TRACE International's 2015 Global Enforcement Report: U.S. Enforcement Actions See Noticeable Increase In 2015

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Mar 09, 2016, 07:00 ET

ANNAPOLIS, Md., March 9, 2016 /PRNewswire-USNewswire/ -- TRACE International today announced the findings of its sixth annual Global Enforcement Report (GER), noting that the number of U.S. enforcement actions concerning bribery of foreign officials has increased slightly from the previous year, though there was a slowdown in the number of non-U.S. foreign-bribery 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.

U.S. Foreign-Bribery Enforcement Activity in 2015

According to the GER 2015, the U.S. continued last year's trend of increased enforcement actions concerning alleged bribery of foreign officials, undertaking a total of 16 such actions, up from the 13 undertaken in 2014. Overall, from 1977 – 2015, the United States had 199 enforcement actions—almost 70% of the total 287 enforcement actions concerning alleged bribery of foreign officials taken to date.

While most of the U.S. enforcement actions were related to the Extractive Industries, there was a noticeable shift in the direction of open investigations, with the highest concentration in Manufacturing and Services (23 out of 126, or roughly 18%), ahead of Extractive Industries and Technology/Software (each at 16, or 12.5% of the total).

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

The vast majority of non-U.S. investigations (93%) and non-U.S. enforcement actions (97%) concerning bribery of foreign officials from 1977 to 2015 were conducted by Organisation for Economic Co-operation and Development ("OECD") members.

According to data in the GER 2015, there were 125 investigations concerning alleged bribery of foreign officials being conducted by 26 countries (excluding the United States) as of December 31, 2015. Twenty of these countries are members of the OECD, three 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. More than 90% of ongoing investigations concerning alleged bribery of foreign officials were being conducted by OECD members, with the United Kingdom conducting more than 21% of such investigations, followed by Germany with 15%. 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.

There were relatively few new non-U.S. enforcement actions related to alleged bribery of foreign officials in 2015. The United Kingdom remained the most active, undertaking three new enforcement actions in 2015 and bringing its total from 1977 – 2015 to 30.

Non-U.S. Actions Involving Bribery of Domestic Officials

With respect to non-U.S. enforcement actions concerning bribery of domestic officials by foreign companies or individuals, activity was distributed relatively evenly across the globe, with the same number of countries bringing such actions in Europe, Asia, and Africa. In terms of absolute numbers, Algeria showed a marked increase from prior years, bringing its 1977 – 2015 total to nine – slightly ahead of China's total of eight, but still lagging considerably behind South Korea's total of 15.

As for open investigations, Brazil stood out this year with more than 13 such cases pending as of December 31, 2015, followed by India, China, and Nigeria, each of which had between 7 and 13 cases pending.

"The data from the past year demonstrate the continuing importance of global anti-bribery enforcement," said Alexandra Wrage, president of TRACE International. "Although enforcement actions outside the U.S. have dropped, international cooperation and enforcement by OECD members is leading to more complex investigations. Companies should expect a continued emphasis on anti-bribery efforts by both foreign and domestic officials worldwide."

About the Global Enforcement Report

TRACE's annual Global Enforcement Report provides graphic and textual analyses of all known enforcement events (including investigations as well as enforcement actions) 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 2015, TRACE's sixth annual compilation, provides anti-bribery enforcement data from 2015 and summarizes 39 years of anti-bribery enforcement activity. The complete GER 2015 is available at 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