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Use of the Foreign Corrupt Practices Act to level the playing
field among domestic companies doing business abroad has led to
complaints that the statute places U.S. companies at a disadvantage
with respect to their foreign competitors.
The FCPA gives prosecutors tremendous discretion in defining its
scope, and thus tremendous leverage in charging decisions.
Corporations are averse to being investigated, especially for FCPA
violations , and as a result these cases often settle. But,
according to the author, a former U.S. Attorney General, the more
that American companies elect to settle and not force the DOJ to
defend its aggressive interpretation of the Act, the more
aggressive the DOJ has become in its prosecution decisions.
Prosecutions of individuals under the FCPA have been less
successful than those targeting companies, but speculation that the
DOJ will scale back its FCPA efforts based on such problems is
unfounded, the author says. He notes that lessons learned in those
cases become part of the Fraud Section's institutional memory,
and that cases such as the one pending against Wal-Mart for its
activities in Mexico make the public keenly aware of the problems
caused by corruption.
The author suggests targeted reforms that add a compliance
defense and a willfulness requirement for corporate criminal
liability. He questions the fairness of going after a company for
unknown violations by a foreign agent if it has complied with a
list of conditions known as DOJ Principles of Prosecution.
Originally published in Executive Counsel August / September
2012
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