Asia dominates US probes into transnational corporate corruption

US regulators are conducting more transnational corporate corruption investigations in Asia, including Hong Kong and China, than in other regions, a study by an international law firm has found.

Asia is the centre of America's enforcement of its Foreign Corrupt Practices Act, with at least 115 pending FCPA investigations under way, more than twice as many as any other region, according to the study by Freshfields Bruckhaus Deringer. Africa had at least 44 FCPA investigations under way, while the European Union faced only 19.

"The number of international companies exposed to the extraterritorial jurisdiction of US regulators is set to skyrocket, as those companies access US capital markets or structure investments in ways that attract US jurisdiction," said William Robinson, a Freshfields global investigation partner based in Hong Kong. "US enforcement activity abroad will also rise accordingly."

A lawyer with another law firm, who declined to be named, said there was "ample reason to expect US law enforcement scrutiny may impact the Asian financial sector, including Hong Kong".

"Large international banks remain in the sights of US law enforcement, as we see ongoing investigations along with the announcement of increasingly frequent deferred prosecution agreements with hefty fines against financial institutions," the lawyer said. "Allegations in those cases run from abetting tax fraud to money laundering to sanctions violations."

The US Federal Bureau of Investigation and US Justice Department have established three international corruption squads targeting foreign bribery and kleptocracy around the world, the FBI said in a statement posted on its website on March 30. The FBI said it was working with the US Justice Department's fraud section, which prosecutes FCPA violators, and the US Securities and Exchange Commission, which uses civil action to prosecute US companies engaging in foreign bribery. "Partnerships with our overseas law enforcement counterparts are an important part of our investigative arsenal," it said.