situation. Mining industries especially (oil and gas, ferrous metals, diamonds, forestry, etc.) face a
difficult challenge: how to work in countries that are rich in natural resources, but are notorious for
corruption (for example, Azerbaijan, Angola, Nigeria), while following the strict anti-corruption
legislation of their home countries.
In due time, companies operating in transitional countries are exposed to pressure from the public in their
It is expected that BP/AMOCO and Netherlands Royal Dutch/Shell will take active steps in this
in response to pressure from civil society. For example, the Caspian Revenue Watch project,
Oil Funds in Azerbaijan and Kazakhstan.
(Azerbaijan Parliament) and thus acquire the status of the law. Foreign companies outside of the oil
sector, like local companies, face arbitrary interpretation of the inconsistent legislation by local public
officials. Immunity granted to international companies also extends to subcontractors. In addition,
multinationals have already demonstrated their firm stance towards corrupt practices and are harassed to
a much smaller extent than local companies. Unfortunately, outside of the oil sector, foreign companies
are not that well protected, which is likely one of the factors behind the low level of foreign investment
in the non-oil sector of Azerbaijan. As mentioned above, corruption has left its stain in all countries. It
suffices to recall the scandals surrounding the U.S. companies Enron and Arthur Andersen.
Multinationals, as a rule, are willing to subcontract to local companies provided the latter meet all the
practices. This is very important for investing companies, as even a remote affiliation with an unethical
business might undermine their hard-earned reputation and affect profits.
According to Transparency Azerbaijan research, issues of particular concern to international companies in
International organizations and companies can help local businesses, if the latter demonstrate their
Until very recently the tax regime in many countries turned a blind eye towards companies paying bribes
deduct bribes as legal business expenditures, while domestic bribery, was viewed as a major criminal
offence. Many governments applied a double standard in their policies on bribery. In 1977, the U.S.
Congress adopted the Foreign Corrupt Practices Act which declared bribes paid to foreign public officials
as a means of doing business as a criminal offence.
Adoption of the Anti-Corruption Act by the US
Alec Appelbaum, Battle Lines Forming in Struggle over Corruption in Caspian Basin, July 20, 2001, in Business and
Economies, August 15, 2001, Eurasia Net Business and Economics,
More details can be found at www.eurasianet.org
More details can be found at
, between mid-1994 and late-1997, 39 out of 139
to bribes. U.S. companies have lost contracts totaling 11 billion US dollars due to their refusal to pay
Following the U.S. initiative, the OECD developed the International Anti- Bribery Convention, which
This Convention makes bribery to foreign public
as well as five non-member states. Among other international instruments designed to combat
corruption, the Council of Europe Criminal and Civil Law Conventions, which our country has recently
joined, should be mentioned.
In June 2000, the president of the Azerbaijan signed a decree tasking the government to draft a national
anti-corruption law and program. Despite the fact that the adoption of this law and program constitutes an
integral part of obligations of Azerbaijan to join the Council of Europe
, the program has not yet been
and adoption of the Law was delayed.
According to experts, the Law contains some minor
deficiencies, for example, the Article 10.1 prohibits public officials from accepting any gifts of over 50
conventional units (i.e., U.S. dollars), however, this prohibition does not extend to officials’ immediate
family members and relatives. Nevertheless, adoption of the Law is a significant step in combating
corruption in our country.
Transparency International and Transparency Azerbaijan
Transparency International (TI) leads the international anti-corruption movement. This international non-
countries world wide. It is funded by subsidies from governments of many countries and private sector
donations. Initially a working group was established with headquarters in Berlin, Germany. Mr. Peter
Eigan led a group of enthusiasts who recognized the need to combat this negative social phenomenon.
Transparency International releases several types of products, the most well known being the annual
Corruption Perception Index. TI does not expose individual cases. Rather, in an effort to make long-term
combat against corruption, TI focuses on prevention and reforming governance systems.
Transparency Azerbaijan (TA) is the national chapter of TI in our country. The main goals pursued by
reduction of corruption by means of joint efforts of all sectors of the society: all branches of power,
public sector, civil society and media.
Let’s Clearly Agree And Recognize That Corruption Is A Crime, Commentary of W. Daily, U.S. Minister of Commerce,
Convention on Combating Bribery of Foreign Public Officials in International Business Transactions,
See Opinion 222, concerning obligations of Azerbaijan before Council of Europe,
Please see footnote 2 above
More information can be found on: Transparency International
(in English); Transparency Azerbaijan
beyond in English, Azeri and Russian)