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Friday
Nov282014

FCPA, Bribery Act have a role in the fight against terrorism

There still seems to be some debate as to whether the FCPA, the UK Bribery Act, and other international focused anti-bribery legislation aids in the fight against terrorism. But the continuum from corruption to crime to terrorism is well-established and arguing that laws such as the FCPA have no place in a country’s overall security regime seems to be me to be naive at best.

One need look no further than last fall’s massacre of civilians in Kenya at the Westgate Mall to see how terrorists use bribery and corruption. The corruption perceptions in Kenya are well-known and it was this corruption led to guns and terrorists being able to cross the border and carry out the attack. Indeed border controls are so porous due to corruption in Kenya that in a prior episode involving the UK Serious Fraud Office (SFO), the UK government had banned certain Kenyan government officials from traveling to the UK, in large part because the country failed to take action against obvious cases of bribery and corruption.

Dick Cassin, writing last year on the FCPA Blog, said, “The visa ban followed a criminal investigation by the UK Serious Fraud Office into contracts between the Kenyan government and UK shell businesses. The contracts for passport controls and border security systems went to phantom overseas companies at prices about ten times the actual cost. Kenya refused to cooperate and in early 2009 the SFO was forced to end its investigation.”

Last week another such convergence was made public, this time in Portugal. The country has a process under which a non-European person who buys real estate valued at more than €500,000 ($621,000) could apply to become a permanent resident of the country. Such a designation would allow the person full access to European countries, clearly a valuable tool for terrorist.

The problem with the Portuguese system was that corrupt officials have been alleged to have approved such purchases of real estate at below this €500,000 threshold and were paid the difference between the actual purchase price and €500,000 as a bribe. Such actions put the entire European border security control at risk because once a terrorist obtains residential status in one EU country; they can travel freely throughout the entire Continent.

So while the FCPA and Bribery Act focus on commercial transactions, both laws clearly have a role in the world’s fight against terrorism. Buying real estate is a commercial enterprise. But if such actions make a country’s borders porous, massacres like the one at the Nairobi mall and much worse will continue to occur.

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Thomas Fox is a contributing editor of the FCPA Blog. He's the founder of the Houston-based boutique law firm tomfoxlaw.com. A popular speaker on compliance and risk-management topics, Fox is also the creator and writer of the widely followed FCPA Compliance and Ethics Blog. His book Lessons Learned on Compliance and Ethics topped Amazon's bestseller list for international law. He can be contacted here.

Reader Comments (1)

With respect to fighting terrorism. the FCPA and the UK Bribery Act could be useful in certain situations.

I think that in most instances with a U.S. nexus, the U.S. Criminal RICO Laws are far more promising. See http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=2885&context=flr; but see http://ricoact.com/?page_id=128.
November 30, 2014 | Unregistered CommenterEthan S. Burger
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