Category Archives: FCPA and Anti-Corruption

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The Schrems Decision: How the End of Safe Harbor Affects Your FCPA Compliance Plan

Like a needle to a balloon, the Schrems decision has drastically altered the data privacy landscape. Who is affected? Everyone – consumers, corporations, employees. But who needs to take action? Any company with offices in the European Union and the United States, any European company that outsources work to the United States (do you know … Continue Reading

Government Contracting Abroad: Beware Compliance Risks

On June 16, 2015, IAP Worldwide Services Inc., a private defense and government contracting company, agreed to pay $7.1 million to settle criminal charges of the U.S. Foreign Corrupt Practices Act (FCPA) related to bribing Kuwaiti government officials to secure a Kuwaiti government contract.  On the same day, James Michael Rama, IAP’s Former Vice President … Continue Reading

New Year, New Orleans, Old Tricks

The Department of Justice’s Kleptocracy Initiative is kicking off 2015 strong.  On January 13, 2015, the DOJ filed a civil complaint seeking the forfeiture of nine properties in New Orleans, worth close to $1.53 million.  The property was allegedly purchased with corrupt proceeds, traced to $2 million in bribes paid to a former Honduran official.… Continue Reading

DOJ Issues Opinion, Provides (Some) Comfort on Successor Liability

In a recent Opinion Procedure Release (OPR), Number 14-02, the U.S. Department of Justice expressly limited successor liability for a US company purchasing a non-US company that had paid bribes in the past.  In so doing, DOJ may have given a little bit of comfort to US companies and issuers thinking about purchasing non-US companies.  … Continue Reading

Take the Mansion, But Leave the Thriller Jacket: DOJ Settles with Equatorial Guinea Veep for $30 Million in Assets Bought With Corrupt Proceeds

On October 10, 2014, the U.S. Department of Justice announced a civil settlement with Teodoro (“Teddy”) Nguema Obiang, Vice President of Equatorial Guinea and eldest son of the country’s current President, under the DOJ’s Kleptocracy Asset Recovery Initiative. Through a combination of forfeiture and divestment, Obiang agreed to turn over $30 million in U.S.-based assets purchased in a “corruption-fueled spending spree,” according to the … Continue Reading

Beyond the Checklist: Seven Keys to Effective Trade Due Diligence

Anti-corruption due diligence can be vexing even in the best of conditions; it is often made more complicated by time and business pressures that arise in the context of a merger or acquisition or an urgent sales opportunity.  Anti-corruption compliance is always fact-intensive, and due diligence is no exception, requiring many judgment calls about what … Continue Reading

Who’s a “Foreign Official”? Supreme Court Could Clarify Key FCPA Term

On August 14, 2014, Joel Esquenazi and Carlos Rodriguez filed a Petition for a writ of certiorari in the U.S. Supreme Court seeking clarification of a key term in the Foreign Corrupt Practices Act.  Among other arguments, Esquenazi and Rodriguez (the “Petitioners”) state that the FCPA “leaves open the pivotal question of who qualifies as a … Continue Reading

Shelter from the Coming Storm: Anti-Corruption Compliance in European Public Procurement

A red sky at morning is the traditional harbinger of ill weather. From our vantage point in Brussels, we’ve scanned the horizon for signs of the future of anti-bribery enforcement activity in Europe. We’ve identified four factors that are starting small, but may build into heavy seas. In particular, there are signs that companies that … Continue Reading

Beach Houses and Bribes: DOJ Seeks Over $700,000 From Former South Korean President

April 24 marked another day of progress in holding kleptocrats accountable for their corruption. On that day, the U.S. Department of Justice (“DOJ”) filed a civil forfeiture complaint to seize more than $700,000 in allegedly illicit funds from former South Korean President Chun Doo-hwan. The corrupt proceeds came from the sale of a Newport Beach … Continue Reading

It Doesn’t Pay to Steal: In Largest Ever Kleptocracy Forfeiture Action, DOJ Seizes $458 Million

On March 5, 2014, the U.S. Department of Justice announced that it had frozen over $458 million of ill-gotten assets that former Nigerian dictator Sani Abacha and his co-conspirators had stashed in bank accounts across the globe.  The DOJ is seeking to recover almost $100 million more.  The largest-ever kleptocracy forfeiture action brought in the … Continue Reading

The Brazilian Anti-Corruption Act of 2013 (Act # 12846)

1.      Background The early 1990’s in Brazil were marked by a combination of extremely high inflation, poor quality services and goods (which were mostly manufactured locally), onerous bureaucracy, and persistent corruption.  An elected president, who followed a military government which had lasted for decades, was seen to be looting most Brazilians’ savings.  He was in … Continue Reading

Tryin’ to Make a Dollar out of Fifteen Cents: The Diebold FCPA Settlement Explains What Officials Did on Their Vacation

Vacation is great, but it can involve a great deal of planning.  And, paradoxically, leisure travel can involve more planning than traveling for business.  That travel-related work stands out as a centerpiece of the October 22, 2013 Diebold, Inc. (Diebold) Foreign Corrupt Practices Act (“FCPA”) settlement with the U.S. Securities and Exchange Commission (SEC) and … Continue Reading

Dodd-Frank Whistleblower Protection: For America Only

The U.S. District Court for the Southern District of New York has held that the whistleblower protection provisions of the Dodd-Frank Act do not apply outside the United States, even where the employee alleged he was terminated for raising compliance concerns under U.S. international law. Specifically, the court found that Dodd-Frank did not protect an … Continue Reading

The FCPA in the News: Big Scoops, Real Fallout

By: Thad McBride, Mark Jensen, and Cheryl Palmeri In early August, the New York Times reported that the U.S. Securities and Exchange Commission (SEC) is investigating JPMorgan Chase related to alleged violations of the Foreign Corrupt Practices Act (FCPA) in China.  According to the article, the press had not previously reported on the investigation, and the Times knowledge of it was based on a “confidential United States government document.”  The article generated a number of similar news reports.… Continue Reading

Lessons Learned from the GlaxoSmithKline Bribery Investigation

By: James Zimmerman and Cheryl Palmeri The recent enforcement of Chinese anti-bribery laws against British pharmaceutical company GlaxoSmithKline (GSK) highlights the compliance challenges faced by foreign companies operating in China. GSK’s Chinese subsidiary is accused of funneling almost $500 million in bribes to doctors and hospitals in China exchange for purchasing or prescribing the company’s products.  The alleged bribes included sexual favors, cash, and invitations to join high-end academic conferences.  GSK employees also allegedly accepted kickbacks and improper commission fees, issued fake invoices, and wrote special bills related to the value-added tax. … Continue Reading

A Rising Voice on FCPA Compliance: The Court

By: Scott Maberry and Mark Jensen One FCPA compliance topic we are often asked about by clients is how government investigations start. The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have developed a number of mechanisms largely within their control (including whistleblowers and cross-industry investigations) to learn about bribery allegations.  There are also mechanisms outside of government control, such as investigative journalism, that can identify bribery allegations and effectively force the government’s hand into investigating them.  Recent events surrounding FCPA allegations against International Business Machines Corporation (“IBM”) suggest a new actor that can force the broadening or deepening of existing FCPA investigations: the U.S. courts.… Continue Reading

Total Settlement of FCPA Charges

By: Cheryl Palmeri On May 29, 2013, Total, S.A. (Total), the French petroleum corporation, agreed to pay nearly $400 million to resolve charges that it violated the anti-bribery and books and records provisions of the Foreign Corrupt Practices Act (FCPA).  Collectively, the penalties imposed by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) against Total mark one of the largest settlement amounts yet under the FCPA.… Continue Reading

U.S. Sanctions Target Russian Corruption, Human Rights Violations

By: Thad McBride Asserting that “the protection of human rights … is not left exclusively to the internal affairs of [any one] country,” in December 2012 the United States enacted the Sergei Magnitsky Rule of Law Accountability Act of 2012 (the “Magnitsky Act”).  Under the law, the President is required to identify individuals found to be involved in human rights violations and impose targeted sanctions on them.  Interestingly, as discussed below, these sanctions seem to be based in significant part on concerns about corruption in Russia.  While the U.S. government continues to aggressively enforce the Foreign Corrupt Practices Act with respect to parties giving bribes, the Magnitsky Act suggests that Congress may seek to employ economic sanctions to target recipients of corrupt payments. … Continue Reading

Line in the Sand: Siemens Argentina Case Limits Personal Jurisdiction Under the FCPA

By: Thad McBride and Cheryl Palmeri A New York federal district court judge has dismissed a Foreign Corrupt Practices Act (“FCPA”) claim against a former executive of Siemens, S.A. Argentina and Siemens Transportation Systems for lack of personal jurisdiction.  The U.S. Securities and Exchange Commission (“SEC”) brought the civil FCPA enforcement action against Herbert Steffen for his role in an alleged scheme by which Siemens paid bribes to top government officials in Argentina to secure a project to create national identity cards. … Continue Reading

Is China Getting Serious or Redirecting Responsibility? New guidance on Chinese Anti-Bribery Enforcement

By: Reid Whitten and Thad McBride For years, a significant number of Foreign Corrupt Practices Act (FCPA) enforcement actions have focused on or involved the People’s Republic of China (PRC), Chinese subsidiaries, or Chinese officials.  It is hard to avoid the conclusion that the PRC is fertile ground for corruption: many of its major industries are dominated by state-owned or -controlled companies.  A tradition of gift-giving and hospitality may blur the distinction between friendly gesture and kickback.  And the sheer volume of business transacted in the country makes policing illicit exchanges for business advantages a tall order for any enforcement agency. … Continue Reading

No Knowledge, but Hints of Omissions in the Allianz FCPA Settlement

By: Matthew Riemer and Mark Jensen On December 17, 2012, the Securities and Exchange Commission (“SEC”) announced a settlement under the U.S. Foreign Corrupt Practices Act (“FCPA”) with Allianz SE (“Allianz”), the insurance company based in Germany, resulting in $5.3 million in civil penalties and more than $7 million in disgorgement and interest.  The settlement stemmed from a two-year investigation into allegations that an Allianz subsidiary paid bribes to government officials in Indonesia over a seven-year period and violated the FCPA’s books and records and internal controls provisions.  The Department of Justice (“DOJ”) started its own investigation into potential criminal liability for Allianz, but closed its case in 2011 with a declination letter, an event that was reported in the Wall Street Journal. … Continue Reading

What’s In the New FCPA Resource Guide: Some Welcome Clarity and Unexpected Muddling

By: Scott Maberry, Thad McBride, and Cheryl Palmeri Much has been said about what is missing from the new FCPA Resource Guide (the Guide) published by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), linked here.  Here, we consider instead the areas in which – true to its name – the Guide offers some helpful guidance.  Specifically, based on our experience of representing companies and individuals before the DOJ and SEC, this article describes four areas in which the Guide taught us something new or called into question what we thought we knew about the FCPA. … Continue Reading

What’s Not in the New FCPA Resource Guide, or Why Doing Your FCPA Homework is Still a Good Idea

By: Mark Jensen Notwithstanding our overall approval of the FCPA Resource Guide (the Guide) issued by the Department of Justice (DOJ) and Securities & Exchange Commission (SEC) earlier this month, we are certainly not above a bit of criticism. To that end, those who have investigated and settled FCPA cases after choosing to cooperate with the government will be familiar with the instruction to do “homework” following a meeting.  The direction generally requires a deeper dive into specific facts or issues identified by the DOJ and/or SEC.  While directed by the government, the homework instruction nonetheless allows the investigation target a lot of leeway about how to get the homework done. The same approach infuses the Guide. … Continue Reading
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