The Foreign Corrupt Practices Act only applies to those making bribes. It does not apply to the recipients of bribes. Since the recipient must be a “foreign official” you run into the issue of “diplomatic immunity.” Richard Cassin looked at one of the approaches to taking actions against the kleptocrats in Proclamation 7750 Unwrapped on The FCPA Blog.
The concept of diplomatic immunity is that officials should only be held accountable to the laws in their home state. We would not want our officials being courted off to a foreign country for prosecution. Other countries should not expect their officials to be courted off to the U.S. for prosecution. I am sure you have seen an episode of Law & Order or Lethal Weapon 2 where a criminal runs free under diplomatic immunity.
It should not surprise you that there is a correlation between parking violations scofflaws under diplomatic immunity and the corruption in their home country. Ray Fishman and Edward Miguel published a paper researching parking violations and diplomatic immunity in New York City.
The Clinton-Schumer Amendment, which gave the New York City permission to tow diplomatic vehicles, revoke their official parking permits, and have 110 percent of the total amount due paid from U.S. government aid to the offending diplomats’ countries of origin, resulted in a substantial decrease in diplomatic parking scofflaws.
The authors also found that there is strong correlation between the affinity for the U.S. and the diplomat’s home country.
Here is the top ten from the study:
- KUWAIT
- EGYPT
- CHAD
- SUDAN
- BULGARIA
- MOZAMBIQUE
- ALBANIA
- ANGOLA
- SENEGAL
- PAKISTAN
Most of these are well known for corruption. It seems these countries also export their corruption.
See:
- Cornering the Kleptocrats, Part I by Richard Cassin on The FCPA Blog
- Proclamation 7750 Unwrapped by Richard Cassin on The FCPA Blog
- Diplomatic immunity – wikipedia
- Cultures of Corruption: Evidence from Diplomatic Parking Tickets (.pdf) by Ray Fishman and Edward Miguel (2006)
- Vienna Convention on Diplomatic Relations of 1961
- Legal Aspects of Diplomatic Immunity and Privileges published by the U.S. Department of State
- Fake parking ticket image is from andy54321 on flickr under creative commons
Doug:
Nice interweaving of Cassin’s recent pieces with the parking study.
Daniel
Daniel –
Cassin got me thinking about ways to deal with foreign officials and I ended up going down this tangent. It seemed interesting and came together.
To me the study shows how a culture of corruption exists with countries. I would bet you could extend some of the paradigm to companies with flawed ethical cultures as well.