International - Written by on Thursday, November 10, 2011 14:41 - 0 Comments

“Precisely the wrong moment in history to weaken the FCPA”

Print Friendly

There has been much talk about the possible amendment (and dilution) of the FCPA in recent times following the US recent ramping of enforcement, telephone number penalties and in recent weeks the longest ever jail sentence, 15 years, for FCPA violations.

To UK readers, the arguments for amending the FCPA sound familiar:  US companies saddled with uneven playing field, loss of competitive advantage and lack of clarity around its provisions are all themes.

Ironic when considering that a few months ago commentators held up the FCPA and its exemptions as a model for amendments to the Bribery Act.  In contrast, today in the US, it is said that the facilitation payment exemption is illusory and the bona fide corporate hospitality exemption meaningless.  Bona fide corporate hospitality, it is argued, by definition cannot be bribery.

And they have a point.

On Tuesday this week Lanny Breuer addressed the 26th National Conference on the Foreign Corrupt Practices Act in Washington in defence of the FPCA.  There is another side to the coin.  Mr. Breuer spoke powerfully in defence of the FCPA referencing the Arab Spring.

Summarising the rationale for FCPA enforcement he said: “The fight against corruption is a law enforcement priority of the United States, and it is also a personal priority of mine.  There are few more destructive forces in society than the effect of widespread corruption on a people’s hopes and dreams, and I believe it is incumbent upon us to work as hard as we can to eradicate corruption across the globe…Indeed, the fight against corruption is an urgent battle – one that, at this historic moment, we must forcefully pursue.”

Talking of the lobby to water down and amend the FCPA he referenced the steps taken by others, including the entry into force of the Bribery Act, and had this to say:

“…at this crucial moment in history, watering down the Act – by eliminating successor liability in the FCPA context, for example – would send exactly the wrong message.  Particularly since it has become increasingly clear over the past year that the trend across the globe is toward criminalization of foreign bribery.  The U.K. Bribery Act took effect in July.  Russia recently passed an anti-bribery law; has ratified the U.N. Convention against Corruption; and is expected soon to accede to the OECD Anti-Bribery Convention.  China, too, recently passed an anti-bribery law and is an observer at the OECD’s Working Group on Bribery…

…the steps taken in China, Russia and elsewhere are important ones.  The history of the FCPA illustrates why.  Its passage in 1977 was a milestone.  But it took decades for the Act to become as strong an enforcement tool as it is today.  Having come this far, on what I believe is a noble journey, we cannot, and should not, start going backwards.  On the contrary, the United States must continue leading the charge against transnational bribery.”

With reference to the original catalyst for the FCPA, Watergate, he quoted from the US Senate at the time:

“’Corporate bribery is bad business,’ the Senate Banking Committee said in its report on the legislation.  ‘In our free market system it is basic that the sale of products should take place on the basis of price, quality and service.  Corporate bribery is fundamentally destructive of this basic tenet.’

That was true then, and it’s absolutely true now.  In the United States, we have taken a strong stand against corruption, and the tide has been turning that same way in many countries across the globe – both as measured by the number of nations that have passed anti-bribery statutes in the past decade and by the recent popular uprisings that have been fueled, at least in part, by public outrage over corruption.

This is precisely the wrong moment in history to weaken the FCPA.”

It’s a compelling argument.

Image © and by kind permission of the United States Department of Justice


Share Button

Comments are closed.

Brought to you by...

Barry Vitou &
Richard Kovalevsky Q.C.

The views expressed on this website are those of Barry Vitou & Richard Kovalevsky QC and/or our guest authors from time to time. Please see our terms of use