This article, which will be published in three parts, provides a compact overview of recent developments and emerging trends in international anti-corruption laws and compliance programs.3
For the last several years, I and my Butler Snow teammates have spent considerable time providing representation, training, defense, and guidance to a growing number of corporate clients engaged in international trade who are seeking to avoid the perils of international corruption. Our goal has been to:
- protect our client companies from enforcement liability and exposure to investigations, prosecution, and sanctions under the laws of the United States, and increasingly, those of numerous foreign countries; and
- help our clients to become more proactive, profitable, respected, attractive to deal with, and more marketable as ethical and compliant companies.
International efforts against corruption are decidedly on the rise.
The U.S. Foreign Corrupt Practices Act (enacted in 1977) is an important piece of global anti-corruption legislation. But it does not stand alone. For example, the U.K. Bribery Act (enacted in 2011) bears a close resemblance to the FCPA, as do a growing number of similar laws.
Since 2015, we have seen a positive trend in global efforts to embrace the international anti-corruption movement. There is a broadening international attitude, described by some as a "virtual consensus," that corruption is destructive and must be eradicated. As of the start of 2019, there were reportedly 49 countries with anti-corruption laws.
This trend is contrary to the legitimate concerns of many American citizens and companies who feared that United States' criminal anti-corruption prosecutions would put compliant parties at a competitive disadvantage in countries where corruption is tolerated, if not culturally and legally accepted.
International bribery and the Organization for Economic Cooperation and Development (OECD).
Findings from Trace International, Inc. show that in 2018 there was a notable global increase in the number of open bribery investigations. In Europe, open investigations rose by 37%, and Europe now accounts for more than half of all foreign bribery investigations.4
Additionally, in 2018, while the number of open United States investigations into foreign bribery allegations dropped slightly, there was a notable growth in enforcement actions. These increased by more than half and approached the record-setting volume of 2016.5
Trace also found that in the United States, the financial services industry remained the most heavily investigated while in other countries the focus remained most prominently on the extractive industries (mining), followed by engineering/construction, and aerospace/defense.6 Only 6% of open investigations focused on financial services outside the United States.7
Perhaps most illustrative of a robust international anti-bribery trend is the Organization for Economic Cooperation and Development's (OECD's) International Anti-Bribery Convention. Since 1988, this Convention has successfully leveraged anti-corruption legislation by requiring that all participating nations (44 as of 20188) criminalize bribery of foreign officials and by encouraging bribery sanctions in international business transactions.9, 10 Interestingly, the OECD does not require the criminalization of receiving or soliciting bribes.
Upcoming
In the coming weeks, we will cover the U.S. policy of focusing on individuals in corporate corruption investigations, the value of corporate surrender and penance, whistleblowers, international corruption ratings, and the importance of compliance in mergers and acquisitions. Please check back here for updates on these emerging developments.
Footnotes
1 Attorney with the U.S. law firm of Butler Snow LLP, New Orleans, Louisiana office; previously (2013-2016) Assistant Dean for Experiential Learning, School of Law, Tulane University, New Orleans, Louisiana, USA.
2 Attorney with the U.S. law firm of Butler Snow LLP, Ridgeland, Mississippi office.
3 This summary is based on Butler Snow's 2019 presentation in Hangzhou, China at the 10th Annual International Conference to the New Haven School of Jurisprudence, sponsored by Zhejiang University, Tulane Law School, and Yale University Law School.
4 "Global Enforcement Report," Trace Report, March 2019, available at https://law.com/global-leaders-in-law/2019/03/05/new-report-says-europe-now-has-more-than-half-of-all-open-bribery-investigations/?curatedinsights=true".
5 Id.
6 Id.
7 Id.
8 "OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions," OECD, available at http://www.oecd.org/corruption/oecdantibriberyconvention.htm.
9 Jim Letten, "Re: U.S. Foreign Corrupt Practices Act and the Importance of Anti-Corruption Efforts in Trade Globalization;" International Law Perspective of the BELT AND ROAD INITIATIVE; Zhejiang University Press, 2015.
10 "OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions," OECD, available at http://www.oecd.org/corruption/oecdantibriberyconvention.htm.
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