Foreign Corrupt Practices Act – more backsliding suggested
After all these years, we finally have a novel dangerous argument, from the City Journal, that we should parse the Foreign Corrupt Practices Act down to its most narrow interpretation. Up to now there has been significant back and forth about enforcement of the FCPA but no one has argued that it’s too broad. Until now with the premise that US companies, who face an uneven playing field, should limit and avoid responsibility, when their employees are corrupt. The argument that is espoused, is, as the Brits say, “it wasn’t me Guv”. The original and ongoing reasoning for the FCPA (FCPA), and why it is so effective, is that an American company can’t simply say that the transaction was far away, didn’t involve an American, and they didn’t know. Mr. Dieterle argues that in a recent Siemens case, “the action was notable because it involved only German and Argentinian citizens conducting business in Argentina. U.S. officials asserted jurisdiction on the grounds that Siemens is registered and traded on the New York Stock Exchange, and that some of the alleged money laundering was channeled through U.S. banks. The result was hundreds of thousands of dollars claimed on an elastic interpretation of jurisdictional authority .” The argument is if a company does business as an American company, it must follow American laws, and it doesn’t matter who it has committed the crime in a foreign country, be it a Indian bookkeeper or Slovenian office manager, the CEO of the US company is responsible.
Why is this important? Because, since 1977, the FCPA, a US federal law prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests. The concept is clear there must be no bribery, and this has been a law which is the gold standard in anti-corruption law circles. This is used by all anti-corruption practitioners as an example of how to deal with corruption and has been suggested by many of us to many governments over the years. Good compliance practices for US companies have developed and been used overseas and, in the US, due to this law. The suggestions in this article are offensive, in that they encourage our worse behavior. What we want is more integrity in business, not integrity, parsed into a very limited area, being only touching on Americans, and no responsibility for actions of US companies overseas. Again, we are reminded that we must support the companies and governments who can see that we should follow the true meaning of this law, no bribery or corrupt actions by US companies overseas, no exceptions.
Link:
https://www.city-journal.org/article/trump-executive-order-foreign-corrupt-practices-act-enforcement