JINA YUUS GLOBAL TRADE

DR. MALAWER

Foreign Corrupt Practices Act and the OECD

The FCPA of 1977 was enacted principally to prevent corporate bribery of foreign officials. Encompassed “conscious disregard” and “willful

blindness” Not intended to cover ‘grease payments’

1998 amendment implemented the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Expanded scope of coverage to include some foreign

persons and extended jurisdiction beyond the borders of the US.

Overview

US National Interest

In the competition-driven private sector, the United States has historically demanded a level playing field With FCPA and OECD signatories would be playing with the same

sets of rules

American corporations have argued that this legislation created an unfair disadvantage for American corporations in their efforts to export goods and services.

“Corruption is not a new problem…It’s a human problem and it has existed in some form in almost every society” Barack Obama, University of Nairobi, 2006

Effectiveness of FCPA

Increases the perceived cost of bribery for businesses

Resolution of cases through Non-Prosecution Agreements and Deferred Prosecution Agreements Questionable deterrent effect Possibly self-defeating in implementation

Lack of transparency Inadequate measure of effectiveness

Policy proposal

Encourage greater transparency in Non- Prosecution Agreement (NPA) and Deferred Prosecution Agreement (DPA) resolutions Increase scrutiny to determine effectiveness

Encourage greater international cooperation Extradition, mutual legal assistance, mutual

monitoring and enforcement

Encourage Corporate Social Responsibility Emphasize limiting the bribery on the supply side in

addition to demand side.

Sources

Hess, David. Enhancing the Effectiveness of the Foreign Corrupt Practices Act Through Corporate Social Responsibility (2012). Ohio State Law Journal, Vol 73, No5. http://ssrn.com/abstract=2221437

Hollingshead, Ann. OECD gives US FCPA a pat on the back.Financial Integrity and Economic Development Task Force. 21 October 2010. http://www.financialtaskforce.org/2010/10/21/oecd-gives-u-s-fcpa-a-pat-on-the-back/

Sanyal, Rajib. Patterns in International Bribery: Violations of the Foreign Corrupt Practices Act. Thunderbird International Business Review. Vol. 54, No. 3, May/June 2012.

Seitzinger, Michael. Foreign Corrupt Practices Act (FCPA): Congressional Interest and Executive Enforcement. Congression Research Service. 7 February 2012. www.crs.gov