The reach of anti-bribery and corruption laws and regulations is forever expanding. The effects can be seen in Europe, the U.S., Latin America, Africa, Asia; in fact, wherever you do business. With these changes come new risks: rising fines and sanctions, widening liability, and stronger enforcement regimes.
Worldwide fines for bribery and corruption have continued to grow. In the U.S., fines almost doubled (80%) to US$6.5 billion. We also saw significant increases in South Africa (744%), where the fine imposed on Harmony Gold Mining for releasing false and misleading information in 2007 formed a substantial part of the overall fines for 2018. While these spikes may seem exceptional, the trend is likely to continue.
Enforcement agencies will no longer stop at your company’s doors. More and more, they’re on the lookout for grounds to prosecute the people at fault. In the U.S., prison sentences for bribery and corruption peaked in 2018, with an average of 65 months (including custody during investigations). That’s not by chance, according to a former deputy chief of the U.S. Department of Justice (DOJ).
European enforcement agencies show a similar pattern, as regulators seek prison sentences not only after a final conviction but are also keeping suspects in custody during investigations. Further east, the criminal liability system in South East Asia is gaining momentum, too. Individual prison sentences average 43 months, compared with 14 in 2017. The longest sentence, 14 years for fraud and money-laundering offenses, was handed down in September 2017.
The deferred prosecution agreement (DPA) is a powerful and efficient enforcement tool often employed by DOJ to resolve strong cases it could otherwise prosecute. Other countries have followed suit.
The UK launched DPAs in 2014. France introduced its equivalent — a judicial agreement in the public interest, or CJIP (convention judicaire d’intérêt public) — in 2016. In Italy, reforms have led to cooperation with enforcement authorities becoming common. In 2013, Brazil introduced its own leniency agreements in corruption investigations, which followed the local antitrust leniency agreement. Germany plans to issue a bill in due course.
Greater data privacy
The European regulation on data privacy, the GDPR, entered into force in May 2018. It’s expected to have a significant impact in the coming years, including on cross-border cases of bribery and corruption. This includes an impact on how you conduct your investigations.
Implementation of the GDPR can collide with your company’s anti-bribery due diligence due to the strict new EU data-privacy rules. And you should note: the authorities take data privacy seriously. France’s data protection watchdog, CNIL, recently issued a record €50 million fine.
Read on for our thoughts on some areas you should watch out for.