Bureau of Economic and Business Affairs
January 30, 2013

The meeting was open to the public. The meeting room was at capacity with individuals from the membership, general public and media.

Committee Chairman Theodore Kassinger of O'Melveny & Myers, LLP, opened the meeting of the Advisory Committee on International Economic Policy (ACIEP) and welcomed members and other participants.

The meeting focused on the continued institutionalization at the State Department of the Economic Statecraft initiative and on the thematic topic: "Recent Developments Regarding Implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions."

Assistant Secretary of State for Economic and Business Affairs (EB) Jose W. Fernandez led the discussion of the Economic Statecraft Initiative. Assistant Secretary Fernandez underscored the United States' continued global leadership as critical to the vitality of the U.S. economy. The State Department has an important role to play by championing a level playing field for U.S. businesses abroad and attracting foreign investment to the United States. The Economic and Business Affairs Bureau has taken the lead in implementing Economic Statecraft, realizing progress in many areas, including investment, fiscal transparency, entrepreneurship, corporate social responsibility, civil aviation, and intellectual property protection.

Assistant Secretary Fernandez then directed the discussion to the thematic topic, noting that the U.S. government is taking important steps to support implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Anti-Bribery Convention). U.S. Department of Justice (DOJ) Assistant Attorney General Lanny A. Breuer talked about the Obama Administration's approach to enforcement of anti-bribery laws and provided comments on the new Resource Guide on the FCPA. U.S. Department of Commerce (DOC) General Counsel Cameron F. Kerry gave an overview of implications of enforcement of the FCPA for companies and U.S. efforts to bring other countries into membership under the Anti-Bribery Convention.

Matters noted during the ACIEP member discussion:

The Anti- Bribery Convention entered into force in 1999 and has grown to include 40 countries today. U.S. government inter-agency efforts are directed at furthering the United States' foreign economic policy goal of providing a level playing field for businesses globally through strict implementation of the Anti- Bribery Convention. The OECD Working Group on Bribery plays the key role of monitoring implementation of the Anti- Bribery Convention.

The Foreign Corrupt Practices Act (FCPA) is the U.S. domestic legislation that implements the Anti- Bribery Convention. The FCPA has been increasingly effective as a law enforcement tool. It is up to all relevant agencies of the U.S. government and the private sector to make sure the Anti- Bribery Convention becomes a global standard for how to do business. The Resource Guide on the FCPA is a key tool to help the private sector understand U.S. government expectations relating to compliance with the FCPA.

The United States first criminalized bribery by U.S. companies and individuals overseas in 1977. The FCPA was a response to a scandal involving high-ranking officials overseas. Yet for 22 years, the United States was basically alone in prohibiting bribery overseas by its companies.

Reference was made to the OECD Working Group on Bribery meetings in Paris, which review how countries are implementing the Convention. It was noted that United States has been disappointed in the enforcement records of several Parties, as those records are described in the 2011 annual report of the Working Group. Japan, a very large exporter and investor overseas, has registered only two foreign bribery convictions; Sweden, home to several major multinational companies, has convicted only two individuals over the past 10 years; Australia, Austria, the Netherlands, and Spain have no convictions; and Canada, at the time of its Phase 3 review in March 2011, had just one conviction of a company. However, on the other hand, the same annual report for the United States lists 58 convictions of individuals and 28 companies. Germany has 14 convictions of individuals, and sanctioned 59 individuals in total. Transparency International also cited other countries, including Italy, Norway, Denmark, the UK, and Switzerland as active enforcers.

It was noted that the vast majority of U.S. companies are outstanding corporate citizens that adhere to the law and engage in strong corporate social responsibility practices. The United States is determined to use the peer review process of the OECD Working Group on Bribery to pressure other countries to be diligent in investigating and prosecuting their companies that employ bribery and other corrupt practices.

The Obama Administration has placed a high priority on fighting corrupt practices by foreign officials and companies doing business overseas. The Anti-Bribery Convention and the OECD are central to the U.S. government's anti-corruption efforts. The United States was one of the first countries to undertake a Phase III review under the Anti-Bribery Convention, based on a decision by the United States' government to be as transparent as possible, which has encouraged other countries. For example, Russia recently acceded to the Anti-Bribery Convention, and it adopted a new anti-bribery statute. The Department of Justice has created the new Resource Guide on the FCPA, which is the result of a coordinated effort by DOJ and the Securities and Exchange Commission.

Bribery is a barrier to trade, is relatively invisible and under-reported, distorting share value and governance in countries where it occurs. Companies with good FCPA compliance programs also generally have good corporate ethics programs; many of these companies are well-managed global brands. The DOC works with OECD member states and other trading partners, to encourage those governments to enhance enforcement of their anti-bribery laws. During the United States' presidency of the G-20, the U.S. government included in the agenda as a deliverable on anti-corruption, which resulted in a new G-20 anti-corruption working group. In bilateral discussions, the U.S. government underscores to other nations that they cannot have a "double-standard" with tough anti-corruption laws and enforcement at home, but weak or non-existent laws or enforcement in relation to their companies' activities abroad. The U.S. continues to press for China's accession to the Convention. When he visited Ghana in July 2009, President Obama underscored the impact of bribery and corruption not just on investment but also on development and poverty reduction.

The U.S. government does not seek to prosecute companies that act in good faith to meet host government conditions, but rather focuses on clear cases involving bribery. U.S. companies with specific questions about whether prospective conduct is consistent with the FCPA should consider using the DOJ Opinion Procedure. Under the FCPA, DOJ is required to provide a binding advisory opinion to persons/companies that provide complete information to DOJ about future conduct that might violate the FCPA

In response to a comment recommending further outreach and training by U.S. government officials to educate US persons doing business overseas about the FCPA and the Convention, it was noted that the State Department, working with DOC, DOJ, and the staff of the SEC other agencies, has issued guidance to political, economic and commercial service officers at U.S. embassies around the world, on anticorruption issues, including on raising corruption issues with host country governments. In addition, the DOJ and SEC speak regularly to the public about anti-corruption and provides clarity to the discussion about the FCPA. Business has the key role in familiarizing the U.S. private sector with the FCPA. DOC provides general information and materials on the statute, but its officials cannot provide specific advice on compliance with the FCPA.

While the U.S. government does not generally have jurisdiction over foreign government officials, the U.S. government makes substantial efforts to ensure that the United States does not become a haven for the ill-gotten gains of such foreign officials. The response from OECD states regarding the new Resource Guide has been fairly positive, because the guide is rigorous and specific in its content and approach. The United States can use the Domestic Finance for Development (DF4D) process to help other countries enhance administration of their anti-corruption and transparency efforts.

Subcommittee reports:

Stakeholder Advisory Board (SAB) for the U.S. NCP: The Co-chairs summarized the SAB's November 20, 2012 meeting, during which the National Contact points (NCPs) from the Netherlands, UK, and Norway discussed via teleconference their procedures for handling specific instances; and the U.S. NCP's presentation on the Proactive Agenda at the January 9th meeting. At the February 12th SAB meeting the UK NCP will respond to further questions about his office's operations and the U.S. government Interagency Working Group (IWG) for the U.S. NCP will brief the SAB about the group's engagement with the U.S. NCP. An ACIEP member stated that she was pleased to see that the U.S. NCP office was more active than in the past, but that she recommended that a permanent full-time staff member with adequate resources is designated for the job in the future.

Sanctions Subcommittee: The Chair reported on the subcommittee's meeting on November 19, 2012, at Georgetown University Law Center attended by Deputy Assistant Secretary Peter Harrell and Adam Szubin of the Department of the Treasury’s Office of Foreign Assets Control. The meeting focused on new Iran sanctions and the easing of sanctions in relation to Burma.

Subcommittee on Women in International Economic Policy: The Co-Chairs discussed their proposal, launched at the April 2012 ACIEP, to explore the possibility of undertaking another survey of studies, this time on the most successful programs and best practices for the promotion of women in the Middle East.

Investment Subcommittee: The Co-chair discussed the subcommittee's January 11 meeting during which the State Department's Economic and Business Affairs Bureau Principal Deputy Assistant Secretary Deborah McCarthy and a representative from the Office of the U.S. Trade Representative provided a briefing and responded to questions regarding Bilateral Investment Treaty (BIT) negotiations. ACIEP Chair Ted Kassinger asked the Investment Subcommittee to provide ACIEP with recommendations on the State Department's further engagement on issues of State-Owned Enterprises.

At the conclusion of the subcommittee reports discussion, ACIEP Chairman Ted Kassinger thanked the participants and adjourned the meeting, noting that the State Department would soon provide ACIEP members with the schedule for future meetings in 2013.