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To Comply With Anti-Bribery Law, Banks Must Be Careful with Payments for Licenses, Sovereign Clients
By Brian Monroe
printAs prosecutors continue to accuse companies and individuals of foreign bribery, banks should be cautious about how they acquire licenses and sovereign wealth accounts, and where their clients send money abroad, say consultants. Enacted in 1977 but little used until 2006, the Foreign Corrupt Practices Act (FCPA) prohibits companies from bribing foreign officials to win contracts or other lucrative business relationships. The law has been cited by U.S. banking regulators who have exhorted banks to monitor for suspicious transactions potentially tied to bribes and foreign corruption. Identifying such bribes can be challenging for banks, particularly when the payments are wired...
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The U.S. Justice Department's long-awaited guidance for businesses complying with a foreign anti-bribery law will do little to change its enforcement even as it sets some minds at ease, say attorneys.
Pending U.S. guidance for the country's foreign anti-bribery law and an ongoing political push to amend its rules could mean compliance changes for banks and other businesses, say analysts.
As global efforts to crack down on bribery grow, financial institutions need to more closely scrutinize the accounts they maintain for politically-tied figures, according to a former senior assistant U.S. attorney.
Since its inception, some of the country's top corporations have asked lawmakers to scale back the reach of the Foreign Corrupt Practices Act, which prohibits bribing foreign officials in conjunction with business deals, with one notable absence: the banking lobby.
Senate panel members Tuesday criticized the U.S. Justice Department's enforcement of a U.S. anti-bribery law even as representatives from the commercial sector asked Congress to better shield it from penalties.
U.S. Justice Department investigations of foreign bribery will likely end up snaring financial institutions, according to the former head of the government's anti-corruption unit.
The departure Friday of the Justice Department's top enforcer of the U.S. Foreign Corrupt Practices Act will mark an end to an era, not a slowdown in penalties against violators, say analysts.
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The U.S. Justice Department plans to grow its staff of less than 10 prosecutors specializing in cases tied to the U.S. Foreign Corrupt Practices Act to 15 or more, a spokeswoman confirmed.
Banks and other companies around the world are delaying deals in developing markets, in some cases canceling projects altogether, because they are afraid of being snared by anti-corruption laws, according to a private survey released today.
The conviction of a former U.S. congressman on corruption charges is more than just another public scandal, say white-collar crime analysts. It's a sign that the United States is increasingly willing to levy a 1977 anti-bribery law against individuals, they say.
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