Guest Post: The Case for Greater US Deference to Foreign Anticorruption Prosecutions–A Response to Maruca

GAB is pleased to welcome back Frederick Davis, a lawyer in the Paris office of Debevoise & Plimpton, who contributes the following guest post:

Last fall, I published two posts in which I raised concerns about overlapping jurisdiction in foreign bribery cases, and about the appropriate role of US enforcement authorities in such cases. My first post noted that the US is not bound by the outcome of criminal processes in other countries, but can—and sometimes does—bring FCPA cases against foreign companies that have already resolved investigations for the same conduct brought initiated by their home countries. (As I also observed, the absence of any such constraint on US authorities creates an asymmetry with respect to countries that endorse an international ne bis in idem/double jeopardy bar, which can block such countries from pursuing a corporation or person that has already been pursued in the US.) My second post urged that the US Department of Justice (DOJ) should be more transparent in articulating when it will defer to non-US prosecutions in the corruption area.

A few weeks back, Michael Maruca posted an interesting critical commentary on my posts. The main thrust of Mr. Maruca’s very thoughtful comment was that the DOJ should not unnecessarily defer to non-US counterparts, partly because he worries about downgrading the effectiveness of US FCPA enforcement efforts, and partly because he envisions competition among national authorities as encouraging a “race to the top” in achieving optimal enforcement of foreign bribery laws. He proposes that the DOJ, rather than being more deferential to foreign resolutions of conduct that might violate the FCPA, the DOJ should go further in sharing the monetary outcomes of multinational investigations, and he provides commonsense principles for how it might do so.

Mr. Maruca’s intervention usefully advances the discussion on a very important issue. I agree with much of what he says. Nonetheless, I continue to view the lack of sufficient US deference to foreign resolutions of foreign bribery cases as a problem, and I have the following concerns about the points Mr. Maruca’s makes: Continue reading

Is China’s Anticorruption Enforcement Implicitly Protectionist?

When a Chinese court fined GlaxoSmithKline (GSK) US$490 million last year for bribing Chinese physicians and hospital administrators, Western firms doing business in China snapped to attention. Indeed, the GSK action is likely only the tip of the iceberg, particularly given a December 2012 official legal interpretation of the Chinese Criminal Law by the Supreme People’s Court and the Supreme People’s Procuratorate that departed from the prior emphasis on bribe recipients and redirected attention to bribe payers. Thus far, multinational corporations – including GSK, Danoneand Volkswagen – have figured prominently in President Xi Jinping’s anticorruption campaign, leading many commentators to argue that protectionism is at play (see here and here). To put the point bluntly, the worry is that Chinese enforcers will go after foreign firms for conduct that is equally if not more common among domestic Chinese firms, and will do so largely to protect those domestic firms from foreign competition.

I have to admit, when I sat down to investigate the claims of protectionist bias, I more or less assumed the ulterior motives in Chinese enforcement. The typical refrain among my American friends who have lived and worked in China is: “Of course enforcers intentionally favor domestic companies. Everything is politically motivated.” That may be true. But what I found – or didn’t find – actually caused me to lean in the opposite direction: We don’t have enough evidence to substantiate claims of biased anticorruption enforcement in China. Continue reading