In a recent article for the ABA Journal ‘Litigation’, Susan Hansen argues that prosecutors are wielding the Foreign Corrupt Practices Act more actively, but not always successfully, while business interests are calling for changes in the law.
One of the DOJ’s current priorities is FCPA enforcement and the suggestion has been made that by being ‘overzealous’ in this regard, the DOJ is making it more difficult for US companies to compete abroad.
In 2010 the DOJ brought 48 new FCPA actions, nearly double the number for the previous year. Thus far in 2011, the DOJ has entered into 12 deferred prosecution agreements and 8 non-prosecution agreements with corporates, 5 of which stemmed from voluntary disclosures to the DOJ.
However, Lanny Breuer, who heads the Justice Department’s criminal division, considers the level of enforcement to be ‘just right’.
Hitherto, few cases brought by the DOJ reached court. But this is changing, as an increasing number of cases are being brought against individuals, who are tending to contest the allegations. So far this has resulted in only mixed success for the prosecution.
By contrast, corporates are less disposed to let a case proceed to court, with all the attendant cost and bad publicity.
The question being asked is whether the DOJ is being too enthusiastic in its enforcement approach.
This is being compounded by what some perceive as a lack of clarity in areas such as the ambit of the term ‘foreign official’, or where the line is drawn between what might be considered a legitimate gift as opposed to a bribe, or on questions of successor liability following company mergers or acquisitions.
A number of legislative reforms are being proposed in these areas. There is also a suggestion that a compliance defence be introduced along the lines of the ‘adequate procedures’ defence available under the UK Bribery Act, something about which the DOJ currently appears to be less than enthusiastic although informally the adequacy of a company’s compliance is something the DOJ will have regard to when (a) deciding whether to prosecute and (b) determining the appropriate level of any sanctions.