Joseph Brand, a veteran international law partner at Patton Boggs LLP, has closely watched the Foreign Corrupt Practices Act evolve from its hotly debated origins more than 30 years ago to become a statute that he says is now “virtually the law of world.’’
Brand has spent much of his career representing clients overseas. In a video interview with Just Anti-Corruption, he recounted how the U.S. international anti-bribery statute became the model for a worldwide network of anti-corruption laws targeting business transactions. “I think this has been a success story,’’ he said.
In the United States, extraterritorial laws like the FCPA are being adopted with far less controversy than in 1977, when FCPA proponents had to overcome resistance from lawmakers fearful of giving overseas companies a competitive advantage. It was a period, Brand recalled, when senators like William Proxmire, the gadfly Democrat of Wisconsin, promised that if the law passed, the United States would pressure its trading partners to enact similar statutes.
The law passed. But the effort to persuade other countries to adopt similar statutes took more than two decades.
Brand said that in the years since the passage of the FCPA, extraterritorial laws have become far less controversial in Congress – a measure of the widespread acceptance by both political parties of the concept of exporting American ethical standards overseas, via federal laws which are being enforced with tough civil and criminal penalties.
As an example of how the climate has changed, Brand cited the recently enacted Dodd-Frank financial regulatory law. Among other provisions, Dodd-Frank requires oil, gas and mining industries to disclose to the Securities and Exchange Commission virtually of all their payments, bonuses and fees to foreign governments.
The amendment, all but lost in the sea of regulations adopted in the aftermath of the Wall Street meltdown, was opposed by the affected industries. It stirred little controversy. “Where was the debate on the law?’’ asked Brand. “There was none. Many of the extractive industries felt that was not fair play.’’
Brand has a wealth of experience in international law. He has traveled to more than 90 countries, representing foreign states and corporate clients in areas like government regulation, finance, trade and governance issues. He is a former vice chairman of the board of George Washington University and is a member of the Board of Trustees of the American University of Sharjah in the United Arab Emirates.
Brand said he expects the United States will continue to forcefully apply its laws and ethical standards abroad and that American and foreign companies will work hard to comply. Though he said some companies regard the FCPA as “an annoyance and an expense,’’ most realize their compliance is the price tag for doing business in the United States, still the world’s biggest economy.
But he cautioned that there may come a time when other countries might turn the tables on the United States. “By 2050 China and India will together have one half the world’s GDP,’’ he said. “You have to ask yourself, have they learned from us about enacting extraterritorial jurisdiction?’’ He added, “Will our people and our corporations be happy to march to their drumbeat in 2050? I think the jury is still out on that question.”