The Anti-Corruption Report

The definitive source of actionable intelligence covering anti-corruption laws around the globe

Articles By Topic

By Topic: Deferred Prosecution Agreements

  • From Vol. 7 No.22 (Oct. 31, 2018)

    Privilege, Data Privacy and Human Resources in Cross‑Border Investigations

    Increasing globalization and better international law enforcement cooperation have made cross‑border investigations increasingly complex, Angela Burgess, a partner at Davis Polk, explained during a panel at PLI’s recent White Collar Crime 2018 program. The panel, which Burgess moderated, addressed how to navigate the minefields of attorney‑client privilege, data privacy and employment law in cross‑border investigations. The panel also included attorneys from the U.S. Attorney’s office in the EDNY, Weil Gotshal, Skadden and HSBC. See “Dispelling Myths About When Attorney-Client Privilege Applies to Communications With In-House Counsel” (Sep. 20, 2017).

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  • From Vol. 7 No.18 (Sep. 5, 2018)

    Is the Pie Getting Bigger? Double Jeopardy in the Age of International Cooperation

    As the frequency of international cooperation and multilateral settlements has increased, so has the question of whether the total “pie” of possible criminal penalties is getting bigger, essentially subjecting companies to international double jeopardy for the same acts of bribery. At a recent panel, experts from Argentina, the Netherlands, Belgium and the U.K. discussed international cooperation, global settlements and the double-jeopardy risks for multinational companies caught in the anti-corruption crosshairs. See “How Significant Is the DOJ’s New Directive on Coordination?” (May 16, 2018).

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  • From Vol. 7 No.15 (Jul. 25, 2018)

    As the U.K. Bribery Act Turns Seven, Experts Take Its Pulse

    The U.K. Bribery Act has “evolved significantly over the course of the last seven years,” Greenberg Traurig shareholder Barry Vitou said at a recent Securities Docket program. He and other panelists offered insights on the upcoming changing of the guard at the SFO, the use and impact of deferred prosecution agreements, the pending House of Lords review of the Act and pending litigation over the scope of attorney-client privilege. See “Joint Head of Bribery at the SFO Discusses the Agency’s Priorities” (May 30, 2018).

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  • From Vol. 7 No.14 (Jul. 11, 2018)

    DPAs Go North: Modernizing Bribery and Corruption Enforcement in Canada

    Among the significant steps the Canadian government has taken over the past year to strengthen and modernize its anti-corruption regime is the introduction of deferred prosecution agreements to resolve cases. In a guest article, Blake, Cassels & Graydon attorneys Mark Morrison, Michael Dixon and John Fast discuss how the new system will work and how DPAs can bolster compliance by incentivizing a collaborative approach to bribery and corruption prevention through certain, predictable outcomes and procedures for self-reporting, reparations and remediation. See “Growing Pains in the Evolution of Canadian Anti-Corruption Enforcement” (Mar. 1, 2017).

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  • From Vol. 7 No.13 (Jun. 27, 2018)

    SocGen Reaches Historic Deal With France and U.S., Legg Mason Tags Along

    SocGen, one of France’s largest financial institutions, recently earned the dubious distinction of becoming the first company to reach a bilateral settlement with France and the United States. The $585-million anti-corruption settlement, which resolved claims that SocGen executed a multi-year scheme to pay bribes to officials in Libya in exchange for investments, is the first time France has levied its own anti-corruption charges against a company. On the same day, the DOJ also announced a related $64-million settlement with Maryland-based investment management firm Legg Mason. We detail the bribery scandal underlying the charges against both companies and dissect the terms of their settlements. An upcoming companion article will discuss what the settlements say about the DOJ’s new policy against “piling on,” America’s commitment to international cooperation and France’s efforts to join the international corruption enforcement big leagues. See “An Insider’s Take on France’s New Approach to Foreign Corruption” (May 16, 2018).

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  • From Vol. 7 No.11 (May 30, 2018)

    Joint Head of Bribery at the SFO Discusses the Agency’s Priorities

    The massive Rolls-Royce settlement in 2017 put Britain’s Serious Fraud Office on the anti-corruption map, but how active will the agency continue to be and how will it coordinate with other jurisdictions in this era of international cooperation? Camilla de Silva, the SFO’s Joint Head of Bribery & Corruption, recently addressed the SFO’s priorities and how the investigation process works at a breakfast held by the ABA’s Criminal Justice Section Global Anti-Corruption Committee in Washington, D.C., as well as in recent remarks at the International Pharmaceutical and Medical Device Compliance Congress in Vienna. See “Are U.K. Enforcement Authorities Sending the Wrong Message to Companies?” (Oct. 18, 2017).

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  • From Vol. 7 No.10 (May 16, 2018)

    An Insider’s Take on France’s New Approach to Foreign Corruption

    As global anti-corruption enforcement grows, many countries are adopting policies and procedures that resemble those of countries with more established regimes, such as encouraging self-reporting and allowing for negotiated resolutions. That can be an uncomfortable process for lawyers who are used to operating differently than their counterparts in places like the U.S. and the U.K. For instance, France recently adopted a more stringent anti-corruption law that requires companies to establish compliance programs and has started offering DPAs. During a presentation at the Society of Corporate Compliance & Ethics’ spring European Compliance & Ethics Institute in Germany, Maria Lancri, a French attorney practicing at GCV, shared her reactions to France’s move towards a more-U.S. style of resolving anti-corruption cases. See “What Compliance Lessons Can Companies Learn From the SFO’s First Two DPAs?” (Sep. 28, 2016).

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  • From Vol. 7 No.2 (Jan. 24, 2018)

    Lessons Learned From the First-Ever French Convention Judiciaire d’Intérêt Public Concluded With HSBC

    On October 30, 2017, less than a year after the enactment of France’s new anti-corruption law known as Sapin II, which created a new settlement tool for use in connection with certain corporate criminal investigations, HSBC Private Bank Suisse SA (HSBC PRBA) entered into a convention judiciaire d’intérêt public (CJIP), France’s first-ever corporate resolution mechanism. In a guest article, Bryan Sillaman, a partner in Hughes Hubbard’s Paris office, and his associate, Marie-Agnès Nicolas, explain that although questions remain regarding certain CJIP-related provisions of Sapin II, the resolution with HSBC PRBA provides a helpful starting point to assess how such agreements will be structured in light of Sapin II’s statutory framework and the procedural requirements of the French legal system. See “Despite Anemic Prosecutions, France Moves Toward Increased Anti-Corruption Enforcement” (Oct. 26, 2016).

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  • From Vol. 7 No.1 (Jan. 10, 2018)

    Local Experts Weigh In on Keppel’s $422 Million Trilateral Anti-Corruption Settlement

    In the latest fallout from the expansive Petrobras scandal, Singapore-based Keppel Offshore & Marine Ltd. and its U.S. subsidiary have agreed to a $422 million multinational settlement to resolve anti-corruption charges in the United States, Brazil and Singapore. The Anti-Corruption Report discussed the settlement and its implications for future enforcement with anti-corruption experts from both Brazil and Singapore. We flesh out the details of all three settlements and discuss the key compliance takeaways. See “Petrobras and Unaoil Investigations Collide in Individual Prosecutions in the U.S. and U.K.” (Nov. 29, 2017).

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  • From Vol. 6 No.24 (Dec. 13, 2017)

    SBM Offshore Reaches FCPA Settlement After a Reopened DOJ Investigation

    Dutch oil-services company SBM Offshore and its wholly owned U.S. subsidiary, SBM Offshore USA, have agreed to pay $238 million to settle allegations that they engaged in a widespread, systematic scheme to bribe government officials in more than five countries. The DOJ had previously declined to prosecute the company but reopened its investigation when new facts came to light. SBM previously settled with Dutch authorities and has been attempting to settle with Brazilian authorities for some time. We look at the company’s corrupt commission payment scheme and the factors that went into its significant penalty discount. See “Petrobras and Unaoil Investigations Collide in Individual Prosecutions in the U.S. and U.K.” (Nov. 29, 2017).

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  • From Vol. 6 No.19 (Oct. 4, 2017)

    Massive Telia Settlement Indicates International Cooperation Will Continue Under New Administration

    Swedish telecommunications company Telia, along with its Uzbek subsidiary Coscom, has agreed to settle bribery allegations with the SEC, DOJ, Dutch and Swedish authorities for the eye-watering sum of $965 million in criminal penalties and disgorgement. While the settlement amount is one of the highest in FCPA history, the company was able to obtain a DPA and avoid a monitor through extensive cooperation and remediation efforts. The facts at issue closely mirror those in VimpelCom’s settlement in 2016, but the companies were treated differently by the government. We analyze the case and the outcome. See “VimpelCom Settlement Highlights U.S. Government’s New Holistic Approach to Anti-Corruption Enforcement” (Feb. 24, 2016).

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  • From Vol. 6 No.5 (Mar. 15, 2017)

    Rolls Settlement Illuminates SFO Expectations for Cooperation and Compliance

    Rolls-Royce’s recent settlement with U.K., U.S. and Brazilian authorities was a key development in global anti-corruption enforcement. The case opens a window into what the SFO, now a major player on the field of anti-corruption enforcement, expects from companies both in terms of cooperation and remediation. That information may prove crucial for many multinational companies as U.K. enforcement continues to assert its dominance on the anti-corruption stage. See “Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption” (Feb. 15, 2017) and “SFO Arrives in the Anti-Corruption Premier League With Rolls-Royce Settlement” (Mar. 1, 2017).

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  • From Vol. 6 No.4 (Mar. 1, 2017)

    SFO Arrives in the Anti-Corruption Premier League With Rolls-Royce Settlement

    The U.K.’s Serious Fraud Office has struggled for legitimacy in recent years, with a limited number of enforcement actions under its belt and a shrinking budget. But its recent settlement with Rolls-Royce has established it as a force to be reckoned with in global anti-corruption enforcement. “The settlement catapults the SFO into the Premier League of global anti-bribery law enforcement,” said London-based Barry Vitou, head of Pinsent Masons’ corporate crime team. But is it sending mixed messages about the value of cooperation and self-reporting? For more on the settlement, see “Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption” (Feb. 15, 2017).

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  • From Vol. 6 No.3 (Feb. 15, 2017)

    Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption

    Rolls-Royce’s recent massive settlement with U.S., U.K. and Brazilian authorities is a stark reminder of the anti-corruption risks associated with intermediaries, agents and fixers when negotiating contracts with state-owned entities. Commissions paid by Rolls-Royce to its agents – including notorious oil-and-gas “solutions” provider Unaoil – often were eventually passed on to foreign officials to close deals, netting Rolls-Royce a global settlement for hundreds of millions of dollars. In this first article discussing the case, we look at the bribes Rolls-Royce paid, how its compliance program failed to prevent them and what companies can do to make sure that commissions paid to agents are not used improperly. In a second article, we will look at the implications for cooperative U.S. and U.K. enforcement and what the SFO is looking for in terms of cooperation and remediation. See “Bribery Act Experts Discuss the Impact of Brexit, DPAs and Other U.K. Developments” (Jul. 13, 2016).

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  • From Vol. 6 No.3 (Feb. 15, 2017)

    $30M SQM Settlement Demonstrates the Hazards of Discretionary Accounts for CEOs and Charitable Donations to the Politically Connected

    Chemical and mining company Sociedad Química y Minera de Chile (SQM) has agreed to pay more than $30 million in civil and criminal penalties to settle allegations that it made inappropriate payments to politicians and people closely connected to them in violation of the FCPA. Much of the company’s FCPA problems stemmed from the mishandling of a discretionary fund provided for the use of the CEO, through which some $14.75 million was funneled to politicians and their associates, often via charitable foundations. See “Room for Improvement: Miller & Chevalier Survey Reveals Troubling Perceptions of Corruption and Compliance in Latin America” (Sep. 14, 2016).

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  • From Vol. 6 No.2 (Feb. 1, 2017)

    After Two Extensions of Its DPA, Zimmer Biomet Settles Further FCPA Charges for $30M

    Biomet’s continued misconduct during the term of its 2012 deferred prosecution agreement, including its bribery of Mexican customs agents and persistent use of a third-party distributor known to have paid bribes in Brazil has led to a new resolution with the DOJ and SEC. The DOJ extended Biomet’s 2012 deferred prosecution agreement twice while the investigation was pending, and now the company (purchased in 2015 by Zimmer, which also bought the DPA obligations) will pay $30 million dollars to resolve the claim in a new settlement, and will take on another monitor for three years. See also “Dan Newcomb Discusses the Unusual Second Extension of Biomet’s DPA” (Apr. 20, 2016).

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  • From Vol. 5 No.22 (Nov. 9, 2016)

    Embraer Uses Sleight-of-Hand Payments to Third-Party Agents to Sell Planes Around the World, Landing It More Than $200M in U.S. Fines

    Embraer, one of Brazil’s leading exporters and the world’s largest manufacturer of mid-size jets, has settled bribery allegations with both the SEC and DOJ related to its use of third-party agents in transactions spanning the globe. According to Karlis Novickis, a regional compliance officer at Whirlpool LatAm based in São Paolo, the fines in this case show that compliance “is one of the best investments” a company can make. In this article, we synthesize the SEC and DOJ’s divergent papers to provide a coherent narrative of how Embraer employees skirted the company’s internal controls. In a companion article in a future issue, we will look at the compliance and enforcement implications of the settlement. See “Regional Risk Spotlight: Giovanni Falcetta of TozziniFreire Talks Anti-Corruption in Brazil Beyond the Petrobras Scandal” (Mar. 23, 2016). 

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  • From Vol. 5 No.22 (Nov. 9, 2016)

    Och-Ziff’s Settlement Offers Five Compliance Lessons for Hedge Fund Managers and Private Equity Investors 

    Och-Ziff’s recent settlements with both the SEC and DOJ for violations of the FCPA should be a wakeup call for hedge fund managers and private equity investors. “Although the enforcement authorities have historically focused their FCPA attention elsewhere, the DOJ and SEC are increasingly turning their attention to sophisticated financial firms,” Jason Jones, a partner at King & Spalding, explained. “Hedge funds, private equity firms, banks, and other firms often focus the majority of their compliance resources on anti-money laundering and sanctions programs, but anti-corruption must not be neglected,” he said. The details of the case, along with the terms of the company’s settlement, offer five key compliance lessons for firms in this industry. For details on the facts underlying the case and the terms of the settlement see our companion article “Dirty Dealings in Africa Result in SEC and DOJ Settlements for Och-Ziff and Two Executives” (Oct. 26, 2016).

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  • From Vol. 5 No.21 (Oct. 26, 2016)

    Dirty Dealings in Africa Result in SEC and DOJ Settlements for Och-Ziff and Two Executives

    After months of speculation, the SEC and DOJ recently announced a settlement with Och-Ziff Capital Management and two of its employees for more than $400 million. The settlement papers indicate that Och-Ziff’s varied dealings in Africa – both in terms of procuring investors and making private equity investments – were characterized by a nonchalant attitude toward compliance. The company routinely worked with intermediaries with questionable backgrounds and known ties to government officials. Once deals were made, little effort was put into ensuring that funds were spent appropriately. According to a team of attorneys at MoloLamken, the settlement is a “significant development” in both the FCPA and hedge fund worlds. “For a number of years, DOJ and the SEC have indicated that their FCPA enforcement efforts are focused on private equity and hedge funds,” they said, “but the Och-Ziff settlement is the first major move in that direction. And it’s a significant one: the case represents one of the largest FCPA settlements in history against one of the world’s largest hedge funds.” A companion article in our next issue will distill further compliance takeaways from the case. See “Addressing Corruption Risks and Compliance Strategies for Co-Investors (Part One of Two)” (Jun. 24, 2015); Part Two (Jul. 8, 2015). 

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  • From Vol. 5 No.19 (Sep. 28, 2016)

    What Compliance Lessons Can Companies Learn From the SFO’s First Two DPAs?

    In July 2016, the U.K.’s Serious Fraud Office received court approval for its second-ever DPA. Both this DPA and the one before it, involving Standard Bank, are stark demonstrations of the fact that violating the U.K. Bribery Act can have serious and expensive ramifications not only for the offending company but also for others in its corporate group, even if they were unaware of the bribery. They also serve as another reminder of the dangers of using agents to win business. In a guest article, Matthew Getz and Prateek Swaika, partner and associate, respectively, at Boies, Schiller & Flexner, consider some of the lessons to be learned in this context, and what companies operating in the U.K. should do to avoid incurring liability when using agents to enter into contracts. See also “In Second DPA, SFO and U.K. Court Focus on Cooperation, Self-Reporting and Compliance” (Aug. 31, 2016).

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  • From Vol. 5 No.17 (Aug. 31, 2016)

    In Second DPA, SFO and U.K. Court Focus on Cooperation, Self-Reporting and Compliance

    Recently a U.K. court approved the second Serious Fraud Office application for a DPA. The identity of the counterparty remains confidential but is understood to be a small to medium-sized U.K. entity wholly owned by a U.S. corporation. The first DPA which was approved by the same judge in November 2015, was with Standard Bank, a regulated institution that settled for what could be perceived as a more stringent penalty. More recently, financially troubled Sweett Group was prosecuted after failing to cooperate in the SFO’s investigation. In a guest article, Elizabeth Robertson, a partner at Skadden located in London, discusses the key features of the most recent DPA and examines the differences between it, the Standard Bank case and the Sweett Group case offering insights on anti-corruption enforcement in the U.K. See “Lessons From the U.K. Sweett Group Prosecution” (Mar. 23, 2016).

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  • From Vol. 5 No.15 (Jul. 27, 2016)

    Serious Consequences for Former Louis Berger Executives Highlight Increasing Individual FCPA Risk

    In July 2015, Louis Berger International, an engineering, architecture and construction management consulting firm, entered into a deferred prosecution agreement with the DOJ and agreed to pay $17.1 million to settle allegations of corruption in Asia. One year later, several of the individuals involved in the bribery have been sentenced based on their guilty pleas and Louis Berger is seeking to recoup its settlement-related losses from one of those individuals in a civil suit. “The LBI complaint highlights yet another avenue for potential exposure for individuals involved in improper business activities,” explained Ted Kang, a partner at Alston Bird. See “No Discount and a Three-Year Monitor: Dissecting LBI’s $17.1 Million FCPA Settlement” (Jul. 22, 2015).

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  • From Vol. 5 No.14 (Jul. 13, 2016)

    Bribery Act Experts Discuss the Impact of Brexit, DPAs and Other U.K. Developments

    In the five years since the U.K. Bribery Act took effect, there have been few prosecutions but, according to Pinsent Masons partner Barry Vitou, speaking at a recent Securities Docket webinar, now is “exactly the wrong moment” to become complacent about compliance. In fact, after the webinar, on July 8, 2016, a judge approved a deferred prosecution agreement between the Serious Fraud Office and an unnamed company to resolve bribery charges in a case that is ongoing against individuals. Vitou, along with Julian Glass, a managing director at FTI Consulting, Richard Kovalevsky QC and Vivian Robinson QC, a partner at McGuireWoods and former general counsel to the U.K.’s Serious Fraud Office, discussed recent developments in the U.K. of concern to companies, including the impact of Brexit on anti-corruption compliance and the SFO’s use of DPAs. See “SFO’s Alford Discusses Enforcement Priorities, Deferred Prosecution Agreements and Corporate Criminal Liability” (Jun. 15, 2016).

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  • From Vol. 5 No.12 (Jun. 15, 2016)

    SFO’s Alford Discusses Enforcement Priorities, Deferred Prosecution Agreements and Corporate Criminal Liability

    In light of events such as the first convictions under the U.K. Bribery Act and the first British corporate deferred prosecution agreement, how does the U.K.’s Serious Fraud Office (SFO) see its role on the domestic and international law enforcement stage? In remarks at the American Conference Institute’s recent New York Conference on the FCPA, Stuart Alford, QC, the Head of Division of the SFO, explained the operations and priorities of the SFO, with emphasis on its role in anti-corruption enforcement, deferred prosecution agreements and corporate criminal liability. See also “U.K. Anti-Corruption Summit Brings Criticism and a Touch of Déjà Vu” (Jun. 1, 2016).

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  • From Vol. 5 No.8 (Apr. 20, 2016)

    Dan Newcomb Discusses the Unusual Second Extension of Biomet’s DPA

    In a rare move, the Department of Justice has extended Biomet’s deferred prosecution agreement for the second time in two years. In March 2015, days before the company’s March 2012 deferred prosecution agreement was set to expire, Biomet announced that the DOJ had informed the company that Biomet’s DPA and monitor appointment had been extended for an additional year. On March 25, 2016, the company announced a second extension, disclosing that the DOJ and SEC are continuing to investigate the company’s activities in Brazil and Mexico as well as “issues” relating to the company’s compliance program. The FCPA Report discussed the implications of this historic extension with Danforth Newcomb, counsel at Shearman & Sterling.  See previously “Learning from the Extension of Biomet’s DPA” (Apr. 1, 2015).

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  • From Vol. 5 No.8 (Apr. 20, 2016)

    District Court Order Threatens Confidentiality of Monitor Reports

    Reports of compliance monitors retained in accordance with corporate settlements have generally been kept out of public view – until now. Finding that a compliance monitor’s report is a judicial record and the public has a First Amendment right to see it, Judge John Gleeson of the Eastern District of New York granted, in large part, the pro se request of an HSBC mortgage customer to unseal the first annual report of the compliance monitor HSBC retained in connection with its $1.9 billion settlement with the DOJ. The matter is stayed pending appeal. A similar case is pending in the D.C. District, where 100Reporters has asked for the Siemens monitor report stemming from that FCPA enforcement action. See also “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three)” (Feb. 20, 2013); Part Two (Mar. 6, 2013); Part Three (Mar. 20, 2013). 

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  • From Vol. 5 No.4 (Feb. 24, 2016)

    VimpelCom Settlement Highlights U.S. Government’s New Holistic Approach to Anti-Corruption Enforcement

    VimpelCom, a Russian-owned, Amsterdam-based telecommunications company, and its wholly owned Uzbek subsidiary Unitel, have come to a global agreement to settle allegations that VimpelCom bribed its way into the Uzbek cable market. Unitel pled guilty to bribery charges, while VimpelCom entered into a criminal DPA and reached a civil settlement with the SEC. Altogether, VimpelCom agreed to pay more than $795 million to the SEC, DOJ and Dutch authorities, and agreed to take on a compliance monitor for three years. The investigation involved more than 17 jurisdictions and was accompanied by a civil forfeiture case seeking the funds paid to the corrupt foreign official in Uzbekistan that are squirreled away in Swiss bank accounts. Here we dissect the settlement and VimpelCom’s significant discounts for cooperation, despite its failure to self-report. In our next issue we will explore how VimpelCom’s blasé attitudes about corruption at its highest levels led to this historic settlement. See “From Discounts to Slush Funds: Red Flags to Heed and Eight Steps to Take to Avoid SAP’s $3.9 Million Mistakes” (Feb. 10, 2016).

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  • From Vol. 5 No.4 (Feb. 24, 2016)

    Excessive Power for Junior Employees and Lavish Trips for Foreign Officials Lead to $28 Million PTC Settlement

    PTC Inc., a Massachusetts-based software company, will pay more than $28 million to settle parallel civil and criminal FCPA charges. Like FLIR and SciClone, PTC’s corruption troubles stemmed from the provision of improper travel, gifts and entertainment to government officials. By inflating the fees paid to third parties for their services, junior employees of PTC’s China-based subsidiaries created pools of money that were then used to fund sightseeing adventures. Officials visited Honolulu, San Diego, New York and Las Vegas and enjoyed guided tours, golfing and other leisure activities. The SEC also announced its first DPA with an individual in an FCPA case, agreeing to defer prosecution against Yu Kai Yuan, a former employee of a PTC subsidiary, because of the significant cooperation he provided during the SEC investigation of the company. The voluntary disclosure calculus and how to handle relationships with lobbyists were among the key compliance concerns implicated in the PTC matter. See “CEO of LAN Airlines Settles FCPA Charges With SEC Over Union Dispute” (Feb. 10, 2016).

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  • From Vol. 4 No.26 (Dec. 16, 2015)

    The Meaning of the U.K.’s First DPA

    Deferred Prosecution Agreements became available in the United Kingdom on February 24, 2014.  Some 18 months later, on November 30, 2015, Lord Justice Leveson approved the first one between the SFO and Standard Bank.  In a guest article, Nicola Howard, a Barrister at 25 Bedford Row, and Jonathan Armstrong and André Bywater, lawyers with specialist compliance practice Cordery, explain how the Deferred Prosecution Agreement process works in the U.K., detail the Standard Bank case and examine what the case means for future corporate settlements.  See “Standard Bank Fined by Both the SEC and the SFO in a Coordinated Settlement Featuring the First British DPA,” The FCPA Report, Vol. 4, No. 25 (Dec. 2, 2015).

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  • From Vol. 4 No.25 (Dec. 2, 2015)

    Standard Bank Fined by Both the SEC and the SFO in a Coordinated Settlement Featuring the First British DPA 

    A court in London has approved the Serious Fraud Office’s first DPA in a case involving Standard Bank’s failure to prevent the bribery of Tanzanian officials.  The bank will pay $32.6 million in fines for alleged Bribery Act violations which allowed the bank to win a lucrative private placement deal.  The SEC announced a coordinated settlement fining Standard Bank $4.2 million for failing to disclose the same payments in violation of Section 17(a)(2) of the Securities Act.  Although there are many lessons to be learned from Standard Bank’s agreement, the matter is a “relatively small case” and the DPA is “an incredibly new animal” in the U.K., said Ryan Junck, a partner in Skadden’s London offices.  “Much of the story about when and how DPAs will be used is yet to be written,” he said.  See also “SFO Secures First Bribery Act Convictions,” The FCPA Report, Vol. 3, No. 25 (Dec. 17, 2014).

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  • From Vol. 4 No.25 (Dec. 2, 2015)

    Ceresney and Caldwell Remarks Highlight New SEC Self-Reporting Policy, Cooperation, Remediation and Transparency

    The government’s keynote speeches at ACI’s recent FCPA Conference featured familiar tunes, but a few of the lyrics were new.  Andrew J. Ceresney, the Director of the SEC Division of Enforcement, and Leslie R. Caldwell, Assistant Attorney General of the DOJ Criminal Division, offered their views on their respective agency’s recent FCPA enforcement activity, focusing, as they usually do, on the benefits of self-reporting, cooperation and remediation by companies that discover misconduct.  Ceresney made an announcement about a new SEC policy regarding self-reporting and promised aggressive enforcement.  Meanwhile, Caldwell opined on the Yates memo and its effect on internal investigations and promised to continue increasing transparency.  For coverage of Ceresney and Caldwell’s speeches during the 2014 ACI program see “Caldwell and Ceresney Push Companies on FCPA Compliance, Cooperation and Self-Reporting,” The FCPA Report, Vol. 3, No. 24 (Dec. 3, 2014).

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  • From Vol. 4 No.17 (Aug. 19, 2015)

    Mayer Brown Attorneys Discuss Global Corruption Risk in the Financial Services Industry

    Financial services firms – including banks, financial advisors and private equity investors – have recently been the subjects of an increasing number of anti-corruption enforcement actions.  Will the enforcement agencies remain focused on the financial services industry, or is it just a passing phenomenon?  During a recent event hosted by Mayer Brown, a panel of experts discussed whether financial services firms are actually facing additional exposure and provided strategies for limiting that exposure.  The panel included three Mayer Brown partners: Alistair Graham of the firm’s London office, John Hickin, based in Hong Kong, and Laurence Urgenson, based in D.C.  See also “Five Corruption Risks in the Financial Services Industry,” The FCPA Report, Vol. 3, No. 15 (Jul. 23, 2014).

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  • From Vol. 4 No.15 (Jul. 22, 2015)

    No Discount and a Three-Year Monitor: Dissecting LBI’s $17.1 Million FCPA Settlement

    Securing government contracts through deliberately disguised bribes recently landed Louis Berger International (LBI) in hot water with the DOJ.  The New Jersey-based construction management company agreed to pay $17.1 million to settle charges that it violated the FCPA.  Unlike other companies that have been rewarded for cooperation or self-disclosure with a below-sentencing guidelines fine, the LBI fine was within the statutorily suggested range.  The company was also required, under the terms of the DPA, to engage a corporate monitor for a period of three years, a costly undertaking that the government has been requiring less frequently.  This article explains the bribery scheme and what companies can learn from the settlement.  See “Top FCPA Enforcers Tout Voluntary Disclosure and Warn About International Cooperation; The Defense Bar Responds,” The FCPA Report, Vol. 3, No. 24 (Dec.3, 2014).

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  • From Vol. 4 No.7 (Apr. 1, 2015)

    Learning from the Extension of Biomet’s DPA

    Days before its March 2012 deferred prosecution agreement was about to expire, medical device manufacturer Biomet announced that the DOJ was extending the term of its agreement for another year amidst allegations of further bribery in Mexico and Brazil.  Biomet, whose $13.35 billion merger with Zimmer Holdings is imminent, reportedly discovered the new bribery allegations (some of which involve offshoots of the original culpable distributors) through an anonymous whistleblower report.  FCPA experts share their insights on Biomet’s troubles and the DOJ’s tactics.  See also “Weak FCPA Compliance Program and Lack of Cooperation Cited in Marubeni’s $88 Million Guilty Plea,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 4 No.3 (Feb. 4, 2015)

    In Rare DPA, SEC Resolves FCPA Claims with PBSJ over Middle-Eastern Bribes

    Florida-based engineering and construction firm PBSJ Corporation (now the Atkins North America Holding Corporation) has agreed to pay $3.4 million to resolve FCPA claims with the SEC relating to bribes in Qatar and Morocco.  The claims were resolved via a Deferred Prosecution Agreement – an unusual settlement tool for the SEC.  The SEC also settled claims with Walid Hatoum, PBSJ’s former international marketing director, through an administrative proceeding.  We summarize the case and draw compliance lessons.  See also “SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting,” The FCPA Report, Vol. 2, No. 9 (May 1, 2013).

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  • From Vol. 4 No.2 (Jan. 21, 2015)

    FCPA Corporate Settlements of 2014: Details, Trends and Compliance Takeaways

    FCPA enforcement remained strong in 2014 with the DOJ and the SEC resolving cases with 10 companies for a total of $1.6 billion, the highest enforcement take since 2010.  However, the majority of the funds, approximately 72%, came from two major enforcement actions ($772 million from Alstom and $384 million from Alcoa).  The cases reveal that the government continues to pursue companies in a variety of industries from a mix of nations.  The settling companies range from a technology company, to a firearm manufacturer, to a cosmetics manufacturer and hail from France, America and Japan.  We summarize the salient points of each settlement and distill lessons from these enforcement actions.  See “FCPA Corporate Settlements of 2013: Details, Trends and Compliance Takeaways,” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013).

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  • From Vol. 4 No.1 (Jan. 7, 2015)

    Anti-Corruption Compliance Lessons from the Avon Settlements

    After a six-year investigation that cost the company upwards of $344 million, Avon has resolved FCPA charges with the DOJ and SEC, agreeing to pay $135 million in penalties.  In a guest article, Michelle J. Shapiro and Kiran Patel, partner and associate, respectively, at Dentons, analyze the settlements and draw three anti-corruption compliance lessons from the saga.  See also “Avon Class Action Dismissal Illustrates Challenges of FCPA-Related Shareholder Derivative Suits,” The FCPA Report, Vol. 3, No. 21 (Oct. 22, 2014).

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  • From Vol. 3 No.25 (Dec. 17, 2014)

    Dallas Airmotive Resolves Criminal FCPA Charges for $14 Million Through a DPA

    Dallas Airmotive, a company that provides aircraft engine, maintenance, repair and overhaul services, has agreed to pay $14 million to settle charges that it bribed Latin American government officials to secure lucrative service contracts.  The bribery scheme included the use of third parties, funneling payments through front companies and providing improper travel benefits to government officials.  The DOJ has declined to prosecute, giving the company significant credit for its cooperation and remediation efforts.  It did not self-report.  See also “Layne Christensen Resolves FCPA Civil Charges After DOJ Declination; Details Its Extensive Cooperation,” The FCPA Report, Vol. 3, No 22 (Nov. 5, 2014). 

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  • From Vol. 3 No.13 (Jun. 25, 2014)

    Davis Polk FCPA Experts Assess Global Anti-Corruption Trends (Part One of Two)

    Midway through 2014, what is the state of global anti-corruption enforcement and what does it mean for multi-national companies?  In a recent webinar, attorneys from Davis Polk & Wardwell examined the trends that are shaping the enforcement and compliance landscape.  In part one of this article series, Davis Polk attorneys compare and contrast three recent FCPA resolutions and discuss the enforcement climate in Asia and other parts of the world and the accompanying compliance implications.  In part two, they discuss international cooperation in anti-bribery investigations and changes in the FCPA enforcement climate, including the increasing use of administrative proceedings by the SEC.  See “Davis Polk Lawyers and Morgan Stanley Compliance Director Discuss DOJ’s Decision Not to Prosecute Morgan Stanley for FCPA Violations,” The FCPA Report, Vol. 1, No. 10 (Oct. 17, 2012).

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  • From Vol. 3 No.9 (Apr. 30, 2014)

    FCPA Implications of Recent Decisions on Judicial Monitoring of DPAs, Statutes of Limitations and Jurisdiction

    FCPA cases are often settled without litigation, and judicial interpretation of the law is relatively scarce.  A few recent cases, however, may impact how the FCPA is enforced.  A recent panel at the New York City Bar discussed five such cases and examined possible FCPA implications of these cases for prosecutors and defense counsel. The panel was moderated by John Buretta, a partner at Cravath, Swaine & Moore and included Peter Clark, a partner at Cadwalader, Wickersham & Taft; Colby Smith, a partner at Debevoise & Plimpton; and Lee Dunst, a partner at Gibson, Dunn & Crutcher.  See also “Four Ways the SEC Enforcement Landscape Is Changing and Why They Matter,” The FCPA Report, Vol. 2, No. 24 (Dec. 4, 2013).

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  • From Vol. 3 No.8 (Apr. 16, 2014)

    Three Regions, Four Settlement Tools and $108 Million: HP Entities Resolve Criminal and Civil FCPA Charges 

    Hewlett-Packard and three of its subsidiaries in Russia, Mexico and Poland have resolved FCPA charges, paying $108 million in penalties.  The schemes involved bribes to obtain contracts with various government sectors and encompass different risk areas, such as third-party payments and gifts.  The entities resolved the actions through a guilty plea (for HP Russia), a deferred prosecution agreement (for HP Poland), a non-prosecution agreement (for HP Mexico) and a cease and desist order (for HP, the California-based parent company).  The criminal fines represent discounts from the low end of the Sentencing Guidelines range, unlike the recent Marubeni case, and no compliance monitor was imposed.  For insights from HP on its current compliance program, see “Conducting Effective Anti-Corruption Due Diligence on Third Parties: An Interview with Gwen Romack, Director of Global Anti-Corruption at Hewlett-Packard Company,” Vol. 2, No. 20 (Oct. 9, 2013). 

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  • From Vol. 3 No.5 (Mar. 5, 2014)

    Deferred Prosecution Agreements Come into Force in the U.K.

    The U.K. will now be using Deferred Prosecution Agreements to resolve certain cases.  Similar to U.S.-styled DPAs, British DPAs are agreements between prosecutors and corporations that charges will be presented but not pursued, provided the organization complies with a set of agreed-upon terms and conditions.  Those terms and conditions generally involve payment of substantial fines and/or the implementation of remediation programs.  In a guest article, Elizabeth Robertson, Laura Atherton and Sasi-Kanth Mallela, partner, associate and special counsel, respectively, in K&L Gates’ London office, say that the advent of DPAs will be broadly welcomed by the business community but their application in the U.K. will not be without its controversies.   They consider some of the issues likely to arise as DPAs, which will be implemented in some significantly different ways than they are in the U.S., find their feet in the U.K.  See FCPA Corporate Settlements of 2013: Details, Trends and Compliance Takeaways,” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013).

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  • From Vol. 3 No.4 (Feb. 19, 2014)

    A Synthesis of Top Firms’ FCPA 2013 Year in Review Insights

    It is crucial for compliance professionals to be up-to-date on the latest trends and patterns in FCPA enforcement. However, a simple review of the 2013 enforcement actions may provide more questions than answers. What does the apparent decrease in FCPA prosecutions mean for businesses operating abroad? How seriously should companies take the increase in FCPA penalties? What is the significance of the SEC's first FCPA non-prosecution agreement? The FCPA Report has gathered insight from several of the year-end reports authored by the nation's top FCPA practice groups, including Shearman & Sterling, WilmerHale, Gibson Dunn, Mayer Brown, BakerHostetler and Debevoise & Plimpton, and distilled those ideas and observations into a succinct outline of the 2013 enforcement trends and patterns. See also "Assessing the Year in FCPA Enforcement and Looking Ahead," The FCPA Report, Vol. 3, No. 2 (Jan. 22, 2014). 

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  • From Vol. 2 No.25 (Dec. 18, 2013)

    FCPA Corporate Settlements of 2013: Details, Trends and Compliance Takeaways

    FCPA enforcement got off to a slow start in 2013, with no official corporate FCPA settlements announced until the beginning of the second quarter.  Experts dove into the vacuum, speculating about whether the lack of settlements signaled a downturn in the government’s commitment to enforcement.  As the year progressed, however, enforcement picked up.  While the statistics were slightly down from 2012, as of press time, the DOJ and SEC had reached nine settlement agreements with corporations, including multiple DPAs and the SEC’s first-ever NPA.  The government assessed over $650 million in fines, disgorgement and penalties from the settling companies, with company settlements ranging from $1 million to a staggering $398 million.  This article discusses four compelling enforcement trends and summarizes the settlements and their compliance takeaways.  See also “Seven Key Trends That Are Changing the FCPA Enforcement and Compliance Landscape,” The FCPA Report, Vol. 2, No. 14 (Jul. 10. 2013).

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  • From Vol. 2 No.25 (Dec. 18, 2013)

    Bilfinger Settlement Highlights the Long Tail and Loose Jurisdictional Requirements of Criminal FCPA Charges

    Bilfinger SE has entered into a Deferred Prosecution Agreement with the DOJ to resolve charges that it and Houston-based Willbros Group paid more than $6 million in bribes to Nigerian officials to retain gas contracts related to the Eastern Gas Gathering System Project (EGGS).  Bilfinger agreed to pay a $32 million fine.  Willbros settled with the DOJ in 2008, paying $22 million to resolve charges related to EGGS (as well as charges relating to a bribery scheme in Ecuador).  One Willbros consultant was sentenced in May and several others pleaded guilty.  One former Willbros executive is currently a fugitive.  This article summarizes the case, extracting the compliance takeaways (including the attenuated U.S. nexus, the long tail of the investigation and the hybrid monitorship), and including a chart comparing the compliance requirements in the DPA to past corporate FCPA settlement agreements.  See “A Comparison and Examination of DOJ Compliance Program Requirements in FCPA Settlement Agreements,” The FCPA Report, Vol. 2, No. 19 (Sep. 26, 2013).

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  • From Vol. 2 No.24 (Dec. 4, 2013)

    SEC’s First-Ever Individual DPA Comes Amid Judge Rakoff’s Criticism of Tactics

    The SEC’s first-ever deferred prosecution agreement with an individual underscores its commitment to relying on proactive disclosure and cooperation to identify and redress violations.  On November 12, 2013, the SEC announced the DPA with Scott Herckis, a former hedge fund administrator who cooperated extensively with the agency in taking action against Berton M. Hochfeld, a hedge fund manager who stole over $1.5 million in investor assets.  Experts say the agreement with Herckis marks an expansion of the SEC’s use of DPAs, which began in 2010 with the SEC’s Cooperation Program.  The government’s use of these cooperation tools has been staunchly criticized, however, including a negative assessment by Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York.  In a recent speech, Rakoff opined that the government’s shift in focus in redressing financial fraud from prosecuting high level individuals to prosecuting companies has led to “lax and dubious behavior on the part of prosecutors, with deleterious results.”  For more on settlement agreements, see “A Comparison and Examination of DOJ Compliance Program Requirements in FCPA Settlement Agreements,” The FCPA Report, Vol. 2, No. 19 (Sep. 26, 2013).

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  • From Vol. 2 No.24 (Dec. 4, 2013)

    Oil and Gas Company Weatherford Settles Civil and Criminal FCPA Charges for $153 Million

    Weatherford International, a Geneva-based oilfield services company with significant operations in Texas, has agreed to settlements with both the SEC and DOJ to resolve government investigations into a number of matters, including charges that it violated the FCPA, sanctions and export controls.  The total fine was $253 million.  The $153 million fine for the FCPA portion makes this the eighth largest FCPA fine to date, and this is the first time the SEC has used books and records charges to allege the violation of export control and sanctions laws.  Weatherford announced a tentative deal last month.  For insight on FCPA training from Weatherford’s chief compliance officer, hired after the government probe began, see “FCPA Training That Works: An Interview with Billy Jacobson, Chief Compliance Officer of Weatherford International,” The FCPA Report, Vol. 2, No. 8 (Apr. 17, 2013).

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  • From Vol. 2 No.21 (Oct. 23, 2013)

    Diebold Inc. Resolves Civil and Criminal FCPA Charges Related to Bribery in China, Indonesia and Russia for $48 Million

    Lavish vacations for foreign officials across the globe in return for business form the basis for many of the government’s allegations against Diebold, Inc., an Ohio-based maker of ATM machines and security systems.  Diebold settled with both the SEC and DOJ on October 22, 2013 and agreed to pay more than $48 million in fines, disgorgement and prejudgment interest for the alleged violations.  The government alleged that $3 million in illicit payments were made on behalf of Diebold in China, Russia and Indonesia from 2005-2010.  The DOJ charged the case as conspiracy to violate the anti-bribery provisions of the FCPA and a violation of the books and records provisions.  The company agreed to retain a compliance monitor for 18 months, often a costly and unwelcome proposition.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013); Part Two of Three, Vol. 2, No. 5 (Mar. 6, 2013); Part Three of Three, Vol. 2, No. 6 (Mar. 20, 2013)

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  • From Vol. 2 No.19 (Sep. 26, 2013)

    A Comparison and Examination of DOJ Compliance Program Requirements in FCPA Settlement Agreements

    While the government has not explicitly enumerated the elements of a best-in-class FCPA compliance program, it has done so implicitly, via settlement agreements and the recent FCPA Resource Guide.  The DOJ and SEC often require settling companies to implement specific compliance policies and procedures listed in Deferred Prosecution or Non Prosecution Agreements.  Those requirements, most recently embodied in “Attachment C,” can be a gold mine of best practices for companies that know how to find such documents, how to read them in context, how to analogize the circumstances of the settlement to their own facts, and how provisions in the agreements have evolved over time.  The government’s view on best FCPA compliance practices is out there, but the information is disparate and difficult to digest.  To bring structure and coherence to this important area, and to enable our subscribers to act on it, The FCPA Report has undertaken a proprietary analysis of numerous settlement agreements released over the last five years.  The results of that analysis are reflected in the following chart, which presents 5 representative settlement agreements, analyzes each of the 15 compliance program provisions included in the settlement agreements, shows how those provisions have evolved over time, links to the full text of each settlement agreement and also links to articles from The FCPA Report offering a deeper dive on relevant provisions and concepts.

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  • From Vol. 2 No.15 (Jul. 24, 2013)

    U.K. Practitioners Discuss the Prospect of Enforcement Actions Under the U.K. Bribery Act, Advantages of Deferred Prosecution Agreements and Proposed Sentencing Guidelines

    What was all the fuss about?  The U.K. Bribery Act was adopted in 2010 and took effect in 2011.  Since then, there have been no prosecutions of corporations under the Act and only two formal investigations are known to be underway.  Experienced U.K. practitioners warn that the “fuss” may be proven justified soon, however, and companies should not be complacent.  In a recent webinar, experts cautioned that “enforcement is coming.”  They also discussed the availability of DPAs under the Bribery Act, the continuing utility of civil recovery orders and the proposed sentencing guidelines issued with respect to the Bribery Act.  This article summarizes the key lessons from the webinar.  See also Strategies for Implementing the U.K. Bribery Act’s Requirement of Adequate Procedures for Intermediaries,” The FCPA Report, Vol. 2, No. 3 (Feb. 6, 2013).

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  • From Vol. 2 No.12 (Jun. 12, 2013)

    Compliance Lessons from Total S.A.’s $398 Million FCPA Settlement: Foreign Cooperation, Compliance Monitors, Broad Jurisdiction and the Effect of Reluctant Cooperation with the DOJ and SEC

    The DOJ and the SEC recently announced significant FCPA settlements with Total S.A., a French oil and gas company.  Total faces charges that, starting in 1995, it used third parties to make illegal payments to a government official in Iran in order to obtain valuable oil and gas concessions.  The nearly $400 million civil and criminal settlement may not spell the end of Total’s troubles, however, as French authorities continue to investigate.  Total’s vulnerability in multiple jurisdictions highlights the increasing international cooperation among anti-corruption regimes and the possibility of carbon copy prosecutions.  The settlement agreement also demonstrates the importance of cooperation.  Experts say that Total’s fine, which does not include a reduction from the Sentencing Guidelines, as well as the long investigation that preceded the settlement, may stem from Total’s reluctant cooperation with authorities.  Total was also required to retain an external compliance monitor – a costly proposition many thought was becoming a rarity.   See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013); Part Two of Three, Vol. 2, No. 5 (Mar. 6, 2013); Part Three of Three, Vol. 2, No. 6 (Mar. 20, 2013).  This article analyzes these and other key compliance takeaways from the Total settlement, with input from practitioners.  This article also details the bribery scheme and the terms of the settlement, including the compliance program enhancements required by the DOJ.

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  • From Vol. 2 No.8 (Apr. 17, 2013)

    Parker Drilling DPA Provides a Checklist of Policies and Procedures That the DOJ Expects to See in an FCPA Compliance Program

    Parker Drilling Company, a Houston-based, publicly traded drilling company, has resolved civil and criminal FCPA charges pursuant to a Deferred Prosecution Agreement (DPA) in which the government emphasizes specific elements of compliance programs, policies and procedures, and demonstrates its increased reliance on self-reporting mechanisms in lieu of external monitors.  See “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).  The charges resulted from Parker Drilling’s authorization of payments to an intermediary that Parker Drilling knew would be used to corruptly influence the decisions of a Nigerian government panel reviewing the company’s adherence to Nigerian customs and tax laws.  In addition to discussing the facts and circumstances relevant to the granting of the DPA, and providing details of the Nigerian bribery scheme, this article includes a detailed discussion of the specific ways in which the DPA requires Parker Drilling to enhance its FCPA compliance program.  The various required enhancements serve as a checklist of what the DOJ expects to see in an FCPA compliance program – and thus serves as an important benchmark against which companies can compare their own compliance efforts.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    Lessons from the Latest Anti-Corruption Developments in the U.K., Brazil and China

    A single-minded focus on the FCPA with a passing nod to other countries’ regulatory regimes is not enough to make a company’s compliance program first-in-class today; multinational companies must fully address an array of global anti-bribery laws in an environment of growing global enforcement and increased prosecutorial vigor.  Regulatory regimes in other countries may not be consistent with existing company compliance programs.  In a recent webinar, partners from Hogan Lovells shared their insight and experience on navigating the latest global developments in anti-bribery and corruption regulation and enforcement.  This article conveys the highlights from the discussion, focusing primarily on the anti-corruption regimes in China, the U.K. and Brazil.

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  • From Vol. 2 No.4 (Feb. 20, 2013)

    How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three)

    Looming large in every FCPA settlement negotiation with the government is the reporting requirements the company will be subject to going forward.  Historically, companies had only two options at the negotiating table – plead for no future reporting to be required or accept an onerous and expensive multi-year compliance monitorship.  Thanks, in part, to the increased sophistication of many in-house compliance programs, the government is embracing new and creative reporting obligations, leaving room for companies to negotiate tailored solutions.  How can companies negotiate an agreement that meets the government’s need to decrease recidivism while limiting the uncertainty, invasiveness and expense of extensive reporting requirements?  This article, the first in a three-part series, examines precedent, practice and trends in post-settlement FCPA reporting obligations; discusses the shift to less traditional forms of reporting; explains the process by which reporting obligations are created; and describes the mechanics of the most intrusive types of reporting: traditional monitorship and self-reporting.  The second article in this series will discuss real-world examples of innovative reporting requirements and recommend specific strategies companies can use to negotiate the most beneficial reporting requirements possible.  The third article will provide advice on choosing the best possible monitor and tactics for limiting the expenses of a monitorship.

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Integral Elements of Proactive and Pre-Merger Anti-Corruption Forensic Audits

    The last five years of FCPA enforcement have increased the need for comprehensive and effective compliance programs and controls designed to detect, deter and remediate instances of bribery and corruption.  A hidden jewel for some organizations is the use of the forensic audit function to help achieve these objectives.  A properly staffed and well-trained forensic audit team can provide a positive return on investment if used appropriately to satisfy the new imperative of a well-functioning compliance program.  Conducted competently, forensic audits can go a long way toward preventing violations, detecting violations (including in the merger and acquisition process), aiding the investigative and remedial process, substantiating the existence, amounts and recipients of payments and ultimately helping a company earn credit when negotiating with the government or self-reporting discovered violations.  See “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).  In a guest article, Paul E. Zikmund, Global Director, Ethics and Compliance, at Bunge Limited, discusses the core elements of proactive FCPA audits, as well as the key mechanics of pre-merger anti-corruption forensic audits.

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Recent Developments in U.K. Bribery Act Enforcement: SFO Head Green Speaks, Abbot Group Settles and Rolls-Royce Reveals Bribery Investigation

    There is growing concern that the U.K. Bribery Act 2010 (Bribery Act), which took effect in July 2011, may pose more serious risks for multinational businesses than the FCPA.  This is due, in part, to the fact that the Bribery Act extends to private as well as government bribery and does not have an exception for “facilitating payments.”  On November 13, 2012, David Green CB QC, who is the Director of the U.K.’s Serious Frauds Office (SFO), gave testimony before the Justice Committee of the House of Commons.  His testimony provides insight into how, under his direction, the SFO may be expected to approach anti-corruption efforts in general, and enforcement of the Bribery Act in particular, especially with regard to self-reporting and deferred prosecution agreements.  In other recent U.K. developments, Scotland’s Crown Office and Procurator Fiscal Service announced its first-ever civil settlement.  The government reached an agreement with Abbot Group Limited arising out of overseas corrupt payments, and Rolls-Royce plc announced that it had reported to the SFO information with respect to bribery and corruption involving overseas intermediaries.  This article highlights the key take-aways of Green’s testimony that are relevant to anti-bribery enforcement and summarizes the Abbot and Rolls-Royce matters.  For more on the mechanics of the Bribery Act, see “Finding Clarity in the New U.K. Bribery Act,” The FCPA Report, Vol. 1, No. 12 (Nov. 14, 2012).

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  • From Vol. 1 No.12 (Nov. 14, 2012)

    Finding Clarity in the New U.K. Bribery Act

    The U.K.’s Ministry of Justice has added another tool to its arsenal – like the U.S., it intends to use Deferred Prosecution Agreements (DPAs) for cases of economic crime, following a recent consultation and the overhaul of U.K. Bribery laws in July of last year.  That overhaul replaced elderly bribery laws regarded as ineffective to prosecute modern cases.  The new Bribery Act 2011 (Act) provides a consolidated scheme of offences and, unlike the FCPA, applies to bribery in both the public and private sectors.  Law enforcement agencies in the U.K. had two main mechanisms to deal with bribery and other economic crime by companies: criminal prosecution (followed by confiscation of illicit assets), or civil recovery under legislation which enables prosecutors to make a claim against a company to recover the proceeds of criminal conduct.  DPAs will offer a third option.  In a guest article, James Maton, a partner in Edwards Wildman Palmer UK LLP’s London office, provides details about the provisions of the Act and guidance issued by the U.K., and the government’s new policy on DPAs.  A forthcoming article in The FCPA Report will address specific actions companies can take in light of this new enforcement landscape in the U.K.

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  • From Vol. 1 No.12 (Nov. 14, 2012)

    Landmark Early Termination of Pride International’s DPA Suggests That the DOJ May Offer Credit for Remedial Compliance Efforts Following an FCPA Prosecution

    In a surprising development, the DOJ agreed last week to end Pride International’s deferred prosecution agreement (DPA) a full year before it was set to expire.  The DOJ’s unusual decision has been viewed as a sign that the Department is willing to seriously consider and weigh a company’s compliance efforts, both before and after an investigation or prosecution.  This article discusses the Criminal Information filed in November 2010 against Pride International, the Pride International DPA, the Government’s Motion to Dismiss the Criminal Information and its Motion to Terminate the Probation.

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  • From Vol. 1 No.11 (Nov. 7, 2012)

    ABA Panel Focuses on Trends in SEC Enforcement of the FCPA and Strategies for Negotiating Civil FCPA Settlements

    The SEC’s focus on the FCPA has remained sharp, and recent changes to its policies and new enforcement tools require defense lawyers to rethink their strategies for dealing with the agency.  On October 18, 2012, a group of distinguished attorneys discussed these issues at the ABA’s Fifth Annual National Institute on the FCPA in Washington, D.C.  The panel was moderated by Cheryl Scarboro, now a partner at Simpson Thacher & Bartlett LLP after a 19-year tenure at the SEC, most recently as the first Chief of the FCPA Unit in the Division of Enforcement.  The participants discussed the latest changes to the SEC’s “neither admit nor deny” policy; the viability of tack-on civil litigation; return of disgorged profits to victims or victim countries; negotiation of the disgorgement figure with the SEC; and the SEC’s use of non-prosecution agreements and deferred prosecution agreements.  This article provides highlights from the panel discussion, with particular emphasis on strategies useful to companies and counsel in responding to the SEC during investigations and in negotiating with the agency in settlement proceedings.

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  • From Vol. 1 No.11 (Nov. 7, 2012)

    In Recent Remarks, Assistant Attorney General Lanny Breuer Discusses Deferred Prosecution Agreements, Civil Forfeiture and FCPA Enforcement against Individuals

    Lanny Breuer, head of the DOJ’s Criminal Division, has given two speeches in the last few weeks about the FCPA.  (The DOJ’s Fraud Section is responsible for enforcement of the criminal provisions of the FCPA.)  See also “Chief of the DOJ’s Criminal Division Defends the Use of Deferred Prosecution Agreements in FCPA Enforcement Actions,” The FCPA Report, Vol. 1, No. 8 (Sep. 19, 2012).

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  • From Vol. 1 No.9 (Oct. 3, 2012)

    Why the Current Regime Is Effective at “Busting Bribery": An Interview with Professor Dan Danielsen, Co-Author of the Open Society Foundations’ Report on Corruption

    The FCPA Report recently had a wide-ranging conversation with Dan Danielsen, a Professor at Northeastern University School of Law and former general counsel of Europe Online Networks, S.A. and partner at Foley Hoag LLP.  Professor Danielsen, along with David Kennedy, Professor at Harvard Law School and Director of the Institute for Global Law and Policy, authored the report “Busting Bribery: Sustaining the Momentum of the Foreign Corrupt Practices Act” (Report).  The Report was commissioned by the Open Society Foundations as a response to the Chamber of Commerce’s report, which argued for amendments to the FCPA.  Danielsen and Kennedy had complete academic freedom as to the content and conclusions drawn in the Report.  In our interview, Professor Danielsen discussed, among other things: why the costs of bribery, given the evolving global scheme, outweigh the benefits; the effectiveness of the DOJ Opinion Procedure; why a good faith compliance defense is inconsistent with the scienter requirement in the statute; how agreements with the government, such as DPAs and NPAs, are creating a regulatory jurisprudence similar to no-action letters in the securities context; companies’ reluctance to go to court and obtain judicial scrutiny; the reasonableness of the current “knowing” standard in the statute; and the need for flexibility in the definition of “foreign official.”

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  • From Vol. 1 No.8 (Sep. 19, 2012)

    Chief of the DOJ’s Criminal Division Defends the Use of Deferred Prosecution Agreements in FCPA Enforcement Actions

    In a recent speech, Lanny Breuer, Chief of the DOJ’s Criminal Division (responsible for criminal enforcement of the FCPA) argued that deferred prosecution agreements, increasingly common in his department’s FCPA enforcement actions, have resulted in “far greater accountability for corporate wrongdoing – and a sea change in corporate compliance efforts.”

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  • From Vol. 1 No.5 (Aug. 8, 2012)

    Pfizer Subsidiaries Agree to Pay $60.2 Million to Settle Civil and Criminal FCPA Charges

    The DOJ announced on August 7, 2012 that Pfizer H.C.P., a subsidiary of Pfizer Inc., has agreed to pay $15 million to resolve FCPA violations arising out of conduct in various countries in Europe and Asia.  The Pfizer subsidiary has also agreed to pay $26.3 million in disgorgement of profits and pre-judgment interest to settle SEC charges; Wyeth LLC, a company Pfizer bought three years ago, agreed to pay $18.9 million in disgorgement and pre-judgment interest.  Pfizer reported in a November 2011 SEC filing that it had reached an agreement in principle with the government, but the details were not announced until nine months later.

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  • From Vol. 1 No.3 (Jul. 11, 2012)

    Orthofix International Agrees to Pay $7.5 Million to the SEC and DOJ to Settle Charges that It Bribed Mexican Officials with “Chocolates”

    In a July 10, 2012 complaint, the SEC charged a Texas-based medical device company, Orthofix International N.V., with engaging in a seven-year bribery scheme involving its Mexican subsidiary Promeca S.A. de C.V. (Promeca).  The SEC alleges that Promeca employees referred to the bribe payments, which totaled over $300,000, as “chocolates.”

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  • From Vol. 1 No.2 (Jun. 20, 2012)

    Data Systems and Solutions LLC Enters into Deferred Prosecution Agreement with the DOJ, Paying $8.82 Million in Fines for Bribing Foreign Officials in Lithuania

    Data Systems & Solutions LLC (DSS), a Virginia-based company that provides design, installation, maintenance and other services at nuclear and fossil fuel power plants, has agreed to a deferred prosecution agreement (DPA) with the DOJ.  This article explains the bribery scheme, DSS’s cooperation with the government and the penalty imposed.  Also, this article highlights two new mergers and acquisitions-related provisions included in this DPA that have not been present in recent DPAs.

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