Jul. 8, 2020

ECCP Edits Provide More Nuance on Training, M&A and Third-Party Management

At a high level, the edits to the DOJ’s Evaluation of Corporate Compliance Programs (ECCP) quietly released in June 2020 are focused on encouraging companies to find ways to constantly improve their compliance programs. However, the edits also provided some further refinements in specific areas of compliance, namely training, mergers and acquisitions and managing third parties. In this second article taking a close look at the 2020 edits, we analyze these specific suggestions with former DOJ attorneys. The first article looked at how the new edits encourage companies to make compliance a positive feedback loop based on “lessons learned.” For a side-by-side comparison of the April 2019 and June 2020 versions of the ECCP, click here.

Second Edition of the DOJ/SEC FCPA Resource Guide Spotlights U.S. Enforcers’ Controversial Legal Interpretations

Eight years after publishing the Resource Guide to the U.S. Foreign Corrupt Practices Act, the DOJ and SEC issued a second edition on Friday evening of a holiday weekend. The updated guide includes new enforcement action examples, case law and policies. While there are no big surprises for those who stay on top of FCPA developments, Shearman & Sterling partner Philip Urofsky writes in this guest article that there are a few takeaways worth noting. He argues that the updates reflect the government’s continuing adherence to certain controversial interpretations of the statute, as well as some strong indications of new foci in the government’s evaluation of a company’s compliance and cooperation. See “Top Practitioners Analyze the New FCPA Guidance (Part One of Two)” (Nov. 28, 2012); Part Two (Dec. 12, 2012).

Novartis and Subsidiaries Settle FCPA Cases for $346M, Avoiding a Monitor Despite Recidivism

Swiss pharmaceutical and healthcare company Novartis AG, along with current subsidiary Novartis Hellas S.A.C.I. and former subsidiary Alcon Pte Ltd, have settled alleged FCPA charges by paying a combined amount of more than $346 million. This was not parent company Novartis AG’s first FCPA rodeo, but it managed to avoid the appointment of a monitor. The settlements stem largely from gifts, travel and entertainment and other improper payments the Novartis subsidiaries provided to healthcare providers in both Greece and Vietnam. The settlements may represent a renewed focus on GTE, and there are some important lessons here for other organizations in merger and acquisition mode, as well as for recidivists. See “Travel Agency Abuse, Falsified Expense Reports and Other Hospitality Blunders Lead to $25 Million Novartis Settlement” (Apr. 6, 2016).

Internal Investigations in the Life Sciences Industry

As the focus of intense enforcement scrutiny over the past decade, multinational pharmaceutical companies have developed sophisticated and robust investigations programs for anti-corruption issues as well as other fraud and compliance risks. Lisa LeCointe-Cephas, the head of global investigations at Merck, began her investigations career in life sciences as outside counsel before moving to in-house positions, first at Bristol-Myers Squibb and then Merck. The Anti-Corruption Report spoke with LeCointe-Cephas about overcoming the technological, cultural and logistical challenges of running a global investigations program in a highly regulated, highly global industry. See “Investigation Strategies During Social Distancing” (Apr. 1, 2020).

Commercial Bribery: The FCPA’s Forgotten Counterpart

Many anti-corruption compliance programs are focused on preventing bribes being paid to foreign officials, but in both the U.S. and abroad there has been increasing attention paid to commercial bribery. In a guest article, Lucinda Low, Brittany Prelogar, Zoe Osborne and Jessica Piquet Megaw of Steptoe argue that corporate prohibitions on public sector bribery are insufficient to mitigate anti-corruption enforcement risks related to commercial bribery and that compliance programs should be reevaluated to fully mitigate this risk. See “$25M Microsoft Settlement Highlights Channel Partner Risk and the Value of Tech in Remediation” (Aug. 7, 2019).

Former Assistant U.S. Attorney Joins Jones Day in San Diego

Robert Huie served as deputy chief of the Major Frauds and Public Corruption Section in the Southern District of California. For more from Jones Day, see “Privilege, Data Privacy and Human Resources in Cross‑Border Investigations” (Oct. 31, 2018).

Former Deputy Counsel to President Obama Joins Latham

Michael Bosworth joins as a partner in the firm’s litigation and trial department and member of the white collar defense and investigations practice. He will be based in New York. For more from Latham, see “Any Decrease in FCPA Enforcement Under Trump Will Be Overshadowed by International Enforcement, Experts Predict” (Apr. 4, 2018).