15/03/2024 – Luxembourg has undertaken significant legislative and institutional reforms since its Phase 3 evaluation in 2011, according to a new report by the OECD Working Group on Bribery. The Working Group notes in particular the constitutional reform that came into force on 1 July 2023, aimed at strengthening and modernising the status of judges and prosecutors. Nevertheless, the legislative and institutional reforms are weakened by structural resource issues affecting the entire criminal justice system. In spite of having secured the first foreign bribery convictions of natural persons since the Convention came into force in the Grand Duchy, the very weak enforcement of the foreign bribery offence remains a matter of concern.
The 46-country Working Group has just completed its Phase 4 evaluation of Luxembourg’s implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related instruments. The report expresses concerns regarding Luxembourg’s efforts to implement the Convention and to actively investigate and prosecute foreign bribery cases and calls on Luxembourg to better identify the foreign bribery risks to which its companies are exposed.
The Working Group makes a range of recommendations to Luxembourg, in particular to:
- Find lasting, structural solutions, backed by sustained political will, to allocate sufficient resources to the fight against foreign bribery.
- Take a more proactive approach to the investigation and prosecution of bribery of foreign public officials, with respect to both natural and legal persons.
- Increase the level of fines for natural and legal persons, which is insufficiently dissuasive, particularly given the seriousness of the foreign bribery offence.
- Devote greater attention to the detection of foreign bribery, including through anti-money laundering mechanisms.
The report also notes several positive developments. It especially welcomes the adoption of an ambitious new law establishing a general whistleblower protection regime, drawing extensively from international standards and incorporating a number of best practices in this field into Luxembourg law. The adoption of “plea bargaining” in the form of a judgment upon agreement (jugement sur accord) is also welcome as this mechanism should facilitate the resolution of complex financial cases. Luxembourg has deployed important efforts and resources to strengthen its legislative framework for mutual legal assistance, making it an efficient and attentive partner in executing mutual legal assistance requests from countries that are signatories to the Convention. The Working Group also notes a number of legislative amendments aimed at extending the confiscation regime and implementing it more effectively and welcomes the introduction of a legal provision establishing the liability of legal persons where a lack of supervision or control has enabled the commission of an offence.
On 7 March 2024, the OECD Working Group on Bribery adopted the Luxembourg Phase 4 report. The report, on pages 93-98, contains recommendations made to Luxembourg by the Working Group. It also provides an overview of recently implemented measures and the specific legal, policy, and institutional features of Luxembourg’s framework for fighting foreign bribery. Within two years (March 2026), Luxembourg will submit a written report to the Working Group on the implementation of all recommendations and its enforcement efforts. The follow-up report will be made publicly available.
The report is part of the OECD Working Group on Bribery’s fourth phase of monitoring, launched in 2016. Phase 4 looks at the evaluated country’s particular challenges and positive achievements. It also explores issues such as detection, enforcement, corporate liability, and international cooperation, as well as covering unresolved issues from prior reports.
