In “Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest” (the “Memorandum”) President Biden declared that his Administration “will lead efforts to promote good governance; bring transparency to the United States and global financial systems; prevent and combat corruption at home and abroad; and make it increasingly difficult for corrupt actors to shield their activities
.” The memorandum calls for an interagency review process and development of a strategy bolstering the ability of the US Government to prevent and combat corruption.
The Memorandum emphasizes a link between corruption and money laundering and stresses the need to combat illicit finance in international financial systems, importance of beneficial ownership reporting and reducing financial secrecy of offshore jurisdictions.
The Memorandum highlights the importance of international cooperation in a number of fields, including information sharing, coordinated sanctions actions, and cross-border enforcement. It further outlines plans for increased collaboration with international partners to address corruption by foreign leaders and foreign state-owned enterprises with the focus on demand-side bribery, including, specifically, in development finance projects.
Specific recommendations and further action will follow the completion of the interagency review, but it is clear that this Administration is set on aggressive fight against corruption and is prioritizing enforcement. Corruption, being defined as a national security threat, warrants serious commitment and vigorous work by various government bodies and their foreign counterparts. The US Department of Justice, and in particular its Criminal Division, may focus more on proactive investigation methods and be more motivated to reach out and cooperate with foreign governments. As a result, we anticipate more investigations under the Foreign Corrupt Practices Act (“FCPA”) and increase in cross-border enforcement actions.
Many Israeli companies, by virtue of conducting their business in the US, or being listed on stock exchanges in the US, or having another jurisdictional nexus to the US, are subject to FCPA requirements and should be aware of these changes in the enforcement landscape and be sensitive to heightened anti-corruption enforcement risks. In addition, increasing anti-corruption and anti-money laundering enforcement in the US will likely heightened enforcement by regulators in other jurisdictions, including Europe and Israel. Under these circumstances, it may be timely to review and evaluate the existing compliance programs and their effective implementation.
The White House, Memorandumon Establishing the Fight Against Corruption as a Core United States National Security Interest
(June 3, 2021), https://www.whitehouse.gov/briefing-room/presidential-actions/2021/06/03/memorandum-on-establishing-the-fight-against-corruption-as-a-core-united-states-national-security-interest/.