For years, these pages have highlighted the need for a Foreign Corrupt Practices Act common language as to the basic question of “what is an FCPA enforcement action?” (See here, here, here, here. See here for the article “A Common Language to Remedy Distorted FCPA Enforcement Statistics” which exposes in detailed fashion distorted FCPA enforcement statistics).
As highlighted in the article, the absence of an FCPA common language has numerous negative effects including infecting nearly all FCPA enforcement statistics.
The most reliable and accurate way to keep FCPA enforcement statistics is by using the “core” approach which focuses on unique instances of FCPA scrutiny. Using this approach, there were 17 corporate FCPA enforcement actions in 2018 that resulted in approximately $1 billion in net FCPA settlement amounts (see here).
The core approach does not distort FCPA enforcement statistics by double counting parallel DOJ and SEC actions involving the same core conduct announced on the same day nor does the core approach distort FCPA enforcement statistics by separately counting the sometimes unique ways the DOJ slices and dices corporate conduct between parent companies and subsidiaries. As highlighted in the above article, the core approach to tracking FCPA enforcement has been endorsed by the DOJ and is a commonly accepted method used to track enforcement in other areas of law.
Yet as highlighted below, once again various FCPA Inc. participants published 2018 FCPA enforcement statistics that were all over the map.
From Shearman & Sterling’s FCPA Digest (kudos to the firm for getting it right).
From the FCPA Blog:
“Last year 16 companies paid a record $2.89 billion to resolve FCPA cases. That includes amounts assessed in resolutions with the DOJ or SEC or both, and through DOJ declinations with disgorgement.”
“DOJ and SEC Resolved 16 Corporate FCPA Cases and Collected $1 Billion in Fines and Penalties in 2018.”
“In 2018, the DOJ and the SEC resolved a combined 20 enforcement actions against business entities, resulting in almost $1 billion in fines, penalties, disgorgement and pre-judgment interest, of which $597.2 million was assessed by the DOJ and $378.7 million by the SEC.”
“By almost all metrics, the level of FCPA enforcement increased in 2018. Indeed, US agencies seemed even more active than in 2017—a year that itself defied skeptics who predicted that the then incoming administration might temper FCPA enforcement. The number of enforcement actions in 2018 rose significantly from 32 to 50 (a 56% increase), and monetary penalties imposed on corporations for FCPA-related conduct also increased, going from approximately $1.9 billion in 2017 to a staggering $2.9 billion in 2018 (a 52% increase). Much of the 2018 penalty amounts will be offset by payments made to foreign agencies or other parties. US authorities realistically stand to collect only an estimated $1 billion, or about one third of the total penalties from their 2018 settlements.”
From Michael Volkov’s Corruption, Crime & Compliance Blog
There are some things in the FCPA space that no doubt are challenging or complex.
However, the basic question of what is an FCPA enforcement action should not be and this article advances a common language to remedy distorted FCPA enforcement statistics.
Strategies For Minimizing Risk Under The FCPA
A compliance guide with issue-spotting scenarios, skills exercises and model answers. "This book is a prime example of why corporate compliance professionals and practitioners alike continue to listen to Professor Koehler."
Order Your Copy
