There is no doubt that 2016 was a record-setting year in the history of the enforcement of the Foreign Corrupt Practices Act. The nearly $2.5 billion in settlements that companies paid to resolve FCPA cases dwarfs the previous year’s figure of $133 million. However, nearly absent from the books last year were incidents in the Middle East.
With the exception of the Embraer FCPA settlement accounting for violations in Saudi Arabia (in addition to other countries outside the Middle East), and a General Cable Corp. payment for alleged violations in Egypt (again, among other nations), none of the other 25 companies that paid the U.S. government to resolve FCPA matters had alleged violations in Middle Eastern nations. Incidents in China led the way, followed by violations in Latin America.
FCPA enforcement has slowed so far in 2017, in large part due to the new administration and resulting leadership changes at the U.S. Department of Justice. However, even among actions in the year’s first quarter (all of which were in January), none were related to the Middle East.
TRACE International, which measures bribery risk by country, tracked a decrease in bribery risk in nearly all Middle Eastern nations between 2014 and 2016. The lowest-risk nation, the United Arab Emirates (UAE), held steady in this time period, with a risk figure of 39 out of 100.
Most other nations, from Bahrain to Qatar to Jordan and even high-risk Yemen (score of 93), had drops in bribery risk between 2014 and 2016. Only Saudi Arabia, Lebanon, Iran and Afghanistan moved in the opposite direction. The most drastic change was in Saudi Arabia, which moved 12 points in the direction of higher bribery risk, from 51 to 63.
Despite these isolated increases in bribery risk by country, it appears that corruption incidents are decreasing for the Middle East as a whole. Nevertheless, companies must remain aware. Of current FCPA investigations, the largest category by industry is the oil and gas services field, which is of course a prominent sector operating in the Middle East.
For in-house counsel whose businesses have a presence in the region, collaboration on issues of such significance is key. The large presence of multinational companies in the region means that in addition to the FCPA, companies must remain mindful of laws such as the UK Bribery Act and anti-corruption statutes originating in Australia, Brazil and other nations.
Recognizing the importance of the Middle East as a global business hub, ACC joined in May with Dubai’s Legal Affairs Department (LAD) to announce collaboration on a groundbreaking in-house credentialing program. The training curriculum will be developed by ACC with a group of leading general counsel from the UAE and the broader Middle East region. There will also be an international contingent participating.
The training will focus on the core competencies attributed to successful in-house counsel as well as the effective and efficient management of a law department, including how to demonstrate the department’s value. In addition, in-house lawyers may select from electives related to specific practice areas, such as employment law, intellectual property and anti-corruption – the exact focus of the FCPA. Certification will highlight global best practices for working in a corporate law department.
The ACC and the LAD program will serve the needs of Dubai’s diverse legal population working on cross-border matters, touching on laws from around the world. Thus, while the FCPA could be a focus for companies that do business in the United States, in-house counsel in Dubai will also look to the UK Bribery Act and other global statutes to provide their legal teams with the most up-to-date information on fighting bribery and corruption.
Published August 11, 2017.