“Fighting Global Corruption: Business Risk Management” Workshop

Ambassador Hans Klemm speaks at the “Fighting Global Corruption: Business Risk Management” Workshop
Ambassador Hans Klemm speaks at the “Fighting Global Corruption: Business Risk Management” Workshop

President Daraban, fellow speakers, distinguished guests, ladies and gentlemen,

Thank you for this opportunity and I’ll follow the President’s lead by also keeping my remarks brief.

It is my pleasure to be here today and to welcome all of you to this special event, “Business Without Corruption: U.S. Anti-Corruption Best Practices Tailored to the Needs of the Romanian Business Environment”.

On behalf of the U.S. Government, I congratulate the Romanian Chamber of Commerce, General Dynamics Corporation and TRACE International for your efforts to promote greater knowledge of anti-corruption best practices here in Romania. Mr. President, thank you for making reference to the U.S.-Romania Strategic Partnership. It is hard to overestimate the contribution that Romania’s increasingly credible fight against corruption has had on the strength of our bilateral Strategic Partnership. We also give very strong credit to Romania’s investment in international security, both here in the Black Sea region, but also on battlefields far from Romania. We also give credit to the strong economic growth that is enjoyed in Romania currently. But it is Romania’s contribution in terms of its fight against corruption that has truly benefited and strengthened the partnership. It is recognized in the United States, it is recognized in capitals within the European Union and I strongly encourage Romania to continue this fight against corruption.

The effects of corruption from a business risk management perspective is that corruption raises the cost and risk of doing business — it deters investment, it stifles economic growth, it distorts prices, it disrupts economic development projects and it corrupts government procurement activities.

A U.S. Department of State study entitled “Fighting Global Corruption: Business Risk Management” notes that corruption raises the cost of doing business by at least 20%. There is a disincentive to honest and efficient employees and citizens as a result. Corruption begins small but leads to bigger or increased corrupt activities and with increased tolerance of corruption the honest are penalized and society begins to accept a perverse incentive program.

Forty years ago, the Congress of the United States passed the Foreign Corrupt Practices Act (FCPA), which forbids American companies to pay or promising to pay anything of value to foreign officials, foreign political parties or their officers or candidates for foreign office in exchange for influencing the action of a foreign official in exercising his/her official duty.

To a large extent, the Foreign Corrupt Practices Act has worked quite well and I know my colleagues at General Dynamics will attest that American companies operating overseas are very conscious of their obligations under the Act and constrained by those obligations.

As you will learn in the next two days, the FCPA has created a preventative framework that can serve as a guideline to keeping companies from crossing ethical and legal lines.

With that President Daraban, I would like to conclude by again thanking the Romanian Chamber of Commerce for hosting today’s event and supporting this conversation on anti-corruption best practices.

Thank you and I wish you a productive event.