Transparency International released its 2019 Corruption Perceptions Index Thursday. The results of this latest iconic list beg the question: Should we look at the ten cleanest countries on the CPI to see where the next mega-FCPA settlement will come from?
Companies from the five highest-ranking “very clean” countries on the 2019 CPI (Denmark, New Zealand, Finland, Singapore, Sweden) have collectively paid $2.49 billion in FCPA penalties since FCPA enforcement began.
Companies from the ten cleanest countries (Denmark, New Zealand, Finland, Singapore, Sweden, Switzerland, Norway, Netherlands, Germany, Luxembourg) have paid a total of $5.43 billion over the same period.
Since 1980, all companies combined from anywhere have paid $17.24 billion in 239 FCPA enforcement actions.
That means companies based in the five cleanest countries have been responsible for 14.4 percent of all FCPA fines. Companies headquartered in the top ten cleanest countries were responsible for 31.5 percent of all FCPA settlements.
Put another way, the cleanest five percent of the world’s countries have been responsible for nearly a third of all FCPA penalties.
The CPI’s number five country, Sweden, has had a string of high profile FCPA cases. Last year, Swedish telecom Ericsson agreed to pay the DOJ and SEC over $1 billion in the second biggest FCPA enforcement action ever. In 2017, another Swedish telecom, Telia, paid $965 million to settle FCPA charges, the third biggest FCPA enforcement action.
As the FCPA Blog has said before, apparently a country’s rank on the CPI isn’t always a good predictor of how companies will behave when they do business overseas. In fact, there may be a negative correlation. Companies from the cleanest countries may behave the worst when they land on foreign shores.
There have not been any FCPA settlements involving companies from the bottom ten countries on the CPI.
The CPI is a methodological wonder, to be sure. We’re big fans of it. But looking at the numbers, the CPI also appears to be an unintended indicator of where the next giant FCPA settlement will come from.