Japan Urged to Toughen Punishment for International Bribery

(Bloomberg) -- Japan has serious gaps in its legislation on international bribery, the head of an Organisation for Economic Cooperation and Development working group said Thursday after a mission to the country he described as a "last resort" to pressure the government into stepping up its efforts to stamp out corruption.

Japan has prosecuted only four cases of international bribery since a convention on combating such corruption came into force in 1999, the OECD said. This is despite Japan being a founding member of the working group.

"Bearing in mind how big the Japanese economy is, for us it is a clear signal that something is wrong," Drago Kos, chairman of the working group, said after two days of meetings in Tokyo with officials from the ministries of justice, foreign affairs and trade.

Deputy Chief Cabinet Secretary Koichi Hagiuda said it was not the government's understanding that the working group had criticized Japan.

"We have been dealing with this actively," he told reporters Friday. "We would like to make efforts to pass legislation to back up the treaty in future."

The accusations cast a shadow over Prime Minister Shinzo Abe's championing of infrastructure exports, which are part of his bid to revive the world's third-largest economy. The criticism from the OECD follows a 2015 report by Transparency International, which described Japan has having "little or no enforcement" of the OECD convention, putting it in the same category as Russia.

Kos said the government has failed to legislate to allow profits of bribery to be confiscated, or to introduce fines for bribery offenses large enough to have a similar effect. Three attempts in the past 15 years have failed, and government officials told Kos during his visit there was no guarantee a law would pass any time soon.

"This is only the second time in the history of the working group that we have had to resort to this measure," Kos said of the group's visit to Tokyo, which comes after it sent letters and statements to Japan calling for change. Argentina is the only other country to have received such a visit, he said.

To contact the reporter on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net. To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net, Andy Sharp, Jason Koutsoukis