Anti-Corruption Risks: Global Enforcement Means Global Detection

Michael Volkov
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Over the last year, we have seen the Justice Department and SEC’s international coordination efforts bear fruit. DOJ has expended time and efforts to train prosecutors and law enforcement on anti-corruption investigations and prosecutions strategy. These programs inevitably foster cooperation and coordination through personal and professional relationships.

In particular, DOJ and the FBI have established working relationships with colleagues in the United Kingdom, France, Germany, Brazil, Canada, Netherlands, Switzerland and Sweden. In addition, the DOJ and the FBI are increasing cooperation with China and other Asian countries, especially in the sharing of information about subjects for investigation and fugitives from China.

The evidence of this cooperation appears in a number of enforcement actions, including the Alstom, Odebrecht, Braskem, Telia, and VimpelCom cases, in which prosecutors and law enforcement coordinated their efforts and ultimately the credit for the enforcement actions. The press releases accompanying FCPA enforcement actions always acknowledge the assistance of global anti-corruption partners and provide an important window into the global network of prosecutors and law enforcement agencies.

As the global anti-corruption enforcement system matures, I would expect that more countries would want to participate. Countries are revising their anti-corruption laws and allocating resources to enforcement programs. Some countries are moving slowly on this path given political resistance and others are more committed to the program. The OECD recently cited Russia, Chile, Sweden and the Ukraine to improve their anti-corruption laws and/or increase enforcement of existing laws.

Given this global framework and trend, global companies need to recognize that anti-corruption compliance is more important than ever before. Why?

With the increased focus on global anti-corruption enforcement, the risk of detection and reporting of potential corrupt conduct rises. To put it bluntly, with increased surveillance and monitoring of corporate conduct, there are more potential contacts between law enforcement and corporate actors or employees wishing to report potential violations. Global companies have never faced a riskier environment for potential detection and enforcement.

If a company is contacted by law enforcement in one country and potential evidence of a violation is learned, you can rest assured that other countries will be added to the investigation, as needed, to ensure that the investigation covers all relevant jurisdictions.

Anti-corruption compliance officers should respond to this by honestly assessing the state of their respective compliance programs, and with specific focus on internal reporting systems. To the extent the company supports its Speak Up culture and encourages internal reporting of potential violations of law, the compliance officer should reassess its reporting avenues and performance. Additional investments in reporting hotlines, and encouragement from senior management should be emphasized.

Companies that encourage employee reporting should ensure that there is no hint of retaliation against employees who report problems and concerns. If employees do not trust the company’s internal system, there are plenty of whistleblower attorneys circling a company looking for potential clients and large recoveries against the company.

The global enforcement system continues to mature and risks will increase exponentially. There are significant benefits to prosecutors and law enforcement from such coordination in terms of detection and conducting a global investigation in compliance with country-specific laws and practices. These efforts are bound to increase and with this increase the risks for global companies rise. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Law Group | Attorney Advertising

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Michael Volkov
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