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Photo Credit: http://riadzany.blogspot.com/2013_08_01_archive.html

Forty years ago, President Jimmy Carter signed into law a novel statute called the U.S. Foreign Corrupt Practices Act (FCPA). It was the first-ever such statute in the world to govern business conduct abroad and address corruption violations involving bribery of foreign government officials. While the enforcement was initially slow, over time the FCPA gained prominence and became one of the most powerful forces to shape the new global norm: corruption is no longer an acceptable part of doing business.

The landmark corruption case against Siemens brought under the FCPA in 2008 resulted in a record-setting $1.6 billion in fines in the U.S. and Germany. Siemens has since cleaned up its act and put in place an impressive compliance program that not only encompasses the company’s employees but also extends to its suppliers and business partners around the world. This case clearly demonstrated that the key value of the FCPA enforcement is not just penalizing companies for past wrongdoings but incentivizing them to better prevent and detect corruption going forward.

The legacy and future of the FCPA were an important topic of discussion at a recent event organized in Washington DC by Coalition for Integrity in conjunction with the annual Integrity Awards Dinner. This year, the Integrity Award honored Senator John McCain and the Corporate Leadership Award went to Parsons Corporation. The accompanying workshop gathered a group of experts who highlighted another key influence of the FCPA: its internationalization. Professor Kevin Davis from NYU Law School pointed out that when the U.S. prosecutes a company from a given country under the FCPA, that country becomes much more likely to enforce its own anti-corruption laws. What is more, countries such as the UK and Brazil have introduced legislation similar to the FCPA and in some respects even more stringent.

Another prominent example of the FCPA’s international impact is the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed nearly to the day 20 years after the U.S. law. The Convention established legally binding standards to criminalize bribery of foreign officials and by now has 43 signatories: all OECD member states and eight non-members including Brazil, a country that has shown a significant commitment to boosting domestic corruption prosecutions with the Lava Jato case. The precedent established by the FCPA and the OECD Convention also contributed to the passage of the UN Convention Against Corruption in 2003, and specifically to its Article 16 that deals with bribery of foreign public officials.

There are certainly challenges remaining ahead for both the FCPA and the OECD Convention. Not all countries – even the OECD members – are enforcing the anti-corruption laws evenly and some (like China) are seen as exporters of bad practices. Differences in national laws can make prosecuting cross-border cases difficult. Above all, while the FCPA and the OECD Convention focus on the supply side of combating corruption, the demand side still leaves a lot to be desired in countries where the rule of law remains weak and officials can act with impunity. Even if fighting corruption around the globe often feels like an uphill battle, today the US Treasury Department’s decision to blacklist thirteen additional individuals under the Magnitsky act accused of human rights abuses and corruption demonstrates that there are powerful tools for sanctioning corrupt behavior and limiting the flow of ill-gotten funds.

Anna Kompanek is the Director of Global Programs at CIPE