In November 2016, France adopted new anti-corruption legislation permitting deferred prosecution agreements in bribery cases. In July 2017, Mexico’s new anti-corruption law will take effect. The more-stringent law should prompt all companies operating in Mexico to re-evaluate their anti-corruption compliance programs. And in February of this year, China released draft amendments of a new law governing commercial bribery that would, among other things, include vicarious liability for employers and liability for bribes paid through third parties.
American companies are understandably focused on complying with the U.S. Foreign Corrupt Practice Act (FCPA), which carries stiff civil and criminal liability for any company that gives something “of value” to a foreign official in order to gain a business advantage. However, foreign governments are passing comparable laws at a seemingly exponential rate and U.S. companies must take care to comply not only with the FCPA, but any local anti-corruption laws in effect in the countries where they operate.
Some of the largest settlements in the history of the FCPA have been magnified by corresponding penalties levied by other countries connected to the corrupt activity. For example, in 2008, Siemens, a German multinational company, set the record for the largest FCPA settlement at $800 million for the series of corrupt payments made by its subsidiaries around the globe. Siemens was subject to the FCPA’s jurisdiction because it traded on a U.S. securities exchange. The company also settled with the German government for an additional $800 million, bringing its total settlement to an astonishing $1.6 billion.
In 2016, Amsterdam-based VimpelCom reached a $795 million settlement agreement that was split evenly between the U.S. and Dutch governments for bribes paid to a government official in Uzbekistan between 2006 and 2012.
Perhaps the greatest indicator of the globalization of anti-corruption enforcement is the growing number of joint and concurrent anti-corruption investigations between foreign governments. Both the DOJ and the UK’s Serious Fraud Office are investigating bribery allegations relating to Unaoil, a Monaco-based intermediary for companies in the oil and natural gas sector.
In February 2016, U.S. software firm PTC paid $28 million to resolve FCPA offenses relating to payments for recreational travel by Chinese government officials. The company had won millions in government contracts and admitted the payments for the luxury travel were buried in the inflated costs of the contracts. One month after the company settled the U.S. charges, China announced that it was launching an investigation into similar conduct by the company.
U.S. companies operating overseas must ensure that they have adequate compliance programs to prevent against FCPA violations, but they must never forget that they are likely subject to a host of foreign anti-corruption laws.