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Foreign Affairs and Enforcement of the Foreign Corrupt Practices Act

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  • Stephen J. Choi
  • Kevin E. Davis

Abstract

We examine factors that might explain how sanctions imposed in Foreign Corrupt Practices Act (FCPA) enforcement actions vary across the firms and countries implicated using a data set of FCPA actions resolved from 2004 to 2011. We find evidence that the sanctions in an individual FCPA action are positively correlated with the egregiousness and extensiveness of the bribe. The sanctions also increase if the ultimate parent company of entities involved in the FCPA violation is foreign and if foreign regulators are involved in the action. At the country level, we report evidence that the SEC and DOJ impose greater aggregate sanctions for violations in countries with a lower GNI per capita and weaker local anti‐bribery institutions. The SEC and DOJ also impose disproportionately greater aggregate sanctions for violations where the home country of the ultimate parent company of FCPA defendants has a greater GNI per capita, stronger anti‐bribery institutions, and a cooperation agreement with U.S. regulators. Overall, these findings suggest that factors besides those deemed relevant by U.S. and international law influence enforcement of the FCPA.

Suggested Citation

  • Stephen J. Choi & Kevin E. Davis, 2014. "Foreign Affairs and Enforcement of the Foreign Corrupt Practices Act," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 11(3), pages 409-445, September.
    • Handle: RePEc:wly:empleg:v:11:y:2014:i:3:p:409-445
    DOI: 10.1111/jels.12045
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    References listed on IDEAS

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    1. Kaczmarek, Sarah C. & Newman, Abraham L., 2011. "The Long Arm of the Law: Extraterritoriality and the National Implementation of Foreign Bribery Legislation," International Organization, Cambridge University Press, vol. 65(4), pages 745-770, October.
    2. Laarni Escresa & Lucio Picci, 2017. "A New Cross-National Measure of Corruption," The World Bank Economic Review, World Bank, vol. 31(1), pages 196-219.
    3. Putnam, Tonya L., 2009. "Courts Without Borders: Domestic Sources of U.S. Extraterritoriality in the Regulatory Sphere," International Organization, Cambridge University Press, vol. 63(3), pages 459-490, July.
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    3. Teichmann, Fabian & Falker, Marie-Christin & Sergi, Bruno S., 2020. "Extractive industries, corruption and potential solutions. The case of Ukraine," Resources Policy, Elsevier, vol. 69(C).

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