Enforcement of Anticorruption Laws by Foreign Institutions

^[1]The emergence of transnational anticorruption laws and enforcement has generated debates about the fairness, effectiveness, and legitimacy of enforcement of legal norms by foreign or international institutions. In a paper developed over the last years and published in December 2014 entitled Transnational Anticorruption Law in Action: Cases from Argentina and Brazil ^[2], professors Kevin Davis ^[3], Guillermo Jorge ^[4], and Maíra Rocha Machado ^[5] discuss this relevant and current topic.

The paper discusses some of the potential pros and cons of transnational anticorruption enforcement, highlighted below:

Potential Cons:

Rights of defendants will be compromised if they are subject to surprising forms of liability of which they have no notice;
Defendants may have to respond to proceedings about the same facts in multiple jurisdictions, putting an unfair burden on them;
Cases may be handled in inaccessible forums applying unfamiliar procedural rules;
Interference might occur with law enforcement efforts of the states that arguably have greatest interest in regulating local corruption;
Foreign institutions may be selective, applying the norms in accordance with their own interests;
Foreign institutions may have particular biases and blind spots;
Foreign institutions are relatively unaccountable to members of the affected society;
Money collected by foreign institutions is not shared with countries whose officials were corrupted (FCPAméricas has discussed his topic here ^[6]).

Potential Pros:

Local institutions may have limited capacity to address political corruption and may be too intimidated to challenge members of the political elite;
Foreign institutions may bring to the table valuable resources that local institutions may be unable to match;
Foreign institutions may have access to superior information, as sources of relevant information may be located outside the jurisdiction of the corrupt official;
Foreign institutions may have superior/specialized expertise in relation to specific aspects of the investigation or prosecution;
Foreign authorities may share information about investigative techniques that local institutions can use in subsequent cases;
Foreign institutions may be less corruptible than local institutions, perhaps because the officials are more carefully selected or because they are subject to more effective monitoring, rewards and punishment.

The article uses case studies to discuss the issue and the implications of the “institutional complementarity theory”. The cases studied were of Siemens in Argentina in the late 2000s concerning bribes paid to obtain and retain a contract to provide national identity cards for the Argentine government; and of the construction of a courthouse for a regional labor tribunal (TRT) in São Paulo in the early 90s. In the Siemens case, foreign institutions played a role mainly in the prosecution of bribe-payers, while in the TRT case, foreign institutions were involved primarily in the recovery of the assets that were the proceeds of bribery.

In short, though cons were identified, the paper concludes that, in both cases analyzed, important limits on the capacity of local anticorruption institutions were overcome partially with the assistance of foreign institutions. Moreover, the paper found important (positive) changes in the capacity and level of accountability of local institutions over time as result of local authorities’ experience in the cases studied.

Foreign and local agencies may have common interests in combating transnational forms of corruption and their combined efforts may be complementary. Readers of this post are encouraged to read the full paper and make their own conclusions. Hopefully, the paper will motivate further studies on the enforcement of anticorruption laws by foreign institutions.

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