20 Jan 2022

Global graft enforcement set to rise as regulators revive anti-corruption efforts

Compliance burden also likely to increase around ESG issues, says Hogan Lovells

Handcuffs, Arrest, White Collar Crime.

Billion Photos; Shutterstock

Anti-bribery and corruption enforcement and prosecution activities are expected to increase globally in 2022 after regulatory efforts stalled amid the coronavirus pandemic, according to a new report by Hogan Lovells.

The annual Global Bribery and Corruption Outlook predicts that regulators on both sides of the Atlantic will ramp up their anti-corruption focus this year, adding to the compliance burden on corporates and individuals amid heightened environmental, social and governance (ESG) requirements. 

Stephanie Yonekura, global head of investigations for white collar and fraud at Hogan Lovells, said: “We expect 2022 to bring a renewed focus on enforcement and prosecution activities throughout many parts of the world. We also expect to see the continued increase in cross-border cooperation among nations that are committed enforcers, such as the UK and US, alongside increased activity from other countries that are building up their anti-bribery and corruption efforts.”

In addition to that growing collaboration between regulators, the report also forecasts an increase in personal liability for directors as well as technology risks such as criminal misuse of cryptocurrencies. 

Yonekura said: “Financial consequences aside, companies could face devastating reputational damage if an investigation is announced, and directors may be held personally liable. 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 programmes to ensure they are prepared for these emerging risks.”

In the US, the Biden administration’s strategy on countering corruption indicates the US government is prepared to make available more resources to tackle the problem. For instance, the strategy calls for the Department of Justice to employ new tools to prosecute money laundering and aggressively enforce the Foreign Corrupt Practices Act, said Ann Kim, a litigation partner at Hogan Lovells in Los Angeles.

Meantime in the UK, the Serious Fraud Office (SFO) is likely to fight back against criticism that it has failed to successfully prosecute individuals associated with corporate wrongdoing, according to Liam Naidoo, a partner at Hogan Lovells.

He said: “We expect the SFO to focus on this while continuing to use DPAs (deferred prosecution agreements) in the coming year. In continental Europe, there is a movement to expand corporate criminal liability for corruption potentially exposing companies to an increased compliance burden.”