Autumnal Adventures to Unchartered Corners (Part II)

I began this series by noting that with the FCPA reform movement now in abeyance, it’s a good time to venture out. Stretch our thinking a bit, push the boundaries. Let’s reassess the problems we’re trying to solve, and how best to solve them. I’ve tried to map out some “unchartered corners” of FCPA reform in a recent paper. Before we go there, let’s survey the current landscape.

As new Contributing Editor Shruti Shah recently explained in her post, our friends at Transparency International have just released, “Exporting Corruption?  Country Enforcement of the OECD Anti-Bribery Convention Progress Report, 2012.” It’s well worth reading, and it notes the extraordinary progress we’ve made in promoting the anti-bribery norm.

“Active enforcement” is no longer limited to the United States and one or two others; rather, seven countries have achieved that level, representing 28% of world exports. Following their lead, twelve countries are now at “moderate enforcement,” and they represent 25% of the world’s exports. It can thus be said that over half of the world’s exports, spread among 19 countries, are covered by significant enforcement of anti-bribery laws. That’s extraordinary; history is unfolding before us.

But in the words of Robert Frost, we “have promises to keep, and miles to go before [we] sleep.” Almost half of the world’s exports are not covered by meaningful anti-bribery law. And as the report shows, almost 40% of world exports originate from countries that are not even parties to the Convention. So what happens when OECD-compliant companies refuse to pay bribes? The report provides yet more evidence for the real answer: non-compliant countries move in and fill the void, paying the bribes that compliant companies won’t pay, getting the business that compliant companies can’t get, perpetuating and exacerbating corruption overseas.

Perhaps one day we will find the overwhelming majority of world exporters bound to, and complying with, the OECD Convention. Working toward that goal is necessary; but is it sufficient? And what should we do in the mean time?  

The TI report maps out where we are now; where do we go from here? Let’s explore.

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Andy Spalding is the senior editor of the FCPA Blog. A former Fulbright Senior Research Scholar in Asia, he’s Assistant Professor at the University of Richmond School of Law.