Overview
2013 was an active year in enforcement of the US Foreign Corrupt Practices Act (FCPA), and for the development and enforcement of anti-corruption laws worldwide. Although the total number of enforcement actions brought by the US Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) did not reach the elevated levels of 2011, the agencies did bring marginally more enforcement actions than in 2012. A closer look at the trends affecting FCPA enforcement suggests that the statute remains a key priority for US authorities, and that the marginally lower 2012-2013 enforcement numbers are the result of the agencies’ deployment of their relatively limited resources to major initiatives not directly resulting in corporate settlements. Those initiatives included the development of the Resource Guide (released in November 2012), resource-intensive prosecution of individuals in criminal and civil proceedings, the resolution of several major, longstanding, investigations, and the pursuit of new investigations requiring the collaboration with other US government agencies and, in many cases, law enforcement authorities abroad.
The enforcement actions the DoJ and SEC brought in 2013 were nevertheless significant in number, and contained a number of important legal and policy developments as well as a continuation of previous enforcement themes. The agencies resolved some of the longest-running and largest investigations in the history of their enforcement programs. The SEC deployed resolution vehicles such as Non-Prosecution Agreements (NPA) for the first time, and the SEC again appeared to expand the scope of its international enforcement reach by using the FCPA’s accounting provisions to charge not only foreign bribery-related conduct, but also related conduct involving underlying violations of US export controls and economic sanctions laws and commercial bribery. Important legal issues were heard in the Federal Courts of Appeal for the first time.
The collateral effects of robust FCPA enforcement also continued to affect companies and individuals significantly in 2013. Shareholder derivative litigation continued; other collateral litigation compounds the risk picture for companies when conducting internal investigations or cooperating with US enforcement authorities.
Perhaps the most important trends in FCPA/anti-corruption law enforcement in 2013, however, were the growing importance of other countries’ and jurisdictions’ anti-corruption enforcement efforts, and increased whistleblower activity in the wake of the implementation of the Dodd-Frank whistleblower bounty provisions. These developments had profound – and not necessarily positive - implications for multinational companies’ compliance programs: financial incentives for whistleblowers to report straight to the SEC undermine companies’ compliance investments, and increased investigation and enforcement activity in other countries and by international authorities such as the World Bank, coupled with increasing cooperation with the US SEC and DoJ, have made it more likely that even a company with a strong, global compliance program will be subject to investigation by US or other countries’ authorities (or both) regarding issues that it would not have previously known of or had the opportunity to investigate and remediate on its own.
As a result, 2013 may come to be seen as the year in which anti-corruption enforcement became truly global, and the year in which companies began to grapple with the significant implications these changes have for their compliance programs worldwide.
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