I. Introduction

There is long-standing consensus among participants in the Working Group on Bribery on the need for a rigorous process of multilateral surveillance to ensure the effectiveness of the instruments to combat bribery in international business transactions, particularly those involving criminal law. The present document summarises the modalities concerning the systems of self- and mutual evaluation provided for in Article 12 of the Convention and Section VIII of the revised Recommendation, which were agreed by the Working, Group at Its meeting on 29 June - I July 1998.

II. General issues

Delegates agree that the monitoring procedure should conform to a number of general principles:

Purpose. The purpose of monitoring is to ensure compliance with the Convention and the revised Recommendation. Monitoring- also provides an opportunity to consult on difficulties ill implementation and to learn from the solutions found by other countries.

Effectiveness. Monitoring must be systematic and provide a coherent assessment of whether a participant has implemented the Convention and 1997 revised Recommendation.

Equal treatment. Monitoring must be fair and this means equal treatment for all participants. Monitoring performance is an exercise among peers who can be frank in their evaluations. The Secretariat has an important role in ensuring uniform application of the procedures.

Recommendation and Convention. The Recommendation and the Convention are very different instruments: the Convention contains detailed binding commitments in the field of criminal law; the Recommendation has a wider scope and is written in more general terms. Both are important elements of the activity to combat bribery in international business transactions. There are also Important interconnections between the two instruments, for example, in the areas of accounting and money laundering.

Cost-efficient. The monitoring procedure should be efficient, realistic, concise and not overly burdensome. It is necessary, however, to ensure that monitoring is effective, since together with the Convention and the Recommendation, it guarantees the level playing field.

Co-ordination with the Council of Europe and other organisations. International organisations such as the Council of Europe and European Union, and the participants in them share the goal of combating corruption, though the scope of their respective efforts and their more specific objectives may differ. All participants want to avoid duplication of effort. Since the Council of Europe is launching a procedure to monitor implementation of its anti-corruption principles and instruments, particular efforts should be made to take its activities into account.

Public information. The 1997 revised Recommendation calls on the Working,, Group to provide regular information to the public on its work and activities and on implementation of the Recommendation. This general responsibility must be balanced against the need for confidentiality whichfacilitates frank evaluation of performance.

III. Phase 1 (1999- April 2000)

Objective

The principal objective of Phase I Is to evaluate whether the legal texts through which participants implement the Convention meet the standard set by the Convention as well as initial actions to implement the Recommendation. It provides an opportunity for countries to learn from the experiences and approaches of others.

To be fair, the evaluation should cover all countries and be carried out in a relatively short time frame.

Phase I would include elements of both self- and mutual evaluation. The approach would be "vertical" or based on examinations country-by-country.

The evaluation of performance is the work of the entire Group of peers.

Elements of the Phase 1 mutual evaluation procedure

The Phase 1 - mutual evaluation will include:

• Preparation of the consultation in the Working Group, including reply to a questionnaire by the examined country and preparation of a provisional report on the country's performance;

• Consultation in the Working Group;

• Adoption of a report on the examined country's performance.

Preparation of the consultation questionnaire and replies to it

The questionnaire would solicit information on implementation of the Convention and on implementation of the Recommendation.

All countries would be expected to reply to the questionnaire by 31 December 1998. If a country' laws to implement the Convention were enacted, and in that process amended, after 31 December 1998, it should Submit an amendment to its reply to the questionnaire.

The replies to the questionnaire should be precise and provide sufficient detail to permit an assessment of conformity of laws with the Convention and consistency of laws and practice with the 1997 Recommendation.

Replies should reflect all relevant elements of the legal system (including, for example, other relevant laws, regulations, judicial precedent, other treaties, the constitution) so as to provide a complete picture of legal implementation of the Convention and implementation of the Recommendation.

Replies to questions concerning the Convention should take into account information in the Commentaries to the Convention which are part of its context.

Replies to the questionnaire would be circulated to all participants in the Working Group.

The Secretariat should examine the replies to ensure they are complete and, if necessary, request additional information from the participant.

Preparation of a preliminary report as the basis of the consultation

The consultation which will take place in the Working Group should be on the basis of a 5-6 page report.

The report should have a standard format, i.e., description, evaluation and recommendations for further measures. (This could be elaborated further.)

The report would be drafted principally by the Secretariat. It would not have any formal status until it was examined by the Group.

Two lead or reviewers would assist the Secretariat. In particular, they would offer suggestions for the sections concerning evaluation and recommendations.

Lead reviewers Would be designated from a roster of experts nominated by participating countries, in consultation with examined countries, and with a view to their familiarity with the legal system of the country examined, and to achieving a variety of perspective and language capability.

The Country being, reviewed would have an opportunity to see the report and comment on it prior to the Consultation in the Working Group.

Working Group consultation and adoption of results

A consultation in the Working Group on each country would last about an hour.

The Consultation would have as is objective to clarify questions and to formulate conclusions, including, as appropriate, recommendations to the examined country.

This assessment Could be adopted by consensus or reflect differences in opinion among participants in the Working Group. (The assessment could also be adopted at a subsequent meeting, if the Group preferred that the Secretariat prepare a draft text of the conclusions.)

The Country being examined would have the opportunity to make an initial short (about 10 minutes) presentation of its approach.

Lead Countries (if these are part of the preparation procedures) could be called upon to make preliminary comments or ask initial questions during the consultation.

Lead countries could help initiate the discussion, but all delegates would be invited to participate in the evaluation.

Report to Ministers in Spring 2000

Country assessments Could be brought together for a report to the Spring 2000 meeting, of the OECD Council at Ministerial level. The final preparation of the report to Ministers could allow for up-dating information and harmonising the assessments.

Draft laws or enacted laws

Reports and consultations in the Working Group would be undertaken only for countries which had implemented the Convention.

Scheduling of reviews would be flexible so as to accommodate countries whose procedures for ratifying the Convention and enacting implementing legislation were completed in the course of 1999.

The report to Ministers in Spring 2000 would distinguish clearly between countries which had become Parties to the Convention and those which had not.

Other OECD bodies

The Working Group is responsible for overall review of performance in implementing the Convention and the 1997 revised Recommendation.

While the questionnaire is directed at all participants, the Working Group would draw on information developed by other OECD bodies, particularly the Committee on Fiscal Affairs and the Development Assistance Committee, on implementation of elements of the revised Recommendation in their respective fields.

Council of Europe and other organisations

The OECD Secretariat will communicate regularly with the Secretariats of the Council of Europe, the EU and other organisations, with a view to avoiding duplication among respective exercises to monitor commitments to combat corruption in international business transactions.

Civil Society

Because peer review is an intergovernmental process, business and civil society groups would not participate in the formal evaluation process, in particular, in the consultation in the Working Group.

Business and civil society groups may wish to express their views to the Group. Providing information on the schedule of the country consultations would permit such groups to provide any information or opinions in writing in a timely way.

Public information

Given the interest of the business sector and the public in this matter, transparency of the monitoring process is important. The Working Group therefore should consider making as much information available as possible. Participants in the informal meeting emphasised, however, that the mutual review

itself needed confidentiality if it were to be frank and efficient. The exact content of any report to be released would have to be determined once the examinations are completed.

Budget

The Secretariat would intend to carry out Phase I within a budget envelope including a new A4 position and modest funds for missions and consultants.

Participants would bear costs of translation of their implementing legislation into one of the two official languages of the OECD, English or French, the costs associated with filling out the questionnaire and with

reviewing the legislation and replies to the questionnaire of other countries and the reports on them.

IV. Preliminary Outline of Phase 2

The present outline is preliminary. A number of substantial elements, notably the questionnaire for Phase 2 and the terms of reference for on-site visits, need to be further developed.

Objective

Its purpose would be to study and assess the structures put into place to enforce the laws and the application of the laws and rules in practice. It would be the moment to broaden the focus of monitoring to encompass more fully the non-criminal law aspects of the 1997 revised Recommendation. Phase 2 would also serve an educative function as participants discuss problems and different approaches.

The form of the evaluations in Phase 1 are country examinations in order to obtain an overall impression of the functional equivalence of participants' efforts.

Timing of Phase 2 Mutual evaluations

In principle, Phase 2 would begin in the second half of the year 2000, in order, in a 3-5 year cycle to be able to finish by 2005. It might be necessary to continue with evaluations of some countries' "legal" implementation of the Convention, if this had not been completed in Phase 1 or if new participants joined the Convention.

It might be interesting to fix the order of the reviews based on the concept used in the entry into force provisions of Article 15 of the Convention i.e., according to relative involvement of economies in international trade.

Phase 2 Mutual Evaluation would be comprised of the following elements:

• reply to a questionnaire,

• preparation of a provisional report on country performance;

• consultation in the Working Group;

• adoption of a report on country performance.

Questionnaire

The questionnaire itself would be specified during 1999.

It might include general questions to all participants and other questions related to specific issues concerning the examined country which had arisen in Phase 1. It would contain questions concerning implementation of the revised Recommendation.

Draft reports assessing performance

Section VIII, paragraph ii, of the 1997 Recommendation calls for a system of mutual evaluation, where each Member country will be examined in turn by the Working Group on Bribery, on the basis of a report which will provide an objective assessment of the progress of the Member country in implementing the Recommendation.

The report should have a standard format to help ensure equal treatment. The format could include sections of description, evaluation and recommendations for improvement. (This could be elaborated further.)

The report would be based on the reply to the questionnaire and information obtained during a visit to the examined country.

It would be drafted by the Secretariat with the assistance of lead examiners.

On-site visits by the Secretariat and lead examiners

On-site visits by the Secretariat and 2-3 lead examiners would be an efficient way to obtain information on practice with respect to a number of elements such as enforcement and prosecution policy. It also offers the possibility to talk with magistrates and police who are applying the law and to consult with the private sector to determine the impact the laws and enforcement have had on their behaviour. It would also be an opportunity to consult on other points in the Recommendation.

Lead examiners for each visit would be chosen, in consultation with the examined country, from a roster of names o,f experts provided by Parties to the Convention (see below).

A clear set of terms of reference for all on-site visits, including the principle of confidentiality, will be developed by the Working Group. All participants agreed that on-site visits should not require information on ongoing criminal or other cases.

The examined country will play an active role in fixing the date for and preparing the visit.

Budget for on-site visits

The cost of on-site visits includes the travel and per them of the Secretariat which is charged to the budget of the Organisation.

Participants could expect to bear the costs of travel and expenses for 2-3 experts over the period of the review cycle.

The examined country would bear the cost of replying to the questionnaire and preparing the on-site visits -- once during the cycle.

Universal versus selective use of on-site visits to assist evaluation

There would be a presumption that all participants would be evaluated in a procedure which would include a visit to the examined country by lead examiners and the Secretariat.

Following the first cycle of country reviews in Phase 2, the Working Group could decide to undertake a more focused or selective round of country reviews or a more horizontal approach to evaluation.

Consultation in the Working Group

The mutual evaluation would be undertaken through a consultation in the Working Group. The consultation would be the opportunity to discuss the difficult issues, listen to the examined country explain its legal system and its approach and find the suggestions that the Group would agree to make.

The examined country Could be expected to bring a number of experts to the session, including from the enforcement community, in order to be able to respond to questions from the Group.

Adoption of a report on the performance of the examined country

The Working Group would need to formulate value judgements concerning the examined country's

Clear, well-structured questionnaires and reports would be important to achieving a qualitative assessment of the examined country's performance which all participants could consider as the result of a fair process which applies an equal standard to all countries.

There should be constructive interaction of the Secretariat and lead examiners with the examined country so the report reflects the fullest possible understanding of the country's approach.

Mutual review

Only Parties to the Convention would actively participate (as lead examiners in possible on-site visits, in the consultation and in the adoption of the report) in the evaluation of whether the examined country had fulfilled the obligations of the Convention.

Involvement of the civil society and public information

Involvement of the civil society and the provisions of public information would be governed by the same considerations as for Phase I.