GLOBALIZED ANTI-CORRUPTION ENFORCEMENT
Direct and Collateral Consequences for Private and State-Owned Enterprises
In this extended November 2013 MassPoint Occasional Note on Globalized Anti-Corruption Enforcement, the global anti-corruption enforcement landscape for financial institutions, other private companies, and state-owned and affiliated enterprises were examined. This page provides access to the full November 2013 Note and its component parts, which are organized by topic.
Financial institutions, their employees, and their state-owned counterparties and business associates are in the crosshairs of enforcement authorities in the United States and abroad, in connection with corrupt or potentially corrupt practices. Pending investigations of JPMorgan and two recent enforcement actions against financial institution employees and a foreign official —all with links to state-owned enterprises (SOEs)—involve the U.S. Foreign Corrupt Practices Act (FCPA), a federal anti-bribery law that prohibits the direct or indirect offering, promising, or giving of “anything of value” to a “foreign official” for the corrupt purpose of obtaining business advantage.
The cases, which illustrate the forms bribery can take in the financial services industry (and beyond), will likely be studied by financial institutions wishing to avoid similar fact patterns and enforcement consequences. But there is more to be learned. Viewed in the context of a globalized anti-corruption enforcement environment, the prevalence of SOEs (including sovereign wealth funds) in international business, and the complexity of international business regulation, the cases’ instructive value transcends specific fact patterns, jurisdictions, and U.S. financial institutions subject to the FCPA. For example, SOEs should know that, in connection with anti-corruption enforcement against their counterparties, their employees are susceptible to U.S. prosecution, they risk disclosure of their sensitive information, and corrupt practices discovered by foreign authorities can trigger enforcement in their home jurisdictions.
This note discusses the globalized anti-corruption enforcement environment and its potential consequences for private businesses and SOEs (whether or not direct targets of enforcement), and provides practical risk management and compliance steps for private firms and SOEs.