The OECD has criticized other signatory nations for not living up to their anti-bribery obligations, and in its just released report also identifies certain discrete areas for U.S. improvement. But the bottom line message is that the U.S. government is a leader in anti-corruption enforcement.

U.S. Anti-Corruption Efforts at an All-Time High

The U.S. government has placed the fight against bribery of foreign public officials at the top of its list of critical law enforcement priorities. The OECD report concludes that this focus translates into vigorous law enforcement action:

• Prosecutions have increased from fewer than five per year between 2001 and 2005 to nearly 19 per year between 2006 and 2009.
  
  
• Between 1998 and September 2010, some 50 individuals and 28 companies were convicted of foreign bribery-related offenses, while 69 individuals and companies have been held civilly liable for foreign bribery.
  
  
• Of the 36 individuals who have been convicted of Foreign Corrupt Practices Act (FCPA) violations and sentenced during this period, 25 received sentences of imprisonment, with the average sentence being slightly more than 30 months.
  
  
• Twenty six companies have been publicly sanctioned for foreign bribery under increasingly popular non-prosecution agreements and deferred prosecution agreements.
  
  
• Since 1998, the U.S. has imposed more than $2 billion in bribery-related criminal fines against legal persons.

Rounding out this enforcement picture, the OECD report emphasizes the U.S. government's imposition of massive sanctions for accounting misconduct and money laundering related to foreign bribery. Consider, for example, that between 1998 and 2003, the maximum monetary sanction leveled against a company in an FCPA case was $2.5 million. But in the past six years, some 23 companies were sanctioned more than $10 million each, and during roughly the same time, U.S. disgorgement actions have reeled in more than $1 billion in foreign bribery proceeds.

OECD Report's Findings

The 68-page OECD report represents what some regard as the largest available collection of statistics and other information on the FCPA. The assessment provides an issue-by-issue analysis of ongoing U.S. enforcement efforts, highlighting a number of key trends and successful practices:

• Resolving most FCPA cases through plea agreements, deferred prosecution agreements and non-prosecution agreements has paid off, resulting in strong enforcement and private sector compliance without the attendant costs, time and resource drain of trials.
  
  
• The Federal Sentencing Guidelines allowing for stiff criminal sanctions, more focused SEC guidance and the potential for hefty civil penalties motivate companies to establish effective compliance policies and procedures.
  
  
• Internal audits of both domestic and foreign subsidiaries, trainings, and whistleblower tip hotlines are the most critical compliance measures.
  
  
• Many FCPA investigations are launched by or through U.S. foreign service officers serving in U.S. embassies.
  
  
• Foreign data protection laws frequently impede companies' abilities to obtain access to the books and records of subsidiaries abroad.
  
  
• From a risk evaluation standpoint, there are three primary areas requiring the most robust anti-bribery measures: (1) third parties, including local agents and joint venture partners, (2) facilitation payments, especially to customs officials, and (3) payments for travel, gifts and hospitality.
  
  
• The business community considers corporate monitors with Department of Justice (DOJ) experience as being the most desirable.
  
  
• The U.S. has devoted significant resources to FCPA enforcement, creating dedicated FCPA units in the DOJ, SEC, and FBI that, in turn, yield economies of scale, concentrated expertise and increased enforcement consistency.
  
  
• New federal legislation, including the whistleblower bounty provisions of the recent Dodd-Frank Act, is expected to accelerate the detection of FCPA violations and the initiation of investigations and prosecutions.

OECD Report's Targeted Recommendations

Transitioning from the descriptive to the proscriptive, the OECD report also contains a number of specific reform recommendations:

• Continue transnational law enforcement cooperation and evidence sharing to up transnational gains in the global anti-bribery fight.
  
  
• Consider extending the FCPA's statute of limitations to 10 years to permit adequate time for investigation and prosecution of these complex financial cases.
  
  
• Reduce business and legal community uncertainty by more clearly defining what qualifies as a "facilitation payment," spelling out that the term covers not only bribes for obtaining and retaining business per se, but also improper payments to secure foreign licenses, permits, etc.
  
  
• Boost transparency, public understanding and compliance by explaining when, how, and why DOJ and SEC use plea agreements, deferred prosecution agreements and non-prosecution agreements and what circumstances trigger the decision to require corporate monitors.
  
  
• Increase use of debarment and arms export license denials (that is, increase use of "Excluded Parties List System") to punish companies engaging in foreign fraud.
  
  
• Consolidate, summarize and make publicly available information on the real-world application of FCPA, including on affirmative defense of reasonable and bona fide expenses.
  
  
• Revise Criminal Resource Manual to explicitly state that the "business nexus test" includes bribes to foreign public officials to (1) obtain or retain business or (2) gain some other improper advantage in the conduct of international business.
  
  
• Increase efforts to raise FCPA awareness and increase deterrence and bribery detection among small-to-medium-size businesses.
  
  
• Boost awareness of need to pursue books and records violations under the FCPA, including offense of misreporting facilitation payments.
  
  
• Clarify that state-owned or state-controlled enterprises, persons holding judicial offices in a foreign country and persons or institutions, such as state-controlled or state-owned enterprises exercising a public function for a foreign country, qualify as "foreign officials" for FCPA purposes.
  
  
• Consider subjecting deferred prosecution agreements to greater judicial scrutiny and provide mechanism for judicial screening of non-prosecution agreements.

The Take-Away

Viewed from the DOJ and SEC's perspective, the landmark OECD report provides welcome external validation of the effectiveness of their mounting anti-corruption efforts. The U.S., in short, has not only complied with the OECD Anti-Bribery Convention but has done so to an extent that, according to the report, deserves to be emulated worldwide.

• U.S. diplomatic pressure, surely buoyed by the OECD's encouraging findings, signals an era of continued domestic and international efforts to stem the tide of global corruption.
  
  
• Companies that fail to appropriately adapt to this new enforcement reality risk exposure not only to massive fines and financial penalties but also to stiffening criminal sanctions. As the OECD report vividly illustrates, this is a risk that is increasingly difficult to justify.

© 2010 Perkins Coie LLP