Friday, July 8, 2011
The New Reality of Global Enforcement and Coordination
More countries are enacting and enforcing anti-corruption laws. While the enforcement environment is certainly changing with the enactment of new laws, and the allocation of more resources to enforce the laws, the most significant trend is the rise in international cooperation.
The US has a long track record of cooperation with the UK. With the new Bribery Act in force, this will have a significant impact on joint investigations and prosecutions. But that is nothing new -- the UK and US have been coordinating and jointly prosecuting and settling cases.
The prospect of more countries working together creates even more significant risks and nightmare scenarios. China has passed a new anti-bribery law, and the US already has agreed to cooperate and coordinate with China. Russia is about to enact a new anti-corruption law. Brazil has just done so. Colombia has joined in passing a new anti-corruption law. India is about to pass a new law as well.
Germany already has ramped up its enforcement program. Spain has passed a new and tough criminal law against corporations. More will follow. The trend is unmistakable -- governments want in on the anti-corruption enforcement game and will work with other countries to do so.
For global companies, the prospects are certain to create compliance headaches and spin legal teams into whipsaw scenarios. As more countries become active, they will want a slice of any fine or penalty imposed. Foreign governments see this as a real possibility for revenues and political benefits.
International cooperation and coordination among the enforcers will not be as difficult as some believe. The US has Multilateral Legal Assistance Treaties in place with many countries. The MLATs create a foundation for cooperation and assistance and adding anti-corruption prosecutions will not challenge this existing system. Working together the Justice Department and the US State Department are likely to expand these efforts, especially in the anti-corruption area.
The analogy I like to use for international compliance and enforcement is multi-state enforcement within the United States. In the last 20 years, states have worked together to coordinate enforcement efforts among themselves and with the federal government, leading to massive enforcement actions, especially in the antitrust arena. The flattening of the global market place will inevitably lead to a flattening of global enforcement, and anti-corruption efforts are likely to increase the infrastructure and integration of such programs.
For compliance officers, this means more laws, more headaches, and more burdens. As if they really needed anything more!!!