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Why isn’t there more FCPA enforcement against Asian companies?

When I talked to groups in Asia about the FCPA, there was always lots of interest, with at least half my podium time devoted to Q&As. But there was one question no one ever asked: “Why is there so little FCPA enforcement against Asian companies?”

If you look at FCPA corporate enforcement by region, which I did using FCPA Blog+, you’ll see that most cases have been against companies from the United States, the UK, and Europe.

Of 270 corporate enforcement actions since the FCPA’s enactment, companies headquartered in the United States account for 64 percent of the defendants. Companies headquartered in Europe and the UK account for 26 percent. That’s 90 percent of all FCPA corporate enforcement actions.

What do you find when you look for companies based in Asia (including North Asia, East Asia, Southeast Asia, and South Asia)? They’re defendants in just 4.8 percent of all FCPA corporate enforcement actions.

Asia’s corporate FCPA percentage is hard to reconcile with some other numbers.

The region is home to about 60 percent of the world’s population. Europe has 9.3 percent of the world’s population, and the United States has just 4.2 percent.

What about levels of economic activity? Maybe that explains why there’s been so little FCPA focus on companies HQ’d in Asia.

That doesn’t work either. Let’s use GDP to measure the share of global economic activity that each region makes up, as the IMF does. Asia produces 41.6 percent of the world’s GDP, Europe about 21 percent, and the United States about 17 percent. Those numbers have been nearly the same for at least the past decade.

Asia, then, has well over half of the world’s population and more economic activity than the United States and Europe combined. So let’s ask the question that never came up when I stood at the podium: “Why is there so little FCPA enforcement against Asian companies?”

Here are a few reasons that come to mind.

The U.S. doesn’t want to destabilize Asian governments. There’s a closer relationship between government and business in Asia than in the West, so FCPA investigations and enforcement would likely do political damage. It might seem like a long time ago, but I think politicians and prosecutors in Washington learned from what happened in the mid-1970s when Congress exposed Lockheed’s overseas bribery. Ensuing scandals brought down leaders in Japan, Italy, and the Netherlands, and nearly toppled the German government. No one in Washington today wants to trigger large-scale turmoil in Asia.

U.S. prosecutors defer to independent anti-corruption agencies. In Hong Kong, it’s the Independent Commission Against Corruption (ICAC), in Singapore the Corrupt Practices Investigation Bureau (CPIB), and in Indonesia the Komisi Pemberantasan Korupsi (KPK or Corruption Eradication Commission). All are vulnerable and sometimes under threat from politicians and business people. (Politics has overwhelmed “independent” anti-corruption agencies in the Philippines, Sri Lanka, and Bangladesh). Yet, independent anti-corruption agencies are potent and effective when they function as intended, and U.S. policymakers and prosecutors are reluctant to undermine them by invading their turf or showing them up.

Evidence needed to support FCPA prosecutions is unobtainable. When suspected perps are Asian companies, FCPA investigations depend on cooperation from sovereign nations and their enforcement agencies. Most witnesses will be non-U.S. citizens living in their home countries, and most corporate documents will be under the jurisdiction of other governments. Occasionally, a non-U.S. government might decide to cooperate (up to a point), but that’s rare. China formalized its non-cooperation in 2018 with a “blocking statute” that prohibits anyone in China from disclosing evidence located there to overseas enforcement authorities in criminal investigations or prosecutions. It extended the blocking effect a year later to administrative and civil matters, prohibiting individuals and organizations in China from producing documents and information about business activities to overseas regulators, except with official permission from Chinese authorities.


For the record, there have been 13 FCPA corporate enforcement actions involving companies headquartered in Asia: One from China, one from Indonesia, seven from Japan, two from Singapore, and two from South Korea.

Of those actions, the five biggest are:

Keppel Offshore & Marine Ltd. (Singapore)– $422 million in 2017

Panasonic Corporation and Panasonic Avionics Corporation (Japan) — $280.6 million in 2018

JGC Corporation (Japan) — $218.8 million 2011

Marubeni Corporation (Japan) $88 million in 2014, and

Samsung Heavy Industries Company Limited (South Korea) — $75.4 million in 2019.

The first Asian defendant named in an FCPA corporate enforcement action was KPMG Siddharta Siddharta & Harsono from Indonesia in 2001. The accounting firm resolved the action without paying any penalties.

The most recent was South Korean telecom KT Corporation in 2022. It paid $6.3 million to resolve FCPA violations in Vietnam and South Korea.

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