Global Anti-Bribery Act: 2020 Review and 2021 Predictions

Like many other law areas, the Foreign Corrupt Practices Act (FCPA), more generally addressed as the anti-corruption act, became a victim of the COVID 19 pandemic. The damage was not as much as was expected initially. More particularly speaking, the number of enforcement actions taken by the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) were quite a few in 2020 as compared to the past few years.

However, both the SEC and DOJ played a significant role in implementing the FCPA. They brought about the crucial cases on the top and made new records and have issued much-awaited updates to long-established FCPA guidelines.

Some of the key developments from the year 2020 are:

  1. Two Top Cases on the Penalty Charts: 2020 started with a case that set new records for FCPA penalties – the Airbus Case. The settlement took $2.1 million of fine and coordination by the US government with the UK and French authorities. In October 2020, another record-breaking settlement came to the surface with The Goldman Sachs Group Inc. The settlement included $3.3 billion of penalty inflicted by the SEC and DOJ, which became a sizable combined FCPA penalty on record. This case also involved the cooperation of US authorities with several foreign law enforcement agencies.
  2. The Record-Breaking Year: Due to these two resolution cases, 2020 became a record-breaking year for penalties, which suggests that US authorities continue despite the decrease in the frequency of enforcement actions, which indicates that US authorities focused on the crucial cases with huge penalties.
  3. Upgraded Enforcement Guidelines: The SEC and DOJ play a significant role in guiding the lay people regarding FCPA compliance. The U.S authorities specifically updated the SEC’s and DOJ’s FCPA Resource Guide and the DOJ’s Evaluation of Corporate Compliance Programs Guidance (Compliance Guidance).
  4. Crucial Legal Regulations: The year 2020 proved vital as SEC and DOJ made two major legal decisions regarding FCPA. One of which is taken in June 2020, the United State Supreme court case held in SEC v Liu that the disgorgement remedy must directly be linked to ill-gotten gains, as it is originally meant to benefit victims. It is still to be how these ruling will be applied in other FCPA cases. Congress also supported SEC disgorgement power – passing laws to expand SEC’s capacity of collecting disgorgement for conduct within the past few years, reversing in some respect the Supreme Court’s 2017 decision of Kokesh vs SEC.

The last few days of the Trump administration provided a chance to reflect on the FCPA regulations over the past few years. Regardless of the prediction that the administration would significantly decrease anti-bribery enforcement, the approach of the Trump Administration is largely business-focused and continued its prior trend of large corporate penalties and increased levels of enforcement activity.

The takeaway is that it has been proved by the past few administrations that anti-corruption law enforcement in the United States is an unbiased affair. And most importantly, law enforcement is no longer just a United States affair, keeping in view the continued improvement in international anti-corruption law enforcement.