November 10, 2003
U.S. Set to Sign Corruption UN Convention
Notwithstanding difficulties cited by the business community, negotiators have told USCIB that the United States intends to sign the United Nations Convention Against Corruption in December.
The convention targets bribery of officials, money laundering involving public funds, government procurement fraud and embezzlement of public funds, requiring countries to adopt laws (if not already on the books) prohibiting such acts. However, it also requires parties to provide a private right of action for those who suffer damages as a result of an "act of corruption.”
Requiring the creation of a private right of action, based on broadened vague activities in jurisdictions in which U.S. companies do business, would expose those companies to an additional risk of litigation in courts outside the United States, business experts said. It is also feared that that this will provide a new basis on which claims will be brought under the Alien Tort Statute.
"Regrettably, the terms of the convention were not well publicized, and the UN negotiating process is very cumbersome," said Edwin Willliamson, vice chair of USCIB's Investment Committee. "As a result, USCIB members were not able to make get their views reflected in a revised text of the convention."
Signing is set for early December with ratification to follow over an estimated two years. The convention requires 30 countries to ratify to trigger entry into force. USCIB members are considering drafting a reservation to lessen the harm of the private right of action.
Staff contact: Stephen J. Canner
UN website
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