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Greater Anti-Corruption Enforcement Against Chinese, African, and Other Parties in Africa Likely, Extractives Industries Likely of Particular Interest

Note: This is a brief update on the newly released Africa Strategy of  the U.S. Administration. Further updates may follow.

The Trump Administration today released the President’s Africa Strategy. The Strategy comprises three pillars (1) promoting the mutual prosperity of Africa and the United States, (2) strengthening security, and (3) promoting stability. In furtherance of its three pillars, the Administration will counter China’s economic and political dominance, combat corruption in government and business, and  heighten scrutiny around or reduce U.S. foreign assistance to African nations, causes, and peacekeeping missions.

The Africa Strategy is consistent with the Administration’s inaugural National Security Strategy, which was published in December 2017 and expressly challenged China’s dominance and “corruption” in Africa, pledged to combat corruption and human rights abuses in Africa, and threatened to diminish or withdraw U.S. foreign assistance to corrupt actors and human rights abusers.

Heightened Anti-Corruption Enforcement: Chinese Companies May Face Most Legal Risk, African and Third Country Actors Will Too

Chinese state-owned and private companies doing business in or with Africa are likely to be subject to more U.S. anti-corruption scrutiny and enforcement actions. African officials and businesses are also likely to be targeted for corrupt activities. All regional and foreign businesses operating in or seeking entry into African markets should be aware of heightened U.S. interest in combating corrupt business conduct over which the United States can assert jurisdiction, as these parties may face greater direct or third party risk. Foreign parties should understand that U.S. anti-corruption enforcement can reach foreign parties and conduct having minimal links to the Untied States. (See, e.g., this extended discussion of Globalized Anti-Corruption Enforcement and the passage on the Chi Ping Patrick Ho case here).

Anti-Corruption and Other Legal Enforcement Targeting Africa’s Extractives Industries, Particularly Nonfuel Minerals

Chinese, African, and other parties doing or seeking business in Africa’s extractives industries– particularly nonfuel minerals (e.g., cobalt)– are likely to be of particular interest in the context of any U.S. anti-corruption or other enforcement actions, as the Trump Administration has taken steps to secure U.S. supplies of “critical” and other minerals and natural resources, including by singling out Africa’s extractives industry for punitive legal action.

Magnitsky Sanctions

In addition to anti-corruption enforcement, the United States may deploy Global Magnitsky Sanctions to punish and sideline African and other officials and private parties deemed to be have engaged in corrupt conduct and human rights abuses. As the Global Magnitsky Sanctions target a wide range of corruption and human rights abuses and are, relative to other sanctions programs, flexible and capable of ready deployment, the sanctions are likely to be an efficient legal tool to advance the goals of the Africa Strategy (and the National Security Strategy more generally).

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Get in Touch, Additional Resources

For more information about this update and MassPoint’s anti-corruption and international business and risk counseling and compliance capabilities on behalf of U.S. and foreign entities, contact Hdeel Abdelhady at habdelhady@masspointpllc.com. For background, view the below MassPoint publications and browse the publications pages and blog.

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Related Publications

United States Strategy Targets Chinese Dominance, Corruption in Africa

Canary in the Cobalt Mine: Glencore Corruption Probe May Not Be a One Off (with discussion of case of Chi Ping Patrick Ho)

Global Magnitsky: The Swiss Army Knife of Sanctions

Departing from Prevailing Legal Standards, United States Directly Sanctions Foreign Government Officials for Corruption

How the Trump Administration Supercharged Global Magnitsky Corruption and Human Rights Sanctions

MONEY IS NOT ENOUGH: Emerging Markets-Based Private and Sovereign Enterprises Need Entrepreneurial Governance to Advance Strategic Objectives in a Changing Environment

FIFA, the U.S. Financial System, and U.S. Jurisdiction Over Foreign Parties and Events

A Great BRIC Wall? Emerging Trade and Finance Channels Led by Non-Western Nations Could Curtail the Global Reach of U.S. Law

 

Post Author: MassPoint PLLC

MassPoint PLLC is a boutique law and strategy firm that works with diverse clients to meet legal, strategy, and risk management needs in a globalized, complex world.