Enforcement officials have been hammering home the message for several years now, but if companies still want proof: A new report has more hard evidence that enforcement of anti-bribery laws is increasing around the world.

The report, released today by anti-bribery group TRACE International, shows that while the United States still sets the pace for cracking down on bribery, non-U.S. enforcement actions have more than doubled since 2012, and in 2014 total non-U.S. enforcement actions concerning bribery of foreign officials outnumbered U.S. enforcement actions.

According to TRACE’s 2014 Global Enforcement Report, foreign enforcement authorities brought 15 enforcement actions concerning the bribery of foreign officials in 2014, more than doubling the eight observed in the previous year. In comparison, U.S. enforcement authorities brought 13 of these enforcement actions in 2014, compared to 10 the previous year.

“The data for 2014 demonstrates that anti-bribery enforcement remains a priority not just in the United States, but throughout the world,” said Alexandra Wrage, president of TRACE International. “Companies and individuals are on notice that they face real consequences for engaging in bribery as a marketing strategy; enforcement of anti-bribery laws is gaining momentum.”

Still, U.S. enforcement of anti-bribery law remains the paramount concern for Corporate America for a reason: the United States has pursued five times as many enforcement actions as the United Kingdom, the country with the second highest total, with 22 enforcement actions, according to the TRACE report. Of the 269 enforcement actions brought from 1977 through 2014 concerning alleged bribery of foreign officials, 184 were brought by the United States. The remaining 85 were brought by 17 other nations.

Of the 184 enforcement actions brought by the United States, 45 involved companies headquartered outside of the United States, or individuals with non-U.S. citizenship. Of the enforcement actions concerning alleged bribery of foreign officials undertaken against non-U.S. companies and individuals, the highest number involved companies or individuals in the United Kingdom, followed the Netherlands, Switzerland, and Germany.

         

Companies or individuals from Europe make up approximately 82 percent of U.S. enforcement actions concerning alleged bribery of foreign officials undertaken against non-U.S. companies and individuals, followed by Asia Pacific with almost 18 percent.

From 1977 through 2014, 17 countries (excluding the United States) have undertaken 85 enforcement actions concerning alleged bribery of foreign officials, with OECD members constituting 14 of the countries. 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 almost 33 percent of such enforcement actions, followed by Denmark with more than 14 percent and the Netherlands with approximately 13 percent. Non-OECD members have brought four percent of all non-U.S. enforcement actions concerning alleged bribery of foreign officials.

Investigations

The United States also leads the way in investigations. Of the 211 investigations being conducted by 27 countries concerning alleged bribery of foreign officials, 111 were conducted by the United States. This means that the United States conducted approximately 53 percent of all ongoing investigations concerning alleged bribery of foreign officials, and five times as many as the United Kingdom, which had the next-highest number of investigations.

Of U.S. investigations, 44 concerned alleged bribery of foreign officials involving companies headquartered outside of the United States or individuals with non-U.S. citizenship, representing approximately 40 percent of all such investigations being conducted by the United States. Of the investigations concerning alleged bribery of foreign officials being 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 66 percent of U.S. investigations concerning alleged bribery of foreign officials conducted against non-U.S. companies and individuals, followed by the Americas (North and South America, excluding the U.S.) with approximately 16 percent, Asia Pacific with approximately 11 percent, Africa with approximately 5 percent and the Middle East with approximately 2 percent.

Of the 26 countries outside the United States that were conducting the remaining 100 investigations, 21 of these countries are members of the Organization for Economic Co-operation and Development (OECD); two are non-member signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; and three are non-members of the OECD.

Over 90 percent of ongoing investigations concerning alleged bribery of foreign officials were being conducted by OECD members, with the United Kingdom conducting almost 24 percent of such investigations, followed by Germany with 17 percent, and Australia with seven percent. Non- OECD members were conducting four percent of ongoing investigations concerning alleged bribery of foreign officials, and non-member signatories to the Anti-Bribery Convention were conducting 3 percent of such investigations.

China conducted the most investigations concerning alleged bribery of domestic officials as of Dec. 31, 2014, followed by India, Brazil, and Nigeria. Of the eight countries conducting four or more investigations concerning alleged bribery of domestic officials, four are in Asia, two are in Latin America, and Europe and Africa each had one.

Of the 45 countries conducting one to three investigations concerning alleged bribery of domestic officials, 18 are in Europe; 12 are in Africa; seven are in Asia; six are in Latin America; and two are in the Middle East.

“Bribery is not limited to any one area or continent; it is a global problem,” said Wrage. “While some countries are the focus of more investigations or enforcement actions than others, there are officials in every country that have benefited from bribery. There is no safe harbor when it comes to bribery.”

Industry-by-Industry

The extractive industries represent the highest number of bribery investigations, with 18 percent of all non-U.S. investigations, followed by engineering and construction with 14 percent, and transportation and communications with almost 13 percent.

When it comes to enforcement actions, the extractive industries represent the highest number of bribery, with 28 percent of all non-U.S. bribery enforcement actions, followed by engineering and construction with more than 12 percent and manufacturers and service providers with 11 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 than foreign officials. These industries include manufacturers and service providers; pharmaceutical; agriculture and food; transportation and communications; healthcare; property development and real estate; and entertainment and film.

Declinations

Since 2008, the U.S. government has declined to bring an enforcement action in 75 cases after conducting an investigation of alleged bribery of a foreign official. Half as many declinations occurred in 2014 compared to 2013, and significantly less than the 37 declinations in 2012.

All information on declinations is taken from publicly available resources. Thus, there may be instances where companies do not disclose knowledge of a declination.

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