Prosecutions under the Foreign Corrupt Practices Act have skyrocketed in the last several years as the U.S. Department of Justice has trained its sights on incarcerating individuals who make corrupt payments to foreign officials in exchange for securing a competitive business advantage. The government initially focused on corporations, obtaining huge fines via negotiated resolution against those entities that paid bribes overseas. Seeking to maximize the deterrent effect of the FCPA, the government increased prosecutions of the individuals who actually authorized and paid the bribes. This, however, generated an unintended consequence: more FCPA trials. The past several months have produced a number of setbacks. Convictions have been vacated, indictments have been dismissed with prejudice, and orders belittling the government’s case and finding that prosecutors engaged in misconduct have been entered. A massive sting operation that produced charges against 22 individuals in early 2010 resulted in lengthy trials of two different groups of defendants, and produced not a single conviction. Very recently, it was reported that Wal-Mart may have violated the FCPA during the mid-2000s. Given the recent losses the government has suffered in other cases, its decision on how to proceed in the Wal-Mart case will be closely scrutinized. In any event, for those engaged in international commerce, these outcomes give rise to an important question: what do these setbacks mean for the future of FCPA enforcement?
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