Diligencing corruption risk in M&A

Global economic growth, convenient travel and technological evolution has propelled cross-border M&A to new heights as companies look to expand and enter into new markets. And as more deals take place, governments around the world are stepping up to tighten commercial conduct regulations. In Europe alone, an estimated €990 billion is lost in the economy every year due to bribery activities. Global anti-corruption enforcement is at its peak, and it is unlikely to recede any time soon.

The number of investigations under the U.S. Foreign Corrupt Practices Act (FCPA), together with the number of prosecutions and enforcement actions taken by the U.S. Department of Justice (DOJ) and the U.S. Securities & Exchange Commission (SEC), has increased dramatically in recent years. Huge fines are being imposed. Investors have also witnessed the extra-jurisdictional reach of the UK Bribery Act. And, on the other side of the world, China is carrying out a country-wide anti-corruption campaign against so-called “tigers and flies,” or corrupt state officials. The Chinese government is also closely working with foreign countries to recover assets gained from illicit activities.