Last week, the Securities and Exchange Commission (SEC) received a letter containing a convoluted proposal that would drastically alter the way it approaches foreign bribery cases.
In its letter, the non-profit group Socio-Economic Rights and Accountability Project (SERAP), which focuses on anti-corruption efforts in Nigeria, asked the SEC to consider allowing foreign government entities involved in corruption schemes to apply for a portion of the agency’s settlements under the Foreign Corrupt Practices Act (FCPA), which prohibits companies with U.S. ties from bribing foreign officials in order to secure business. SERAP reasons that “it is axiomatic that victimized foreign government entities bear the cost of bribery and corruption of their officials.”
FCPA compliance has been a hot topic among the in-house bar for several years. The U.S. collects billions of dollars each year through FCPA sanctions. According to Thomson Reuters, in 2010, collections under foreign bribery cases accounted for nearly half of the government’s $2 billion in settlements and judgments. Currently, the SEC forces companies involved in foreign bribery to return illegal profits to harmed investors. SERAP’s proposition would expand this practice.
The SEC says it will review SERAP’s letter.
Meanwhile, the U.K. is testing giving foreign bribery funds to countries where corruption took place. Last week, the country’s Serious Fraud Office announced that London-based defense company BAE Systems—which admitted in 2010 that it failed to keep adequate records of payments it made to receive a contract in Tanzania—would fund almost $47 million in educational projects in the African country.