Be Careful What You Wish for: Thoughts on a Compliance Defense under the Foreign Corrupt Practices Act
48 Pages Posted: 15 Feb 2013
Date Written: 2012
The Foreign Corrupt Practices Act has become a major weapon to police the conduct of global corporations. The number of prosecutions by the Department of Justice and Securities & Exchange Commission has increased steadily over the past decade, accompanied by larger fines and penalties for companies caught paying bribes as part of their overseas operations. Given the scope of corporate criminal liability, which allows for a prosecution based on the acts of virtually any agent acting on behalf of the organization, companies have agitated for the ability to defend against charges when they have in place compliance programs designed to prevent and report violations. This compliance defense has been extolled as a means to give corporations a weapon to fight the government when they have tried, but failed, to prevent misconduct that would otherwise result in potentially crippling criminal charges. This article, which was the basis for the keynote address given at the symposium “The FCPA at Thirty-Five and Its Impact on Global Business” put on by the Ohio State Law Journal, considers how a compliance defense would operate, and its benefits and burdens. While often advanced as a boon to corporations and the government, it could subject companies to intrusive investigations by prosecutors seeking information that could be used to overcome it, and there are questions about how aggressively a company might advance the defense when cooperation is the key to avoiding criminal charges. While the defense would provide a means to combat criminal charges, the compliance defense may not be as significant as sometimes portrayed by its proponents.
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