Since his first day in office, Secretary of State John F. Kerry has maintained that economic policy is foreign policy and vice versa. This principle recognizes that the bellwether for a country's success depends squarely on the soundness of its economic policies and whether it allows businesses - within and without its borders - to operate in environments of transparency, consistency, and predictability.
Combating corruption is critical to establishing and maintaining such environments. Corruption poses a major threat to global prosperity and it undermines the rule of law, government institutions, and human dignity. The World Bank has estimated that $1 trillion of transactions worldwide are tainted by bribery each year.
The United States has been robustly engaged on a wide variety of fronts to address corruption, from legislative efforts at home, to foreign assistance and bilateral and multilateral diplomacy. But while governments can take a leading role in addressing corruption, other stakeholders also need to step forward, including civil society organizations, businesses, the media, and ordinary citizens, so we can collectively take action to fight the root causes of graft.
That is why, as we mark International Anti-Corruption Day, I want to bring attention to a critical weapon that is gaining recognition in the fight against corruption. This is the principle of corporate liability, which can play a key part in ensuring international business is conducted in an aboveboard manner, free of corruption and bribery.
Corporate liability ensures that companies and corporations can be held responsible for the illegal actions of their employees. In other words, companies can be held just as liable for wrongdoing as the individual officers, employees, or agents involved in the offense.
When a legal system embraces corporate liability, the effects can be profound. For example, in the United States, the U.S. Foreign Corrupt Practices Act (FCPA) authorizes regulators, including the Department of Justice and Securities and Exchange Commission, to hold corporations liable when their employees engage in foreign bribery.
Because corporations are on the hook for the actions of their employees, they have a real incentive to discourage employees from engaging in bribery or other corrupt behavior. In effect, this makes corporations themselves instrumental agents in the fight against foreign bribery.
In addition to our country's enforcement of the FCPA, I am pleased to note that because of the Anti-Bribery Convention - the world's foremost international agreement to address foreign bribery - and the peer review of the Organization for Economic Cooperation and Development (OECD) Working Group on Bribery, many countries have adopted corporate liability laws for the first time.
This is real progress considering that 16 of the 41 Convention Parties had no established system for corporate liability prior to the Convention. And while the Convention obligates its Parties to establish corporate liability only for bribery of a foreign public official, many Parties have either adopted a broader form of corporate liability, or started with foreign bribery and then widened the scope.
These developments are helping to foster greater corporate responsibility in a range of areas, including environmental, tax, competition, and customs law. And thanks to the concerted efforts of the United States and the other Parties of the OECD Anti-Bribery Convention, we are deterring crime and allowing more businesses to do what they do best: create jobs and economic opportunity around the world.