Global Anti-Corruption Prosecution, Enforcement Rising, Compliance Experts Say

Enforcement of the Foreign Corrupt Practices Act and other global anti-bribery regulations is rising, compliance experts said. Companies may still risk violating anti-bribery laws even while working remotely during the pandemic and should make sure their compliance procedures are being followed, they said.

Businesses have specifically seen an “increased prosecution appetite” for bribery violations by the U.S. Department of Justice and the United Kingdom’s Serious Fraud Office, which has placed a “spotlight” on anti-corruption in industry compliance programs, said Kelly-Ann McHugh, Asia Pacific director for MyComplianceOffice. “Anti-bribery and anti-corruption legislation globally has existed for some time, though enforcement is becoming more aggressive globally,” said McHugh, speaking during an Aug. 5 webinar hosted by MyComplianceOffice. Although FCPA enforcement is off to its slowest start in a decade (see 2105050018), industry lawyers say businesses should expect penalties to pick up as more Justice Department officials are appointed to the Biden administration (see 2107210058).

Multinational companies headquartered in the U.S. or the U.K. should especially be aware of their jurisdiction’s corruption laws, said Helen Chan, a compliance expert at Thomson Reuters Regulatory Intelligence. She said potential exposure can be broad for laws in the U.S., the U.K. and Canada’s Corruption of Foreign Public Officials Act, among others. “All of these anti-bribery laws have extraterritorial reach over the country's own respective citizens as well as businesses that are domiciled there,” Chan said during the webinar.

Chan specifically said mutilatiational companies should be careful when operating in China, where “gift giving and favors are generally seen as expected practices to build business relationships.” Several recent FCPA cases have featured China connections, including a case last year that involved an Airbus bribery scheme (see 2001310040) and a 2019 case involving two Chinese citizens (see 1911150020).

Chan added that bribery enforcement related to gifts has been “quite aggressive” under Chinese President Xi Jinping. “Obviously, this can create a lot of challenges when it comes to crafting compliance policies for anti-bribery.” She said companies can turn to the “fair amount” of internal anti-bribery guidance China has issued in recent years, which can help with compliance. “While multinationals and private sector businesses are not directly bound by this guidance,” she said, “it's a very useful indication of what authorities will expect businesses to abide by in their own internal policies.”

Chan also cautioned companies against relaxing their anti-bribery and anti-corruption policy procedures because their employees are working from home and aren't traveling much because of the pandemic. She said there may even be a “higher risk” that compliance violations go undetected. “You have potential situations where employees are working remotely and they're not subject to as much oversight, and they may be entertaining potential clients and trying to win business on their personal time,” Chan said. “All together these developments point to a need for robust compliance measures.”