This new era of FCPA enforcement has resulted in many things, including an increase in quality legal scholarship devoted to the FCPA and related topics.
Case in point, Joseph Yockey’s recently released scholarship “Solicitation, Extortion, and the FCPA” (see here for the download). Yockey (here – Associate Professor at the University of Iowa College of Law) provides the following abstract.
“The U.S. Foreign Corrupt Practices Act (FCPA) prohibits firms from paying bribes to foreign officials to obtain or retain business. It is one of the most significant and feared statutes for companies operating abroad. FCPA enforcement has never been higher and nine-figure monetary penalties are not uncommon. This makes the implementation of robust FCPA compliance programs of paramount importance. Unfortunately, regardless of whether they have compliance measures in place, many firms report that they face bribe requests and extortionate threats from foreign public officials on a daily basis. The implications of these demand-side pressures have gone largely unexplored in the FCPA context. This Article helps fill that gap. First, I describe the nature and frequency of bribe solicitation and extortion to illustrate the scope of the problem and the costs it imposes on firms and other market participants. I then argue that current FCPA enforcement policy in cases of solicitation and extortion raises several unique corporate governance and compliance challenges, and ultimately poses a risk of overdeterrence. Though these concerns can be partially addressed through enhanced statutory guidance, I conclude by urging regulators to shift some of their focus from bribe-paying firms in order to directly target bribe-seeking public officials. Confronting the market for bribe demands in this way will help reduce corruption in general while also allowing employees and agents to spend less time worrying about how to respond to bribe requests and more time on legitimate, value-enhancing transactions.”
Yockey’s article also nicely touches upon other topics as the below excerpts demonstrate.
“As regulators continue to push the boundaries of statutory interpretation firms, find it difficult to predict ex ante whether conduct that appears permissible under the FCPA‟s terms will later expose them to sanction (or the threat of sanction). Left unchecked, this hinders efforts to design monitoring programs that will prevent illegal payments without also deterring employees from pursuing legitimate transactions or engaging in socially desirable risk-taking.”
“Several factors explain the recent resurgence in FCPA enforcement. [...] A more cynical explanation for the government‟s focus on the FCPA is based on the “revolving door” between government and private sector employment. The rise in FCPA enforcement has produced a cottage industry of FCPA experts, including lawyers, accountants, and consultants at prestigious firms, which DOJ and SEC personnel often join after leaving their federal jobs for considerably higher compensation.”
“Another factor adding to the compliance challenges faced by firms concerns the way in which the DOJ and SEC have recently interpreted and applied several of the FCPA’s key provisions. Regulators have become more expansive in their interpretation of the FCPA anti-bribery provisions and considerably narrower in their assessment of the statute’s exceptions and defenses. Much of the trouble in this regard comes because the government’s authority under the FCPA is not as broad as the recent resurgence in enforcement activity might suggest.”
“Whether there is truly an unfair balance of power between regulators and corporate defendants [given the prevalence in which FCPA enforcement actions are resolved via non-prosecution or deferred prosecution agreements] is outside the scope of this paper. What appears undeniable, however, is that an absence of judicial review on key aspects of the FCPA makes it considerably more difficult for firms to design compliance programs that efficiently separate lawful but aggressive competitive activity from conduct that clearly violates the statute.”