reprinted with permission from Mike Koehler, Southern Illinois University School of Law
2012 Wisconsin Law
This article asserts that the current FCPA enforcement environment does not
adequately recognize a company's good faith commitment to FCPA compliance and
does not provide good corporate citizens a sufficient return on their
compliance investments. This article argues in favor of an FCPA compliance defense
meaning that a company's pre-existing compliance policies and procedures, and
its good faith efforts to comply with the FCPA, should be relevant as a matter
of law when a non-executive employee or agent acts contrary to those policies
and procedures and in violation of the FCPA. This article further argues that a
compliance defense is best incorporated into the FCPA as an element of a
bribery offense, the absence of which the DOJ must establish to charge a
substantive bribery offense.
Part I of this article contains a case study to demonstrate the type of conduct
that would be covered by an FCPA compliance defense. Contrary to the claims of
some, an FCPA compliance defense would not eliminate corporate criminal
liability under the FCPA or reward "fig leaf" or "purely paper" compliance
programs. A compliance defense would not apply to corrupt business
organizations, activity engaged in or condoned by executive officers, or
activity by any employee if it occurred in the absence of pre-existing compliance
policies and procedures.
Part II of this article places an FCPA compliance defense in the context of the
broader issue of corporate criminal liability and acknowledges the work of
other scholars and commentators who have called for a general compliance
defense to corporate criminal liability. This section channels that work into
the specific context of the FCPA and argues that the unique aspects and
challenges of complying with the FCPA in the global marketplace warrant a
specific FCPA compliance defense.
Part III of this article highlights that an FCPA compliance defense is not a
new idea or a novel idea. This section contains an overview of the FCPA
legislative history of a compliance defense, most notably the compliance
defense passed by the House of Representatives in the 1980's. The justification
and rationale for a compliance defense then pales in comparison to now as most
U.S. companies engage in international business during an era of aggressive
FCPA enforcement. This section also demonstrates that several countries, like
the U.S. that are signatories to the Organization for Economic Cooperation and
Development Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions (the "OECD Convention"), have a compliance-like
defense in their domestic laws.
Against this backdrop, Part IV of this article details the DOJ's institutional
opposition to an FCPA compliance defense, yet argues that the DOJ already
recognizes a de facto FCPA compliance defense albeit in opaque, inconsistent
and unpredictable ways. Thus, an FCPA compliance defense accomplishes, among
other things, the policy goal of removing factors relevant to corporate
criminal liability from the opaque, inconsistent, and unpredictable world of
DOJ decision making towards a more transparent, consistent, and predictable
model best accomplished through a compliance defense amendment to the FCPA.
This section concludes by highlighting the growing chorus of former DOJ
officials who support an FCPA compliance defense and argues that the DOJ's
current opposition to a compliance defense seems grounded less in principle
than an attempt to protect its lucrative FCPA enforcement program.
Part V of this article concludes by highlighting certain policy objectives
advanced by an FCPA compliance defense. This section argues that an FCPA
compliance defense will better incentivize more robust corporate compliance,
reduce improper conduct, and thus best advance the FCPA's objective of reducing
bribery. An FCPA compliance defense will also increase public confidence in
FCPA enforcement actions and allow the DOJ to better allocate its limited
prosecutorial resources to cases involving corrupt business organizations and
the individuals who actually engaged in the improper conduct.
Download the full paper from the Social Science Research
Read more articles on the FCPA by Mike Koehler
at FCPA Professor.
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