Alina Mungiu-Pippidi
The action of US President Donald Trump to halt the enforcement of the Foreign Corruption Practice Act (FCPA) can be easily understood if one looks at this map:
At first sight, yes, US companies were at a great disadvantage because they could not bribe abroad – hence the largest number of convictions related to them. But check the table on the right, and the situation changes. While the enforcement started with US companies, it caught up in later years and hit massively the European competitors of the US. Just think of Airbus, who settled not to get a conviction, confessing to twenty years of malpractice. Europeans still claim this was a US plot to help Boeing. FCPA may have applied to the US only for the first decades, but then it gradually extended its jurisdiction to everyone with a USD account. Just compute the total number of convictions of European countries in the table (we are no match for the US taken one by one), and you will discover that in recent years, Europe has caught up. Even high-reputation countries in the Corruption Perception Index (which measures reputation), like Sweden, had to confess and pay huge fines. The law was levelling the field – by moving the standards up. But for a superficial observer, US was at a big (historical) disadvantage still- so why not turn history back. Due to US efforts to make it adopted, the OECD anti-bribery convention is still there, so no, it’s not legal again to bribe. It’s just that enforcement has ceased, and we can now rival the Chinese in bribes again.
“It’s going to mean a lot more business for America,” Trump said when signing the executive order on Monday.
Do you want a bet? Besides punishing honest US companies and all the companies in the world, which paid expensively to comply with anti-bribery regulations, this decision will not bring more business to the US. It may lower the global value of bribes, however, now that more competitors for the favours of corrupt governments exist while abandoning any pretence of the moral superiority of the West. And how much time will pass before the empowered foreign kleptocrats buy openly favors in the DC market, as they used to do before Watergate?