Introduction
Africa has continued to lead the ranks as the region with the highest rate of return on foreign investment.1 The continent is not only fast in developing its commercial future, but since the turn of the 21st century, the rate of real GDP has risen at more than twice its pace in the 1980s and 1990s, thereby making the continent an attractive destination for some of the most reputable global companies to set up offices. However, operating in and out of Africa comes with its challenges because the continent is plagued with a myriad of issues such as corruption, conflicts, environmental pressures, and insecurity, all of which tend to expose global companies operating in Africa, to corporate criminal liability for vices such as bribery, corruption, influence peddling, money-laundering, conflict/terrorism financing, and all kinds of white-collar crimes.
Moreover, the risk and exposure to corporate criminal liability for the above-listed white-collar crimes is significantly higher for global companies operating in Africa but whose headquarters are in countries like Germany, the United Kingdom, the USA, France, and the European Union. This is because these companies are not only required to comply with local laws that deal with white-collar crimes within Africa, but they are much more required to ensure that their operations in Africa comply with, and are not in violation of laws, regulations, and transnational legislations that criminalize whitecollar crimes in their jurisdictions.
This article attempts a brief examination of some of the legislations that criminalize corporate involvement in white-collar crimes in countries like Germany, the United Kingdom, the USA, France, and the European Union and discusses their implications on corporate criminal liability for multinational corporations operating in and out of Africa.
The Concept of Cross-Border White-Collar Crime, its Impact on Foreign Companies Operating in Africa and Challenges in its Investigation
White-collar crime has been defined by the United States Federal Bureau of Investigation (FBI) as 'those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence.2
Crimes of this nature become crossborder or international when they span multiple jurisdictions, leveraging the interconnected nature of the global financial systems to evade detection and enforcement efforts.3 A common form of cross-border whitecollar crime, prevalent with multijurisdictional business operations is the bribery of foreign corrupt officials by multinational corporations and their executives in exchange for being awarded contracts. A case in point is the Haliburton scandal, which led to a notable settlement with the Nigerian government and the conviction of Albert "Jack" Stanley, a U.S. citizen and a former officer and director of Kellogg, Brown & Root, Inc. ("KBR"), that was during part of the relevant period a subsidiary of Halliburton.
Similarly, investigations by the Department of Justice and the Securities and Exchange Commission (US), revealed that Siemens and its subsidiaries paid bribes totaling approximately $1.4 billion to foreign government officials in various countries globally. Upon pleading guilty Siemens and its subsidiaries paid a record $800 million in fines and penalties. More recently, on 8th August 2024, the former Finance Minister of Mozambique, Mr. Manuel Chang, was found guilty and convicted by a Brooklyn Court, for his role in a $2 billion fraud, bribery, and money laundering scheme that victimized investors in the United States and elsewhere referred to as the Tuna Bonds case. Furthermore, following Credit Suisse AG and Credit Suisse Securities (Europe) Limited (CSSEL) admission of having defrauded investors in the US and elsewhere, Credit Suisse paid approximately $475 million in penalties, fines, and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom.4
Another story of great concern is the findings by South Africa's Judicial Inquiry into the alleged state capture by the Gupta Brothers, which impacted several foreign companies operating in South Africa, including Denton's for payments made to alleged money laundering vehicles operated by the Gupta Brothers.
Notwithstanding these laudable instances of combating the growth of cross-border white-collar crime, there are still inadequacies existing in collaboration by law enforcement agencies of sovereign nations, varying legislation of countries, and political factors that hinder the detection and prevention of these crimes.
Again, with various countries adopting data privacy laws that protect personal and other important information, another barrier that has further complicated combating crossborder crimes is the transfer of information between multiple countries, with some jurisdictions restricting the cross-border transfer of information through "blocking statutes", which act to prevent the disclosure of data or other materials to foreign jurisdictions for legal proceedings, except when there is a treaty or agreement between the jurisdictions providing for such a transfer.5
This divergence in the legal framework of various countries further compounds the complexity of investigating cross-border financial crimes, which spells the need for improved international cooperation and transparency measures.
Legislations by Various Jurisdictions to Tackle Cross-Border White-Collar Crime
Given the ever-present need to safeguard the global economy and recognize the necessity to challenge the growth of cross-border whitecollar crimes, several jurisdictions have promulgated legislations that aim at not only unraveling the complexities but also discouraging these crimes.
Cross-Border White-Collar Crime Legislations in the USA
In 1977, the United States of America enacted the Foreign Corrupt Practices Act (FCPA), which is considered today as one of the most effective cross-border anti-corruption laws in operation.
The FCPA is a federal law, enforced by the U.S. Department of Justice, which prohibits payments, gifts, or even offers of "anything of value" to a "foreign official" to influence the official or otherwise "secure any improper advantage" in obtaining, retaining or directing business.
A key strength of the FCPA is its worldwide application, and it applies to all US or foreign public companies listed on the stock exchange in the U.S. or companies that are required to file periodic reports with the U.S. Securities and Exchange Commission. The Act is also applicable to a company's employees, officers, stockholders, and agents such as third-party actors, distributors, and consultants.
Another notable development from the US, in 2023, Homeland Securities Investigations (HIS) established the Cross-Border Financial Crime Center (CBFCC) which is a public-private partnership of federal law enforcement agencies, partner nations, banks, financial institutions, and financial technology companies.6 CBFCC is notable for supporting the prosecution, disruption, and dismantlement of transnational criminal organizations, strengthening the financial technology industries against illicit activity, and enhancing communication between government and private sector partners.
A Bill to be cited as "Combating Cross-border Financial Crime Act of 2023" has also been introduced by U.S Senators, Sheldon Whitehouse, Bill Cassidy, and Angus King in November 2023 but it is yet to be passed into Law. The Bill is targeted at combating illicit cross-border financial activity and improving the Trade Transparency Unit program of U.S. Immigration and Customs Enforcement and other purposes.7
Currently, in the US, there are various Anti-Money Laundering Laws used in combating these white-collar crimes, such as:
1. The Bank Secrecy Act (BSA) 1970 - This remains the country's most important anti-money laundering law. It was enacted to ensure that financial institutions in the US do not facilitate money laundering.
2. USA Patriot Act 2001 - This Act criminalized the financing of terrorism and augmented the existing BSA framework by strengthening customer identification procedures. Also, it prohibits financial institutions from establishing, maintaining, administrating, or managing correspondent accounts for foreign shell banks.
3. Anti-Money Laundering Act of 2020 - This amended and modernized the Bank Secrecy Act (BSA) for the first time since 2001. Aside from deterring money launders from using shell companies to evade detection, the Act also addresses emerging financial threats and encourages information sharing, coordination, and technological advancement.
Cross-Border White-Collar Crime Legislations in the United Kingdom
A series of financial scandals occurred in London during the 1970s and 1980s that caused the public to lose trust in how sophisticated frauds were handled. Deliberations on this issue necessitated the birth of the Special Fraud Office (SFO) in 1987, which became effective in April 1988.
SFO, established by the Criminal Justice Act, 1987,9 is the nonministerial government department saddled with the responsibility of investigating and prosecuting serious complex fraud and corruption in England, Wales, and Northern Ireland. SFO also enforces the Bribery Act 2010.
Under Section 2 of the Criminal Justice Act 1987, SFO is empowered to require any person (or business/bank) to provide any relevant documents (including confidential ones) and answer any relevant questions including ones about confidential matters. SFO which is headed by a director appointed by the Attorney General investigates and prosecutes different types of high-profile cases involving fraud.
The need to harmonize the existing white-collar crimes legislation and consolidate the criminal offenses about bribery in the UK and other countries led to the Bribery Act, of 2010. The Bribery Act, 2010 features an international outlook as it covers transactions that take place not only in the UK but also abroad in both the public and private sectors.
Section 6 of the Bribery Act is important as it criminalizes an attempt to influence a person acting in their capacity as a foreign public official by offering, promising, or giving a financial or other advantage to obtain or retain business or a business advantage.
It is still an offense if the offer, promise, or giving is made through a third party and/or where the offer, promise, or giving of a reward is to a third party at the foreign public official's request or agreement. Multinational companies headquartered in the UK are also advised to take note of salient provisions of the Bribery Act such as the potential liability for the acts of persons deemed to be associated with a commercial organization. If a person associated with a commercial organization bribes a person to obtain or retain business or a business advantage for the commercial organization, then the organization may be guilty of an offense under the Bribery Act and liable for an unlimited fine.10
The Bribery Act defines an associated person under Section 8 to be a person who performs services on behalf of the commercial organization and provides as an example an employee, agent, or subsidiary.
The provisions regarding corporate offenses are essentially strict liability, however, a defense to culpability is that the commercial organization has designed "adequate procedures" to prevent acts of bribery or official corruption by associated persons. Moving forward, since the Bribery Act of 2010 mostly covers the offences relating to bribery, there was need for a legislation that will overhaul corporate criminal liability to improve transparency over UK companies and at the same time prevent fraudsters and terrorists from using corporate entities to exploit the UK's economy. This led to the promulgation of the Economic Crime and Corporate Transparency Act, of 2023 ("ECCTA").
The ECCTA was passed in October 2023, to strengthen the existing framework for tackling financial crimes, featuring notable changes to widen the net of corporate criminal liability. The provisions of the ECCTA are targeted at enhancing corporate governance and accountability, which is crucial to maintaining the integrity of the global economy.
The ECCTA introduced a new test for corporate criminal liability. Before the ECCTA the identification doctrine developed through case law required that for a corporate entity to be criminally liable for a financial crime, the natural persons committing the crime must be the directing mind and will of the company, who also possessed the necessary mens rea to commit the offense.
In essence, to prove criminal culpability, investigators had the herculean task of identifying a natural person who was senior enough to be the directing mind and will of the company. The difficulty with this approach in dealing with multinational companies is that the "directing mind" of the organizations is usually far removed from the day-today activities of the corporate entities so corporate criminal liability could be avoided
Now, with the promulgation of the ECCTA, a company will be criminally liable for the actions of persons considered senior managers, effectively lowering the threshold for corporate criminal liability and ensuring that corporate entities themselves are fully involved in tackling financial crimes. The definition of senior managers covers natural persons who make decisions or manage a whole or substantial part of the organization's activities. This not only covers members of the board but also heads of departments.
The ECCTA also introduced a new corporate offense of the Failure to Prevent Fraud, an expansion on what was applicable under the Bribery Acts under the failure to prevent offense. The ECCTA provides that a large organization would be criminally liable where a person associated with the organization ("Associated Person") commits a fraud offense for the benefit of the organization, or for the benefit of someone for whom the organization provides service.
The ECCTA applies to organizations that meet at least two of three thresholds, which are a turnover of more than £36 million, a balance sheet total of more than £18 million, and an average of more than 250 employees. It is important to note that the applicability of the ECCTA extends beyond the UK and includes multinationals that do not have a subsidiary or operate in the UK. If an employee or agent commits or attempts to commit fraud against UK citizens, the corporation could be found liable for their actions.
Cross-Border White-Collar Crime Legislations in France
Over the years, the French practices of white-collar crimes have evolved, given the globalization of French companies. This necessitated the promulgation of Sapin II Law, the French Law on the protection of whistleblowers in public and private sectors, passed into law in December 2016 and came into effect on 1st January 2018.11 Sapin II indeed has strengthened the French legal framework for combating bribery and corruption through its notable provisions.
The Sapin II Act features key provisions designed to ensure that multinational corporations headquartered in France, establish internal control mechanisms that work to prevent corruption. The Act established the French Anti-Corruption Agency (AFA), which is responsible for ensuring that companies put in place effective anticorruption compliance programs. The Agency is also empowered to monitor and implement the provisions of the Act.
Going further, the Act mandates companies based in France with at least 500 employees or a group of companies that employs at least 500 employees worldwide and revenue of more than 100 million euros but whose parent company is headquartered in France, to establish and implement anti-corruption program. Failure to comply with the requirements of the Sapin II Act can result in penalties of up to 30% of average revenues, calculated over the last three fiscal years, and the company can be placed under mandatory compliance supervision for a maximum of three (3) years.
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