One of the most high profile corruption investigation of all time kicked off yesterday, with arrest of several FIFA officials in Switzerland pursuant to a request from the US.

Details remain limited, but

“U.S. authorities said nine officials and five sports media and promotions executives were charged in cases involving more than $150 million in bribes over a period of 24 years. They said their investigation exposed complex money laundering schemes, millions of dollars in untaxed incomes and tens of millions in offshore accounts held by FIFA officials”.

(World soccer rocked by U.S., Swiss arrests of officials for graft| Reuters)

Matters are of course allegations at this point, but a couple of interesting early observations can be made:

  • The investigation demonstrates the very long arm of US extra-territorial jurisdiction. At this point, there is no suggestion of any US citizens or corporate bodies being involved, or any action taking place on US territory. However, the Foreign Corrupt Practices Act (FCPA) does permit investigation when “the economic interests of the US are prejudiced”. It is worth noting that the US was a bidder for the 2022 World Cup.
  • There may be some tough questions for third parties. If the allegations of millions of dollars in bribes and money laundering have any foundation, then they must have flowed through various bank accounts and been facilitated by other professionals. The US Attorney for the Eastern District in New York has stated: “Part of our investigation will look at the conduct of the financial institutions to see whether they were cognizant of the fact they were helping launder these bribe payments.”
Practical Law David Bacon

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