ÿþ<html> <head> <title> Foreign Companies in United States Bound by Anti-bribery Law </title> <meta http-equiv="Content-Type" content="text/html; charset=EUC-KR"> <meta name="KEYWORDS" lang="en-us" content="Bribery and Corruption, Transparency"> <meta name="KEYWORDS" lang="kr" content="Bribery and Corruption, Transparency"> <meta name="ROBOTS" content="NOINDEX"> </head> <body text="#000000" bgcolor="#FFFFFF" link="#0000EE" vlink="#551A8B" alink="#FF0000"> <table CELLSPACING=0 CELLPADDING=0 WIDTH="588" align=center > <tr> <td WIDTH="100%" HEIGHT="11"><img SRC="wwwgztop.gif" height=30 width=588> <img SRC="http://usinfo.state.gov/usinfo/img/assets/3602/WashingtonFile.gif" alt="Washington File"> <p> <font size=-1> <!-- BEGIN DATA BUFFER --> <p>26 March 2007</p> <h3>Foreign Companies in United States Bound by Anti-bribery Law</h3> <p class="subhead">Strong enforcement intended to ensure market integrity, fairness</p> <p class="byline">By Andrzej Zwaniecki<br/>USINFO Staff Writer<br/><br/> </p> <p>Washington -- The U.S. government, in an effort to protect the integrity of U.S. capital markets and lead international anti-corruption efforts by example, is focusing on prosecuting companies and individuals who bribe foreign government officials.</p> <p>In the last six months, the Department of Justice as brought several new cases under the Foreign Corrupt Practices Act (FCPA), a 1977 law that prohibits companies doing business in the United States from paying bribes to officials in other countries to obtain or retain business.  Some of those cases involved domestic U.S. companies and individuals; others concerned foreign firms.</p> <p>For example, the department levied substantial fines against a U.S. company for bribing South Korean and Chinese officials, a Norwegian company for bribing Iranian officials and a British company for paying off Nigerian officials.</p> <p>Although U.S. enforcement efforts principally are focused on U.S. companies, the FCPA allows the government to prosecute foreign companies that issue stock on U.S. capital markets.</p> <p> If you come to the United States and seek access to our capital markets, we expect you to play by the same rules our own companies do, says Benjamin Longlet, senior counsel to the assistant attorney general in Justice s Criminal Division.</p> <p>In the wake of widely publicized corporate fraud scandals, the department has increased its focus on enforcing the FCPA substantially. Since 2001, it has obtained plea agreements or deferred prosecution agreements from a number of corporations and individuals, including the Monsanto Company, the Micrus Endovascular Company, Titan Corporation, Statoil, Schnitzer Steel Industries Inc. and others, Longlet told <i>USINFO</i> recently.</p> <p> We think we are doing our share and making a real, meaningful impact on this problem, he said.</p> <p>But many other countries with similar laws have been doing little or nothing at all.</p> <p>Two-thirds of the 31 countries that signed the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials have had little or no enforcement of related bribery laws since 1999, according to a Transparency International (TI) 2006 report. The report said none of the countries came even close to the U.S. record of 55 investigations and 50 prosecutions between 2005 and 2006. TI is an international anti-corruption research group.</p> <p>U.S. CORPORATIONS RAISE QUESTIONS ABOUT UNFAIR TREATMENT</p> <p>Some U.S. companies have complained the U.S. government puts them at a disadvantage by pursing corporate bribery aggressively as many of their overseas competitors continue to pay bribes without fear of serious prosecution.</p> <p>But U.S. officials take another view.</p> <p>As  our foreign law enforcement partners see our commitment to combating corruption around the world and to enforcing our own anti-corruption laws, it is more likely that they will prosecute corruption in their own countries, Assistant Attorney General Alice Fisher said in October 2006.</p> <p>Longlet said the vigorous enforcement of the FCPA actually benefits U.S. businesses because it helps to preserve the integrity of U.S. capital markets and the confidence of investors.</p> <p> If investors know that U.S. companies profits aren t a house of cards built on corruption, they will be more likely to invest their money in U.S. markets, Longlet said.  And that s good for all businesses. </p> <p>Kathryn Nickerson of the Commerce Department says the United States is working to ensure fairness through the OECD working group that monitors enforcement of the OECD convention. Nickerson is a senior counsel in the office of the chief counsel for international commerce.</p> <p> We urge other parties to the convention to enforce their laws to the same extent we do, she told <i>USINFO</i> in a recent interview.</p> <p>The OECD adopted the convention in 1997 to level the playing field for all companies engaged in international business. All 30 OECD and six non-OECD countries have signed and ratified the convention.</p> <p>BRIBERY STILL MARS INTERNATIONAL DEALS</p> <p>Although the Justice Department previously has brought FCPA cases against foreign companies -- such as Syncor Taiwan in 2002 -- the department announced the first case against a foreign firm whose stock is traded on U.S. exchanges in October 2006.</p> <p>The Norwegian oil and gas company Statoil admitted bribing an Iranian official in exchange for lucrative oil and gas rights in Iran.  The company agreed to pay a $10.5 million penalty and enter into a deferred prosecution agreement with Justice. </p> <p>In February, three different subsidiaries of Vetco International Ltd., a British company, pleaded guilty to bribing Nigerian officials.  A fourth subsidiary entered into a deferred prosecution agreement.  Vetco agreed to pay a total of $26 million in fines.</p> <p> Hopefully, Statoil, Vetco and other cases like this will get other countries attention, said Nickerson.</p> <p>Rampant corruption in many developing countries, coupled with weak enforcement of anti-bribery laws in many developed nations, has produced a significant number of tainted deals.</p> <p>During the period from April 2004 to May 2005, more than 53 contracts worth around $15 billion available for competitive bidding by foreign companies may have been affected by bribery, according to U.S. government sources.</p> <p>OECD officials say member countries are making progress in the fight against bribery. However, a drop in the value of overseas contracts marred by bribes paid by firms from OECD countries has been offset by increased bribery outside the OECD membership. Companies from emerging markets such as India, China and Russia ranked among the worst in the TI 2006 Bribe Payers Index.</p> <p>The <a href="http://www.transparency.org/content/download/9757/71853/version/1/file/BPI_2006_Analysis_Report_270906_FINAL.pdf">full text</a> of the index (PDF, 16 pages) is available on the TI Web site.</p> <p>For more information on U.S. policies, see <i><a href="http://usinfo.state.gov/ei/economic_issues/bribery_and_corruption.html">Bribery and Corruption</a></i>.</p> <p>(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)</p> </font> </td> </tr> </table> </body> </html>