United States Announces Official Strategy to Fight Corruption | Skadden, Arps, Slate, Meagher & Flom LLP
On December 6, 2021, the White House published “United States Anti-Corruption Strategy“(the strategy paper), which describes the Biden administration’s emphasis on fighting corruption as a core US national security interest. The paper describes an interagency and cross-border approach to fighting corruption. against corruption, in particular:
- additional resources and coordination between federal agencies responsible for dealing with corruption issues;
- increased control over the recipients of bribes (in addition to payers) and gatekeepers who facilitate corruption;
- take advantage of existing anti-money laundering and asset recovery regimes in the fight against corruption; and
- more coordination with international partners.
Businesses should expect increased Foreign Corrupt Practices Act (FCPA) enforcement efforts from the United States Department of Justice (DOJ) and the United States Securities and Exchange Commission (SEC) and that these efforts be increasingly supported by data and resources from other government agencies, including the Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury, the United States Department of Commerce, the United States Agency for international development (USAID), the US State Department and US intelligence agencies.
Businesses should review their compliance programs in light of this renewed focus on law enforcement to ensure that they (1) identify areas of corruption risk and (2) deploy appropriate measures to address at these risks.
On June 3, 2021, President Biden released National Security Study Memorandum-1, which called on the federal government to conduct an interagency review of existing anti-corruption efforts and develop a strategy to “significantly strengthen ability of the United States government to »fight corruption.1 The strategy document is the result of this interagency review, and it defines areas in which the federal government intends to increase resources and focus on anti-corruption efforts.
The strategy paper notes that “in parallel with this review, ministries and agencies have started to accelerate and amplify their efforts to prevent and combat corruption at home and abroad.” This statement dovetails with Deputy Attorney General Lisa Monaco’s recent announcement regarding changes to the Department of Justice’s enforcement policies, including the expectation that companies seeking cooperation credit disclose (1) non-privileged information about all those involved in the misconduct, regardless of their seniority, and (2) any prior criminal, civil and regulatory misconduct. Monaco also clarified that there is no presumption by default against the imposition of monitors in corporate resolutions. These priorities were reiterated by DOJ officials at the 39th Annual FCPA Conference of the American Conference Institute in Washington, DC (the FCPA Conference). See our customer alert of November 2, 2021 on the Monaco announcement, “Practical Steps in Responding to DOJ Changes to Law Enforcement Policies. “
The strategic document sets out five strategic pillars with specific “lines of action” on which the federal government is invited to act.
Pillar 1: Modernize, coordinate and fund the efforts of the US government to better fight corruption.
The first pillar focuses on improving information sharing and organization, as well as increasing resources for coordinated anti-corruption efforts at the national and international levels. This indicates that the Biden administration intends to increase anti-corruption resources, including directing other federal agencies, such as the United States Department of Commerce, USAID, the United States Department of State and the US Treasury Department to focus on anti-corruption efforts. . The Biden administration is also asking the intelligence community to prioritize the collection and analysis of data regarding corrupt actors and communication in their networks.
Specific initiatives include the creation of a new anti-corruption working group at the United States Department of Commerce to coordinate with a recently established working group at USAID and the recently established anti-corruption coordinating body in the United States. United States Department of the Treasury and the Department of State. The latter’s mission is to increase diplomatic reach, multilateral engagement and the alignment of politics, diplomacy and foreign aid around anti-corruption efforts. The strategy paper also notes that the President’s budget request for FY2022 included a significant increase in resources in support of FinCEN to create a new beneficial owner registry system that can be used by the forces of the United Nations. order to track the proceeds of corruption.
Pillar 2: Fight against illicit financing
The second pillar deals with current vulnerabilities in US and international financial systems that can be exploited by those seeking to launder assets or disguise the proceeds of crime. The strategy paper specifically highlights the alleged shortcomings of US regulatory frameworks that do not require professionals and service providers (for example., lawyers and accountants) who can facilitate or be complicit in corrupt schemes “to understand the nature or the source of income of their clients …”. These same professionals “provide advice on investments, structure transactions and can serve as a point of access to American and international financial systems, in particular by facilitating the creation of opaque structures.” The strategy paper calls on federal agencies to “consider ways to increase sanctions” against the guards, “including working with states to impose professional sanctions.” At the FCPA conference, Gurbir Grewal, director of the Division of Enforcement at the SEC, stressed the importance of trusting gatekeepers, noting their role on the front line and the fact that the SEC would like them to be its allies.
Third pillar: empower corrupt actors
This pillar highlights efforts to tackle the demand side of corruption. It seeks to address problems related to the enforcement of existing laws like the FCPA, which prohibits bribery or attempted bribery of foreign public officials, but does not provide for prosecutions against recipients of bribes. Importantly, the strategy paper describes the establishment of a pilot Kleptocracy Asset Recovery Rewards program at the US Treasury Department, allowing payments to whistleblowers who provide information leading to identification. and the recovery of stolen assets related to corruption from a foreign government. This appears to be modeled after the SEC’s whistleblower program, which in fiscal 2021 resulted in 258 tips to the SEC regarding potential FCPA violations.2
This pillar also highlights the use of visa sanctions and restrictions, such as the Global Magnitsky Sanctions program, to prevent corrupt foreign officials from traveling to the United States or using the proceeds of corruption in the system. American financier.
Pillar four: Preserve and strengthen the multilateral anti-corruption architecture
The fourth pillar sets out a commitment to strengthen multilateral initiatives, agreements and standards for anti-corruption efforts. This includes a commitment to preserve and strengthen existing programs adopted by the United Nations, the Organization for Economic Co-operation and Development (OECD) and NATO, as well as increased support for key global partnerships that enhance transparency. .3
Fifth Pillar: Improving Diplomatic Engagement and Leveraging Foreign Aid Resources to Advance Political Goals
The final pillar emphasizes the fight against corruption as a focal point of U.S. foreign relations. In order to tackle the global scope of corruption, the strategy paper calls for expanding diplomatic engagement and foreign assistance in anti-corruption efforts, a commitment to protect anti-corruption actors, l ‘use of innovative and technological tools to promote transparency, and use of joint analyzes with foreign aid to better understand corrupt global networks.
Companies operating internationally should be aware of the Biden administration’s increased focus on anti-corruption efforts. The best defense against corruption liability is a strong compliance program. Businesses should review their risk assessments and compliance programs to ensure they identify and address corruption risks in their operations. For more information on DOJ’s guidelines for compliance programs, please see our Client Alert “Key takeaways from the updated Department of Justice Business Conformity Assessment Guidelines. “
1 “Memorandum on Establishing the Fight Against Corruption as a Fundamental Interest of the National Security of the United States“, 2021 Daily Comp. Pres. Doc. 202100467 (June 3, 2021).
2 SEC, “2021 Annual Report to Congress, Whistleblower Program, “(November 15, 2021).
3 This pillar also reflects the new OECD Recommendation on Further Combating Bribery of Foreign Public Officials in International Business Transactions (the Recommendation), which was published in November 2021. The Recommendation encourages OECD member countries to proactively approach the investigation and prosecution of bribery of foreign officials. officials and specifically recommends that member countries address not only the supply side but also the demand side of corruption, coordinating, where appropriate, with other member and non-member countries. The Recommendation also encourages “direct coordination” between countries engaged in concurrent or parallel investigations and prosecutions, and suggests that member countries consider the risk of prosecuting the same person or entity in different jurisdictions for the same behavior. Recommendation of the Council for the Further Fight against Bribery of Foreign Public Officials in International Business Transactions, OECD (November 26, 2021).