives or promises a bribe to a New Zealand public official.

What is a foreign public official?

Foreign public officials include people who act in the service of a foreign government, such as:

• government ministers and employees
• members of foreign parliaments
• judges and court officials
• employees of state-owned or state-controlled enterprises
• employees of public international organisations.

Foreign bribery is a crime

It is a criminal offence to bribe or attempt to bribe a foreign public official. New Zealand public officials also commit an offence if they solicit or accept bribes from foreign persons. Individuals and organisations involved in foreign bribery can face serious penalties, which may include prosecution or fines.

Recognise foreign bribery

Foreign bribery may be hidden in ordinary business activity across jurisdictions. It can involve seemingly legitimate payments, gifts, contracts or interactions with public officials that are intended to improperly influence a business or government decision. Foreign bribery can also involve agents, consultants, business partners, family members, or other intermediaries.

The following examples provide a non-exhaustive list of what can constitute foreign bribery.

• A consultant acting for a New Zealand company offers free products to a foreign customs official in exchange for ignoring regulatory requirements relating to imported goods.
• An employee of a New Zealand company offers a job to a relative of a foreign local government employee in exchange for the issue of a business licence.
• An overseas agent working for a New Zealand company makes a cash payment to the procurement manager of a foreign state-owned enterprise to secure a contract.
• A foreign public official provides confidential information about competing tenderers to a New Zealand company in exchange for a new vehicle.

Bribery in private international business

Bribery can also occur in private international business dealings where no public official is involved. It may occur between private businesses operating across borders. Examples of bribery in private international business include:

• A director of a New Zealand company pays for a procurement manager from an overseas company to visit New Zealand during a competitive tender process. The trip includes luxury accommodation, sporting event tickets and spending money. The New Zealand company is later awarded the contract.
• A sales employee of a New Zealand company agrees to pay a kickback to an employee of a foreign company in exchange for approving the purchase of goods.

Know the red flags

Red flags help organisations identify risk, strengthen due diligence and escalate suspicious activity. One red flag may not mean foreign bribery is occurring, however, repeated, unexplained or high-risk indicators should be checked and reported where appropriate.

Any organisation, in any sector, that engages in international business transactions can use red flags to help identify potential foreign bribery risks, inform risk assessments, strengthen due diligence processes, and support the timely escalation of suspicious activity for further review.

Find out more about foreign bribery red flags: https://www.sfo.govt.nz/foreign-bribery/foreign-bribery-red-flags(external link)

For additional examples of the foreign bribery risk indicators, refer to the International Foreign Bribery Taskforce’s Indicators of Foreign Bribery guidance.

Resources for organisations

Effective counter fraud practice is deliberate and risk based. Organisations can use these resources to build awareness, support prevention and encourage reporting.