The Foreign Corrupt Practices Act is a key piece in the U.S. government’s fight against bribery and corruption across the globe. While the law has its limits, as it applies to the bribe-payor and not the bribe-receiver (in contrast to the U.K. Bribery Act which makes illegal both sides of the corruption equation), it remains an incredibly powerful tool. The drafters of the legislation realized the importance to U.S. foreign policy when they enacted the law back in 1977. Any company subject to the FCPA can and does stand in the wake of the U.S. government’s fight against this global scourge.
However the FCPA is only one tool the U.S. government has in its arsenal. The recent forfeiture lawsuits filed against those accused of looting the Malaysian sovereign wealth fund, the 1MDB are another such tool. The U.S. is recognized as the global leader in this fight, and given the position of the U.S. in worldwide business commerce, The Man From FCPA finds such a view appropriate.
In an editorial in the Financial Times, the paper recognized that the United States is uniquely suited to pursue this goal, particularly in light of the forfeiture filings against family members and close business associates of the Prime Minister of Malaysia, in connection of looting 1MDB for personal use and gain. More importantly, the piece makes the clear link between corruption and lack of a viable democracy in the country. To defeat any inquiry into the graft, the Prime Minister has effectively removed anyone who questioned his role in this scandal. While it is the people of Malaysia who have suffered from the theft of an alleged $3.5bn from the 1MDB, it is the United States that is seeking return of those stolen funds.
In a recent FCPA enforcement action involving the Latin American focused airlines LATAM, some criticized the U.S. government for enforcing the action against what they believed was essentially a local labor dispute in a foreign country. This commentary misses out in two key elements. First, a bribe was paid to an Argentine government official and second, LATAM is a publicly listed U.S. company. If the U.S. government is not going to enforce its anti-bribery laws, when appropriate against U.S.-based companies; it will not have the authority to stop corruption across the globe.
Continue the conversation at Compliance Week Europe: 7-8 November at the Crowne Plaza Brussels. Join us as we look at changes in global anti-corruption regulations, slave labour risks in your supply chain, and how to detect fraud, to name just a few topics. Learn more