The majority of U.S. investigations and enforcement actions concerning alleged bribery of foreign officials conducted against non-U.S. companies and individuals involved companies or individuals from Europe, according to a new report issued today by anti-bribery group TRACE International.
According to TRACE’s 2015 Global Enforcement Report, the United States leads the way in investigations. Of the 251 ongoing foreign bribery investigations conducted by authorities in 27 countries, 126 were being conducted by the United States—almost five times as many as the United Kingdom, the country with the second highest total. The remaining 97 were brought by 24 other nations.
Of U.S. investigations concerning alleged bribery of foreign officials conducted against non-U.S. companies and individuals, the highest number involved companies or individuals in the United Kingdom, followed by Switzerland and Canada. Companies or individuals from Europe made up approximately 71 percent of U.S. bribery investigations, followed by the Americas (13 percent), Asia Pacific (11 percent), and the Middle East (four percent).
Overall, from 1977 through 2015, 19 countries pursued 287 enforcement actions concerning alleged bribery of foreign officials. The United States still sets the pace for cracking down on bribery, with 199 enforcement actions. This figure is 70 percent of the total enforcement actions, to date, and almost seven times as many as the United Kingdom, the country with the second highest total.
Fifty-four of the 199 U.S. enforcement actions have involved companies headquartered outside of the United States or individuals with non-U.S. citizenship, representing 27 percent of all foreign bribery enforcement actions initiated by the United States. Of the enforcement actions against non-U.S. companies and individuals, the highest number involved companies or individuals in the United Kingdom, followed by Switzerland, Germany and the Netherlands.
According to the TRACE report, companies or individuals from Europe made up 72 percent of U.S. enforcement actions resulting from the bribery of foreign officials undertaken against non-U.S. companies and individuals, followed by Asia Pacific represent 20 percent, the Americas (excluding the United States) with six percent, and Africa with two percent.
Overall, the number of enforcement actions concerning alleged foreign bribery by the United States increased slightly in 2015, but did not significantly differ from the past four years. Non-U.S. enforcement actions decreased 73 percent from 2014, representing lowest number of non-U.S. enforcement actions since 2007.
The TRACE report showed that 26 other countries (excluding the United States) conducted 125 investigations concerning alleged bribery of foreign officials. Twenty of these countries are members of the Organization for Economic Co-operation and Development; three are non-member signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; and three are not members of the OECD.
Ninety-three percent of ongoing investigations concerning alleged bribery of foreign officials were being conducted by OECD members, with the United Kingdom conducting approximately 22percent, followed by Germany (15 percent), Sweden, Switzerland, and Australia, with six percent each. Non-OECD members were conducting four percent of ongoing bribery investigations, and non-member signatories to the Anti-Bribery Convention were conducting three percent of such investigations.
As for open investigations, Brazil stood out this year with more than 13 such cases pending, followed by India, China, and Nigeria, each of which had between seven and 13 cases pending. Regarding enforcement actions, 18 countries (excluding the United States) undertook 88 enforcement actions concerning alleged bribery of foreign officials from 1977 through 2015. OECD members constitute 15 of the countries; three are not members of the OECD.
More than 96 percent of enforcement actions concerning alleged bribery of foreign officials have been undertaken by OECD members, with the United Kingdom having brought 34 percent of such enforcement actions, followed by Denmark with almost 14 percent and the Netherlands with approximately 13 percent. Non-OECD members have brought three percent of all non-U.S. enforcement actions concerning alleged bribery of foreign officials.
South Korea brought the most enforcement actions concerning alleged bribery of domestic officials, followed by Algeria, China and Nigeria. The regional distribution of enforcement actions concerning alleged bribery of domestic officials is quite similar, with six of the 26 countries that have brought such enforcement actions located in Europe, six in Asia, six in Africa, five in the Americas (excluding the United States) and three in the Middle East.
“The data from the past year demonstrate the continuing importance of global anti-bribery enforcement,” Alexandra Wrage, president of TRACE International, said in a statement. “Although enforcement actions outside the United States have dropped, international cooperation and enforcement by OECD members is leading to more complex investigations. Companies should expect a continued emphasis on anti-bribery efforts by both foreign and domestic officials worldwide.”
The extractive industries represent the highest number of bribery investigations, with 19 percent of all non-U.S. investigations, followed by engineering and construction (16 percent) and manufacturers and service providers and transportation and communications, with 14 percent each). Non-U.S. investigations concerning alleged bribery of domestic officials have outnumbered non-U.S. investigations concerning alleged bribery of foreign officials by approximately 25 percent.
When it comes to enforcement actions, the extractive industries represent the highest number, with approximately 27 percent of all non-U.S. bribery enforcement actions, followed by engineering and construction with approximately 15 percent and manufacturers and service providers with approximately 12 percent.
More non-U.S. enforcement actions concern alleged bribery of foreign officials than domestic officials. Some industries, however, face a higher risk of enforcement actions concerning alleged bribery of domestic officials. These industries include engineering and construction; manufacturers and service providers; pharmaceutical; transportation and communications; healthcare; agriculture and food; property development and real estate; and entertainment and film.
With U.S. investigations, specifically, the manufacturer and service provider industry faced the most investigations, with approximately 18 percent, followed by extractive industries and technology and software, with 12.5 percent each. In comparison, the extractive industries saw the most U.S. enforcement actions, with 21 percent, followed by manufacturers and service providers and aerospace/defense/security, with 16 percent each.