illegalCriminals love borders.  In many an old Hollywood movie, the bad guys escape over the border to another state or country after robbing a bank or completing a jewel heist.  In real life, heinous murderers and other hardened criminals routinely flee to a country where they hope extradition treaties don’t apply.  Film director Roman Polanski is currently fighting extradition from Switzerland to the U.S. to face sentencing in a child sex case.

Financial criminals, corporate bribers and terrorists love borders as well, hoping to exploit legal and regulatory differences among countries to avoid getting caught and prosecuted.  That’s increasingly true as business grows more global.  In one current case, for example, British lawyer Jeffrey Tesler is fighting extradition from the U.K. to the U.S. to face charges that he bribed Nigerian officials on behalf of a giant multi-billion dollar construction consortium.

“Dual Criminality” Standard

New agreements effective this month between the U.S., Europe Union and 56 European member states aim to make life more difficult for transnational criminals.   Characterized by the U.S. Department of Justice as “a milestone in cooperation” between the U.S. and Europe, the agreements make it easier for countries to extradite individuals charged with crimes and to jointly develop and share information.

One of the biggest changes under the agreements is that lists of extraditable offenses will be replaced with a “dual criminality” standard.  Until now, individuals could avoid extradition because the specific crimes they were charged with were not listed in the extradition treaty with another country.  “Dual criminality, on the other hand, typically requires only that the charged offense constitute a criminal act in both countries, regardless of the name given the offense or the listing of the offense in the applicable treaty,” notes a commentary by law firm White & Case.

The agreement also “enhances and modernizes” law enforcement techniques, according to the Department of Justice, by “allowing prompt identification of financial account information in criminal investigations; permitting the acquisition of evidence, including testimony, by means of video conferencing; and authorizing the participation of U.S. criminal investigators and prosecutors in joint investigative teams in the EU.”

Foreign Corrupt Practices Act

Negotiations on the agreements began after the September 11, 2001 terrorist attacks and will enable investigations of alleged terrorists.  However, in recent years the Department of Justice has also dramatically increased prosecutions of individuals and companies under the Foreign Corrupt Practices Act.

The U.S. government has long argued that corporate corruption on a global basis harms American national interests while also threatening the “integrity and prosperity” developing countries.   A U.S. government official told a Senate committee last week that U.S. companies are believed to have lost out on business opportunities worth about $27 billion in the past year alone, “because they refused to violate honest business practices.”

Only last week, British defense contractor BAE agreed to pay fines totaling more than $400 million to settle charges that it had made illegal payments to officials in various countries to obtain contracts.  In late 2008, industrial giant Siemens agreed to pay more than $1.6 billion in fines and penalties to settle charges brought under the Foreign Corrupt Practices Act.

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