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Expanding the Global Fight Against Corruption

By Cameron F. Kerry

Today, December 9, is International Anti-Corruption Day.  It’s an occasion to reflect on the global fight against corruption.

Bribery and corruption are trade barriers that impede our ability to rebuild the economy and meet President Obama’s goal of doubling U.S. exports. In the past year alone, American companies are believed to have lost out on deals worth about $25 billion because they refused to pay bribes.  

Companies should be able to compete for international business on the quality and price of their products and services, not bribes.   

“In too many places, the culture of the bribe is a brake on development and prosperity, President Obama has said. “It discourages entrepreneurship, destroys public trust, undermines the rule of law and stifles economic growth.” 

The United States has been a leader in combating transnational bribery since it enacted the Foreign Corrupt Practices Act (FCPA) in 1977.  It has been leading by example: U.S. enforcement agencies have filed 105 enforcement actions involving bribery of foreign officials since the beginning of 2009, and have collected over $2 billion in criminal and civil penalties.  In a review of U.S. efforts, the 38-country Working Group on Bribery of the Organization for Economic Cooperation and Development (OECD) recently applauded U.S. enforcement.

The United States has also been working to level the playing field internationally.  The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions now has 38 parties who undergo detailed peer review; the United Nations Convention Against Corruption has been joined by 148 nations and is stepping up compliance review; when the G-20 leaders met in Seoul last month, they endorsed President Obama’s proposal to broaden the G-20 anti-corruption agenda and adopted a comprehensive Anti-Corruption Action Plan.  

What we still need is the political will to implement and enforce these international anti-corruption mechanisms on the part of all countries with companies in international business.  Countries such as the United Kingdom and Germany are taking steps to improve laws and step up enforcement. Under France’s G-20 Presidency, we count on that country to set a strong example as well.

Economic powers like China and Russia are critical to the fight.  China, a G-20 member, does not currently have a law criminalizing bribery of foreign officials in international business transactions, but ongoing U.S.-China government-to-government exchanges appear to be making progress. China’s National People’s Congress has published for comment proposed amendments to its criminal law that would prohibit foreign bribery in international business and may take up the bill early next year. G-20 member Russia also has a foreign bribery law in the works.

Fighting corruption also requires cooperation between government and civil society. The Working Group on Bribery recently released Good Practice Guidance to help companies develop compliance programs for preventing and detecting foreign bribery. The G-20 will invite industry and civil society to increase voluntary compliance efforts and innovative public-private partnerships to prevent corruption as part of its Anti-Corruption Action Plan.

Because of the FCPA, businesses subject to U.S. jurisdiction have incorporated foreign bribery compliance programs into their corporate cultures. In fact, companies subject to the FCPA have said they rely upon it as a useful tool to shield themselves against bribe solicitations, refusing to pay them because they are illegal not only under local law, but also back home.

Strong preventive programs enable companies to lead by example and educate their employees about the importance of fighting corruption.  Companies known for their integrity and quality business practices are also more likely to be highly valued by capital markets.  Compliance enhances true competitiveness.  Governments seeking sustainable growth – as opposed to kleptocratic ones – prefer doing business with reputable companies that deliver high-quality products and services without undermining good governance.

We’d like more businesses from other countries to do the same.  The way to level the playing field is not to lower U.S. standards.  Rather, it is to set the bar high against corruption for all companies no matter where they are from by continuing to expand the network of trading partners participating in the fight against transnational bribery.

No nation or government, no business or NGO can end corruption in international business transactions alone. 

Cameron Kerry is General Counsel of the U.S. Department of Commerce.