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On Law Enforcement Through Agreements Between the US Regulatory Authorities and Foreign Corporations

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Regulating Corporate Criminal Liability

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Abstract

This chapter is concerned with agreements concluded between the regulatory authorities of the United States (the US) and non-US corporations for the purpose of obliging the latter corporations to comply with the US law. The major instruments are grouped into (1) plea agreements, and (2) deferred prosecution agreements (DPAs) or non-prosecution agreements (NPAs). While they are frequently used by the US authorities these days, they may conflict with the principle of territorial sovereignty, in particular when the law enforcement coerces the corporation to act in violation of the law of the local state. Moreover, such unilateral law enforcement may be regarded as a circumvention of a judicial assistance treaty between the US and the local state, if there is any. This contribution explores relevant scholarly works and cases, including the BAE case and the UBS case, in order to ascertain the justification of these legal instruments. It concludes that they could be best characterized as a supplemental network underlying the current mutual legal assistance regimes. At the same time, unless its law enforcement is supported by legitimacy and transparency, it will be difficult for the US to smoothly enforce its domestic law across the border.

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Notes

  1. 1.

    “Declaration on Principles of International Law Concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations”, Res. 2625, Annex, United Nations General Assembly Official Record, Vol. 25 Supp. (No. 28), U.N. Doc. A/5217, 121 (1970), preamble, para (c).

  2. 2.

    Mann (1964), p. 126; Akehurst (1972), p. 145; Brownlie and Crawford (2012), p. 478.

  3. 3.

    Federal Rules of Criminal Procedure, Rule 11; see Samaha (2010), p. 461.

  4. 4.

    Moohr (2004), p. 165; Garrett (2011), p. 1776.

  5. 5.

    Nanda (2011), p. 71; Garrett (2007), p. 888.

  6. 6.

    US DOJ Office of the Deputy Attorney General, “Memorandum from Mark Filip: Principles of Federal Prosecution of Business Organizations”, 28 August 2008.

  7. 7.

    Ibid.

  8. 8.

    Speedy Trial Act of 1974, 18 USC § 3161 (h)(2).

  9. 9.

    US DOJ Office of the Deputy Attorney General, “Memorandum from Eric Holder: Bringing Criminal Charges against Corporations”, 16 June 1999; ibid, “Memorandum from Larry D. Thompson: Principles of Federal Prosecution of Business Organization”, 20 January 2003; ibid, “Memorandum from Paul J. McNulty: Principles of Federal Prosecution of Business Organization”, 12 December 2006; ibid, “Memorandum from Mark Filip: Principles of Federal Prosecution of Business Organizations”, 28 August 2008. See also Nanda (2011), p. 80.

  10. 10.

    Finder et al. (2009), p. 16; Podgor (2009), p. 1524; Nanda (2011), p. 80.

  11. 11.

    US DOJ Office of the Deputy Attorney General, “Memorandum from Craig S. Morford: Selection and Use of Monitors in Deferred Prosecution Agreements and Non-Prosecution Agreements with Corporations”, March 7, 2008.

  12. 12.

    Ibid.

  13. 13.

    Mann (1984), p. 47; Mann (1964), p. 131.

  14. 14.

    See Hedlund and Dunning (1993), p. 52.

  15. 15.

    McClean (2012), p. 169.

  16. 16.

    Mann (1984), p. 47; Lowenfeld (1996), p. i.

  17. 17.

    Lowe (1981), p. 257; Herzog (1981), p. 381; Névot (1981), p. 421.

  18. 18.

    See American Law Institute (1987), Sec 442(1)(c).

  19. 19.

    Schlosser (1985), p. 42; Schlosser (2000), p. 89, p. 113.

  20. 20.

    Leipold (1989), p. 28, p. 34.

  21. 21.

    Stürner (1986), p. 31.

  22. 22.

    Ibid.

  23. 23.

    Vienna Convention on the Law of Treaties of 1969, adopted on 23 May 1969, entered into force on 27 January 1980, United Nations Treaty Series 1155: p. 331.

  24. 24.

    Stadler (1989), p. 1; Stiefel et al. (1991), p. 779.

  25. 25.

    Stürner (1982), p. 159.

  26. 26.

    Ibid.

  27. 27.

    Report of the U.S. Delegation to the Eleventh Session of the Hague Conference on Private International Law (1969), International Legal Materials 8: p. 785.

  28. 28.

    Smith and Parling (2012), p. 245.

  29. 29.

    Laufer (2006), p. 5.

  30. 30.

    2011 Federal Sentencing Guidelines Manual §8B2.1.

  31. 31.

    Zagaris (2010), p. 1; Boister (2012), p. 112.

  32. 32.

    Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, adopted on 21 November 1997.

  33. 33.

    United Nations Convention on Transnational Organized Crime adopted on 15 November 2000, entry into force on 29 September 2003, United Nations Treaty Series, vol. 2225, p. 209.

  34. 34.

    Convention on Mutual Administrative Assistance in Tax Matters, adopted on 25 January 1988.

  35. 35.

    See OECD Guidelines for Multinational Enterprises, 2011 Update, 25 May 2011.

  36. 36.

    See for example, United States Model Income Tax Convention, 15 November 2006, Article 26, available at http://www.irs.gov/pub/irs-trty/model006.pdf (20.11.2013).

  37. 37.

    US v. UBS AG, Deferred Prosecution Agreement, Case 0:09-cr-60033-JIC Document 20 Entered on FLSD Docket, February 18, 2009.

  38. 38.

    Ibid, para 6.

  39. 39.

    See “Amicus Brief of Government of Switzerland”, filed on April 30, 2009; US DOJ, “Memorandum of Law in Support of Petition to Enforce “John Doe” Summons,” June 30, 2009.

  40. 40.

    Nanda (2011), p. 83; Garrett (2011), p. 1815.

  41. 41.

    Bassiouni (2012), p. 27.

  42. 42.

    Smith and Parling (2012), p. 245; Garrett (2011), p. 1840.

  43. 43.

    Anti-terrorism, Crime and Security Act 2001 c.24, Sec 107.

  44. 44.

    Garrett (2011), p. 1840; Smith and Parling (2012), p. 245.

  45. 45.

    High Court of Justice [2008] EWHC 714 (Admin), Case No: CO/1567/2007, 10 April 2008.

  46. 46.

    House of Lords [2008] UKHL 60.

  47. 47.

    US v. BAE Systems plc, “United States Sentencing Memorandum”, Case 1:10-cr-00035-JDB, Filed on February 22, 2010, p. 2.

  48. 48.

    US DOJ, Plea Agreement “Re: United States v. BAE Systems plc”, February 4, 2010, available at http://www.justice.gov/opa/pr/2010/March/10-crm-209.html (12.2.2014).

  49. 49.

    Ibid, para 12.

  50. 50.

    Garrett (2011), p. 1842.

  51. 51.

    Foreign Account Tax Compliance Act, 26 USC §§ 1471–1474, 26 USC § 6038D.

  52. 52.

    Jolly (2013).

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Acknowledgment

The author thanks Thomas Richter for his advice on this contribution.

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Authors and Affiliations

  1. National Defense Academy of Japan, Kanagawa, Japan

    Yurika Ishii

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  1. Yurika Ishii
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Correspondence to Yurika Ishii .

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Editors and Affiliations

  1. Faculty of Law, LMU Munich, Munich, Germany

    Dominik Brodowski

  2. ROXIN Rechtsanwälte LLP, München, Germany

    Manuel Espinoza de los Monteros de la Parra

  3. University of Fribourg, Fribourg, Germany

    Klaus Tiedemann

  4. Faculty of Law, LMU Munich, Munich, Germany

    Joachim Vogel

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Ishii, Y. (2014). On Law Enforcement Through Agreements Between the US Regulatory Authorities and Foreign Corporations. In: Brodowski, D., Espinoza de los Monteros de la Parra, M., Tiedemann, K., Vogel, J. (eds) Regulating Corporate Criminal Liability. Springer, Cham. https://doi.org/10.1007/978-3-319-05993-8_19

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