The over- and under-enforcement of anti-corruption law in investment disputes and international development
Andrew T Bulovsky Associate, Freshfields Bruckhaus Deringer US LLP, Washington, DC, USA

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Since the early 2000s, anti-corruption enforcement has become increasingly entangled with international investment. This entanglement has created a paradox: the simultaneous over- and under-enforcement of anti-corruption law. Over-enforcement occurs when authorities from multiple jurisdictions subject companies to duplicative enforcement actions and disproportionate penalties for the same underlying conduct. Under-enforcement occurs when local courts and arbitral tribunals insulate the demand side of corruption from liability by failing to exercise jurisdiction over corruption-tainted disputes. Both over- and under-enforcement result in part from unilateralism, whereby States pursue their own interests at the expense of international legal objectives. The over- and under-enforcement of international anti-corruption law undermines anti-corruption law itself, makes investment riskier in developing States and inhibits developmental objectives. To correct for over-enforcement, this article proposes formal commitments from States that the State with the strongest jurisdictional ties to a corruption scandal retains investigative priority. To correct for under-enforcement, this article suggests that local courts and arbitral tribunals invoke equitable estoppel to accept jurisdiction over corruption-tainted disputes and use a contributory-fault approach to hold both the supply side and the demand side of corruption accountable. These solutions would likely prove efficacious in agreements between States and contracts between States and potential investors. Ultimately, this article frames anti-corruption enforcement trends in the context of unilateralism and discusses practicable solutions for a more proportional anti-corruption law regime.

Contributor Notes

The author would like to thank Professor Timothy Dickinson for his continued mentorship, guidance and friendship; and the journal's editors and reviewers for their insightful edits to this article. The views expressed in this article are the author's own and do not necessarily reflect the views of Freshfields Bruckhaus Deringer US LLP.

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