Government Contracts Lawyer & Attorney : Sheppard Mullin Law Firm : Bids, Licenses, Awards, Conflict of Interest.

On December 14, 2007, Congress passed H.R. 1585, the 2008 Defense Authorization Bill. President Bush stated on December 28, 2007 that he intended to "pocket veto" the Bill because he viewed a particular section as potentially jeopardizing the ability of the Iraqi government to focus its resources on rebuilding. Regardless of whether the President's "pocket veto" is successful (Speaker Pelosi has stated that the House is currently considering whether to revise the legislation), it appears that there is more than enough support to override now that Congress has returned to session. Consequently, the provisions of H.R. 1585 are likely to become law one way or another.

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Recently, the Government has been increasing its enforcement efforts under the Foreign Corrupt Practices Act, announcing that there are 60 active investigations in its pipeline and that five FBI agents have been assigned full time to FCPA enforcement.  In the last two years, more FCPA enforcement actions have been completed than in the prior ten years combined.  FCPA compliance is, moreover, not a “stand alone” issue – increasingly, FCPA have become a focal point in due diligence with respect to M&A activity and the formation of joint ventures, one party to which has historically conducted business in a high risk region.

Click here for a PowerPoint that summarizes some of the principal issues and questions that typically arise under the FCPA.

Authored by:

John Fornaciari

202.218.0009

jfornaciari@sheppardmullin.com

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A Dozen Questions to Ask

• Are you an issuer, US person or US entity?
• Have any foreign agents or subsidiaries?
• Are you a foreign person or company whose transactions touch the US?
• Promised or paid anything of value to a foreign official (governmental, political, NGO) for business purposes?
• Did you or a third party know or suspect it would be passed on to a foreign official?
• Have you consciously disregarded circumstances indicating improper payments occured?
• Do you maintain an adequate system of internal controls?
• Was the payment to facilitate a routine governmental action (grease payment) permitted by the foreign country?
• Do your books fairly reflect the transactions and properly characterize expenditures, such as "entertainment?"
• Have you conducted comprehensive due diligence on your foreign business partner?
• Is your industry historically prone to corruption?
• Are you doing business in a country with a "corrupt" environment?

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