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COVID-19 took the world by surprise and continues to spread across the globe in more than 210 countries and counting.  The outbreak in the United States escalated rapidly, with over 585,000 confirmed cases as of April 14, 2020.  The federal government and a number of hard-hit states were caught off guard, and soon learned that their inventories of personal protective equipment (“PPE”) and other life-saving equipment such as test kits and ventilators were insufficient to keep pace with the pandemic.  The demand for equipment to fight COVID-19 skyrocketed and government and commercial entities have shifted into high gear to respond.  Whether motivated by humanitarian concern or commercial enterprise, many state and local governments, companies and individuals are now looking abroad to procure critical supplies on an expedited basis.  At the same time, many foreign industrial manufacturers are positioning themselves for the high demand of exports by adapting their facilities to produce PPE.  For example, Chinese electric car maker BYD announced on March 13, 2020 it is now the largest face mask factory in the world—less than one month after converting its facilities in response to the pandemic.  In the midst of these exigent circumstances, the global supply chain landscape is replete with Foreign Corrupt Practices Act landmines—and well-intentioned companies hoping to partner with foreign PPE manufacturers could become a casualty if they don’t watch their step.
Continue Reading FCPA Landmines Beneath the Surface of the COVID-19 Crisis

Along with the anti-bribery provisions, the U.S. Foreign Corrupt Practices Act (“FCPA”) contains accounting provisions that apply to publicly traded companies. These provisions require that companies maintain and adhere to internal policies that manage risk and ensure that accurate financial records are maintained. There is no bribery requirement for there to be a violation of these provisions. There is also no foreign conduct requirement. All that is required is that a company have a policy in-place and circumvent that policy to obtain some business advantage (no matter how small). The Securities and Exchange Commission (“SEC”) often initiates investigations based on allegations of foreign bribery, but resorts to the accounting provisions when the alleged bribe cannot be proven (because an internal policy violation can almost always be found and the SEC does not want a company to get off scot-free).
Continue Reading FCPA Accounting Provisions Have Teeth: Halliburton to Pay $29.2 Million to Settle FCPA Charges

As its name implies, the U.S. Foreign Corrupt Practices Act (“FCPA”) was designed to prevent U.S. companies from engaging in foreign bribery. The Department of Justice (“DOJ”) and the Securities Exchange Commission (“SEC”), the U.S. Government agencies charged with enforcing the FCPA, have made great use of the FCPA in this regard. They have secured more than $5 billion in settlements over the past five years. This success has resulted in more expansive views of the FCPA’s reach and innovative arguments to find liability when the alleged misconduct occurred entirely within the U.S. The apparent preference for the FCPA in these situations over other potentially applicable laws is likely due to the ease with which an FCPA violation may be proven. An internal policy violation is all that is needed.
Continue Reading Whatever Happened to the FCPA’s Foreign Conduct Requirement – How the FCPA is Being Used to Police Domestic Conduct and Internal Policy Violations

Brazilian aircraft manufacturer Embraer SA (“Embraer”) will pay the United States government $205 million to settle allegations that the company violated the Foreign Corrupt Practices Act (“FCPA”) by paying millions in bribes and falsifying accounting records.  The United States government asserted that Embraer bribed government officials within the Dominican Republic, Saudi Arabia, and Mozambique with millions of dollars to win government aircraft contracts. The government also alleged Embraer paid millions in falsely recorded payments in India through a fraudulent agency agreement.
Continue Reading Embraer’s FCPA Deferred Prosecution Agreement and $205 Million Payment Demonstrate Need for Adequate Internal Controls

The private equity industry is facing increased scrutiny by the U.S. Government for potential violations of the Foreign Corrupt Practices Act (“FCPA”).  The Securities and Exchange Commission (“SEC”) has created a new private fund unit and publicly asserted that it is more closely examining the operations of private equity funds and their portfolio companies.  As with all SEC units, the private fund unit works in conjunction with the U.S. Department of Justice (“DOJ”) criminal and civil fraud divisions.  This increased attention will lead to more investigations, and has enhanced the need for robust FCPA compliance by private equity funds.
Continue Reading U.S. Targets Private Equity Funds for FCPA Scrutiny

The SEC awarded more than $14 million to a whistleblower earlier this month in exchange for information that helped the SEC bring an enforcement action against the perpetrators of an investment fraud in less than six months after receipt of the whistleblower’s tip. [1] The award is the largest made by the SEC since the Office of the Whistleblower was set up in 2011 under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. According to SEC Chair Mary Jo White, the hope is that “an award like this will encourage more individuals to come forward.”
Continue Reading SEC Awards $14 Million to Whistleblower

On August 15, 2013, the Ontario Superior Court found Canadian national Nazir Karigar guilty of conspiring to offer a bribe to Indian government officials under the Corruption of Foreign Public Officials Act (“CFPOA”). The CFPOA makes it an offense to directly or indirectly give or offer a loan, reward, advantage or benefit of any kind to a foreign public official in order to obtain or retain an advantage in the course of business.
Continue Reading Canada’s First Foreign Bribery Conviction Shows Trend in Increased Enforcement

By Anthony N. Moshirnia 

In 2008, Siemens AG paid $800 million to settle charges that it had violated the Foreign Corrupt Practices Act, which generally prohibits bribery of foreign officials for the purpose of obtaining or retaining business. That settlement amount remains the largest in the history of FCPA enforcement. In addition, the company agreed to substantially improve its procedures for identifying and preventing improper payments that could be used as bribes. According to a recently filed whistleblower complaint, however, since the 2008 settlement, Siemens employees have regularly circumvented the company’s internal controls, allowing “intermediaries” to pay kickbacks to government officials.Continue Reading Siemens Whistleblower Complaint Underscores Need for “Top-Down” Anti-Corruption Compliance

By Anthony Moshirnia

On November 14, 2012, the SEC and the DOJ released their long-awaited Resource Guide to the Foreign Corrupt Practices Act, which can be found here. The Resource Guide consolidates and summarizes the government’s previously stated positions and case law regarding the FCPA and, unsurprisingly, confirms that FCPA enforcement will remain a priority for the foreseeable future. The publication uses hypotheticals to provide helpful clarification and practical advice on issues such as gift-giving and hospitality. The hypotheticals are also discussed in a recent posting on our Global Trade Law Blog, which can be read here.Continue Reading DOJ and SEC Release New FCPA Resource Guide

By John Hynes

We regularly report on Foreign Corrupt Practices Act ("FCPA") developments and have furnished subscribers with a primer on the FCPA. As expected, 2012 has proven to be yet another busy year for the government in enforcing the FCPA. This article highlights some of the most important recent developments in the anti-corruption and FCPA enforcement world, while a more comprehensive update can be found here.Continue Reading FCPA and Anti-Corruption Enforcement Update: April – September 2012

By Alison Kleaver and Joseph Barton

One of the goals of the Foreign Corrupt Practices Act (“FCPA”) is to prevent U.S. companies and individuals from paying bribes to foreign officials in exchange for business. To this end, the FCPA prohibits any domestic individual or business entity from making payments to a “foreign official” for the purpose of obtaining or retaining business. 15 U.S.C. § 78dd-2(a)(1). However, who, precisely, qualifies as a “foreign official” is the subject of much uncertainty. In particular, whether employees of a state-owned company qualify as foreign officials for purposes of FCPA is an area of great concern—and potential liability—particularly for U.S. companies doing business in Latin America where governments often have at least some level of involvement in various business sectors from education to utilities to health care.Continue Reading Meaning Of FCPA’s “Foreign Official” Causes Uncertainty For Companies Doing Business Abroad