The two U.S. agencies that enforce the Foreign Corruption Practices Act collected more than $700 million in combined fines and penalties in 2013, in cases that involved oil giant Total, apparel company Ralph Lauren, ADM, Philips Electronics and others, according to a rundown in the FCPA Professor.
One blog post details enforcement by the Department of Justice, which garnered $420 million in 2013 — not its highest yearly amount ever, but more than in 2012 ($142 million) and 2011 ($355 million.)
According to another post, FCPA enforcement actions by the Securities and Exchange Commission garnered $300 million last year.
These FCPA penalties are substantial, yet they are only a slice of the total cost accruing to the private sector from corruption. That price tag is estimated at $515 billion for 2012 in 105 developing countries, according to a new report published by the Center for Strategic International Studies.
“The Costs of Corruption: Strategies for Ending a Tax on Private-sector-led Growth,” describes the risks of graft that go beyond the face value of a bribe and criminal penalties — such as exclusion from bidding on government contracts, “casino risk,” where the counterpart does not deliver and there is no legal recourse, shareholder derivative suits, and liability caused by unsafe and defective products.
The 38-page report explores what companies are doing to combat corruption and what more can be done within their own operations, through relationships with their supply chains, and in conjunction with governments and multilateral organizations, and lays out actionable steps for doing so.
Get the full CSIS report.
CREATe President and CEO Pamela Passman joined a group of leaders in business and civil society for a discussion of “Costs of Corruption” on Tuesday, Jan. 21 at CSIS in Washington, D.C.
View the video below:
Visit CSIS for a video of the event.
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