This recent post on the Global Anti-Corruption Blog hints that Canada may be “too nice” in enforcing its FCPA-like law (the Corruption of Foreign Public Officials Act).
The post states: “Canada’s track record of enforcing the CFPOA does not match the United States’ track record of enforcing the FCPA.”
When criticizing the perceived lack of enforcement of the CFPOA (or any FCPA-like law), it would seem incumbent to highlight credible allegations of bribery and corruption by specific companies that are not being prosecuted.
However, there is no such analysis.
Rather the post cites OECD criticism and Transparency International criticism of Canada’s perceived lack of enforcement in an effort to “prove” that Canada has low enforcement of the CFPOA.
Yet, as highlighted in prior posts here and here, the OECD and Transparency International likewise never address the question of how many CFPOA enforcement actions Canada should have.
One does not need a PhD in statistics to recognize that certain comparative statistics are not valid.
For starters, the occurrence of many events is generally tied to the population of a country.
Should a country with a population of 39 million (Canada) have as many enforcement actions of a specific law compared to a country with a population of 333 million (United States)?
It’s like posing the question: should a country of 39 million have as many speeding tickets issued per year compared to a country of 333 million?
Consider also that in recent years approximately 70% of corporate FCPA enforcement actions have been against foreign companies – not U.S. companies. (See prior posts here and here). Most of these enforcement actions have been based on the foreign company having shares traded in the U.S. and/or use of the U.S. banking system.
As to the former, approximately 1,000 foreign companies (in any given year) have shares traded in the U.S. (and thus become subject to the FCPA). Does Canada have a similar number of foreign companies with shares traded in Canada? I highly doubt it.
As to the later, do foreign companies use Canada’s banking system to the extent such companies use the U.S. banking system? Again, I highly doubt it.
Both of these issues, significantly impact U.S. FCPA enforcement.
Moreover, as highlighted several times on these pages, comparing U.S. FCPA enforcement to enforcement of other FCPA-like laws by other countries is an apples to oranges comparison for several reason.
First, the U.S. is rare among OECD Convention countries in having so-called respondeat superior liability in which a business organization can face criminal or civil liability based on the conduct of any employee or agent to the extent the conduct was within the employee or agent’s scope of employment/agency and was intended, at least in part, to benefit the business organization. In contrast, most other OECD Convention countries either: do not recognize legal person liability; or if they do only allow such liability to the extent conduct was engaged in by so-called ‘‘controlling minds’’ of the business organization such as board members or executive officers.
Second, the FCPA contains three separate independent provisions: the anti-bribery provisions, the books and records provisions, and the internal controls provisions. In contrast, the FCPA-like laws of many other OECD Convention countries are not as expansive and may merely contain anti-bribery provisions.
Third, the FCPA is enforced both criminally and civilly. In contrast, the FCPA-like laws of many other OECD Convention countries are only enforced criminally or civilly and not both.
Fourth, the FCPA is predominately enforced against business organizations through alternative resolution vehicles (NPAs, DPAs, declinations with disgorgement, administrative orders) that are not subjected to any meaningful judicial scrutiny. In contrast, in most other OECD Convention countries law enforcement agencies must do something that may be considered old-fashioned by current U.S. standards—and that is prove actual legal violations to someone other than itself. Here, it should be noted though – envious of U.S. FCPA enforcement numbers, that other countries have adopted alternative resolution vehicles in recent years.
Fifth, in the last decade approximately 40% of corporate FCPA enforcement actions are the result of voluntary disclosures. In contrast, voluntary disclosures are not a dominate feature in most other OECD Convention countries (perhaps because most other OECD Convention countries do not have a multi-billion industry focused on enforcement of their FCPA-like law like the U.S. does).
