The U.S. Government is Here to Help...Fight Corruption?
All too often when I speak with a company about the U.S. governments international anticorruption initiatives, their response suggests considerable suspicion. And while their skepticism is understandablesince 2007, the U.S. has prosecuted 85 corporations for violating the Foreign Corrupt Practices Act (the statute which makes bribery of a foreign official illegal) to the tune of $3.9 billion in total penaltiesit may also be misplaced.
When it comes to dealing with bribery abroad, the U.S. government is not simply one monolithic enforcement agency. As U.S. Department of Justice Deputy Chief of Staff for the Criminal Division Daniel Suleiman said this month in a speech before the Minnesota State Bar Association, [t]he Justice Department is just one component of the U.S. governments fight against corruption. The State Department, with which we work very closely, the Treasury Department, and others are also very much involved.
The government is placing increased emphasis on helping companies to assess corruption risks in their international dealings. Assessment of risk is fundamental to developing a strong compliance program, write the Securities and Exchange Commission and the DOJ in their recently published "Resource Guide to the U.S. Foreign Corrupt Practices Act." To guide companies conducting market research into higher-risk areas, the U.S. Department of Commerce publishes "Country Commercial Guides," which are updated annually and present a comprehensive look at a countrys commercial environment, including its corruption risks and information on the FCPA. The State Department publishes Investment Climate Statements for nearly every economy, which also provide U.S. firms with country-specific information and assessments on investment laws, measures, and other important business-related factors in foreign markets, including those related to corruption.
In addition, the Department of Commerces worldwide network of local trade specialists regularly advise U.S. exporters, particularly small and medium-sized companies, on specific bribery risks they may face in a particular country. The Commerce Departments International Company Profile, for example, allows U.S. exporters to purchase a financial report in many countries of the world that includes listings of foreign companies key officers and senior managementand other information crucial to helping companies conduct their own due diligence when choosing business partners or overseas agents.
The U.S. government is actively engaged in diplomatic negotiations to level the playing field by uniting governments under common antibribery commitments. About 15 years ago, that meant pushing the worlds major economies to adopt the "OECD Convention on Comating Bribery of Foreign Public Officials in International Business Transactions" [PDF], which establishes legally binding standards to criminalize bribery of foreign public officials and now boasts 40 country signatories. Ten years ago, the U.S. actively negotiated and encouraged the adoption of the "U.N. Convention Against Corruption" [PDF] (UNCAC), which contains provisions on criminalizing not only foreign bribery, but also domestic bribery and the concealment and laundering of the proceeds of corruption. Antibribery provisions have become a staple of every Free Trade Agreements signed by the United States over the last decade.
The aim of these diplomatic efforts is simple: When we help other nations crack down on corruption, it makes it easier for our companies to do business, as well as theirs, writes Secretary of State John Kerry in the Departments latest budgetary request [PDF] published last month. Other branches of the government are also working to increase the commitment by foreign countries to tackle their domestic corruption problems. This February, the SEC partnered with the DOJ and the FBI in conducting a foreign bribery training program that provided intensive training to 130 foreign investigators and prosecutors from 30 countries.
The U.S. government offers a variety of resources to help American companies navigate U.S. anticorruption laws, and to help them understand and deal with risks and opportunities around the world, said Francisco J. Sánchez, U.S. under-secretary for international trade. In our embassies and consulates worldwide, these boots on the ground include commercial and economic officers who provide information to U.S. firms entering those markets about pitfalls to avoid, and information on how to prevent and address corrupt practices where they are encountered. We encourage U.S. businesses to take advantage of these key resources.
And companies are taking matters into their own hands by reporting a trade problem directly online to the Department of Commerces U.S. Trade Compliance Center if they suspect that one of their competitors is engaging in corrupt practices. The Trade Compliance Center reviews the complaint and then will involve the appropriate agency, whether it is the Department of State, Justice, Commerce, or the SEC. Follow-up action may involve direct diplomatic contacts with the government of the foreign competitor.
The big picture of the U.S. governments involvement in combatting bribery abroad, then, is more well-rounded than simple enforcement numbers would suggest. A growing number of companies are actually seeking out the U.S.s assistance in dealing with the bribery risks they face abroad. And with both stick and carrot in hand, the governments efforts are designed to encourage more international trade by eliminating the risks caused by corrupt business practices and leveling the historically skewed playing field for U.S. businesses.
Alexandra Wrage is the president of TRACE, a business association supporting companies in their antibribery compliance efforts by offering a wide range of risk sorting, training, and due diligence solutions.