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Journalists around the world no doubt read deep meaning into Sunday’s final edition of UK tabloid News of the World. But according to corporate-corruption expert Alexandra Wrage, the News Corp scandal should send a message to all companies doing business in multiple jurisdictions: shore up your compliance programs or be ready to face multi-jurisdictional consequences. Wrage, president of Annapolis, MD-based TRACE, a non-profit anti-bribery compliance organization, says more and more multinational organizations are going to be faced with multi-jurisdictional compliance issues going forward. She says that News Corp’s alleged bribing of public officials is emblematic; companies paying a bribe in one country can expect more than ever that they’ll face enforcement actions in two, three, or more countries. “I’m trying to find new ways to impress upon companies why it’s important that they avoid bribery risk of any kind,” says Wrage. “But increasingly what gets their attention is the fact that these cases have an almost unlimited shelf life.” Wrage says that countries that have traditionally not taken action against bribery are increasingly piggy-backing onto other countries’ actions. “If you are a country under huge pressure to bring an anti-bribery case, but you have fairly underdeveloped prosecutorial service and very few resources,” she says, “it is much easier for you to go after a company that has already settled in another country than for you to investigate and establish a case for yourself.” Wrage says News Corp faces actions not only in the United States (where the company is incorporated) and the UK (where the alleged wrongdoing occurred), but also in Australia because of its secondary stock listing. “Australia could bring an SEC-like action for books and records violations, assuming the payments were made and assuming they were not accounted for as bribes—which they never are,” notes Wrage. Wrage says that although the Murdoch case involves all highly developed jurisdictions, it’s a good illustration of the potential for successive liability. “You can actually almost find yourself feeling sorry for companies when they’re faced with a cascade of enforcement actions across different countries and different legal systems,” she says. “The KBR/Halliburton case, for example, involved four joint-venture partners from four different countries, an agent in a fifth country, and wrongdoing in a sixth country.” Wrage adds that the very nature of international business involves money moving through more than one country, and when it comes to anti-bribery enforcement there isn’t established protocol for when countries should step forward and when they should take a back seat. “It’s really just done as a matter of international courtesy,” she says, “and that’s not very comforting for companies in trouble.” While being susceptible to liability in more than one jurisdiction won’t necessarily alter a company’s approach to doing business, Wrage says the potential for spin-off actions can reinforce for employees how important it is that they take bribery seriously: “It’s critically important that companies have a compliance program and controls and training in place to avoid this happening in the first place.” “For all of us working in the anti-bribery compliance community, there’s just an incredible pace of growth,” she says. In the last three weeks, Wrage has conducted training in eight countries on three different continents. She notes that the big headlines generated by the News of the World story “can be a great training tool. If you’re doing training of your local hires in Africa, the United States, the FCPA, the Department of Justice feel really far away,” she says. “But if suddenly they think that the UK is going to be interested and their own government is going to be interested, it brings it home much more quickly.” “We used to say, ‘And your own country could prosecute,’ but of course they never did,” says Wrage. “Now we can actually point to cases where the country where the bribe was taken has an incentive.” Countries with fewer resources are now interested in moving ahead with prosecutions. “Sometimes it’s very politically motivated and sometimes it’s very selective,” she says, “but nevertheless, for employees of U.S. or other multinationals working on the front lines, this is getting their attention.” See also: “The Potential Perils of Cross-Border Internal Investigations” and “Canadian Oil and Gas Co. NIKO Enters $9.5M Guilty Plea for Bribery,” CorpCounsel.com, June 2011.

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