The chairman of the U.S. Securities and Exchange Commission, Jay Clayton, chose a speech in September to the Economic Club of New York to argue that when it comes to enforcement of anti-corruption laws, the United States is “acting largely alone.” He cited figures to back his stance and followed up by calling on other nations to follow the U.S. lead in tackling what is an international problem.
But does his viewpoint stand up to serious scrutiny? Only to a very limited degree.
His view that the United States has spent more than two decades “vigorously” enforcing the Foreign Corrupt Practices Act (FCPA) is a valid enough point. In the past five years or so, the SEC has brought more than 70 FCPA-related cases – and these cases have involved misconduct more than 60 countries. So there is no doubt the FCPA is a strong piece of legislation and the United States is far from shy when it comes to enforcing it.
But what about the SEC chair’s claim that the United States is “acting largely alone;” especially as he argues that other countries are taking advantage of U.S. efforts to tackle bribery and corruption? The United States has, for many years, been one of a relatively small group of nations prepared to investigate bribery but the view that somehow everyone else is freeloading is unfair.
That view is based on the argument that because other countries do not have strong anti-bribery legislation, U.S. companies bidding for work abroad are up against foreign rivals who are not bound by legislation as far-reaching as the FCPA; meaning the U.S. companies are at a disadvantage when trying to clinch deals. But should that not be a reason for the United States to work closer with other nations to eradicate bribery rather than criticizing them for what the SEC chair sees as a lack of effort?
As markets have evolved, so have enforcement practices outside the United States.
If we take the UK as just one example, the Serious Fraud Office (SFO) uses a multi-disciplinary approach to investigating bribery and corruption. Forensic investigators, lawyers and computer specialists work together for maximum effectiveness. The SFO also works with other UK agencies – not to mention national and international enforcement agencies – to tackle bribery and corruption.
The SFO is also encouraging a culture of co-operation and self-reporting among corporations. Avoiding prosecution via a deferred prosecution agreement – as was the case with Rolls-Royce – is now a possibility.
In the Bribery Act, the UK has a more far-reaching piece of legislation than the even the FCPA.
And unexplained wealth orders are just one in a series of measures available to UK authorities when it comes to targeting the assets of those suspected of being corrupt.
These are all reasons why Mr. Clayton would be wrong to lump the SFO – and by extension, the UK – with those countries he sees as falling short when it comes to tackling bribery and corruption.
But it would also be wrong to think the UK is the only nation taking a more aggressive approach to tackling bribery. Anti-corruption laws may vary significantly from jurisdiction to jurisdiction but many countries are now working harder to combat bribery. Corruption has been made the subject of agreements from bodies as sizable and varied as the Council of Europe, the United Nations, and the Organization for Economic Co-operation and Development.
In today’s world, the claim that the United States is “acting largely alone” when it comes to anti-corruption enforcement seems, at best, shortsighted.
4 Comments
Correction, Mr Rahman. Mr Clayton was talking about action, not talk. You are talking about corruption’s being the “subject of agreements”.
The TPP (which came into force on January 1) has an anti-corruption chapter.
It may as well not be there. At least in regard to one major party to that agreement.
One may add that according to the 2018 Transparency International Report on Exporting Corruption 7 countries (United States, Germany, United Kingdom, Italy, Switzerland, Norway and Israel) ranked as active enforcers of the OECD Convention.
Germany, the United Kingdom and Switzerland have also consistently ranked as active enforcers together with the United States in past Exporting Corruption Reports.
In the Siemens case, at the top of the list of the largest corruption cases for a long time, the total amount paid by Siemens in Germany in fines and disgorgement of profits (the equivalent of $ 856 million for two cases in Munich) exceeded that paid in the United States ($800 million), according to the DoJ Press release dated 15 December 2008).
In a global settlement of the Odebrecht case with the authorities of the United States, Brazil and Switzerland, Brazil took the largest share of the settlement with the United States and Switzerland sharing equally the balance, which makes it as much a Swiss as a US case.
There is a tendency in the United States and internationally to focus on legislation and enforcement in the US and the UK because the information is easily available in English. However, that obscures the fact that all countries parties to the OECD Convention have criminalized the corruption of foreign public officials (even though, admittedly, many of these countries lag behind in enforcement). Some of these legislations deserve to be better known (the Loi Sapin II in France and the Decreto Legge 31/2001 and the Legge Severino in Italy for example).
The US has the highest number of Enforcement actions as compared to the rest of the world. One can add the total enforcement actions of the rest of the world and it will not come close to the total number of enforcement actions by the US. Many of the cases presented as multi-national where primarily driven by US Prosecutors and Federal Investigators. Here is an example of enforcement action by France, and I paraphrase: Yes, the company committed the following infractions, but has since implemented corrective measures; therefore, no sanction. Really!!!! Most countries talk, talk, and talk but do not enforce the laws. Especially, if it involves one of its companies.
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