Journalists around the world no doubt read deep meaning into Sunday’s final edition of UK tabloid News of the World. But according to corporate-corruption expert Alexandra Wrage, the News Corp scandal should send a message to all companies doing business in multiple jurisdictions: shore up your compliance programs or be ready to face multi-jurisdictional consequences.
Wrage, president of Annapolis, MD-based TRACE, a non-profit anti-bribery compliance organization, says more and more multinational organizations are going to be faced with multi-jurisdictional compliance issues going forward. She says that News Corp’s alleged bribing of public officials is emblematic; companies paying a bribe in one country can expect more than ever that they’ll face enforcement actions in two, three, or more countries.
“I’m trying to find new ways to impress upon companies why it’s important that they avoid bribery risk of any kind,” says Wrage. “But increasingly what gets their attention is the fact that these cases have an almost unlimited shelf life.”
Wrage says that countries that have traditionally not taken action against bribery are increasingly piggy-backing onto other countries’ actions. “If you are a country under huge pressure to bring an anti-bribery case, but you have fairly underdeveloped prosecutorial service and very few resources,” she says, “it is much easier for you to go after a company that has already settled in another country than for you to investigate and establish a case for yourself.”
Wrage says News Corp faces actions not only in the United States (where the company is incorporated) and the UK (where the alleged wrongdoing occurred), but also in Australia because of its secondary stock listing.
“Australia could bring an SEC-like action for books and records violations, assuming the payments were made and assuming they were not accounted for as bribes—which they never are,” notes Wrage.
via Another Lesson of News Corp Scandal: Beware Multi-Jurisdictional Bribery.
