Wednesday, July 6, 2011
In the past, domestic prosecutions of foreign corporations were not noteworthy. This has changed dramatically. Federal prosecutors now advertise a muscular approach targeting major foreign firms and even entire industries. High-profile prosecutions of foreign firms have shaken the international business community. Not only is the approach federal prosecutors have taken novel, but corporate criminal liability is itself a form of American Exceptionalism, and few other countries hold corporations broadly criminally accountable. To study U.S. prosecutions of foreign firms, I assembled a database of publicly reported corporate guilty plea agreements from the past decade. I analyzed U.S. Sentencing Commission data archives on federal corporate prosecutions and also data concerning federal deferred and non-prosecution agreements with corporations. Not only are large foreign firms prosecuted with some frequency, but they typically plead guilty and are convicted. In this Article, I develop how foreign corporate convictions have become common in distinct substantive criminal areas, but the trends and types of foreign corporate prosecutions share important features in common. The prosecutions are concentrated in crimes prosecuted by Main Justice, and international treaties and cooperation agreements have facilitated extraterritorial prosecutions. Larger and public foreign firms are prosecuted, and the typical resolution involves not only higher than average fines, but also a guilty plea and not pre-indictment leniency. I argue that due to their new prominence, we should consider foreign corporation prosecutions as a group so that we can better evaluate and define the emerging prosecution approach.