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Acting Assistant Attorney General Blanco Delivers FCPA Speech

Blaco

Today, Acting Assistant Attorney General Kenneth Blanco delivered these remarks at a Foreign Corrupt Practices Act / OECD Convention Anniversary Conference held at NYU School of Law. This post excerpts portions of Blanco’s remarks.

But first a few comments.

In his speech, Blanco states that it “is astonishing to think about what the FCPA and OECD Anti-Bribery Convention have achieved in a relatively short period of time.” That of course depends on what the word “achieve” means. On one level, has the FCPA really “achieved” (after 40 years – not exactly a “relatively short time period”) its objective of reducing bribery given that there are more enforcement actions, not fewer, as the FCPA has matured?

Moreover, in the speech Blanco stated that “since 2016 alone, the Justice Department has brought more than 35 criminal cases against individuals … in connection with foreign bribery charges.” I really have no idea where that number comes from given that, based on information in the public domain, in 2016 the DOJ brought FCPA enforcement actions against 8 individuals (see here) and thus far in 2017 the DOJ has brought FCPA enforcement actions against 12 individuals.

“It is astonishing to think about what the FCPA and OECD Anti-Bribery Convention have achieved in a relatively short period of time.

At the time of its passing in 1977, the FCPA was revolutionary, the first law of its kind.  And as a result, the U.S. was at the forefront of fighting international corruption, fighting to level the playing field for all honest and ethical corporations and individuals to fairly compete.

In fact, before and for decades after the FCPA was enacted, international bribery remained an accepted practice in order to compete for overseas contracts.  Some countries even permitted such bribes to be tax deductible.

Over time and persistence by prosecutors, agents, victims, and others – people like you here today – bad actors were exposed and the consequences of their bad acts were exposed as well.  Their greed and lavish lifestyles, often flaunted in the face of their many victims, became too much.  The public, everyday people, got tired of having their money stolen by corrupt individuals in the public and private sector. They demanded, and much like us, expected corruption to be punished.

Through the passage and enforcement of the FCPA, and the adoption of the OECD Anti-Bribery Convention, and other conventions like the United Nations Convention Against Corruption (UNCAC) and the Convention on Transnational Organized Crime (UNTOC), much has evolved and changed over the years, in a major way.

Forty-three nations are now signatories to the Anti-Bribery Convention and, as required, each has passed laws that criminalize the bribery of foreign officials.  Because of the international norms created by the Convention, many other countries have passed similar legislation and more are in the process of doing so.  This international approach has dramatically advanced our collective efforts to uncover, punish and deter foreign corruption.

The stakes for continuing down this path could not be clearer or higher.

Bribery threatens national security, good governance, sustainable growth and development, and democratic processes.  It undermines the rule of law and breeds distrust and instability.  It facilitates organized crime and empowers authoritarian rulers and can destabilize entire regions.  It corrodes public trust in countries rich and poor, inflicting particular harm on emerging economies.

Corruption punishes honest and ethical companies, unfairly and unjustly rewarding those companies willing to break the rules to get ahead, hurting our economy, businesses, investors, the ability of people to advance in life, harming society as a whole.

The commitment of the signatories to the Convention is grounded in the recognition of these harms and a collective desire to stand firm against them, united in our efforts.

But what makes the OECD Convention so unique, and so effective, is that it not only requires its signatories to affirm their commitment to fighting transnational corruption, or even that they pass laws to do so, but it also encourages cooperation and a collaborative approach.

Each of the signatories to the Convention has agreed to abide by strong provisions for mutual assistance, peer evaluation, and systematic monitoring.  In particular, the comprehensive peer review process motivates countries to ensure the highest level of compliance with the Convention and to take concrete action to fight foreign bribery and corruption.

For example, the Phase 4 evaluation process, which began in 2016, focuses on enforcement and covers in-depth exploration of issues such as detection, corporate criminal liability, mutual legal assistance, as well as unresolved issues from prior review periods.

These peer review mechanisms have ultimately made the compact an incredibly effective tool for combatting corruption.

In addition, over the past 10 years, law enforcement officials of the now 43 Parties have met twice a year to share experiences and information on foreign bribery enforcement.  These meetings have been instrumental in fostering contacts between law enforcement officials and facilitating international cooperation in foreign bribery cases.

The criminals we seek to identify and bring to justice move quickly, and it is imperative that we, collectively, do the same, moving as quickly as we can, using all of our collective tools.

Because of the efforts of the OECD Working Group on Bribery, and our law enforcement partners at home and overseas, we have transitioned from a world in which bribery of foreign officials was considered a sound business strategy, to one in which bribery is treated like the corrosive crime that it is.

The Department’s FCPA enforcement program would not be where it is today without the help of the OECD’s Working Group on Bribery and the member countries it comprises.

We are committed to continuing to work together with our overseas partners, to hold accountable individuals and companies who engage in corruption, regardless of where they operate or reside.

Our efforts in this respect, due to the tireless work performed by our prosecutors, the SEC, the FBI and other law enforcement agencies, has been remarkable.

Since 2016 alone, the Justice Department has brought more than 35 criminal cases against individuals and 17 cases against corporations in connection with foreign bribery charges.  These efforts have resulted in the collection of more than $1.6 billion in fines, penalties and disgorgement.  Going forward, we will continue to work closely with the SEC, the FBI and other law enforcement agencies.

We will work with our foreign counterparts to make sure that businesses and organizations that refuse to play by the rules are held responsible.

Countries around the world are strengthening their laws, and investigating and bringing impactful cases.

In this context, we have found that not only is there a need to cooperate with our partners on the investigative side, but also on global resolutions that apportion penalties between the relevant jurisdictions.

[…]

While the United States and our international partners are working together to investigate and bring criminal cases, particularly those involving corruption, the United States also stands ready to assist with the seizure of illegally obtained assets, even where a criminal case may not be brought in the United States.

The Criminal Division’s Money Laundering and Asset Recovery Section’s Kleptocracy Asset Recovery Initiative, which is specifically designed to target and recover the proceeds of foreign official corruption that have been laundered into or through the United States, has proven to be an incredibly valuable tool to fight corruption.  The results of this initiative have been outstanding.

[…]

The fight is never easy and a great deal of work remains to be done.

We at the Department of Justice will continue, as we have for years, to push forward against corruption wherever our laws permit.

We are proud to stand with our fellow counterparts around the world who are joining us in this fight, shoulder to shoulder, steadfast.

I am confident that if we continue to adhere to the spirit of trust and cooperation that has brought us this far, we will achieve results that seemed inconceivable just 20 years ago.

So, it seems clear from all this hard work and success, that there is a lot to be proud of in celebrating the 40th anniversary of the FCPA, and the 20th anniversary of the OECD Anti-Bribery Convention.”

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