The number of foreign bribery enforcement actions brought by the United States slowed notably last year, while the overall pace of transnational anti-bribery enforcement actions and investigations lagged worldwide, according to the 2021 Global Enforcement Report released Wednesday by TRACE International.
The report serves as a helpful resource for chief compliance officers who want to better understand which industries are most susceptible to a bribery investigation or enforcement action. It provides a global glimpse into all known enforcement activity—investigations, enforcement actions, and declinations—over the last 45 years, following enactment of the U.S. Foreign Corrupt Practices Act (FCPA).
Data from the report is based primarily on cases and investigations tracked in the TRACE Compendium, a searchable database of international anti-bribery enforcement actions.
The report found the United States brought seven enforcement actions concerning bribery of foreign officials in 2021, down from 12 in 2020 and 19 in 2019. Non-U.S. enforcement actions were down to five from seven in 2020.
“The slowdown in enforcement actions coincides with a continued upward trend in transnational cooperation among enforcement authorities, which has led to coordinated resolutions with substantial penalties in recent years,” TRACE President Alexandra Wrage said in a press release. “With a recently renewed focus among G7 countries on prosecuting financial crime, especially corruption and kleptocracy, we expect enforcement authorities to maintain very high expectations for companies’ compliance programs.”
A summary of TRACE’s 2021 findings, broken down by industry and region, are discussed in more detail below.
Investigations by industry: Extractives remains the most investigated industry, both globally and specific to the United States. Approximately 18 percent of all U.S. investigations concerning bribery of domestic and foreign officials are related to the extractives industry, followed by financial services (15 percent) and manufacturers/service providers (13 percent).
Excluding the United States, the extractives industry represents 19 percent of all investigations, followed by engineering/construction (17 percent) and aerospace/defense/security (14 percent).
Enforcement by industry: From 1977 through 2021, extractives represented 19 percent of all U.S. enforcement actions concerning alleged bribery of domestic and foreign officials, followed by manufacturers/service providers (14 percent) and aerospace/defense/security (11 percent).
Excluding the United States over the same time period, extractives represented approximately 24 percent of all bribery enforcement actions, followed by engineering/construction (18 percent) and manufacturers/service providers (13 percent).
Bribery investigations of foreign officials by country: There were 294 investigations in total concerning alleged bribery of foreign officials being conducted by authorities in 37 countries as of the end of 2021, according to TRACE. The United States was conducting 118 open investigations, representing 40 percent of all ongoing investigations.
European countries accounted for approximately 46 percent of all investigations (136), while the Asia Pacific region accounted for nearly 9 percent of ongoing investigations. Following were the Americas (excluding the United States) at 3 percent, the Middle East with approximately 1 percent, and Africa with fewer than 1 percent. These figures are consistent with TRACE’s 2020 report.
Notable in 2021 was Brazil overtaking China as the most active of non-U.S. jurisdictions in bringing enforcement actions for domestic bribery from foreign companies, according to TRACE’s findings.