Claiming international anti-corruption related fines, losses and profits will increasingly become a live issue as countries seek to enforce their own domestic and international anti-corruption laws.
Historically, the USA’s anti-corruption agencies have been able to extract large fines and disgorgements from perpetrators with fairly remote U.S.-connections — but often at the expense of countries that have suffered the substantive and ill-affordable loss. Ironically, this source of lucrative enforcement may now be operating unfairly for U.S.-companies and individuals. It may underpin an official reluctance to embrace fully the intention expressed in Article 4.3 of the OECD Anti-Bribery Convention that states:
When more than one Party has jurisdiction over an alleged offence described in this Convention, the Parties involved shall, at the request of one of them, consult with a view to determining the most appropriate jurisdiction for prosecution.
Interesting arguments have been advanced that provided a formal Art 4.3 request is submitted, the Convention, as a U.S.-implemented treaty, overrides the constitutional doctrine of dual sovereignty for crimes (which bars protection against international double jeopardy prosecutions). However, the fact remains that the wording of Art 4.3 is hopelessly vague, with no mandatory mechanism to determine the appropriate jurisdiction following an inconclusive consultation.
There have been numerous calls for international protection against multiple international prosecutions. Recently, Canada, as part of its corruption law reforms to the Corruption of Foreign Public Officials Act, extended its own companies and individuals protection against subsequent prosecution in Canada for an offense already tried in another jurisdiction. Without a similar approach in the U.S., “the level playing field” justification for the FCPA may be turned on its head. U.S. companies could face a double whammy of national and international enforcement agencies seeking to extract large penalties in respect of the same offense.
It may not be straightforward, but the OECD Convention ought to be amended to provide for a binding Art 4.3 mechanism to determine an appropriate prosecution jurisdiction. Factors in that determination might include where the substantive offence occurred or was facilitated, where the losses either occurred or were received, the nationality or connections of the respective participants, the existence of the rule of law, appropriate penal sanctions and whether there would be an equitable sharing of penalties and recoveries.
Alistair Craig is a commercial barrister practicing in London. He can be contacted here.