by Elina Karpacheva & Branislav Hock
This brand new paper that was recently published entitled “Foreign whistleblowing: The impact of US extraterritorial enforcement on anti-corruption laws in Europe” investigates the expansion of US law in the area of transnational economic crime by discussing the case of foreign whistleblowers, defined as non-US citizens who help US enforcement authorities to sanction both non-US corporations and US corporations that engage in economic crime. Written by Elina Karpacheva and Branislav Hock, the paper shows that extraterritorial application of US whistleblowing laws is part of a broad trend associated with extraterritorial enforcement of US laws, allowing the USA to become the leader in sanctioning US corporations as well as non-US corporations for economic crime.
The paper demonstrates that the US whistleblower reward programmes have been increasingly used by foreign nationals. Foreigners provide quality tips that proved to have higher chances of being rewarded by the US authorities than tips submitted by US whistleblowers. In spite of being controversial, rewarding foreign whistleblowing increases the effectiveness of enforcement against perpetrators of transnational economic crime.
While the emerging EU-wide whistleblowing regime aims to prevent organisational wrongdoing, it refuses to proactively recruit whistleblowers. Member states have in place procedures for utilising disclosed information by corporations or relevant authorities, but no one has implemented comprehensive whistleblower programmes similar to the US ones. Instead, because of legal, historical and cultural reasons, economic crime detection mechanisms are based on traditional sources of information collected by, for example, financial intelligence units that are collecting information from internal compliance departments of obliged entities, tax authorities and through the process of statutory audit.
In effect, US enforcement practices have become the standard in many fields that has influenced law and law enforcement in other countries as well as internal compliance of corporations. The paper concludes that when discussing whistleblowing law, Europeans should consider principles associated with the impact of extraterritorial foreign anti-bribery enforcement.
The full paper can be found here: https://doi.org/10.1108/JFC-11-2022-0283