By: Scott Maberry and Reid Whitten

On November 21, 2011, President Barack Obama signed Executive Order 13590 expanding sanctions against non-U.S. companies doing business in Iran. Under the new rules, whole sectors of business between Iran and third countries are now subject to U.S. sanctions. Overnight, non-U.S. companies working in Iran—in sectors not previously subject to sanctions—found their contracts subject to punishment under U.S. law. Many of these companies had invested significant resources in making sure their transactions in Iran did not fall afoul of U.S. sanctions, some having met directly with U.S. Government agencies, including the U.S. State Department, to understand the rules. These companies must now again adjust the aim of their compliance efforts to hit moving targets.

Fortunately for these companies, it appears likely that in the near-term, contracts already in place and compliant with the rules at the time of the November 21 order will not be the target of enforcement actions.
 


Continue Reading Aiming for a Moving Target: Bad and Good News on Changing Iran Sanctions

By: John W. Chierichella

In our February 2009 posting, we commented on the final rule implementing, via FAR 52.222-50 (“Combating Trafficking in Persons”), the Trafficking Victims Protection Reauthorization Act of 2005.

On January 1, 2012, companies doing business in California will have state-level disclosure obligations to deal with in this realm as well. That is the effective date of the California Transparency in Supply Chains Act of 2010, which imposes obligations on every large retailer and manufacturer doing business in California to disclose whether it has taken specified actions to eliminate slavery and human trafficking from its product supply chain.
 


Continue Reading New Disclosure Requirements For Companies Doing Business In California

By Keith Szeliga and Christopher E. Hale

On December 2, 2011, Federal Acquisition Regulation Subpart 3.11 – Preventing Personal Conflicts of Interest for Contractor Employees Performing Acquisition Functions – takes effect. The new Rule requires contractors to screen for and prevent personal conflicts of interest when supporting Government acquisition functions. [1] The Rule also requires contractors to prohibit covered employees from utilizing non-public information for personal gain and to obtain from covered employees executed non-disclosure agreements prohibiting the dissemination of such information.


Continue Reading New Personal Conflict Of Interest Rules For Contractors

By Thaddeus McBride & Cheryl Palmeri

On October 26, 2011, Joel Esquenazi was sentenced to 15 years in prison for committing and conspiring to commit both money laundering and violations of the Foreign Corrupt Practices Act (“FCPA”). Esquenazi is the former president of Terra Telecommunications Corporation (“Terra”), an international telecommunications company. According to the U.S. Department of Justice (“DOJ”), this is the longest prison sentence yet imposed in a case involving the FCPA.


Continue Reading Longest Prison Sentence Yet in FCPA Case

By Thaddeus McBride, Mark Jensen, & Corey Phelps

In late September, Flowserve Corporation (“Flowserve”) and a number of its subsidiaries agreed to settle alleged export violations with the Department of Commerce, Bureau of Industry of Security (“BIS”) for $2.5 million, and to remit $502,408 to the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) to settle alleged U.S. sanctions violations. Flowserve, including its subsidiaries, is an oil, gas, and chemical services company with operations around the world. The settlement underscores the value of compliance measures specifically tailored to a company’s operations, and provides yet another example of the U.S. government vigorously enforcing U.S. law overseas.
 


Continue Reading OFAC, BIS Double Up Flow Serve: What the Flowserve Settlement Says About Corporate Compliance Programs

As we discussed here last November, the United States Navy, the other military services, and the Department of Defense, have all recognized that their personnel are using social media and have responded by establishing detailed social media policies.  Similarly, there is not a shred of doubt that your company’s employees are using social media. And, just like the military services and DoD, if you’re a government contractor then you must establish a social medial policy—and it cannot be a “cookie cutter” version of standard corporate social media policies. Among other things, it must address the risk of classified information being leaked, and the ways in which your employees’ security clearances can be put in jeopardy if they are not using social media prudently.
Continue Reading 10 Social Media Must Haves for Your Company’s FAR-Mandated Compliance Program

By Michelle Sherman

“Loose tweets sink fleets” is a new twist on a familiar saying. It is also borrowed from the Navy Command Social Media Handbook issued October 15, 2010. The Navy appreciates that social media is widely used, and that a ban on social media is not the answer. Trying to turn a blind eye to the use of social media, or banning its use in the workplace is naive. Whether they are doing it at work or in their free time, people who hold security clearances, or have access to classified or sensitive information, are using Facebook to connect with friends who may be one to three degrees removed. They are connecting with other professionals on Linkedin, and sometimes tweeting about their every day activities on Twitter.
 


Continue Reading “Loose Tweets Sink Fleets” – What Government Contractors Should Include In Their Social Media Policy

By David S. Gallacher

While Vice President Biden was busy touting Summer 2010 as the “Summer of Recovery” and the economic effects of the February 2009 Stimulus Act (a.k.a. the American Recovery and Reinvestment Act, the Recovery Act, ARRA, the Stimulus Act, etc.), the gears of the regulatory process ground steadily onward. Throughout the summer, the White House Office of Management and Budget (“OMB”) issued updated policy guidance implementing the ARRA requirements, and the rule-makers in the FAR Councils remained hard at work updating and (hopefully) finalizing the regulations implementing the finer details of the Recovery Act. Despite the fact that the ARRA funding officially expired on September 30, 2010 (meaning that any unobligated ARRA funds will now revert to the federal treasury to be saved or spent another day), the Government spent its summer fine-tuning the regulations. As the sun begins to set on the Recovery Act, and as the Summer of Recovery fades into the past, we summarize here some of the key features of the final Recovery Act rules promulgated over the last few months. 
 


Continue Reading Bidding Adieu To The “Summer of Recovery”: Changes To ARRA Buy American And Reporting Requirements

By Curtis M. Dombek and Michael W. Emmick

On April 29, 2010, after a period of public comment, the United States Sentencing Commission (“USSC”) issued proposed amendments to the United States Sentencing Guidelines (“USSG”). Absent Congressional action, those amendments will take effect on November 2, 2010. One of the proposed amendments relates to USSG § 8C2.5(f), which provides for a 3-point reduction in culpability score for companies that had an effective compliance and ethics program in place at the time of the offense of which they have been convicted. This amendment is part of the USSC’s announced effort to reevaluate corporate sentencing and provide for greater reward and encouragement for compliance programs, self-reporting, and remediation of discovered offenses. 
 


Continue Reading Amendment of Federal Sentencing Guidelines Calls for Updating of Compliance Policies