Hogan Lovells Bribery and Corruption Outlook reveals uptick in enforcement actions and record fines around the world

London and Washington, D.C., 12 February 2019 – Hogan Lovells has today published its annual Global Bribery and Corruption Outlook, exploring the global trends in anti-bribery and corruption regulation and enforcement, and outlining developments to watch out for in 2019. The exclusive analysis, edited by Hogan Lovells partners Lillian S. Hardy and Desiree Maier reveals that regulators around the world are increasingly using heavier penalties and longer sentences to crack down on bribery and corruption.

The United States has long led the way in policing bribery-related offences, and this continued in 2018, with an 80% increase in the total monetary value of fines to over $6bn. Fines also increased in Singapore (25%). Whilst the UK, Brazil and Hong Kong all saw a reduction in the total value of fines imposed in 2018 this was simply a reflection of some of the biggest corporate fines ever imposed landing in 2017. Significant fines were also issued in Europe (e.g. in Germany individual fines of up to $1bn).

Demonstrating regulators' increased level of scrutiny, enforcement agencies also handed longer sentences in 2018. In the US, prison sentences for bribery and corruption peaked, with an average out length of approx. five years. The UK saw a similar pattern, while in Singapore individual prison sentences more than tripled from an average of approx. one year in 2017 to four years in 2018. 

New industries are also coming under more scrutiny. In particular, the report showed huge increases in the energy sector (up 1600% compared to 2017), and this trend is likely spread to the TMT, life sciences and transport sectors over the next few years. 

There were also more settlements, with deferred prosecution agreements (DPAs) becoming a powerful tool for enforcement agencies. The Department of Justice (DoJ) has long used DPAs to resolve corporate cases, and other jurisdictions are now following suit. The UK launched DPAs in 2014 and has had four DPAs since. France introduced its equivalent – a judicial agreement in the public interest, or CJIP (convention judicaire d’intérêt public) — in 2016. In Italy, reforms have led to growing cooperation with enforcement authorities. In 2013, Brazil introduced its own leniency agreements in corruption investigations, which followed the local antitrust leniency agreement. Germany also plans legislation to introduce similar measures in due course. 

Looking ahead, the report also outlines the top trends companies should watch out for in 2019, including the following:

• Enforcement: In 2019 we are likely to see a further emphasis on individual accountability, and even higher fines. 

• Settlements: With Germany planning to issue a draft bill on DPAs, and growing take-up across the UK and elsewhere, it is clear DPAs are here to stay. 

• Privilege in internal investigations: While the landmark UK Court of Appeal victory secured by Hogan Lovells for its client ENRC restored the previous status quo, businesses must still approach privilege in internal and external investigations with care. Privilege protection varies by jurisdiction so documents in one jurisdiction may not have the same protection elsewhere. 

• Data: This is an increasing area of concern for regulators across the world. With the implementation of new regulations such as the GDPR, businesses should stay abreast of relevant data developments, which may impact on anti-bribery due diligence in cross-border cases of bribery and corruption. 

Crispin Rapinet, Global Head of the Hogan Lovells Investigations, White Collar and Fraud practice, said: "It is clear that regulators outside the US are paying greater attention on bribery and corruption and looking to create a safer, more robust and more transparent system. Record fines highlight the need for continuous ABC compliance across a range of jurisdictions and industries." 

The Global Bribery and Corruption Outlook 2019 is available here. The firm also has an online Bribery and Corruption portal, which is available here


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