Has the Foreign Corrupt Practices Act Been Successful In Achieving Its Objectives?

Abstract

As long as there has been law, inquisitive minds have contemplated the salient question of whether the law has been successful in achieving its objectives. In 1977, the U.S. enacted the Foreign Corrupt Practices Act (“FCPA”), the first law of its kind in the world governing the conduct of domestic actors in their interactions with foreign officials in foreign markets. Upon the 40th anniversary of the FCPA, it is appropriate to ask the salient question of whether the FCPA has been successful in achieving its objectives.

To answer this question, success in the FCPA context must first be defined. Admittedly, this is no easy task as there are various plausible meanings of success in analyzing any law including the FCPA. Prior to highlighting the various plausible meanings of FCPA success, Part I of this Article provides a brief overview of the real-world events and policy reasons which resulted in Congress enacting the FCPA in 1977. From there, Part II of this Article draws upon attempts to measure the success of other laws and highlights various plausible meanings of FCPA success. Part III discusses “hard” enforcement metrics such as the quantity of FCPA enforcement actions as well as the quality of enforcement actions given how the FCPA is being enforced as well as outcomes in actual FCPA actions when government enforcement agencies are put to their burden of proof. Part IV discusses “soft” enforcement metrics, such as voluntary compliance with the FCPA as well as deterrence. Part V discusses “modeling” metrics — namely whether the pioneering FCPA law motivated other countries to enact similar laws.

Even with these various plausible meanings of FCPA success, actual measurement is difficult because some meanings are measurable, other meanings are largely unmeasurable, whereas other measures of success, while measurable, assume causation between an event and a subsequent development. Nevertheless, each plausible meaning of FCPA success is analyzed through various FCPA enforcement statistics, FCPA enforcement agency statements, qualitative FCPA data points, and other FCPA relevant information.

This Article concludes that it is inconclusive whether the FCPA, upon its 40th anniversary, has been successful in achieving its objectives — it all depends on one’s best definition of success. Reasonable minds can certainly differ as to the best meaning of FCPA success and whether the FCPA has been successful in achieving its objectives. Indeed, this Article’s main goal is to foster a dialogue on the best meaning of FCPA success and force those in the FCPA space to pause, reflect, and come to their own conclusion upon the FCPA’s 40th anniversary regarding the salient question of whether the FCPA has been successful in achieving its objectives.

Keywords: Foreign Corrupt Practices Act, FCPA