Leading European arms makers are building up offshore slush funds to bypass new international measures backed by the U.S. to outlaw corruption, according to the Paris-based Organization for Economic Cooperation and Development (OECD). Japan also is targeted for similar illegal practices. Mark Peith, chairman of an OECD working party on corruption, says: "Many companies are stashing cash into these slush funds because they want to retain the option to bribe." OECD, which has not publicly identified the offending weapons companies, bases its allegations on information from confidential banking sources that the money is being deposited in countries outside OECD to make it safe from detection. Although OECD is not pointing the finger at individual British arms companies, it severely condemns Britain for failing to implement the OECD anti-bribery convention. It is now two years behind fellow OECD members in ratifying the agreement. "Britain has basically flunked the examination," says OECD's Peith. British government ministers say they cannot find time to introduce the appropriate legislation until after the next parliamentary elections. Due in 2002, these could be advanced to next year.