I concluded my “Facade of FCPA Enforcement” article (here) by discussing several reasons why the facade of FCPA enforcement matters. One reason is what I called “modeling” – the increasing frequency by which other nations are modeling enforcement of their own bribery laws on U.S. enforcement methods. I stated that unless these methods are addressed and corrected here in this country, they will continue to be replicated elsewhere, perhaps leading to a global facade of enforcement. The section focused mostly on the United Kingdom and how the Serious Fraud Office has not been shy in stating its intention to model its enforcement of U.K. bribery laws on the DOJ’s enforcement of the FCPA, including use of non-prosecution and deferred prosecution agreements. See here for a 2009 document titled “Approach of the Serious Fraud Office to Dealing with Overseas Corruption” and here for my extensive Q&A with SFO Director Richard Alderman.
Against this backdrop, the Financial Times recently reported (here) that the U.K. “plans to introduce U.S.-style corporate plea bargains.” Edward Garnier, the U.K. Solicitor General, is quoted as saying, “You have to have a cost-benefit analysis. If I can produce a system which has all the benefits [of the U.S.] and can do justice, as well as making money for this country, it seems to me that there’s something to be thought about. This provides for a way of dealing with criminality without causing collateral damage.”
As the OECD observed last year in its U.S. Phase 3 Report, “it seems quite clear that the use of these agreements [NPAs and DPAs] is one of the reasons for the impressive FCPA enforcement record in the U.S.” (See here for the prior post). As noted in several previous posts, former DOJ FCPA unit chief Mark Mendelsohn was asked “if you did not have the choice of deferred or non prosecution agreements, what would happen to the number of FCPA settlements every year” and he stated as follows “if the Department only had the option of bringing a criminal charge or declining to bring a case, you would certainly bring fewer cases.” (See Mark Mendelsohn on the Rise of FCPA Enforcement, 24 Corporate Crime Reporter 35, September 10, 2010).
NPAs and DPAs clearly yield a high quantity of enforcement activity, but the quality of that enforcement activity is open to question. NPAs and DPAs are not America’s finest law enforcement product and I previously wrote in this essay that they ought to be abolished in the FCPA context. In short, the U.K. ought to pause before importing these resolution vehicles.
For an excellent commentary on the above U.K. issues, see this recent piece from Monty Raphael (here) who states, among other things, “if the driver for the criminal regulation of business is how big a return a country can derive from its investigations, such regulation will be bereft of integrity and, most importantly, predictability.”
London readers will be interested in this October 17th event with Edward Garnier and Richard Alderman at Pinset Masons’ London office concerning the issues discussed above.
