The Foreign Service Journal, June 2016

THE FOREIGN SERVICE JOURNAL | JUNE 2016 33 zation for Economic Cooperation and Development’s Anti- Bribery Convention in 1997 and the United Nations Convention Against Corruption in 2003, that require state signatories to adopt similar legislation criminalizing foreign bribery. This has resulted in foreign countries aggressively enforcing anti-corrup- tion laws. Trying to persuade foreign governments to create a trans- parent business environment can be extremely challenging, especially when the local government finances itself through corruption. Trying to work through nongovernmental orga- nizations (NGOs) that seek to expose government corruption creates the risk of alienating the local government. However, the FCPA focuses on the supply side of bribery—i.e., the foreign companies that are paying bribes locally. Advocating compliance with the FCPA makes the point that corruption is a two-way street and requires cooperation between the country of the bribe giver and the country of the bribe receiver. This message is usually much less threatening to foreign governments than hectoring about democracy and human rights. Moreover, foreign companies are often enthusiastic about having their employees trained in the FCPA. Many of them real- ize that having a compliance program that meets international standards gives them a competitive advantage because U.S. and European multinationals will often pay a premium to avoid the anxiety and risk that accompany working with companies that do not practice good business ethics. Russia, for Example Russia provides a good example of how this can all work in practice. While Russia has a long way to go before it can be called a rule-of-law state, there has been some progress at the corporate level, largely because of the FCPA and its progeny. During my time there, I saw the development of an incipient compliance culture. In 2008 no one talked about compliance, and there was no Russian word for it. But by 2013 Russia had adopted a law essentially requiring companies to have compli- ance programs. The current Russian-language version of Wikipedia contains an entry on “komplayens” (in Cyrillic transliteration), which states: “Today, compliance with standards (komplayens) is an area of professional activity that has been brought to Russian organizations by major Western companies.” During the same time, Russia acceded to the OECD Working Group on Bribery and passed legislation to bring itself into conformity with the requirements of the OECD Anti-Bribery Convention. All of this has a real effect on a day-to-day basis. While work- ing at Embassy Moscow, I taught classes on the FCPA for a local law school that offers a U.S. master of laws (LLM) degree. The classes were attended primarily by young Russian lawyers work- ing in Russian companies or law firms, or Russian branches of international companies and law firms. After lectures, students often approached me with questions about the FCPA implica- tions of transactions that they were working on. On several occasions, they told me that they had used what they learned in the course to persuade their clients or employers not to proceed with possibly corrupt transactions. In other words, bribes were not paid because of the FCPA. Since I joined the law firm Baker & McKenzie in 2012, we have frequently been retained by local companies in the former Soviet Union seeking assistance in establishing compliance pro- grams that meet international standards. Some do this because they are listed on U.S. exchanges. Others recognize that having a good compliance programmakes it easier for them to attract foreign partners. Many recognize that anti-corruption compli- ance is good for business: internal controls that prevent bribery also help companies avoid internal fraud and embezzlement and unscrupulous business partners. Spread of the “Compliance” Culture The processes that I have witnessed in Russia and the former Soviet Union are by no means unique. Under the influence of the OECD’s Working Group on Bribery, the U.N. Convention Against Corruption and other international institutions, many other countries that had no concept of anti-corruption compli- ance 10 years ago have now adopted aggressive anti-corruption Advocating compliance with the FCPAmakes the point that corruption is a two-way street and requires cooperation between the country of the bribe giver and the country of the bribe receiver.