Global graft enforcement to rise to revive anti-corruption efforts
According to Hogan Lovells, compliance burdens around ESG issues likely to be higher
Following regulatory efforts stalling amid the Coronavirus epidemic, Hogan Lovells predicts the enforcement and prosecution of anti-bribery and corruption crimes are anticipated to increase worldwide in 2022.
The annual Global Bribery and Corruption Outlook foresees that regulators on both sides of the Atlantic will increase their attention to anti-corruption efforts in 2022, which will require corporations and individuals to devote more resources to compliance amid growing environmental, social and governance (ESG) regulations.
“We expect to see a renewed focus on enforcement and prosecution activities in many parts of the world in 2022,” said Stephanie Yonekura, global head of investigations for white-collar and fraud at Hogan Lovells. The increase in cross-border cooperation between countries that are committed enforcement agents, like the US and the UK, will be coupled with increased activity from other countries which are bolstering their anti-bribery and corruption efforts.”
Aside from the growing collaboration between regulatory bodies, the report predicts a rise in personal responsibility for directors as well as technological risks like the misuse of crypto currencies.
As Yonekura pointed out, announcing an investigation could have financial repercussions besides causing massive reputation damage and directors could face personal liability. Furthermore, a growing body of case law has addressed corporate liability for ESG, data and technology risks. In the near future, punishment for misconduct in these areas might operate as it currently does under ABC laws. It would be prudent for companies to review their existing compliance programs to ensure they are prepared for these new risks.”
By pursuing a comprehensive strategy to combat corruption, the Biden administration indicates the US government will make more resources available to meet the challenge. According to Ann Kim, a litigation partner at Hogan Lovells in Los Angeles, the department of justice will use new tools to prosecute money laundering and aggressively enforce the Foreign Corrupt Practices Act.
While in the UK, Liam Naidoo, a partner at Hogan Lovells, says the Serious Fraud Office (SFO) might fight back at criticism that it has failed to take action against individuals associated with corporate wrongdoing.
He said: “We assume that SFO will remain focused on this with continued use of DPAs (deferred prosecution agreements) in 2023. Across continental Europe, companies in the financial sector face increasing compliance burdens because of a movement to expand their criminal liability for corruption.”