In a recent post, I argued that U.S. authorities investigating British pharma giant GlaxoSmithKline (“GSK”) should consider criminally prosecuting GSK but partially offsetting any attendant penalty in light of the $490 million fine already imposed by China. This option is only available to the DOJ, though, because it stands on one side of a crucial divide in the global anticorruption regime: the U.S. — unlike Canada, the U.K., and the European Union — does not recognize an international variant of ne bis in idem (“not twice for the same thing”) (also known as “international double jeopardy”).
Recognizing an international double jeopardy bar can have a dramatic impact on a country’s capacity to combat international corruption. For countries like the U.K., being second-in-line to target an instance of transnational bribery often means not being able to prosecute the conduct at all. (For example, in 2011, the U.K. had to forego criminal sanctions against DePuy International because the U.S. had already prosecuted the British subsidiary.) In recent years, though, a spike in the number of parallel and successive international prosecutions has inspired a small but growing chorus of commentators calling for countries like the U.S. to formally embrace international double jeopardy.
To these commentators’ credit, many of their arguments sound in basic notions of fairness: you shouldn’t punish someone twice for the same crime. But before we jump on the double jeopardy bandwagon, I want to spend a few minutes explaining why, when it comes to the global fight against transnational bribery, double jeopardy probably isn’t all it’s cracked up to be.
To begin, most arguments calling for the U.S. and other OECD member countries to recognize international double jeopardy are nonstarters. Consider, for example, Professor Michael Van Alstine’s 2012 article arguing that the OECD Anti-Bribery Convention obligates the U.S. to recognize international double jeopardy. Professor Van Alstine offers two reasons this might be so, but both are flawed. First, he contends that the Convention’s requirement that each member state criminalize the same conduct creates an exception to the Supreme Court’s dual sovereignty doctrine. But that position is inconsistent with existing U.S. case law; in U.S. v. Jeong, for example, a federal appeals court held that the OECD Convention does not prevent the U.S. from prosecuting a businessman even though he had already been prosecuted in South Korea. Second, Professor Val Alstine suggests in the alternative that the consultation requirement in Art. 4.3 of the Convention overrides the U.S. Supreme Court’s doctrine, but this argument is difficult to reconcile with the soft “consultation” language of Art. 4.3.
A number of other commentators — including the B-20 (business leaders) Task Force, corporate counsel, and contributors to the FCPA Blog — have urged revisions to the OECD Convention. For instance, one commentator has argued that Art. 4.3, should be altered to create a binding mechanism for determining which OECD member state shall have jurisdiction over a particular case of bribery. But these arguments too suffer from an obvious and fatal flaw: political implausibility. Not only would this amendment require the assent of several countries that do not recognize ne bis in idem internationally, but it would also radically transform the Convention by requiring countries to surrender their sovereign power to determine whether to prosecute particular instances of criminal conduct. One need not take an extreme realpolitik view of international affairs to doubt that many countries would embrace such a revision to the Convention.
But perhaps more important than the legal or political barriers to U.S. recognition of international double jeopardy is the fact that this principle is simply not a good idea in the fight against transnational bribery. There are several reasons why the U.S. position (rejection of international ne bis in idem) is in fact the sounder position:
- It prevents a race to prosecute/settle: Imagine a world in which all countries have criminalized transnational bribery and recognized an international double jeopardy bar, but Country A enforces the law more aggressively and obtains larger penalties than Country B. Offenders would have a strong incentive to reach a criminal resolution with Country B in order to block any criminal prosecution by Country A. Additionally, both countries would have an incentive to “race to the courthouse,” lest they miss out on any criminal penalties. Presumably, this would lead to a race to settle, which would result in shorter investigations, less unraveling of broad schemes, and lower average penalties.
- It removes an excuse not to prosecute: Sadly, many OECD members are mere observers in the fight against transnational bribery; they don’t need any more excuses to not prosecute. Unfortunately, international double jeopardy offers just that. For example, a recent Transparency International report suggested that the U.K.’s Serious Fraud Office had cited a questionable interpretation of the nation’s double jeopardy law to justify failing to launch certain investigations.
- It prevents an absurd result: As the Wall Street Journal has suggested, China’s GSK prosecution may prevent the U.K. from prosecuting the British company. Now, if the tables had been turned — if the U.K. had prosecuted GSK and China recognized double jeopardy — then China would be left unable to prosecute a company for bribing Chinese officials. But transnational bribery harms two sovereigns, and stepping back, there seems to be something unfair about telling the U.K. it cannot prosecute its own company, or telling China that it cannot prosecute a company for harm done in China, merely because another nation got there first.
Of course, proponents of international double jeopardy offer a number of counterarguments — chief among them, fears that successive prosecutions result in under-disclosure and over-deterrence. But these claims are not particularly compelling. First, if the absence of double jeopardy discourages disclosure, increasing incentives for disclosure, or simply mandating disclosure, offers an easy fix. Second, although over-deterrence arguments admittedly turn on empirical questions that we simply cannot answer conclusively, in light of the harm caused by bribery and the difficulty in detecting it, I’m inclined to err on the side of more robust enforcement, especially when countries can — and perhaps should — consider foreign penalties when setting their own settlement demands.
Really interesting, Jordan. I wonder how you would feel about a U.S. policy requiring the offset of previously paid penalties (rather than the DOJ simply opting to allow that in a case by case basis, as you suggest they should in the GSK case). It seems like such a rule would fix a lot of the ‘basic fairness’ concerns of double jeopardy while simultaneously muting the problems you identify in bullet one. Of course, the fact that the second country would receive a reduced settlement/damage award could still prompt countries to race to be first (especially for a country whose award would likely be lower; if they moved second they would still receive nothing), but it does seem to reduce the dangers of point one considerably compared to a hard and fast no double jeopardy rule.
Great question. I think I would be opposed to a strict offset rule, and would prefer to continue allowing enforcement authorities to consider offset on a case-by-case basis. Not only does the case-by-case approach preserve some flexibility on the part of the enforcement authorities, but I doubt that a strict offset rule would actually be a good idea for two reasons. First, while it might make the “race to the bottom” problem marginally less troublesome — because the second-moving country may be able to recover something (rather than nothing, as they would if they recognized international double jeopardy — the incentives still exist for them to move first. Sure, even an agency with a discretionary policy may want to move first to avoid the social pressure or negotiating tactics that result when defendants know that the agency will sometimes offset penalties, but that pressure will likely be substantially less. Second, making it a strict rule rather than a discretionary policy actually removes an issue from the plea bargaining process, giving the government less leverage to extract concessions and companies less of an incentive to cooperate or remediate.
You make great points, Jordan. I’d like to pick up on (1) and (3). Assuming a universal standard of international double jeopardy, cases might not even get as far as a “race to the courthouse.” Here is a (admittedly highly stylized) hypo: offenders could effectively forum shop by self-disclosing in a comparatively lenient jurisdiction that requires mandatory prosecution. I wonder whether companies, if given the choice, would gamble for less severe penalties in jurisdictions that lack the financial and technical resources to conduct a full investigation (and the cooperative relationships with more developed prosecuting authorities, like the US and UK) at the expense of due process protections. If so, the framework could result in the involuntary overburdening of prosecutorial agencies that are ill-equipped to handle the caseload, as well the interference with those agencies’ own anticorruption agendas. If not, it would lead back to your absurd result.
You’ve hit on a great point here, one that I wish I had fleshed out more. In addition to causing eager countries to race to prosecute and giving reluctant second-movers another excuse not to investigate, this could indeed lead to forum shopping. Of course, critics of my argument might suggest that the lack of international double jeopardy reduces incentives for companies to disclose bribery violations for fear of being prosecuted in multiple countries. Besides the obvious response that a country can combat this problem through mandatory disclosure laws or disclosure incentives, you make the great point that an international double jeopardy regime might lead companies to forum shop. Especially if they know that the country to whom they disclose and with whom they cooperate might not share information freely with foreign enforcement authorities, then countries might have an incentive to pick countries who are, for whatever reason, expected to be more lenient.
I’m very much with you on this, Jordan. I do think on your last point, about the alleged risk of over-deterrence, the issue is a bit complicated because of the self-disclosure issue. On the one hand, if we’re just thinking about the magnitude of the penalties, the limited empirical evidence we have does tend to support your view that current penalties are likely far too low to deter foreign bribery (see https://globalanticorruptionblog.com/2014/07/17/should-fcpa-sanctions-be-nine-times-larger/), On the other hand, I do think that the worry that liability in multiple jurisdictions could reduce the incentive to self-disclose is a genuine problem (see https://globalanticorruptionblog.com/2014/03/18/whats-left-out-of-left-out-of-the-bargain/). I’m not sure that one can avoid that simply by saying that we could mandate self-disclosure. We could in theory, but that may not be feasible, and even if we did there might be widespread non-compliance, or other drawbacks we haven’t considered. (I don’t think the DOJ would really want literally every technical FCPA violation to be disclosed, no matter what they say in public.)
All that said, I agree with your bottom line. Even though I do think there are legitimate concerns about multiple, uncoordinated enforcement actions for the same underlying conduct, international double jeopardy seems to me far too blunt a tool to use to solve this problem, and its costs, which you aptly describe, seem much greater than its benefits.
I completely agree. Both international double jeopardy and mandatory disclosure rules are instruments likely too blunt to be of great value to the fight against transnational bribery. And there is no question that overlapping and redundant prosecutions in multiple national jurisdictions powerfully reduces the incentives to self-disclose, a problem that will only grow more severe as countries like China begin to join the effort. My only broader point is that discretionary offset policies (discussed in my previous post on GSK) combined with programs to incentivize self-disclosure are a preferable approach.
For those of you who are interested, here is a link to my prior post on China’s prosecution of GSK and the question of how second-moving enforcers like the United States should respond to China’s massive penalty. My apologies for not linking to it in the post.