U.S. authorities are holding course on bribery and corruption enforcement. That’s despite a predicted slowdown in favor of a more business-friendly approach.
Record settlement for telecom operator
September saw the first notable FCPA resolution under the Trump administration: a US$965m global settlement with Swedish telecom operator Telia Company. It highlights DOJ’s and the SEC’s willingness to impose large penalties under the FCPA. Even with the hefty penalty, Telia dodged having a monitor, marking a trend worth watching.
Four years before his election, President Trump expressed contempt for the U.S. Foreign Corrupt Practices Act (FCPA). He called it a “horrible law” that “should be changed.” He suggested efforts to stop global corruption amounted to the U.S. acting as “policemen for the world,” which he called “ridiculous.”
But recent remarks by Department of Justice (DOJ) and Securities and Exchange Commission (SEC) officials show enforcement of the FCPA remains a priority. Both agencies will target individuals at fault for corporate wrongs.
In fact, DOJ expanded the FCPA Pilot Program though the new FCPA Corporate Enforcement Policy (CEP), issued in November. The CEP strengthens incentives for companies to use compliance programs and to cooperate during investigations.
Also, in December the Trump administration released its National Security Strategy. It highlights countering foreign corruption as one of five priorities to “promote free, fair, and reciprocal economic relationships.”
But FCPA cases aren’t shaped solely by an aspirational commitment to fight global corruption. It takes specific DOJ policies like the CEP; these dictate how corporate fraud investigations will proceed. And it takes law enforcement priorities; these steer limited enforcement resources.
Agencies will focus on individuals to deter misconduct
In a keynote address on compliance and enforcement, Deputy Attorney General Rod J. Rosenstein expressed a “resolve to hold individuals accountable for corporate wrongdoing.” Attorney General Jeff Sessions, in his nomination hearing, also said DOJ will “continue to emphasize the importance of holding individuals accountable for corporate misconduct.” And at the Committee on Banking, Housing, and Urban Affairs, chairman of the SEC Jay Clayton restated his belief in “the deterrent effect of enforcement proceedings that include individual accountability.”
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