Anti-corruption law goes global
The notion of extra-territorial enforcement of anti-corruption law first emerged in 1977 with the passage of the US Foreign Corrupt Practices Act, which prohibits bribery of foreign officials as a means of obtaining or retaining business, and holds parent companies liable for illegal actions taken by subsidiaries. Of great concern to US companies was the fact that the FCPA’s reach did not extend to non-US companies unless they had a US listing or operational presence. US companies complained that they were being forced to compete with one hand tied behind their backs.
As a result, for two decades the US lobbied the Organization for Economic Cooperation and Development to get similar legislation passed abroad. This finally bore fruit in 1999 when the OECD Anti-Bribery Convention was ratified, finally placing European and US companies on a similar footing. Today, the 30 OECD member countries have been joined by six developing nations, including Argentina, Brazil and Bulgaria, which have enacted national anti-bribery laws that criminalize bribery of foreign public officials.
As a result, growing numbers of companies are caught in the net of home country anti-corruption legislation, which helps to level the playing field. This is still a work in progress, since several major emerging economies have yet not ratified the convention, but each new signatory is a positive sign, with Estonia the latest to accede to the agreement.