Expect greater corporate anti-bribery push

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Expect greater corporate anti-bribery push

Anti-corruption campaigns by companies are gathering momentum worldwide, but many executives doubt their effectiveness, according to a report released on Monday that examines U.S. efforts to discourage companies from paying bribes to foreign officials.

By (Reuters)

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Published: Tue 28 Jul 2009, 10:20 AM

Last updated: Thu 2 Apr 2015, 3:00 AM

The report by PricewaterhouseCoopers said that the number of cases and severity of penalties brought under the 1977 Foreign Corrupt Practices Act by criminal and civil authorities is likely to increase, with an estimated backlog from 2008 of 120 cases.

Driven by the backlog and the Obama administration’s focus on accountability in the wake of the financial crisis, regulators were expected to devote more resources, the report said.

“There still exists a gap between company executives’ acknowledgment of the need for anticorruption programs and the strength of or their confidence in those programs,” said the report “Corruption crackdown: How the FCPA is changing the way the world does business.”

A survey of 390 senior executives globally found that 80 percent said their companies had such a program in place, but only 22 percent were confident of the program’s efficacy, PricewaterhouseCoopers said.

It said that at the end of last year about 100 companies were involved in open FCPA investigations, which are brought by the U.S. Department of Justice or the Securities and Exchange Commission.

Compliance with the Act will become a top corporate governance issue, the report said.

“Bribery wasn’t really a board-level priority until fairly recently. It was just one of a basket of risks, and with rare exceptions — usually some crisis — it rarely took valuable board time and resources,” Michael Fine, director of private-sector initiatives at Transparency International-USA, was quoted as saying in the report.

“The magnitude of recent impacts in Europe and the US has changed this, making corruption a top-level issue.”

Among several cases cited in the report was one involving corporate giant Siemens AG , the largest FCPA case to date, in which the company agreed last year to pay $1.6 billion in penalties to U.S. and German authorities.

U.S. regulators said Siemens and three subsidiaries paid 4,000 bribes to government officials, including in Bangladesh, China, Libya, Mexico, Nigeria, Russia and Venezuela between 2000 and 2006.

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