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Europe gets a grip on graft

Shift in thought

Even as the EU sets a new standard on digital privacy, it is playing catch-up with the US in preventing bribery of its firms overseas. Together, the US and EU can raise anti-corruption standards.

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A TV crew works outside the Popular Party's headquarters in Madrid, Spain, May 24, after the National Court issued hefty prison sentences for politicians and businesspeople involved in a kickbacks-for-contra­cts scheme that helped fund the ruling party.

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One of the healthy competitions between Europe and the United States is over which one can set a new global standard. On May 25, the European Union began to win on one standard – digital privacy – with the start of stiff rules on how companies handle personal data. The impact, though limited to firms operating in Europe, is being felt globally.

In another type of standard, however, Europe has only begun to compete with the US.

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Corruption still pervades many countries on the Continent. The latest example is the May 24 sentencing of 29 people in Spain’s ruling Popular Party related to a massive scheme involving kickbacks. Another is the alleged bribery of members of the Council of Europe’s parliamentary assembly by Azerbaijan for remaining silent on discussions of human rights violations in that Central Asian country.

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Yet one by one, more European nations from Ireland to Slovakia are tightening enforcement of anti-graft rules, especially against companies that operate overseas. For years, many governments have turned a blind eye toward bribery of foreign officials on a dubious assumption that their domestic firms might lose business.

In France, for example, people were shocked in April when a powerful businessman, Vincent Bolloré, was held in jail and questioned over suspected graft in Africa. The move, however, is the result of what is considered a cultural revolution in France. A new law that took effect last year, known as Sapin II, set up a new anti-corruption agency and gives prosecutors new tools to deal with corporate corruption abroad. At least three companies have already settled with the new agency in cases involving bribery of a foreign official.

The new French law is similar to Britain’s Bribery Act of 2010, which itself is based on a ground-breaking law in the US, the Foreign Corrupt Practices Act of 1977. The US law has been effective in catching many European companies, an embarrassment that has proved an incentive for EU member states to toughen up their own laws. Germany, for example, has cracked down on its firms after the US settled a case with the German engineering firm Siemens in 2008. 

With each new anti-graft law in Europe, the US finds it easier to work with European officials on cases of transnational corruption. On both sides of the Atlantic, governments are rising to higher standards of honesty, transparency, and accountability. Together, they may ultimately set a new global standard.