v. reports on enforcement in oecd convention countries - Begroting

Martin Schlaff be indicted for transferring some US $4.5 million into the bank accounts of Gilad and Omri Sharon,
the sons of the former prime minister. 216 The funds were allegedly transferred in 2002 to pay off debts Sharon had
acquired during the 2001 elections in Israel. The results of the investigation, including a reported recommendation
that the two sons be charged, 217 have reportedly been passed on to the offi ce of the state prosecutor as well as to
the head of the Police Investigations Department. Police also reportedly carried out an investigation ending in 2009
into allegations that Schlaff had sent Foreign Minister Avigdor Lieberman hundreds of thousands of dollars in funds
between 2001 and 2004 while Lieberman was serving as national infrastructures and transportation minister. 218
Israeli prosecutors have reportedly been thwarted in their efforts to secure the extradition from Peru of a
former judge, Dan Cohen, on charges of accepting bribes from Siemens in connection with a purchase of turbines
while he was director and chairman of the asset committee of the Israel Electricity Corporation. 219 The amount
of the bribes is allegedly in the millions. 220 The extradition was originally upheld by the Peruvian Supreme Court
in July 2010 but a lower court later reversed this decision based on an appeal by Cohen on the grounds that the
legal process against him had been fl awed and that there were no diplomatic relations between Peru and Israel
(although both countries are parties to the UN Convention against Corruption.) The Supreme Court then reportedly
launched a counter-appeal, which was upheld by the Lima district court and thus opened the way for the Peruvian
government to sign the extradition warrant. However, in January 2011 the international department of the Israeli
prosecution services was informed that they had failed to obtain the extradition. 221
Inadequacies in legal framework: There are no signifi cant inadequacies in the legal framework.
Inadequacies in enforcement system: As the law prohibiting foreign bribery is relatively new in Israel, it is still
early to determine the effectiveness of the enforcement system. In the export credit fi eld, although Ashra (the Israeli
Export Insurance Corporation Ltd.) requires anti-bribery declarations by companies seeking insurance or export
licenses, it does not require that such companies demonstrate the accuracy of these declarations, in particular with
regard to subsidiaries and agents.
Legal framework and enforcement system regarding subsidiaries, agents and other intermediaries: Israeli
Penal Law 5737-1977 holds an Israeli company liable for bribery of foreign public offi cials, whether the bribes are
paid by third parties, subsidiaries, agents or other intermediaries acting on its behalf.
Recent developments: Israel has recently adopted regulations on internal controls for public companies, including
controls against fraud. In 2010 the State Attorney issued Guideline No. 9.15 (Aggravation of Sanctions and
Sanctioning Policy for Bribery Offences) instructing state prosecutors to implement a recent increase in sanctions
for bribery offences, including bribery of foreign public offi cials. Furthermore, the Ministry of Defence (MOD)
reported that it had introduced the requirement of a new anti-bribery declaration for exporters in connection
with defence marketing and export license applications. 222 Export licences also now include a provision stating
that a violation could lead to the suspension or revocation of the licence. Additionally, during 2011 major defence
exporters will be required to adopt and implement corporate anti-bribery compliance programmes in stages as a
precondition for receiving marketing and export licenses. In the fi rst stage major defence exporters will be required
to notify the MOD that their board of directors has decided to develop and implement an anti-bribery compliance
programme. In January 2011, the Israel Tax Authority issued Income Tax Circular 2/2011 on the prohibition of
bribery of foreign public offi cials, referring to the amendment to Article 32 of the ordinance prohibiting the taxdeductibility
of payments made in violation of any law and clarifying explicitly that the amendment also applies to
payments of bribes to foreign public offi cials. Ashra reported that it has taken all necessary steps to comply with all
clauses of the Recommendation on Bribery and Offi cially Supported Export Credits.
216 France 24, 7 September 2010, “Austrian tycoon may face Israel bribery charges”,
http://www.france24.com/en/20100907-austrian-tycoon-may-face-israel-bribery-charges ; HAARETZ.com, 7 September 2010,
“The Schlaff saga” http://www.haaretz.com/weekend/week-s-end/the-schlaff-saga-1.312804
217 Jerusalem Post, 1 February 2011, “Police: Sharon‘s sons mediated bribery transfers for ex-PM”,
http://www.jpost.com/NationalNews/Article.aspx?ID=206242&R=R1
218 Ibid.
219 HAARETZ.Com, 26 January 2011, “Peru denies extradition of former Israeli judge”,
http://www.haaretz.com/news/diplomacy-defense/peru-denies-extradition-of-former-israeli-judge-1.339202 ;
La Republica, 15 January 2011, “Declaran improcedente libertad provisional tramitada por ex juez israelí”
http://www.larepublica.pe/23-09-2009/declaran-improcedente-libertad-provisional-tramitada-por-ex-juez-israeli
220 Ibid.
221 Ibid.
222 Israel Ministry of Defense Export Control Site “מנכ“ל משהב“ט קורא ליצואנים הביטחוניים לגבש וליישם תכניות ציות למניעת
שחיתות ומתן שוחד לעובדי ציבור זרים” http://www.exportctrl.mod.gov.il/ExportCtrl/Information/ForbiddenBribery/Hanhayot/ ;
Globes, 24 October 2006, http://www.globes.co.il/serveen/globes/docview.asp?did=1000145240
Progress Report 2011: Enforcement of the OECD Anti-Bribery Convention
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