Prior posts here and here have highlighted several reasons why it is absurd to compare U.S. enforcement of the Foreign Corrupt Practices Act to other nation’s enforcement of their FCPA-like laws.
The OECD’s recent Phase 4 review report of the U.S. (see here for the prior post) nicely captures several (but not all) of these reasons.
For instance, at a most basic level, exposure to bribery risk is a function of real-world point of contacts with “foreign officials” – including in high-risk countries and industries.
In this regard, the OECD report notes under the heading “The United States’ Exposure to Foreign Bribery Risks”
“The U.S. private sector is highly exposed to the risk of bribery of a foreign public official, as U.S. companies trade with high-risk jurisdictions world-wide and operate in sectors known to be at risk of bribery. The foreign bribery allegations and concluded cases that have surfaced to date illustrate this high-risk exposure in a variety of sectors and industries on the global market, in which the United States often acts as a major player. In particular, the United States is the world’s largest arms and defense equipment exporter, and a significant global actor in several other sensitive sectors, such as medicinal and pharmaceutical products, oil and gas, technology, and aerospace. Furthermore, U.S. financial institutions are among the largest financial and insurance services providers.”
In addition, compared to other OECD Convention countries, the U.S. has an extremely flexible standard for corporate criminal liability. As stated in the OECD Report:
“The principles underlying corporate liability for criminal and regulatory offences in the United States are quite broad. Under the respondeat superior doctrine, a company or other entity will be liable for the “acts of its directors, officers, or employees whenever they act within the scope of their duties and at least in part for [its] benefit.” If those conditions are met, the entity can be held liable. Notably, this liability will attach even if the entity or its management attempted to supervise the persons involved or otherwise prevent the offence from occurring.”
Moreover, the U.S. has a buffet of resolution vehicles (non-prosecution agreements, deferred prosecution agreements, so-called declinations with disgorgement, administrative actions – collectively what the Report calls “non-trial resolutions”) used to resolve alleged FCPA violations. Thus, it is no surprise that the more options law enforcement has, the more enforcement there will be. As stated in the OECD report:
“Between the entry into force of the Convention and June 2018, 96% of foreign bribery cases in the United States were resolved with a non-trial resolution instrument. The country’s high volume of concluded cases is largely attributed to this practice.”
[…]
The lead examiners acknowledge that non-trial resolutions are an important contributory factor to the U.S. high volume of concluded cases ….”.
