A New Strategy for Preventing Bribery and Extortion in International Business Transactions
Bruce W. Klaw
University of Denver, Daniels College of Business
August 3, 2012
Harvard Journal on Legislation, Vol. 49, No. 2, 2012
Over the last thirty-five years, governments worldwide have been engaged in an important and laudable battle against bribery in international business transactions. The core of the U.S. anti bribery strategy is the Foreign Corrupt Practices Act, a federal law that imposes criminal penalties on those — and only those — who give bribes to foreign officials and that largely relies on voluntary disclosure to detect such corruption. This supply-side criminalization strategy, however, is ineffective, incomplete, inefficient, and inequitable. It punishes many extorted persons who do not deserve it and largely fails to punish the corrupt foreign officials who do. By punishing companies that voluntarily disclose their payments and denying them opportunities to recover their losses from extortion, it also establishes a perverse incentive structure that virtually ensures bribery will remain secret in most cases. The focus of the U.S. strategy should be shifted to prevention, not punishment. To this end, Congress should decriminalize the giving of bribes, replacing it with a robust mandatory disclosure regime that will enable foreign countries and business competitors to take action against willing bribe givers and allow victims of extortion to shield themselves from needless litigation, while obtaining meaningful restitution for the losses they have incurred. The U.S. government should then use the mandatory reports of unwilling payments to criminally prosecute the corrupt foreign officials who demand such payments, if foreign governments are unwilling or unable to do so.
Number of Pages in PDF File: 70
Keywords: FCPA, Foreign Corrupt Practices Act, Corruption, Disclosure, Bribery, Extortion, International Business Transactions, White Collar Crime, International Criminal LawAccepted Paper Series
Date posted: August 4, 2012
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