Foreign Affairs and Enforcement of the Foreign Corrupt Practices Act

37 Pages Posted: 26 Jul 2014

See all articles by Stephen J. Choi

Stephen J. Choi

New York University School of Law

Kevin E. Davis

New York University School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: September 2014

Abstract

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 data set 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.

Suggested Citation

Choi, Stephen J. and Davis, Kevin E., Foreign Affairs and Enforcement of the Foreign Corrupt Practices Act (September 2014). Journal of Empirical Legal Studies, Vol. 11, Issue 3, pp. 409-445, 2014. Available at SSRN: https://ssrn.com/abstract=2472224 or http://dx.doi.org/10.1111/jels.12045

Stephen J. Choi (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Kevin E. Davis

New York University School of Law ( email )

40 Washington Square South
Vanderbilt Hall, Room 335
New York, NY 10012-1099
United States
212-992-8843 (Phone)

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