TRACE's 2014 Global Enforcement Report

Non-U.S. Enforcement Actions Outpace U.S. Enforcement in 2014

Jun 03, 2015, 07:00 ET from TRACE International

ANNAPOLIS, Md., June 3, 2015 /PRNewswire/ -- TRACE International today announced the findings of its fifth annual Global Enforcement Report (GER), noting that non-U.S. enforcement actions have more than doubled since 2012, and in 2014 total non-U.S. enforcement actions concerning bribery of foreign officials outnumbered total U.S. enforcement actions.  An enforcement action refers to an adjudication of allegations of bribery of government officials by a foreign company or individual that is a final resolution of charges.

Non-U.S. Enforcement Actions

Data in the GER 2014 demonstrates that there were 15 non-U.S. enforcement actions in 2014, slightly more than the 13 U.S. enforcement actions during the same period.  Overall, from 1977 – 2014, the United States had 184 enforcement actions, or 70% of the total 269 enforcement actions concerning alleged bribery of foreign officials taken to date.  The United Kingdom had the next highest total of enforcement actions, with 27 total enforcement actions from 1977 – 2014.

"The data for 2014 demonstrates that anti-bribery enforcement remains a priority not just in the United States, but throughout the world," said Alexandra Wrage, president of TRACE International. "Companies and individuals should be aware that they face real consequences for engaging in bribery as a marketing strategy; enforcement of anti-bribery laws is gaining momentum."

Targets of U.S. Investigations and U.S. Enforcement Actions

In other key findings in the GER 2014, almost 40% of all U.S. investigations concerning bribery of foreign officials involved non-U.S. companies or individuals.  However, only 24% of U.S. enforcement actions concerning bribery of foreign officials from 1977 to 2014 involved non-U.S. companies or individuals. Companies or individuals from Europe made up approximately 66% of U.S. investigations and 82% of U.S. enforcement actions concerning bribery of foreign officials from 1977 to 2014 that involved non-U.S. companies or individuals.

In terms of industry, the Extractive Industries have faced the brunt of all investigations and enforcement actions concerning bribery of domestic and foreign officials.

Non-U.S. Investigations and Non-U.S. Enforcement Actions

The vast majority of non-U.S. investigations (93%) and non-U.S. enforcement actions (96%) concerning bribery of foreign officials from 1977 to 2014 were conducted by Organisation for Economic Co-operation and Development ("OECD") members.

According to data in the GER 2014, there were 100 investigations concerning alleged bribery of foreign officials being conducted by 26 countries (excluding the United States) as of December 31, 2014. A total of twenty-one (21) of these countries are members of the OECD, two (2) are non-member signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the "Anti-Bribery Convention"), and three are not members of the OECD. Over 90% of ongoing investigations concerning alleged bribery of foreign officials were being conducted by OECD members, with the United Kingdom conducting almost 24% of such investigations, followed by Germany with 17% and Australia with 7.5%.  Non-OECD members were conducting 4% of ongoing investigations concerning alleged bribery of foreign officials and non-member signatories to the Anti-Bribery Convention were conducting 3% of such investigations.

Bribe Recipients

Since 1977, Chinese and Iraqi officials have been at the center of most enforcement events, followed by officials in Nigeria, India, Russia, Brazil and Indonesia.

China surpassed every other country, with Chinese officials being the alleged recipients of bribes in 90 different enforcement events. Iraq had the next-highest number of enforcement events, followed by Nigeria, India, Russia, Brazil and Indonesia. For countries with more than 15 enforcement events, five (5) are in Asia, three (3) are in Africa, three (3) are in Europe, three (3) are in Latin America, and two (2) are in the Middle East.

"Bribery is not limited to any one area or continent.  It is a global problem," said TRACE president Alexandra Wrage. "While some countries are the focus of more investigations or enforcement actions than others, there are officials in every country that have benefited from bribery. There is no safe harbor when it comes to bribery."

About the Global Enforcement Report

TRACE's annual Global Enforcement Report provides graphic and textual analyses of all known enforcement events—including investigations, enforcement actions and declinations—since the first bribery cases were prosecuted in the United States following the enactment of the U.S. Foreign Corrupt Practices Act. Data from the GER is based primarily on the cases and investigations tracked in the TRACE Compendium, TRACE's online database of transnational corruption cases. TRACE cannot know or accurately estimate how many enforcement events may be underway but not made public or not included in a major international publication. The analyses exclude matters involving local companies bribing local government officials, reflecting only enforcement events with an international component involving an alleged payment to a government official or an employee of a state-owned entity.

The GER 2014, TRACE's fifth annual compilation, provides anti-bribery enforcement data from 2014, as well as summarizes 38 years of anti-bribery enforcement activity. The complete GER 2014 is available here: http://www.traceinternational.org/about-trace/publications/.

About TRACE

TRACE International and TRACE Incorporated are two distinct entities with a common mission to advance commercial transparency worldwide by supporting the compliance efforts of multinational companies and their third party intermediaries. TRACE International is a non-profit business association that pools resources to provide members with anti-bribery compliance support while TRACE Incorporated offers both members and non-members customizable risk-based due diligence, anti-bribery training and advisory services.  Working alongside one another, TRACE International and TRACE Incorporated offer an end-to-end, cost-effective and innovative solution for anti-bribery and third party compliance. For more information, visit www.TRACEinternational.org.

SOURCE TRACE International



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