A law firm released its third annual review of the latest developments in anti-bribery and corruption regulation and enforcement around the world. One finding is that, despite significant investment in anti-bribery compliance, many corporate compliance officers are concerned about their exposure and some are falling short on best practices.
The review observes that, while in the United States the number of Foreign Corrupt Practices Act (FCPA) enforcement actions brought by the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) seems to have cooled off for the first time in the last five years, the leveling-off in the number of cases is not a sign that US or other regulators are losing interest in anti-corruption enforcement.
Jeremy Cole and Peter Spivack, Co-Heads of Hogan Lovells’ Investigations, White Collar, and Fraud practice group, said: “As companies expand their business activities into higher risk markets, they must be aware that enforcement will increasingly be on multiple fronts, not only from the United States.”
The review points to the apparent slowing pace of new FCPA enforcement actions that it says will likely continue in 2013. The cooling-off period is mostly due to the concentration of case resolutions and pending investigations, many of which are industry wide. Examples of industries experiencing corruption sweeps include healthcare, financial services, movie studios, and defence.
For example, the review specifically observes that nine enforcement actions were brought in 2012 against seven companies in the healthcare sector. The almost ten-year-old healthcare industry sweep may be entering a phase where the agencies are resolving more cases than they are starting. But with ongoing investigations against at least 21 companies, the sweep will likely continue to play out for at least the next few years.
The review also summarises recent FCPA cases and the following trends:
Increased variations in the use, scope, and duration of compliance monitors
Continued pursuit of individuals, executives, and employees in the aftermath of company settlements
Industry-wide investigations are on the rise and the government’s sweep of the medical device industry is beginning to show results
Compliance and cooperation are the keys to sustainability and may even prevent prosecution or, at the very least, greatly reduce penalties.
While the main trend in this review surrounds recent FCPA enforcement actions by the SEC and DOJ, as in past reviews, it also emphasizes that corruption enforcement is not just for the US or UK governments. Other countries have made clear that they will be increasing their enforcement efforts and targeting foreign companies doing business within their borders. The review presents some of the highlights of anti-bribery and corruption enforcement and regulation in Europe, Brazil, Asia, and the Middle East.
“Compliance with the FCPA to satisfy risk management standards is not enough to mitigate risk,” said Steve Immelt and Patrick Sherrington, Global Co-Heads of Hogan Lovells’ Litigation, Arbitration and Employment practice. “It is critical to pay proactive attention to compliance and prevention to meet the challenges of corruption and bribery compliance, investigations, and remediation throughout the world.”
To view the 48-page Global Bribery and Corruption Review 2012 report visit – http://viewer.zmags.com/publication/89ae8f6f.
