Recently Professor Samuel Buell and Professor Rachel Brewster (both from Duke University School of Law) authored a paper titled “The Market for Global Anticorruption Enforcement” which addresses the general increase in FCPA enforcement over the past approximate decade.
This post sets forth additional information to consider regarding the issues discussed in the article.
The article abstract states:
“In just two decades, enforcement of the Foreign Corrupt Practices Act (FCPA) has evolved from a backwater of corporate and international financial crime to one of the most prominent and feared laws in those fields. What accounts for the ten-fold increase, over just 15 years, in the annual FCPA case volume produced by United States enforcers? We explain the development as arising from a confluence of independent but nonetheless symbiotic international and domestic political and economic forces. First, in the international arena, policymakers dramatically shifted their beliefs in the harms from bribery. This change and the continuous American pressure to conclude an anti-bribery treaty created a new consensus among major exporting countries to criminalize foreign bribery. This opened up new political and institutional paths to pursue the supply of foreign bribes. Second, U.S. enforcement lawyers eagerly pursued these newly available paths, propelled by political pressure and professional considerations. Third and inevitably, a large and active FCPA defense bar emerged that, perhaps ironically, helps keep primed a now steady pump of FCPA actions into the U.S. corporate enforcement system. A fourth stage has begun in which other nations, particularly in Europe, are both assisting and competing with the U.S. in the field of anti-corruption enforcement. It remains to be seen how this latest development will, over the longer haul, affect the size of the global market for anti-corruption enforcement and the U.S. share of that market.”
Set forth below is additional information to consider regarding the issues discussed in the article.
- As to the FCPA enforcement statistics cited in the article, see here for the article “A Common Language to Remedy Distorted FCPA Enforcement Statistics.”
- The FCPA’s anti-bribery provisions are not extraterritorial as to foreign actors. The jurisdictional portion of 78dd-1 (applicable to foreign issuers) is “use of the mails or any means or instrumentality of interstate commerce” in furtherance of a bribery scheme and the jurisdictional portion of 78dd-3 (applicable to other foreign actors) is “while in the territory of the United States, corruptly to make use of the mails or any means or instrumentality of interstate commerce or to do any other act” in furtherance of a bribery scheme. Sure the U.S. enforcement agencies take expansive views of this jurisdictional in what I’ve called a form of de facto extraterritoriality, but as a matter of law the FCPA’s anti-bribery provisions are not extraterritorial as to foreign actors.
- As to the many criminal books and records and internal controls actions brought by the DOJ, see this prior post.
- As to the issue of why so many top FCPA settlements involve foreign companies, see this prior post (statistics current when post published).
- For an extended discussion of several widely recognized practical reasons for the general increase in FCPA enforcement, as well as widely discussed provocative reasons for the general increase, see Chapter 6 of the book “The Foreign Corrupt Practices Act in a New Era” titled “Reasons for the General Increase in FCPA Enforcement.”