Anti-corruption enforcement is a slow-moving vehicle. Investigations into business bribery allegations can take years to resolve, even with the application of significant agency resources. Building up enough prosecutorial capacity to handle a reasonable caseload requires its own long-term effort, both institutionally and politically.
The long-haul nature of enforcement is reflected in the 2020 Global Enforcement Report published by TRACE last month. Tracking the number of open transnational bribery investigations and completed enforcement actions across jurisdictions and industries, the report’s figures change incrementally from year to year, gradually bringing patterns into focus.
For example, while the United States has always been the leader in historical anti-bribery enforcement and investigations, its share of global enforcement actions (66 percent) is now much larger than its share of global open investigations (39 percent). This may be an early indication that as more countries build up capacity and enforce their laws against foreign bribery, there will over time be a shift away from the central role that U.S. agencies have played by virtue of the FCPA’s relative antiquity. This conclusion finds support in the appearance of a slight increase in the number of open investigations outside of the United States into bribery of domestic officials by foreign companies, possibly a testament to the United States and other countries’ efforts to assist foreign legal authorities in building up the capacity to enforce laws against foreign bribery.
The 2020 Global Enforcement Report also found that while the extractive industries remain the most actively prosecuted both in the United States and elsewhere, there is a divergence in the second-most-investigated industry. Outside of the United States, engineering and construction had the most open investigations. Still, U.S. agencies are currently devoting more attention to the financial services sector—historically not among the industries with the heaviest enforcement. The United States has also seen far fewer enforcement actions with respect to engineering and construction than the rest of the world, with considerably greater focus on aerospace/defense and healthcare. This appears to reflect the historical roots of the FCPA in the defense sector bribery scandals of the 1970s and heightened scrutiny of the healthcare sector over the past two decades.
But the most significant finding of the report may be precisely how little has changed. While U.S. agencies concluded fewer enforcement actions in 2020 than in the previous year (12 compared to 17), it’s important to consider the context of both the pandemic and a president who actively denounced the FCPA. Meanwhile, outside of the United States, the number of foreign bribery enforcement actions held steady at six.
Compliance officers should understand that the global enforcement apparatus has continued to function under trying conditions. The prospect of an official investigation remains the predominant deterrent of corrupt business activity and the strongest driver of corporate compliance programs. As budgets stay tight, global anti-bribery enforcement’s sustained progress may be the most effective justification for maintaining an organization’s financial commitment to ethical practices. With increased global capacity building and cross-border cooperation, we can expect to see more jurisdictions becoming increasingly involved in exposing and punishing corrupt behavior. While the shift toward a more multilateral enforcement regime may be slow, the business community has a strategic interest in keeping itself current.
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