FCPA and Anti-Corruption

Contrary to some expectations, the Trump Administration Department of Justice imposed record penalties under the U.S. Foreign Corrupt Practices Act from 2017 through 2020. But in each of those years, fewer and fewer new FCPA investigations were initiated. We expect the Biden Administration to continue the trend of increasing FCPA enforcement settlement values, while also increasing the pace of initiating new FCPA investigations. Anticorruption matters present some of the most severe threats to a company’s organizational integrity. Understanding the changing enforcement culture is an important component to addressing those threats.
Continue Reading The Next Four Years of FCPA Enforcement: What to Expect From the Biden Administration

Europe has come up with a nifty plan to help Iran buy and sell stuff outside the reach of U.S. sanctions. The problem is that the plan is a fraud magnet. How do we know? It’s been tried before, and the fraud was epic.

The plan is known as the “Instrument in Support of Trade Exchanges,” or “INSTEX.” Lots of smart people have been involved in creating the program. Let’s hope they’re not too young to remember 1995, when fraudsters first heard that the UN was setting up a program known as “Oil-for-Food.” Similar to INSTEX, Oil-for-Food was designed to allow a sanctioned country (in that case, Iraq) to sell oil on the world market in exchange for food, medicine, and other humanitarian goods. A 2005 independent audit of the program found a staggering variety of fraudulent schemes netting billions of dollars in income for illicit merchants, intermediaries, and the Saddam Hussein regime itself. If INSTEX is not careful, it could be the victim of similar scams.
Continue Reading How to Steal $10 Billion from Europe

The summer of 2017 saw the U.S. Department of Justice’s docket still teeming with Foreign Corrupt Practices Act (FCPA) cases. In this post, we draw a few lessons from three of them, which bring together three threads that seem often to weave together: bribery, kleptocracy, and money laundering.
Continue Reading News Flash: Kleptocrats Still Taking Bribe Money With One Hand and Laundering it With the Other

On August 29, it was announced that the U.S. Department of Justice is considering an investigation into Uber, the San Francisco-based technology company that has expanded its ride-sharing service abroad to more than 70 countries. Press reports indicate that DOJ may investigate potential violations by company personnel of the U.S. law against foreign bribery, known as the Foreign Corrupt Practices Act (FCPA). On the same day, the company confirmed the review and said that it was cooperating with the Justice Department on the matter.
Continue Reading Growing Pains for Expanding Tech Companies: Uber Investigated for FCPA Violations

Ok, ok, don’t panic. Maybe not all of the millions of dedicated readers of this blog are in violation.

Nevertheless, as of June 1, if your company does business in France, it may be time to check your anticorruption compliance obligations.
Continue Reading Oh, Hadn’t You Heard? You’re Violating French Law Right Now! France Gets Serieuse about Anti-Corruption

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 where your cloud is?), and any company that sends information from the EU to the United States.
Continue Reading The Schrems Decision: How the End of Safe Harbor Affects Your FCPA Compliance Plan

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 of Special Projects and Programs also pleaded guilty to FCPA charges.  For U.S. government contractors, the opportunities to provide services and expertise to foreign governments are lucrative, but this enforcement action also highlights the risks associated with obtaining such contracts.
Continue Reading Government Contracting Abroad: Beware Compliance Risks

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 New Year, New Orleans, Old Tricks

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.  But as described below, we emphasize “little bit.”
Continue Reading DOJ Issues Opinion, Provides (Some) Comfort on Successor Liability

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 DOJ. Those assets include a Malibu mansion, Ferrari, and $1 million for life-size Michael Jackson statues Obiang had expatriated from the United States to Equatorial Guinea. He gets to keep a Gulfstream jet and most of his other Michael Jackson paraphernalia, however, including the red leather jacket MJ wore in “Thriller” and the white crystal-covered glove from the king of pop’s “Bad” tour. The settlement dollar-value represents less than half of what the DOJ sought; Obiang managed to send a bulk of his U.S.-based assets outside the United States, including several luxury cars. But the case still represents significant progress in the U.S. government’s anti-corruption efforts, particularly because this action was brought against an official still in power, and most of the settlement amount will be used for the benefit of the people of Equatorial Guinea.


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

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 issues to prioritize and how to deploy limited resources.  This article aims to provide a basic outline of seven key steps to consider in anti-corruption due diligence.
Continue Reading Beyond the Checklist: Seven Keys to Effective Trade Due Diligence