REACHING BEYOND THE FCPA: OLD STATUTES, NEW TOOLS

For the past decade, the enforcement of the US Foreign Corrupt Practices Act (FCPA) has expanded dramatically, but has traditionally been relatively predictable in being limited to conduct involving bribery of foreign government officials. However, several recent cases against companies and individuals by US authorities indicate the clear trend of bringing associated bribery charges under various US federal criminal laws in parallel to an FCPA charge. The US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) are not hesitating to prosecute companies and individuals for conduct occurring overseas that does not involve bribery of foreign government officials. Since the 2006 Schnitzer Steel FCPA settlement, the DOJ has been quietly dusting off old federal laws such as the Travel Act and Mail and Wire Fraud statutes to prosecute foreign commercial bribery to supplement FCPA prosecutions. The SEC has also expanded its application of the accounting provisions to include control deficiencies even if there is no evidence of public bribery. It appears that with the establishment of President Barack Obama’s interagency Financial Fraud Enforcement Task Force in 2009, the Dodd-Frank Act’s expansion of SEC’s examination authority in 2013, and the attention on commercial bribery as a result of the UK Bribery Act in 2010, US authorities are empowered more than ever to expand the scope of the fight against corporate corruption.

These enforcement developments are significant because companies operating abroad can no longer assume that corrupt conduct that does not involve government officials or procurement will not lead to prosecution in the United States. In light of these developments, companies should also consider whether their compliance policies, procedures and controls need to be expanded to prevent commercial bribery and to strengthen other financial controls.

Jan-Mar 2014 Issue

Baker & McKenzie LLP