TRACE Report Offers Global Anti-Bribery Enforcement Stats

TRACE's Wrage doesn't see it that way. She warned not to expect to see the DOJ or SEC scaling back their efforts any time soon. The hope last year was that “U.S. enforcement agencies can begin to step back as other countries step up,” Wrage said. “But we're less confident after reviewing this year's numbers.”

Sue Reisinger is a senior reporter with ALM.

The anti-bribery group TRACE International, Inc., has released its latest annual report offering in-house counsel detailed data on the pace of enforcement in different countries. The report says the United States more than doubled its formal enforcement actions between 2009 and 2010.

“In-house counsel struggle to assess risk internationally,” said Alexandra Wrage, TRACE's president and board chairperson. “In our experience, well-governed companies are searching for this sort of data in order to allocate compliance resources effectively.”

The Global Enforcement Report 2011 (https://secure.traceinternational.org/news/documents/GlobalEnforcementReport2011_000.pdf) provides an updated summary of international anti-bribery enforcement trends, based on the cases and investigations compiled by TRACE, a nonprofit membership association that offers anti-bribery services and products.

Wrage said she was surprised to see the percentage of non-U.S. companies pursued by the U.S. Department of Justice and the Securities and Exchange Commission, which jointly enforce the bribery provisions of the Foreign Corrupt Practices Act.

Many of the largest enforcement actions have come against companies headquartered abroad, such as Germany's Siemens and Daimler AG, and BAE Systems plc in the UK.

“This undermines the argument by the Chamber of Commerce and others that the FCPA is putting U.S. companies at a competitive disadvantage,” Wrage suggested.

Key findings in the report include:

• The United States has pursued 3.5 foreign bribery enforcement actions for every one by all other countries combined since the year 2000.
• Top industries for anti-bribery enforcement are in the sector covering oil, gas, and coal, accounting for nearly 20% of all enforcement activity.
• There's a near three-way tie for second place, with the aerospace/defense, manufacturing, and health care sectors each accounting for about 12% of enforcement activity.
• The largest number of enforcement actions involve alleged bribe payments to officials in China, Iraq, and Nigeria.
• While the United States was pursuing actions at a record pace, enforcement by countries other than the United States actually fell in 2010.

In another perspective on international bribery, the FCPA Professor blog recently carried a summary of a panel presentation from a recent meeting of the American Bar Association in Toronto. Juliet Sorensen, a clinical assistant professor of law at Northwestern University, wrote that the consensus among the panelists was that aggressive enforcement of bribery statutes is an international trend not limited to the United States, despite the TRACE statistics.

“Even Canada, which Transparency International has deemed the laggard of the G-7 in its anti-bribery enforcement, has brought a significant indictment in the last year and currently has 20 active investigations,” Sorensen said.

TRACE's Wrage doesn't see it that way. She warned not to expect to see the DOJ or SEC scaling back their efforts any time soon. The hope last year was that “U.S. enforcement agencies can begin to step back as other countries step up,” Wrage said. “But we're less confident after reviewing this year's numbers.”

Sue Reisinger is a senior reporter with ALM.