Envelopes stuffed with cash and lavish gifts for foreign officials were once standard practice for companies chasing profits in the red-hot markets of Asia, Africa and Latin America, but now US authorities have cracked down stepping up enforcement of the Foreign Corrupt Practices Act (FCPA), a 1977 law rarely enforced until recently.
The surge in FCPA enforcement has led to multimillion-dollar fines on firms that are often not even based in the United States, and it has shed light on how some corporations pursue growth in emerging markets.
On Thursday, Japanese rubber giant Bridgestone agreed to plead guilty to charges that its US employees bribed officials of Mexico\'s state oil firm Pemex to win deals, sometimes writing "Read and Destroy" on sensitive fax messages about the illicit payments.
And in July, US regulators charged London-based liquor company Diageo with FCPA violations that included taking South Korean officials on a junket to Prague and Budapest in return for favorable tax treatment.
Diageo also paid a senior Thai official to lobby for lower sales taxes on its Johnnie Walker whiskey and bribed employees of state-owned liquor stores in India to stock its brands, the US Securities and Exchange Commission (SEC) alleged.
Diageo did not admit wrongdoing but paid $16 million to settle the charges.
Bridgestone and Diageo joined a long list of foreign firms hit by the law, including Germany\'s Siemens, which paid a record $800 million FCPA settlement in 2008.
Anti-corruption activists say the increase in FCPA enforcement is helping battle graft in countries where bribery is deeply entrenched.
The crackdown has "changed the calculation for companies," said Alexandra Wrage, president of Trace International, a nonprofit organization that helps corporations develop anti-corruption programs.
"It has made it more expensive and riskier to pay bribes than to resist them," she said.
US authorities initiated a record 82 enforcement actions for FCPA violations last year, compared to only two in 2000, according to Trace International\'s data.
The surge is partly due to the growing number of US companies doing business in "high-risk countries" like China and India, said Cheryl Scarboro, a former head of the FCPA enforcement unit at the SEC.
But Washington has also devoted more effort and personnel to investigating the often-complex cases, said Scarboro, who led the SEC probe of Siemens.
"There is certainly more focus than ever before on following those threads and being more proactive in terms of these investigations, not necessarily waiting for companies to come in the door and to report the conduct," she told AFP.
In one case, investigators even posed as officials from the west African nation of Gabon and demanded kickbacks for a fictitious procurement deal for Gabon\'s presidential guard.
That undercover operation led to the arrests of 22 executives and employees of security-equipment companies, mostly at a gun show in Las Vegas, Nevada, in January 2010; the first trial in the case is currently underway.
Foreign companies can be charged under the FCPA if they funnel the payments through their US offices or if their shares are traded in the United States, which is how Diageo and Bridgestone were ensnared.
After the investigations, Bridgestone said it was "committed to the efforts to further enhance and expand (its) remediation measures" while Diageo said it had "significantly strengthened (its) compliance regime around the world".
Other countries are following suit: Germany has stepped up use of its Anti-Corruption Act and Britain brought its Bribery Act into effect in July.
This year, Australian prosecutors applied a decade-old foreign bribery law for the first time when they charged Securency, a banknote-printing company, with bribing officials in Indonesia, Malaysia and Vietnam.
"It\'s a tidal wave hitting people around the world," said Geoff Bell, who was recently appointed chief risk and compliance officer at Securency and oversees its anti-corruption program.
"Any company would need to have its head in the sand if it wasn\'t aware of all the attention that the authorities are paying to bribery and corruption."
Critics argue that the FCPA forces companies to add burdensome compliance programs and makes them less competitive.
"There are some credible arguments to be made that the enforcement of the law... has had a chilling impact on US business behavior in overseas markets," said Mike Koehler, assistant professor of business law at Butler University in the US state of Indiana.
Even the FCPA\'s supporters admit that the law might be strengthening the hand of companies that operate outside its reach.
"The United States can\'t stop the kleptocrats of the world from demanding bribes," said Wrage, of Trace International.
"Corrupt government officials continue to ask and if companies operating under the FCPA won\'t pay, they\'ll find other companies that will.
"It\'s not a secret that Russian and Chinese companies behave in a manner that reflects the absence of a similar statute."
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