Regulators to re-energize enforcement efforts globally
Corporations and individuals will face an increased compliance burden this year, particularly as a result of increased environmental, social and governance expectations, according to a new report.
Hogan Lovells’ annual Global Bribery and Corruption Outlook predicts that 2022 will bring re-energized anti-bribery and corruption enforcement and prosecution activities around the world.
In addition to ESG concerns, other key trends that are reshaping risk include a growing collaboration between regulators, an increased personal liability for directors and technology risks including the criminal misuse of cryptocurrencies.
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“We expect 2022 to bring a renewed focus on enforcement and prosecution activities throughout many parts of the world,” said Stephanie Yonekura, global head of investigations, white collar and fraud at Hogan Lovells. “We also expect to see the continued increase in cross-border cooperation among nations that are committed enforcers, such as the UK and U.S., alongside increased activity from other countries that are building up their anti-bribery and corruption efforts.”
Yonekura added that regulators appear committed to ramping up their anti-corruption enforcement efforts that stalled over the past two years. Aside from financial consequences companies could face devastating reputational damage if an investigation is announced, and directors may be held personally liable, she said.
“There is also a growing body of case law regarding corporate liability for ESG, data and technology risks. Recent trends suggest the future sanctioning of misconduct in these areas may operate like existing ABC laws. Businesses would do well to review their existing compliance programs to ensure they are prepared for these emerging risks,” said Yonekura.
The full Global Bribery & Corruption Outlook report examines enforcement trends across a number of regions. Other key trends outlined in the report include:
• ESG: There is a growing overlap between corruption enforcement and expectations around environmental and social behaviours of large companies. Companies with good anti-corruption compliance procedures should be well-prepared for growing ESG-related compliance obligations.
• EU: In France, a draft law plans to broaden the scope of companies that are subject to Article 17 of the Sapin II Act. At the EU level, regulators are preparing to implement the EU Whistleblower Directive, which provides additional protections for whistleblowers.
• Southeast Asia: In recent times, Asia has been the most frequently implicated region in U.S. FCPA-related bribery schemes. Countries in Southeast Asia are recovering from setbacks of the pandemic and introducing new policies and measures to fight bribery and corruption.
• Latin America: A renewed enforcement push is expected this year, particularly around processes for buying vaccines and supporting vulnerable populations.
• China: The digital evolution of brick-and-mortar retailers driven by the establishment of a cashless payment infrastructure and upgraded logistics networks will give rise to novel compliance risks and challenges.
• Africa: Domestic enforcement of corruption is likely to pick up speed particularly in the more developed economies of Nigeria
The report is co-edited by Hogan Lovells partners Ann Kim and Liam Naidoo.
