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The Coming Chaos In Global Enforcement

Anti-corruption laws are breaking out all over.

In a few days, the U.K. Bribery Act will be a reality. Other countries, prodded by the OECD and U.S., are criminalizing overseas public bribery. Spain, the Netherlands, and the Czech Republic are among them. Russia has a new law, so do India and China. Indonesia wants one. In South America, Brazil joins the club, and others are talking about it.

It's good news.

But what happens to a company and its executives if they're prosecuted in three, four, or five jurisdictions for the same bribes? Will the companies pay multiple fines? Will individuals be handed off from one prison to the next?

No one knows how it will work. There's no international superstructure in place to sort it out. And with big money up for grabs, there's sure to be enforcement competition.

Earlier this year, we asked Richard Alderman, head of the U.K.'s Serious Fraud Office, about it. Here's the exchange:

FCPA Blog: When the Bribery Act becomes effective, should global companies fear the prospect of duplicate enforcement actions in both the U.S. and U.K.?

Richard Alderman: The SFO works closely with the DOJ and the SEC. We shall discuss how best to proceed. I do not want to see duplicate actions in each jurisdiction. I want the SFO to be able to agree with our U.S. counterparts on a resolution that we can pursue jointly with the corporate.

FCPA Blog: Isn't the prospect of multiple prosecutions even more disturbing if other countries join the U.S. and U.K. in aggressively pursuing global corruption? Do we need some kind of supra-national enforcement body?

Richard Alderman: It is important that the enforcement authorities liaise closely together so that there can be an overall resolution subject to the decisions of the courts in each jurisdiction. These issues are best left to the authorities in each jurisdiction and the courts.

Good intentions. But as more overseas antibribery laws come on line, will enforcement agencies always cooperate? Or will they sometimes compete?

For starters, the coming uncertainty will make self reporting less attractive. After a voluntary disclosure in Washington, what will happen when prosecutors get a whiff of it in London, Madrid, Prague, Moscow, Beijing, and ten other places?

Yet, with SOX obligations and the new SEC whistleblower rules, can any issuer really make a case against self reporting, even for one-off compliance problems? There are no easy answers.

So, let the chaos begin.

Reader Comments (2)

Article 4(3) of the OECD Convention states as follows. "When more than one Party has jurisdiction over an alleged offence described in this Convention, the Parties involved shall, at the request of one of them, consult with a view to determining the most appropriate jurisdiction for prosecution."
June 29, 2011 | Unregistered CommenterProfessor Mike Koehler
Thanks for this post, as usual really useful for anticorruption practitioners.
But I have a question concerning Spain : I thought this country has yet a foreign bribery offence ? Was I wrong ?

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