It is not just US firms that have to worry about being punished for bribery activity in international jurisdictions.
This is the finding of a new report from Trace International. The US is – unsurprisingly – the most active country when it comes to pursuing anti-bribery actions against corporations, thanks largely to an increased focus on the Foreign Corrupt Practices Act (FCPA) on the part of the Department of Justice. Also not particularly surprising is that the second-most active jurisdiction is the UK, which recently took a significant step toward bolstering its anti-corruption laws with the new UK Bribery Act.
While the report acknowledges the difficulties in gathering these types of data, it draws some interesting conclusions: the US accounts for 75 percent of enforcement activity globally; since 1977 only 22 countries have pursued foreign bribery cases and only 35 have taken domestic action against a foreign issuer; the countries with the highest alleged instances of bribery are Iraq, Nigeria and China; and South Korea and Italy are the most aggressive nations in pursuing bribery of their own officials by foreign companies.
Bribery activity has serious consequences for all firms, and large US companies should note this increase in global activity. Rebecca Hoskins, a lawyer in the Seattle office of Perkins Coie, says the study could have serious implications in terms of M&A transactions.
‘Risk-based FCPA due diligence can help an acquirer identify potential FCPA violations by a target company during the due diligence phase, before signing a definitive agreement,’ she notes. An assessment of a target company’s FCPA compliance risk can be a useful first step. ‘This generally includes evaluating the risk of corruption in each country where the target does business. Transparency International’s corruption index map is a great resource for this.’