by Sandrine Hannedouche-Leric, Elisabeth Danon, and Brooks Hickman
A new Study on Resolving Foreign Bribery Cases with Non-Trial Resolutions builds a typology of non-trial resolutions available to the Parties to the OECD Anti-Bribery Convention and takes stock of how these resolutions have been used to resolve foreign bribery cases in recent years.
The Study focuses on key legal, procedural and institutional challenges attached to the use of non-trial resolutions to conclude foreign bribery cases. It provides data demonstrating a clear trend to resolve these cases outside the court room. In particular, it shows that nearly 80% of foreign bribery cases concluded since the OECD Anti-Bribery Convention entered into force 20 years ago have been resolved with a non-trial enforcement vehicle. Relying on data and case examples, it analyses how these instruments have driven the enforcement of foreign bribery laws. In some countries, non-trial resolutions have provided the exclusive means for sanctioning legal persons, while other countries have used non-trial resolutions to impose sanctions in their first-ever foreign bribery resolutions.
At an event to launch the Study, the Head of Integrity Compliance at the World Bank led a debate with high-level law enforcement officials from Brazil, France, the United Kingdom and the United States. Debates focused on how non-trial resolutions have facilitated the coordinated, multi-jurisdictional conclusion of foreign bribery cases, concluding that the use of these non-trial enforcement mechanisms is likely to continue expanding.
This echoes the findings in the Study which show that coordinated multi-jurisdictional non-trial resolutions have been on the rise for the last ten years. These multi-jurisdictional resolutions have provided a means for imposing the highest global amount of combined financial penalties in foreign bribery cases.
Multi-jurisdictional non-trial resolutions are on the rise
The Study reports that “starting with the 2008 Siemens AG non-trial resolution coordinated between the United States and Germany, a number of coordinated multi-jurisdictional non-trial resolutions has followed at a pace that has increased exponentially since 2016,” and provides case studies of coordinated resolutions in large multi-jurisdictional cases, including Rolls-Royce, Standard Bank and VimpelCom. The Study further explains why both the authorities and alleged offenders may prefer coordinated resolutions over separate enforcement actions. In particular, it observes that in coordinated resolutions, “multi-jurisdictional cases can be resolved between several authorities at the same time, giving both prosecution authorities and companies some certainty in the outcome and in particular the amount of the combined financial penalty.” Coordination is preferable for alleged offenders, as “the various jurisdictions involved in a global resolution will take into account the sanctions imposed by other jurisdictions, thus reducing the risk that a defendant will be unfairly subjected to penalties disproportionate to the conduct in question.” For law enforcement authorities, coordination can help avoid challenges associated with double jeopardy or ne bis in idem, and offenders cannot play one authority off another in order to get a lighter sentence by racing to a jurisdiction with a weak legal framework. It also allows the enforcing jurisdictions to “fairly distribute any compensation, fines, disgorgement, or other penalties” imposed.
Non-trial resolution instruments facilitate cross-country coordination
The Study reports that “the challenges inherent in coordinated multi-jurisdictional resolutions generally arise from the fact that authorities involved in the resolution work within their own respective domestic legal and institutional framework.” While foreign countries can provide legal assistance to support a trial being held in another country, it can be difficult, if not impossible, to obtain a multi-jurisdictional resolution through trial, considering the procedural hurdles and fundamental differences between legal systems and cultures. The increase of coordinated resolutions has helped law enforcement authorities overcome these challenges by boosting informal communication, thus facilitating the early sharing of information. In addition, authorities can coordinate on the timing of the resolution, and decide on the allocation of the sums collected through the fine imposed on the alleged offender. The outcome of such resolutions can also be announced simultaneously by the authorities of the countries involved, a result difficult to achieve through separate trials.
Multi-jurisdictional resolutions have permitted the highest global amount of combined financial penalties in foreign bribery cases
The Study is based on governmental data gathered from both the Working Group on Bribery’s monitoring reports and a comprehensive survey circulated to all the Parties to the Convention. It also relies on an OECD database of foreign bribery cases in which a sanction has been imposed as well as specific case studies of major multi-jurisdictional cases. Multi-jurisdictional resolutions have permitted law enforcement officials to collect the highest global amount of combined financial penalties in foreign bribery cases. Table 1 shows that eight of the ten largest foreign bribery enforcement actions resolved to date involved coordinated or sequential non-trial resolutions with at least two Parties to the Anti-Bribery Convention.
Table 1. Ten Largest Foreign Bribery Enforcement Actions among the Parties to the Anti-Bribery Convention[1]
| Company | Countries | Total penalties | Year imposed |
| Odebrecht/Braskem | Brazil, Switzerland, United States | $3.5 billion | 2016 |
| Siemens | Germany, United States | $1.6 billion | 2008 |
| Telia Company AB | Netherlands, Sweden, United States | $965 m | 2017 |
| VimpelCom | Netherlands, United States | $835 m | 2016 |
| Rolls-Royce | Brazil, United Kingdom, United States | $800 m | 2017 |
| Alstom | United States | $772 m | 2014 |
| Société Générale | France, United States | $585 m | 2018 |
| KBR/Halliburton | United States | $579 m | 2009 |
| Teva Pharmaceutical | United States, Israel | $541 m | 2016, 2018 |
| Keppel Offshore & Marine Ltd | Brazil, Singapore, United States | $422 m | 2017 |
Note: The table lists the ten largest enforcement actions for foreign bribery that the Parties to the Convention concluded with legal entities through June 2018. These enforcement actions have resulted in sanctions for anti-bribery violations (plus any other related offences) against at least one corporate defendant in at least one jurisdiction. For example, the Siemens and Alstom cases are included because their subsidiaries were charged with violating the FCPA’s anti-bribery provisions in coordinated enforcement actions. Conversely, if a company (including its subsidiaries) resolved the enforcement action based solely on false accounting or other charges, it would not be included.
Where applicable, the total penalty for each enforcement action combines all criminal or non-criminal penalties (including confiscation) imposed in enforcement actions that were brought simultaneously or consecutively against related corporate entities (e.g. related subsidiaries) in relation to the same bribery scheme. The monetary penalties imposed in related enforcement actions against natural persons are not counted.
During the event to launch the Study, one panelist affirmed that resolving multi-jurisdictional cases is complex, but it is the way of the future. Time will tell if this trend will continue. It will largely depend on whether non-trial resolutions have appropriate safeguards and guarantees in place to ensure that they adequately deliver justice.
***
The video of the panel discussion at the Global Anti-Corruption and Integrity Forum is accessible online. (See the section “Watch Live” for Room 1 starting at 8:13:00).
***
The OECD Anti-Bribery Convention is the first and only international anti-corruption instrument focused on the “supply side” of the bribery transaction. It establishes legally binding standards for criminalising the bribery of foreign public officials in international business transactions. It also provides for a host of related measures to make this commitment effective, including the systematic monitoring of its implementation by the OECD Working Group on Bribery in International Business Transactions, which is composed of representatives of the Parties to the Convention.
***
Footnotes
[1] Table 1 identifies the ten largest foreign bribery enforcement actions among the Parties to the Anti-Bribery Convention. The table includes four columns identifying, from left to right, the company that the enforcement action was brought against, the countries involved in the enforcement action, the total penalties imposed on the relevant company and the year in which the penalty was imposed. The largest penalty imposed was $3.5 billion, while the smallest penalty imposed was $422 million.
Sandrine Hannedouche-Leric is a Senior Legal Analyst, and Elisabeth Danon and Brooks Hickman are Legal Analysts, for the OECD Anti-Corruption Division.
Disclaimer
The views, opinions and positions expressed within all posts are those of the author alone and do not represent those of the Program on Corporate Compliance and Enforcement (PCCE) or of New York University School of Law. PCCE makes no representations as to the accuracy, completeness and validity of any statements made on this site and will not be liable for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with the author.