Complying With the Foreign Corrupt Practices Act: A Practical Primer (January 2012)

  

By The University of Chicago Corporate Lab (Dean David Zarfes, Michael L. Bloom, Sean Z. Kramer, Salen Churi, David Finkelstein, Joe Mueller)

--------------

The Year of the FCPA Trial: Reflecting on Recent FCPA Developments In and Out of the Courtroom at the ABA’s  2012 National Institute on White Collar Crime

 

By A. Joseph Jay III    

The breakout panel on developments in FCPA enforcement at the ABA’s 26^th National Institute on White Collar Crime (held in Miami, Florida from February 29 to March 2, 2012) was, as always, “standing room only” as attendees crowded the aisles to hear the latest in this perennially hot area.  Click title for full article.

--------------

 An RLA’s View from the Balkans: Serbia’s Pursuit of European Integration Via Anti-corruption Measures

 

 

 

 

 

By Eli J. Richardson

The fight against corruption is not one-size-fits all across the globe.  Various countries take various approaches, some more effective than others.  A country’s approach is shaped by its particular context (its culture, experience, legal system, international relations and policy objectives) and comprises particular components (agencies, laws, training, financial resources and adopted international conventions) chosen by the country.  When the context changes, the components change – ideally for the better.  And because policy objectives can change faster than other aspects of the context, it is policy changes that most rapidly can transform the country’s approach to anti-corruption.  This phenomenon is exhibited by the nation of Serbia, located in the so-called “Balkans” region of Southeastern Europe.  As I observed first-hand while working in Serbia’s capital, Belgrade, for the U.S. Department of Justice (DOJ), new policy thrusts can rapidly spawn new anti-corruption programs having, at least on paper, myriad specific components.  The question then becomes whether the country will actually and effectively implement the components in furtherance of its new policy. Click title for full article.

--------------

Don't Expect Too Much From DOJ's Upcoming "New FCPA Guidance"

By Mike Emmick

After the last few years of extremely aggressive DOJ prosecutions under the Foreign Corrupt Practices Act (FCPA), white collar practitioners and the business community generally can be forgiven if they saw a ray of hope in the recent comments of Lanny Breuer, the head of DOJ's criminal division.  Click title for full article.

--------------------------

First-Of-Its-Kind FCPA/Travel Act "Decision Tree"

   

By T. Markus Funk

Perkins Coie Partner and ABA Global Anti-Corruption Task Force Co-Chair T. Markus Funk has drafted a very handy decision tree sketching out the key analytical steps in evaluating a potential bribery situation. Click title or the graphic for the "tree."

---------------------
 

News Corporation’s Travails Across the Pond: Internal Investigation Engagement Lessons

 

 

By Robert W. Tarun

 

The News Corporation phone-hacking scandal in London has a long list of victims and casualties – from families of servicemen killed in action to celebrities, including Prince William and Prince Harry.  The victims’ voicemails were hacked, possibly aided by journalists’ payments to local constables.  More than a dozen News Corporation officers and employees have now been arrested. Click title for full article.  

 

-------------------

 

Inside Korea’s Anti-corruption Laws: A Domestic Perspective for Multinational Companies

 

 

 

By Seung Ho Lee (no photo), Michael Yu, Samantha Dreilinger

 

Conducting business in the Republic of Korea requires a delicate balancing act.  Many companies have global compliance programs prohibiting or strictly limiting employees from providing gifts and entertainment to government officials, yet, many Koreans consider providing these same benefits to government officials, business partners and potential clients to be an expected cultural reality of doing business.  The resulting tension between policy and practice can be frustrating for companies, and—as evidenced by numerous recent U.S. Foreign Corrupt Practices Act (“FCPA”) enforcement actions involving Korea—costly. Click title for full article.  

 

-----------------

 

Anti-Corruption Compliance: Are Employees Becoming “Over-Trained”?

 

 

By Greg Esslinger 

As the US Department of Justice and US Securities and Exchange Commission, and now the UK Serious Fraud Office, continue to make known their expectations regarding the sufficiency of compliance programs, companies continue to try proactively to get ahead of the curve.  With the backdrop of the US Sentencing Guidelines and prominent conventions such as the OECD, the US and UK governments both have identified corporate tone, leadership, due diligence, monitoring and remediation as key components of a successful and defensible compliance program.  Similarly, they have made clear that immediate and continuous training of employees is integral to the equation. Click title for full article.  

 

--------------

 

Proposed Legislation Would Reform Dodd-Frank Whistleblower Provisions

 

 

By Martin J. Weinstein and Robert J. Meyer 

U.S. Representative Michael Grimm (R-NY) recently introduced the Whistleblower Improvement Act of 2011 (“H.R. 2483”). This legislation would, among other things, amend Section 21F of the Securities Exchange Act (“Section 21F”) to reform the whistleblower provisions enacted under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).  Click title for full article.  

----------------

 

China Takes Its Fight Against Corruption Online

 

 By Ananda Martin

 

China is tackling what some within the Communist Party have characterized as an epidemic of corruption among its ranks - online.  In June, a central bank report stated that, since the mid-1990s, between 16,000 to 18,000 corrupt government officials stole more than $120 billion and fled overseas.  To combat this problem and increase public faith in government, corruption watchdogs are increasingly relying on the internet as a tool to promote transparency.  Click title for full article.  

 

------------- 

 

The Dodd-Frank Bounty Provisions:  A Former FBI Agent’s Perspective 

 

By Kevin Knierim

Now that the Securities and Exchange Commission’s (“SEC’s”) Whistleblower Office website is (finally) open for business, uncertainty and curiosity surround the long-debated enforcement tool’s implementation.  Preceded by a contentious comment period that did little to illuminate the parameters of the Dodd-Frank Act’s incentive program, the proof will be in the proverbial pudding.  A former FBI agent turns a criminal investigator’s eye on the unfolding process and its participants. Click title for full article.  

-----------

 

Global Jurisdiction for a Global Crime: The Long Reach of Anti-Bribery Laws in G7 Nations 

 

  By Tyler Hodgson

With the notable exception of Canada, all 29 signatories to the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“OECD Anti-Bribery Convention”) have adopted the ‘nationality principle’ in their enabling legislation to assert jurisdiction over citizens (and often permanent residents) who commit bribery offences abroad.  This includes the six other G7 member nations: Britain, America, France, Germany, Italy and Japan.  This paper will briefly review the various jurisdictional provisions of the OECD anti-bribery enabling legislation of the G7 nations. Click title for full article.  

-----------

 

Why Should I Cooperate With The UK Serious Fraud Office? Assessing The Carrot Against The Stick

 

By Hemma B. Ramrattan

 

The UK Serious Fraud Office’s ("SFO") guidance on voluntary disclosure and cooperation leaves no room for doubt that the UK Bribery Act of 2010 is designed “to bring about a behavioral change in businesses and create a corporate culture in which no form of corruption is tolerated.” Now that the dust has settled and the UK Bribery Act is in force, it makes sense to go back to the basics and ask – what is it that the SFO can do for you if you self-report and cooperate with their investigations? Click title for full article.  

 

------------

 

ABA Roundup: The Globalization of Anti-Corruption Law

By Juliet S. Sorensen 

At the annual meeting of the American Bar Association in Toronto last week, the Presidential Showcase Program of the Criminal Justice Section was entitled “The Globalization of Anti-Corruption Law.”  Moderated by T. Markus Funk of Perkins Coie, the panel included Andrew S. Boutros of the U.S. Attorney’s Office in Chicago (appearing in his personal capacity); Walter H. White, Jr., from the London office of McGuire Woods; Tyler Hodgson, of the Canadian firm Border Ladner Gervais; and yours truly.Click title for full article.  

----------

The SEC Releases Whistleblower Bounty Rules -- So What Now?

 

  

By T. Markus Funk and Assad H. Clark

 

--------- 

 

SEC's New Whistleblower Rules Redefine Reporting Landscape

  

By Patrick Collins, T. Markus Funk, Regina LaMonica, Caryn Trombino

On May 25, 2011, in a 3-2 vote, the U.S. Securities and Exchange Commission (“SEC”) adopted its final rules (“Rules”), as required under Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act” or the “Act”).  The Rules implement the SEC’s hotly anticipated new whistleblower bounty program that rewards individuals who provide the SEC with information leading to successful enforcement actions that exceed $1 million in monetary sanctions.  Eligible whistleblowers can earn a payout of 10% to 30% of any monetary sanctions collected because of the tipster's information.  Click title for full article.  

--------- 

Insights from the 2011 National Institute on White Collar Crime's FCPA Panel

By Lory Stone and Jodi Avergun

“The FCPA is a failure,” proclaimed an animated Monty Raphael, Special Counsel at the London firm of Peters & Peters Solicitors LLP and Chairman of the Fraud Advisory Panel, at this year’s panel reflecting on Foreign Corrupt Practices Act (“FCPA”) trends and developments at the 25th Annual National Institute on White Collar Crime in San Diego, California.  Raphael went on to exclaim, to an incredulous panel, that the Department of Justice’s (“DOJ”) record number of enforcement actions shows that the FCPA is not working as an effective deterrent.  Other panelists, in turn, defended the FCPA’s deterrent effect and progressive enforcement over the years.  Click title for full article.  

------------- 

Why Corruption in Morocco Matters

  By Juliet S. Sorensen

Last month I traveled to Morocco, serving as a faculty advisor to a group of Northwestern University graduate students researching issues related to law and business in that country.  Morocco is on the move: the government has announced new incentives to foreign direct investment and ambitious plans to extend wireless communications to the furthest corners of the Sahara and the Atlas Mountains.  On March 9, King Mohammed VI announced a committee to draft a new constitution that would cede roughly half the King's authority to an elected prime minister and would establish separation of powers, individual liberties, and gender equality.  But the country’s growth is stymied by public corruption, and that, too, must be addressed by the kingdom, with the support of the United States.  Click title for full article.  

---------------

The Dodd-Frank Act: Application of Bank Supervision and Regulation to Systemic Nonbank Financial Companies

 By Christopher J. Bellini

Enacted on July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) comprehensively reforms and restructures the U.S. financial regulatory system.  As part of this effort, Title I of the Act establishes the new Financial Stability Oversight Council (the “Council”).  The Council is made up of ten voting members – nine federal financial regulatory agencies and an independent member with insurance expertise – and five nonvoting members.  Click title for full article.  

------------

Highlights from the UK Ministry of Justice’s Newly-Issued Guidance on the UK Bribery Act

 

By Peter P. Tomczak (photo) and Andrew S. Boutros (Task Force Co-Chair)

On March 30, 2011, the UK Ministry of Justice published the forty-three page, final version of the Guidance on procedures that relevant commercial organizations can implement to prevent bribery (the “Guidance”), with an accompanying “Quick Start Guide” that summarizes key points and answers to common questions regarding implementation of the Guidance by those organizations. Click title for full article.  

--------

A Voice From the Past Rings True 35 Years Later: Ted Sorensen on the FCPA

 By Juliet S. Sorensen

In July 1976, a New York lawyer named Theodore C. Sorensen wrote an article for Foreign Affairs entitled “Improper Payments Abroad: Perspectives and Proposals.”  At the time, Congress was engaged in a lengthy debate about how most effectively to prevent U.S. entities from paying bribes to foreign government officials.  That debate lasted until December 1977, when the Foreign Corrupt Practices Act ("“FCPA”) was enacted. Click title for full article.  

-----------

Corruption Is Bad … But What Is It, and What Should Be Done?

 By Mike Koehler

Everyone it seems is talking about it.  The G-20 nations all agree that it “threatens the integrity of markets, undermines fair competition, distorts resource allocation, destroys public trust and undermines the rule of law.”[1]  According to President Obama “preventing and tackling [it] must be a key part … of efforts to shape an international economic architecture that is rules-based and transparent.” Click title for full article. 

---------

FCPA Theory Meets the Egyptian Streets:  Mubarak’s Corrupt Government Falls

By Andrew S. Boutros, Task Force Co-Chair 

On January 25, 2011, widespread civil unrest broke out in Cairo, Egypt. Soon thereafter, Tahrir Square was home to a popular uprising that, according to reports, numbered about two million. It took only eighteen days from the protest’s beginning to end Hosni Mubarak’s 30-year reign. Click title for full article.  

--------

Summary of Revisions to the Chinese Commercial Bribery Law 

   

By Kelly Austin and Tzung-lin Fu

China recently extended the definition of commercial bribery to include illicit payments to foreign officials.  As part of the Eighth Amendment to the PRC Criminal Law, Article 164 will criminalize “giving money or property to any foreign official or officer of a public international organization” for the purpose of seeking “improper commercial benefits” (不正当商业利益). Click title for full article.  

---------

Going Global:  Political Corruption Investigations and Reciprocal Cooperation Under the UN Convention Against Transnational Organized Crime

 By Jason Pickholz

Imagine that tomorrow morning, as you approach the building where you work, you notice United States law enforcement agents conducting a search and seizure.  Upon taking a closer look, you realize that they are accompanied by investigators from a foreign country.  You watch as the agents carry off your company’s computers and files for the foreign investigators to take back to their own country.  Click title for full article.

---------

By Barry Sabin, Maria Barton and Matt Cronin

The World Bank Group (“World Bank” or the “Bank”) has increasingly taken steps towards becoming one of the most agile anti-corruption organizations, building upon its multi-jurisdictional access that few national enforcement agencies can match. A gathering in World Bank headquarters in December 2010 of over 240 officials to form the “International Corruption Hunters Alliance” is a recent high-profile example of its international presence. World Bank President Robert B. Zoellick hailed the event as a “groundbreaking international initiative to tackle corruption,” comparing its importance to the Bretton Woods Agreements that created the international financial system. Click title for full article.  

----------

Will There Be a "Russian FCPA"? Unlikely                                                                                                     

 By Dmitry Dementyev (photo) and Roman Zhavner

The Foreign Corrupt Practices Act ("FCPA") is a U.S. law with worldwide application. As such, it not only references foreign laws, but also mandates comprehensive, trans-national compliance. This, in turn, necessitates that FCPA practitioners study foreign anti-bribery laws, and monitor foreign anti-bribery enforcement actions that may directly impact enforcement in the U.S. Click title for full article.  

---------

 By Michael Volkov 

With the ever-increasing enforcement of domestic and international anti-bribery statutes against global businesses, politicians are now responding to organizations lobbying for “reform.”  In the United States, for example, the Senate Judiciary Committee, responding in part to the US Chamber of Commerce’s critique of current FCPA enforcement practices, held an oversight hearing on enforcement of the Foreign Corrupt Practices Act.  In the United Kingdom, the UK Anti-Bribery Act has faced delay again amidst business concerns that enforcement of the Act will undermine UK businesses’ ability to compete in the global marketplace. Click title for full article. 

--------

 By William C. Athanas 

The proliferation of FCPA enforcement actions against corporate entities in recent years is well documented. Although these actions have imposed a variety of sanctions against companies operating in a broad range of countries and industries, they frequently share a common property: systemic failures of compliance to prevent, detect and remedy violations of law. Because of the lack of judicial guidance illuminating the contours of the FCPA, those engaged in international commerce have understandably relied heavily on these enforcement actions in an effort to enhance their ability to avoid a similar fate. To be sure, studying the context and substance of FCPA actions against other entities serves a helpful purpose. However, narrowly confining the information-gathering process to those situations necessarily leads to underinformed decision making. Of equal, if not greater, value are the lessons learned from those companies that have attracted the attention of government regulators, but that ultimately avoided criminal and civil sanctions altogether. Click title for full article.

----------

Third-Party Agents: What Kind of Diligence is “Due”

By Michael Volkov and Ryan Morgan 

Almost all FCPA enforcement actions involve the failure of a company to adequately screen or prevent a third-party agent from bribing a foreign official.  The company’s relationship with the third-party agent is where the rubber hits the road: economic pressure to use the agent is strong when the agent can get the company the contract, and compliance officers know that third-party agents are the ones most likely to bribe a foreign official to win a contract, obtain a license, or secure a regulatory permit.  In the absence of a company’s systematic failure to comply with the FCPA, companies need to focus on third-party agent relationships and laser their compliance efforts to make sure they do not cross the FCPA boundary. Click title for full article.

-------

(Mis)Using Official Immunity to Shield Against Corruption Charges: The Example of Former Croatian Prime Minister Ivo Sanader