Earlier this year, Senator Ben Cardin and Representative William Keating presented the The law on the fight against the Russian kleptocracy and in other foreign countries or the CROOK law. If passed, the bill will create an anti-corruption fund to pay fines to victimized countries that will support their anti-corruption institutions. An additional penalty will be imposed for violating the Corrupt Practices Abroad Act (FCPA) to finance the fund. In addition, anti-corruption legislation directs the State Department to organize itself against foreign corruption with an interagency task force. Currently, the Senate version is awaiting consideration by the Senate Foreign Relations Committee, and the House version is awaiting a voice vote.

The CROOK Act deters transnational corporations from doing illicit business, promotes fair and efficient governments, and establishes one of the first systems in which the United States actively supports international anti-corruption practices. In addition, the creation of a fund to support anti-corruption efforts abroad is of major importance as it would encourage rapport and collaboration. As countries around the world strive to establish effective whistleblower programs, the existence of such a fund could help build support for rewards programs.

The CROOK law was first introduced in the House of Representatives in 2019, but failed. The first bill of the House ordered the State Department to establish the Anti-Corruption Fund, and the new house bill does the same. On the other hand, the Senate version orders the Treasury Department to create the fund. Besides this small difference, the new versions in the Senate and in the House largely reintroduce the same bill. Both versions enjoy bipartisan support, but the failure of the bill in 2019 suggests a difficult road.

Foreign corruption destabilizes governments and weakens democratic institutions around the world. The CROOK law eliminates foreign corruption by strengthening FCPA regulations and by returning part of the fines to victim countries. Two strong supporters of the bill Senator Roger Wicker and Ben Cardin State, “Corruption undermines democracy, undermines the rule of law and impedes the efficient and equitable delivery of government services, as evidenced by scandals affecting some pandemic response efforts.” By improving the FCPA, the CROOK Act protects democratic institutions, good governance and fair competition. Passing the CROOK Act would send a clear message of support for whistleblowers outside the United States.

International corruption and other illicit favors weaken the effectiveness of governments, impoverish millions of people and ravage the kleptocracy. Legislation is essential to help fund and diplomatically support regulatory structures in affected countries.

Copyright Kohn, Kohn & Colapinto, LLP 2021. All rights reserved.Review of national legislation, volume XI, number 147

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