Price Sanond

Increase in Foreign Anti-Corruption Prosecutions, but not just by US Authorities and not just Against US Companies.

  • September 10, 2012
  • Comments Off on Increase in Foreign Anti-Corruption Prosecutions, but not just by US Authorities and not just Against US Companies.

A progress report by Transparency International on enforcement of the OECD Convention on the Combating of Foreign Public Officials in International Business Transactions (the OECD Convention)  reports increased (but still inadequate) enforcement of foreign anti-corruption laws. The signatories to the OECD Convention represent two-thirds of world trade and three-quarters of world investment. In a sense, the OECD Convention is a treaty that requires signatory countries to adopt laws similar to the U.S.’s Foreign Corrupt Practices Act (FCPA).

The OECD’s report says there is now active enforcement in seven countries.  The U.S. leads with 275 cases followed by Germany with 176 cases.  All seven countries with active enforcement regimes report an increase in the number of foreign anti-corruption prosecutions.  According to the OECD report:

With 144 new cases in 2011, the total number of cases prosecuted by 37 major exporters rose from 564 at the end of 2010 to 708 at the end of 2011, with a further 286 investigations ongoing.

A recent New York Times article suggests that even in the absence of increased enforcement by countries other than the U.S., non-American companies and individuals still face serious risks for violating foreign corruption laws: “[A] list of the top companies making these settlements [of U.S. FCPA] charges is notable in one respect: its lack of American names.”   According the New York Times:

Peter Y. Solmssen, general counsel at Siemens, said European companies were only now becoming aware that the law applied to them. This is in part because of the attention given to his company’s case.

“U.S. companies have been living with this law a lot longer than European companies,” Mr. Solmssen said. “It’s been part of their awareness. Our case was a real watershed. It woke up a lot of people in Europe. There had not been a lot of headline cases before that to make people sit up and take notice.”

But that is changing.  All businesses, American or not, should expect more aggressive enforcement of foreign anti-corruption laws.  The number of prosecutions is increasing and the anti-corruption authorities are becoming creative and aggressive in their use of anti-corruption laws.

For example, the FCPA does not criminalize a foreign official’s receipt of a bribe, but that has not stopped the U.S. Department of Justice from using other laws, particularly money laundering laws, to indict, convict and imprison foreign officials who have received bribes in violation of the U.S. FCPA.  In Thailand, the former Governor-General of the Tourism Authority of Thailand, Ms. Juthamas Siriwan, and her daughter are facing and challenging such charges in the U.S. District Court for the Central District of California. The achieves section of the Anti-Corruption section of the Knowledge part of this website contains a number of articles about this protracted legal dispute in the U.S.