A frequent topic of anti-corruption discussions is despite the aims for increased cooperation between US and foreign regulators in the wake of the Siemens case, whether increased visibility of US enforcement actions has in fact led to enforcement actions by regulators outside the United States?
In the case of China, discerning an answer has been difficult.
The resolution of the Control Components case in 2009 provoked a flurry of articles in the Chinese news media including this great cartoon:
The heading reads: “US DOJ releases an announcement showing that a US controlled company admits bribing 36 state-owned enterprise employees.”
The Chinese news articles seemed to suggest that there could be a relationship between published resolutions of FCPA cases and commencement of Chinese anti-corruption investigations. But then nothing seemed to happen. Similarly, the Morgan Stanley disclosure about compliance problems in its China real estate business also resulted in reports of investigation, but without announcements of action enforcement actions following.
So, an open question is whether foreign cases are really leading to government investigations and enforcement actions. A recent on-the-record interview with an official in the Ministry of Supervision’s Foreign Affairs Bureau confirms this relationship does in fact exist.
In an article entitled, “监察部日均查处40件商业贿赂案 部分涉跨国公司” [“Investigation into 40 cases involving commercial bribery shows involvement of multinationals reports Ministry of Supervision”], Kong Xiangren, Deputy Secretary, states:
“We are finding that with many cases, especially those involving multinationals involving in commercial bribery, often it is the US or European local officials who are finding the cases, and that this leads us to attend to and then investigate [PRC] domestic officials – there is a close connection between this [process] and the hidden nature of bribery.”
So, there you have it – Chinese officialdom openly is confirming that the PRC government is in fact following up on (and taking seriously) the reports of US FCPA cases with a China nexus.
