Over the past decade, the number of Foreign Corrupt Practices Act (FCPA) enforcement actions has soared, as has the number of cases before the International Centre for Settlement of Investment Disputes (ICSID). At the same time, events have demonstrated that two problems may arise from the lack of coordination between anticorruption investigations and ICSID arbitration proceedings. First, anticorruption investigations may reveal arbitral decisions to be incorrect due to a lack of evidence regarding corruption in the formation of investment contracts. Second, the "corruption defense"—an emerging affirmative defense that allows host states to invoke corruption in the formation of investment contracts as an absolute bar to liability—creates a perverse incentive that encourages states to expropriate investors' assets, or to renegotiate for burdensome new terms, following FCPA investigations.

This Note explores the characteristics of the corruption defense as applied by ICSID tribunals, including the evidentiary burden placed upon the host state to assert the defense. It then proposes a framework for FCPA-ICSID interaction designed to strengthen the defense and to further the goal of eradicating global corruption. It proposes using tools such as waiver and disgorgement, contract cure, and communication between FCPA enforcement authorities and ICSID tribunals to remedy the problems identified above.

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