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Tuesday, April 3, 2012

Spahn on Multi-Jurisdictional Bribery Law Enforcement

Saphan

Elizabeth Spahn (New England Law | Boston) has posted Multi-Jurisdictional Bribery Law Enforcement: The OECD Anti-Bribery Convention (Virginia Journal of International Law, Vol. 53, No. 1, 2012) on SSRN. Here is the abstract: 

For the first twenty years, modern global anti-bribery law reform efforts were unilateral. The U.S. enacted the Foreign Corrupt Practices Act (FCPA) in 1977, criminalizing bribery to foreign officials to obtain business. In 1997, the major multi-lateral legal framework, the Organization for Economic Cooperation and Development (OECD) Anti-Bribery Convention was negotiated. The Convention includes thirty-eight states (thirty-nine as Russia joins in 2011-2012) comprising nearly all the major world economic powers. Brazil joined the Convention in 2002. Although China is not yet an OECD Convention member state, it enacted domestic laws criminalizing bribery of foreign officials abroad in 2011. India is the only major global economic power that apparently still permits bribery abroad as of 2012. 



During the first decade of the Convention (1997-2007), country peer review processes under the auspices of the Working Group assisted the thirty plus jurisdictions in eliminating favorable tax treatment for bribery abroad and enacting domestic legislation criminalizing (or its equivalent under the individual state’s legal system) bribes paid to foreign officials. The success of the Convention harmonizing formal law among member states marks an end to the period of a widespread de jure double standard in which it was illegal to bribe domestic officials but permitted (and given favorable tax treatment in fourteen jurisdictions) to bribe foreign officials. The formal rules governing the playing field have been leveled. 

Beginning in about 2007, the OECD Convention Working Group increased its focus on multilateral enforcement efforts. Enforcement is horizontal, with each state enforcing its own domestic laws. Working Group Prosecutors’ Meetings were established which include tour de table case reviews, facilitating exchanges of information in these highly complex white collar crime cases. Cooperation among member states at the prosecutorial level is a hallmark of the Convention. Where one state is unable to prosecute due to domestic political or technical legal problems, other states with jurisdiction may step in. Enforcement competition thus provides a potential hard law backstop against ‘national champion’ protectionist tendencies. 

Three landmark cases involving OECD Convention enforcement cooperation and competition in prosecuting powerful multi-national corporations are discussed. In the BAE case, both enforcement competition and eventually cooperation facilitated prosecutions in both the U.K. and the U.S. In the Siemens case there was enforcement cooperation between Germany and the U.S. A series of cases known as TSKJ, involving five multi-national corporations and potentially twelve jurisdictions, were referred to the U.S. by French magistrates, ultimately involving cooperation between the French, Italian, Swiss, U.K.and the U.S. authorities. 

Enforcement against bribing foreign officials involves multiple and overlapping jurisdictions. Because multi-national corporations by definition operate across the borders of many sovereign states, many jurisdictions are potentially involved. Determining the ‘nationality’ of a given multi-national corporation is complicated at best. Whether corporations as fictional or juridical legal persons should be subject to criminal liability at all is hotly debated in U.S law; in some other legal systems criminal sanctions for juridical persons (corporations) is unavailable. Article 3(2) of the Convention requires “effective, proportionate and dissuasive non-criminal sanctions” in such situations. Double jeopardy and the European equivalent ne bis in dem principles are not yet well developed in cross-border crime cases. Prosecutions by non-Convention states are not yet coordinated with Convention states’ prosecutions. 

Five years into the enforcement phase of the OECD Convention there is significant evidence that global anti-bribery law reform has moved from a unilateral to a multi-lateral law enforcement model based on a horizontal enforcement competition and cooperation. There have been notable successes in this very early phase. Multi-lateral law enforcement based on the OECD Convention model is potentially useful in addressing other forms of cross-border criminal activity.

http://lawprofessors.typepad.com/crimprof_blog/2012/04/spahn-on-multi-jurisdictional-bribery-law-enforcement-.html

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