FCPA Enforcement Against U.S. and Non-U.S. Companies

Abstract

This Article explores how U.S. authorities have enforced the FCPA against non-U.S. companies and tests the perception that the FCPA disproportionately impacts U.S. businesses. After briefly discussing the FCPA, its enforcement, and its reach, this Article examines corporate FCPA enforcement activity since the statute’s enactment in 1977. It finds that foreign firms have actually fared worse under the FCPA despite the fact that DOJ and the SEC have brought more enforcement actions against domestic companies in absolute terms. The average cost of resolving an FCPA enforcement action to non-U.S. corporations of resolving an FCPA enforcement action has been more than four times higher than it has been for domestic corporations: $72.3 million to $17.6 million. In recent years, the difference has been even more pronounced—in 2017, the averages were $150.3 million and $16.1 million, respectively. This Article also explores other ways in which FCPA enforcement has more dramatically affected foreign companies. For instance, U.S. enforcement authorities have more frequently required post-resolution obligations for foreign corporations. Between 2004 and 2018, nearly 60 percent of foreign companies involved in FCPA enforcement actions were subject to post-resolution obligations in the form of an independent compliance monitor, self-reporting, or a combination of the two, compared to only 54 percent of domestic companies. Finally, this Article offers some theories to explain these data.