For nearly 15 years, the United States has had the worldwide corruption enforcement stage to itself, reaping billions of dollars in fines and settlement payments from companies that have acknowledged engaging in bribery in foreign countries. That monopoly, however, may soon end. In a report entitled Left Out of the Bargain, the World Bank recently observed that “the country of enforcement was different from the country where the official was bribed or allegedly bribed” and that the country of enforcement has rarely shared its financial recoveries with the countries where the corruption occurred. Motivated by the potential financial recovery in a time where governments are struggling financially and aware of the financial benefit the U.S. has gained from corruption abroad, we believe that countries that have largely ignored corruption enforcement may become more active. As a result, companies may face additional punishment as multiple sovereigns pursue penalties for the same conduct.
Corruption Around the World
Corruption of government officials takes place everywhere, and the level of corruption varies significantly from country to country. According to Transparency International, which publishes an index detailing perceived levels of corruption in 177 countries, nations like Afghanistan, North Korea and Somalia are perceived as highly corrupt, while New Zealand and Denmark are seen as having low levels of corruption. The U.S. is about average among developed countries in corruption of its public officials, ranking 19th out of 177, on a par with Uruguay, between Ireland and Japan, and behind 11 countries in Europe.
Historically, each sovereign’s enforcement efforts to stop corruption also have differed widely. The U.S. has been the dominant “global sheriff” through the Department of Justice’s aggressive use of the Foreign Corrupt Practices Act (FCPA). As a result, the U.S. government has reaped in significant monetary penalties from entities around the world.
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