Pressures Grow On Companies To Squash Bribery, Corruption – Study
Enforcement agencies and regulators around the world are expanding their definition of corporate crime and political landscapes continue to shift, extending the compliance obligations on businesses, the report said.
Companies are expected to exert more control over their staff, subsidiaries and third parties in the fight against corruption and bribery, a report by Hogan Lovells says.
The firm’s Investigations, White Collar and Fraud (IWCF) practice said that it expects law enforcement and regulatory agencies to turn on the pressure as the world moves on from the disruptions and lockdowns over the past two years.
“One of the big shifts in the regulatory environment that we’ve seen is that companies are expected to have greater oversight of their employees, subsidiaries, and third parties,” Hogan Lovells partner Stephanie Yonekura, global leader of the IWCF practice area, said. (She is based in Los Angeles.)
Among other trends are an increase in ESG responsibilities, the impact of fundamental changes to working practices post-Covid, and economic sanctions being used as both legal and political tools.
In the US, the US Department of Justice has made fighting bribery and corruption a top priority. As part of this effort, it has recently revised its Corporate Enforcement Policy (CEP) to encourage companies to cooperate fully with government investigations.
Shanghai-based partner Calvin Ding, who also co-edited the report, said there are a number of non-US developments at work.
“China abandoning its zero-Covid strategy should spur a return to better growth in China. At the same time, we are seeing renewed appetite for enforcement wherever Chinese companies operate and invest, and that includes in Africa and Latin America. Political and leadership changes, particularly in the latter region, are also likely to create more investigative pressure,” Ding said.
The report looks at regulatory developments worldwide, such as the changes at the Serious Fraud Squad, regulatory changes in Southeast Asia and Latin America, more aggressive law enforcement in Germany, and China's heavy investment in Africa, and the implications of that.
The authors of the report said: "The expectation is on compliance teams to mitigate risk and catch misconduct that may slip through. Where it is found, the onus is on you to self-disclose relevant, non-privileged information about the conduct. Even then, disclosure alone isn’t enough: it must be fast; it must be full. True, complex corporate structures can obscure your oversight of compliance. And yes, data privacy laws, foreign laws, and blocking statutes can make it hard to collect evidence."