71 Pages Posted: 24 Jul 2012 Last revised: 30 Apr 2014
Date Written: December 30, 2013
We examine factors that might explain how sanctions imposed in Foreign Corrupt Practices Act (FCPA) enforcement actions vary across the firms and countries implicated using a dataset of FCPA actions resolved from 2004 to 2011. We find evidence that the sanctions in an individual FCPA action are positively correlated with the egregiousness and extensiveness of the bribe. The sanctions also increase if the ultimate parent company of entities involved in the FCPA violation is foreign and if foreign regulators are involved in the action. At the country level we report evidence that the SEC and DOJ impose greater aggregate sanctions for violations in countries with a lower GNI per capita and weaker local anti-bribery institutions. The SEC and DOJ also impose disproportionately greater aggregate sanctions for violations where the home country of the ultimate parent company of FCPA defendants has a greater GNI per capita, stronger anti-bribery institutions, and a cooperation agreement with U.S. regulators. Overall, these findings suggest that factors besides those deemed relevant by U.S. and international law influence enforcement of the FCPA.
Keywords: bribery, Foreign Corrupt Practices Act, corruption, extraterritoriality
JEL Classification: F59, K22, K42, L51, M51
Suggested Citation: Suggested Citation
Choi, Stephen J. and Davis, Kevin E., Foreign Affairs and Enforcement of the Foreign Corrupt Practices Act (December 30, 2013). NYU Law and Economics Research Paper No. 12-15; NYU School of Law, Public Law Research Paper No. 12-35. Available at SSRN: https://ssrn.com/abstract=2116487 or http://dx.doi.org/10.2139/ssrn.2116487
By Mike Koehler