United States Strategy on Countering Corruption: US enforcement efforts rise whilst the SFO reports its lowest number of new investigations

United States Strategy on Countering Corruption: US enforcement efforts rise whilst the SFO reports its lowest number of new investigations

How will the recently published US Strategy on Countering Corruption affect the UK?  Richard Sallybanks and Anoushka Warlow consider the US Government’s proposals, and what they might mean for the SFO.

On 6 December 2021, the US Administration published its first ever ‘Strategy on Countering Corruption’ (“the Strategy”) which includes a stark warning to its foreign counterparts: live up to obligations to criminalise and prosecute foreign bribery, or be held accountable.

What is the Strategy?

That corporate criminal liability was a low priority for the Trump Administration is unsurprising given that the former President himself once reportedly complained that “it’s just so unfair that American companies aren’t allowed to pay bribes to get business overseas!”  It is also unsurprising that, not long after taking office, President Joe Biden took a markedly different stance.

On 3 June 2021, the Biden Administration issued a National Security Study Memorandum establishing the fight against corruption as a core national security interest for the US.  So important was the fight that government agencies were directed to undertake a 200-day interagency review, the product of which – 186 days later – is the Strategy; a 38 page document identifying corruption as “a fundamental threat to the rule of law” and setting out a “comprehensive approach” for combatting it.

The Strategy organises its efforts into five mutually reinforcing pillars of work:

  1. Modernising, coordinating, and resourcing efforts to fight corruption;
  2. Curbing illicit finance;
  3. Holding corrupt actors accountable;
  4. Preserving and strengthening the multilateral anti-corruption architecture; and
  5. Improving diplomatic engagement and leveraging foreign assistance to advance policy goals.

Under these pillars, a full menu of policy and enforcement strategies are presented.  But, for those in the UK, there are two main takeaway messages: first, the US will be doing more to tackle corruption both on a global and domestic scale, and secondly, in doing so the US will expect assistance and cooperation from foreign governments.

 

“Aggressive enforcement action”

The Strategy is clear that the US Government is committed to taking “aggressive enforcement action” to root out widespread corruption.  The Strategy promises independence and resources to law enforcement agencies investigating and prosecuting domestic crimes, alongside a range of new initiatives to increase intelligence gathering, investigative efforts and expand coordination across US Government agencies.

Amongst other things, the Strategy includes plans to vigorously pursue the enforcement of foreign bribery cases via criminal and civil enforcement actions, including through the (somewhat neglected under the Trump Administration) Foreign Corrupt Practices Act, the US equivalent of Bribery Act 2010.

The Strategy chimes with the comments of Lisa Monaco, US Deputy Attorney General, in her keynote speech to the American Bar Association’s National Institute on White Collar Crime in October 2021 in which she urged prosecutors to be bold in holding accountable those who commit criminal conduct and set out policy changes designed to ‘invigorate the department’s efforts to combat corporate crime’.

 

“Increased cooperation”

Recognising the global nature of the threat, the Strategy highlights the importance of the need to work together with ‘partner countries’ to bolster anti-corruption enforcement and prevent the establishment of new safe havens for corrupt actors and their ill-gotten gains.

Amongst other things, it sets out plans to preserve and strengthen existing international anti-corruption architecture including through pushing the G7 and G20 (both of which include the UK) to focus on implementing strong anti-corruption measures and on promoting transparency and good governance.

Specific reference is also made to the need to improve information sharing domestically and internationally including through the use of international partnerships, and to deepen cooperation and assistance including, where appropriate, through partnering with foreign jurisdictions in joint investigations and prosecutions.

In its own words: “We will [be]… pushing partners to live up to their obligations, and holding accountable those who fail to do so”.

 

What does it all mean?

What it lacks in specific detail, the Strategy makes up for in robust message: corruption will not be tolerated.  It is, therefore, no surprise that US corporate defence lawyers are reporting a significant uptick in work, and greater demand for services across white-collar practices including foreign bribery, money laundering, anti-trust, sanctions and cryptocurrency.

Meanwhile, in the UK, the SFO has recorded its lowest annual tally of new criminal investigations into corporate misconduct, just four in 2021, echoing similarly low figures in 2019 and 2020 (five and seven respectively).  However, as recent examples of its close and effective working relationship with its US counterparts, the SFO will point to Deferred Prosecution Agreements concluded with Airbus SE and Amec Foster Wheeler Energy Limited in 2020 and 2021 respectively as part of global settlements of anti-corruption investigations involving the US authorities.

Whilst the long enjoyed ‘close partnership’ between UK and US should protect the SFO from any direct criticism, just six months ago at the G7 conference the two nations agreed to “lead the world” in tackling illicit finance by reinforcing transparency and financial integrity, protecting open societies, and giving corrupt and malign actors no place to hide.

No doubt the SFO will be feeling the pressure to live up to those promises, particularly in circumstances where it concludes 2021 bruised by highly critical comments made by the Court of Appeal in the context of the Unaoil corruption case which it is now known certainly strained the working relationship between the SFO and the US Department of Justice.

Either way, what seems abundantly plain is that UK law enforcement can anticipate an increase in requests for intelligence sharing, mutual legal assistance, and extradition, as well as pressure to step up its own anti-corruption activity, as the US Department of Justice firmly renews its focus on complex investigations into multi-jurisdictional bribery and corruption.

 

The Strategy paper is available here: https://www.whitehouse.gov/wp-content/uploads/2021/12/United-States-Strategy-on-Countering-Corruption.pdf

The National Security Study Memorandum is available here: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/06/03/memorandum-on-establishing-the-fight-against-corruption-as-a-core-united-states-national-security-interest/

 

 

Richard Sallybanks, a partner in BCL for more than 20 years, has been involved in numerous UK and international business crime investigations and prosecutions. His core practice is defending senior executives and HNW individuals who are suspects in investigations into bribery, corruption and fraud.  Many of his cases are cross-border, in particular involving the US, and Richard is experienced in managing and co-ordinating teams of lawyers in multi-jurisdictional investigations, as well as advising on the implications of overseas criminal investigations, the mutual legal assistance regime, extradition and Interpol.

Anoushka Warlow is a senior associate specialising in acting for individuals in complex, multi-jurisdictional, allegations of serious fraud, bribery and corruption.  She has been involved in many high-profile investigations and prosecutions brought by all the major domestic and international enforcement agencies.  She is currently representing several high net worth individuals who are the subject of investigations conducted by the SFO, HMRC and the US DOJ and SEC, and has expertise advising on cross-border considerations arising in UK/US investigations.  Anoushka has experience defending individuals in complex civil fraud proceedings and is also frequently asked to advise on the propriety of investigative steps taken by enforcement authorities, including asset freezing orders and steps taken pursuant to mutual legal assistance requests.

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