Non-U.S. companies have long dominated the FCPA Blog Top Ten list, and currently occupy nine of ten places. That means the DOJ and SEC (no matter who’s in the White House) apply the FCPA unfairly, using it to “punish” mainly big, well-known foreign businesses, right?
Well, actual enforcement numbers tell a different story.
Since the FCPA’s enactment in December 1977, there have been 251 corporate enforcement actions.
Of those 251 FCPA cases, 168 involved companies headquartered in the United States. That means 67 percent of all FCPA corporate enforcement actions have been against U.S. companies.
What about the last ten years? Surely foreign companies have been specifically targeted.
Not true.
From 2011 until now, there have been 142 corporate FCPA enforcement actions.
Of those, 76 involved U.S.-based companies. That’s 53 percent of all FCPA corporate enforcement actions during the prior decade.
By comparison, since 1977 only 13 UK-based companies have been prosecuted for FCPA offenses, 11 German companies, six from France, and four from Italy.
So, while it may seem like foreign companies, especially those from Europe, have been unfairly targeted, the numbers don’t support that.
Still, there’s the question about the Top Ten list. Why do non-U.S. companies always dominate it?
As our Editor-At-Large recently said, one reason is the “culture” gap. Outside the United States, many executives and lawyers are still reluctant to cooperate with DOJ investigations, at least initially. And their lack of initial cooperation has contributed to so many foreign companies ending up on the Top Ten list.
In turn, that has likely distorted perceptions (especially outside the United States) about what companies are the usual targets of FCPA enforcement.
Research for this post was conducted on FCPA Blog+.
4 Comments
Harry – I give the complainers credit for having active imaginations and the ability to come up with constant excuses. The US would not have to lead in this area if other governments stepped up. Instead, they mostly just talk.Thanks, Harry, for doing this work to point out the flaws in their criticism. Perhaps these critics could, instead, turn a bit more attention to fighting corruption and less to complaining.
Hi Harry, great topic for discussion. There’s a great article (not by me!) that goes pretty deep at https://www.gibsondunn.com/wp-content/uploads/2019/09/Diamant-Sullivan-Smith-FCPA-Enforcement-Against-U.S.-and-Non-U.S.-Companies-Michigan-Business-Entrepreneurial-Law-Review-Spring-2019.pdf. Worth a read, in my humble opinion…
Important data. Foreign resentment of perceived DOJ bias is significant, and on the rise.
Harry, this is always the first answer that I get when I conduct anti-corruption training in Europe and I ask the attendees what they find remarkable when I show them the top-10 settlements. And I have now conducted hundreds of these trainings. My response:
1. Actually, the majority of the investigations still concerns US companies.
2. However, many European companies still don’t know what to do when they receive a question from the DoJ about suspicious payments. Often they won’t fully cooperate from the start of the investigation – and that’s an understatement.
3. The quality of the anti-corruption compliance programs of many European companies is still lagging behind the quality of these programs in the US – though there are more and more exceptions to that general rule.
And as a result of 2 and 3, they will get higher fines.
When conducting a compliance risk assessment, many (North-West) European companies assess the bribery and corruption risk as a relatively low risk compared to other risks. I try to change their mind by showing them the top 10 list. The top-10 list of non-FCPA bribery and corruption settlements also gets more and more impressive, by the way.
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