The Anti-Corruption Report

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

Articles By Topic

By Topic: DOJ Opinions

  • From Vol. 7 No.16 (Aug. 8, 2018)

    Miner’s First Speech As a Criminal Division Leader Focuses on M&A

    In a recent speech, DOJ Criminal Division Deputy Assistant Attorney General Matthew Miner made clear that corruption issues inherited through a merger or acquisition will be covered by the FCPA Corporate Enforcement Policy. Acquirers that discover corruption in target companies can avoid or decrease fines and penalties if they self-report, cooperate and remediate after the deal closes, he said. However, he also suggested companies could avoid liability all together if they “slow down to assess risks” and seek a DOJ Opinion before completing the deal. See “Brian Ong of FTI Discusses Creating an M&A Anti-Corruption Due Diligence Game Plan and Getting the Most Out of Target Interviews” (May 18, 2016).

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  • From Vol. 6 No.6 (Mar. 29, 2017)

    Managing Subsidiary Risks: Setting Things Up for Success (Part One of Three)

    A common theme of many anti-corruption settlements is the involvement of foreign subsidiaries. A parent company may have little oversight of its far-flung subsidiaries, but can still be on the hook if bribes are paid or books and records are not kept properly. In this three-part series, The FCPA Report will look at the different ways companies can minimize and mitigate anti-corruption risks at their subsidiaries. In this first part, we discuss how companies can be held liable for the actions of their subsidiaries and how subsidiaries can be set up for success from the beginning – both when building one from scratch and when acquiring an already existing company. The subsequent articles will discuss how companies can use culture, communication and internal controls to keep subsidiary risks in check. See “How to Mitigate FCPA Risk Before and After an Acquisition” (Feb. 18, 2015).

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  • From Vol. 4 No.16 (Aug. 5, 2015)

    Mitigating Corruption Risk in the Middle East (Part Two of Two)

    Business is booming in the Middle East, with many foreign investors seeking to take advantage of these rapidly expanding markets.  Doing so, while avoiding entanglement with anti-corruption regulators, requires careful risk assessment and planning.  The first article in this two-part series discussed the high incidence of corruption throughout the region, highlighting which countries and industries are the riskiest, and the legal and cultural diversity that can complicate a company’s assessment of corruption risk.  This, the second article of our two-part series, looks at three specific attributes of doing business in the Middle East that pose their own unique risks:  (1) the dominance over many economic sectors by state-owned entities and royal families; (2) the prevalence of third parties in business transactions in the region; and (3) the culture of gift-giving in Middle Eastern countries.  We draw from the knowledge of a panel of experts, organized by Strafford Publications and including Tom Best, a partner at Steptoe & Johnson in Washington, D.C.; Marc Alain Bohn, counsel at Miller & Chevalier in D.C.; John Vincent Lonsberg, a partner with Baker Botts based in Dubai, U.A.E.; and Daniel P. Chung, of counsel with Gibson Dunn in D.C.

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  • From Vol. 4 No.4 (Feb. 18, 2015)

    How to Mitigate FCPA Risk Before and After an Acquisition

    Robust pre-acquisition due diligence can prevent the purchase of a costly FCPA violation along with the target company.  During a recent webinar hosted by Strafford Publications, experts Thaddeus R. McBride, a partner at Bass Berry & Sims and Brian Moffatt, Senior Compliance Counsel at EthosEnergy, discussed the importance of FCPA awareness in the mergers and acquisitions space.  This article outlines the risks associated with M&A as well as some of the best practices the panelists discussed for addressing those risks.  See also “Checklist of Actions to Take and Factors to Consider When Conducting Pre-Merger Anti-Corruption Due Diligence,” The FCPA Report, Vol. 2, No. 19 (Sep. 26, 2013).

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  • From Vol. 3 No.23 (Nov. 19, 2014)

    FCPA Liability Does Not Reach Successor When Target’s Misconduct Was Beyond FCPA’s Jurisdiction, DOJ Affirms, Outlining M&A Best Practices

    The SEC/DOJ FCPA Guidance says that an acquisition does not create liability where none existed before.  In its second Opinion Procedure Release of 2014, the DOJ reaffirms the limits of FCPA liability, announcing that it would not take enforcement action against a U.S. acquiring company based on its foreign target’s pre-acquisition conduct, which was not subject to the FCPA’s jurisdiction before the acquisition.  The company explained its pre-acquisition diligence and its post-acquisition plan to bring the target in compliance.  The release comes at a time when the DOJ and SEC are facing judicial scrutiny of their interpretation of the jurisdiction of the FCPA.  See “Hoskins Provides an Opportunity for Judicial Determination of the FCPA’s Jurisdiction,” The FCPA Report, Vol. 3, No. 20 (Oct. 8, 2014); “How Broad Is the FCPA’s Reach Over the Acts of Foreign Nationals?,” The FCPA Report, Vol. 2, No. 6 (Mar. 20, 2013).

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  • From Vol. 3 No.7 (Apr. 2, 2014)

    DOJ Green Lights the Sale of Stake in Private Business by Owner-Turned-Foreign Official to Affiliated Buyer

    Does the purchase of a closely-held business from a seller who becomes a foreign official violate the FCPA?  The DOJ’s first Opinion Procedure Release of the year examines whether a company’s payment to the foreign official, the former chief executive and minority owner of a foreign subsidiary of the company, to complete a previously contemplated buyout (but at a higher price than originally agreed) violates the FCPA.  This article scrutinizes the facts in the request and the DOJ’s decision and reasoning.  See “DOJ Clarifies Bounds of Humanitarian Aid Benefitting Foreign Officials in FCPA Opinion Release,” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014).

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  • From Vol. 3 No.1 (Jan. 8, 2014)

    DOJ Clarifies Bounds of Humanitarian Aid Benefitting Foreign Officials in FCPA Opinion Release

    In its only Opinion Procedure Release of 2013, the DOJ weighed in on aid to relatives of foreign officials, giving guidance to a law firm partner who wants to personally pay the medical expenses of the daughter of a foreign official – a foreign official from a country with which the law firm does business.  See “SEC Investigation of JPMorgan Hiring Practices Demonstrates FCPA Nepotism Risks,” The FCPA Report, Vol. 2, No. 17 (Aug. 21, 2013).

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  • From Vol. 2 No.22 (Nov. 6, 2013)

    Gifts, Travel, Entertainment and Anti-Corruption Compliance: Sources of Authority, Best Practices and Benchmarking

    FCPA experts report that gifts, travel and entertainment expenses are one of the most asked-about areas in anti-corruption compliance and the answers can be surprisingly hard to come by.  A recent Strafford webinar provided experienced practitioners’ insights into navigating the potentially perilous shoals surrounding these expenses.  The program, “FCPA Gifts, Entertainment and Hospitality: Surviving Heightened Enforcement,” featured Margaret M. Cassidy, a principal at Cassidy Law in Washington, D.C., and John E. Davis, a member of law firm Miller & Chevalier.  Cassidy and Davis discussed available sources of guidance on gifts, travel and entertainment expenses, sources of guidance for benchmarking compliance controls and insights on implementing effective policies with regard to gifts, travel and entertainment.  This article summarizes the key takeaways from that presentation.  See “Ten Strategies for Paying for Government Clients to Attend the Olympics or Other Sporting Events without Violating the Foreign Corrupt Practices Act,” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012).

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  • From Vol. 2 No.21 (Oct. 23, 2013)

    A Hot Bench Hears Oral Arguments in Historic Challenge to the Definition of “Foreign Official”

    The FCPA clearly prohibits bribes to employees of instrumentalities of foreign governments, but for many in the business world, it is by no means clear what an “instrumentality of a foreign government” is.  Is a state-owned or state-controlled hospital an instrumentality?  A telecommunications company with some government involvement?  A non-utility company in which the government has a minority but controlling interest?  By some estimates, two-thirds of recent FCPA enforcement actions have relied on the idea that an employee of a state-owned entity is a “foreign official.”  Lawyers, compliance professionals and businesspeople currently have a range of resources to turn to in understanding what constitutes an instrumentality, but none is conclusive or determinative – especially for international salespeople on the front lines of potential FCPA violations.  In a historic appeal, the Eleventh Circuit is poised to construe the meaning of “instrumentality” under the FCPA with a level of authority heretofore absent from anti-corruption jurisprudence.  The court heard oral arguments earlier this month and The FCPA Report spoke with the attorneys for defendants Joel Esquenazi and Carlos Rodriguez.  This article includes their insights on the positions of the parties and the importance of the case.  This article also discusses lower court decisions and other relevant authority on this crucial issue.

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  • From Vol. 2 No.18 (Sep. 11, 2013)

    Anti-Corruption Professionals from GE, Abbott Laboratories and Navistar Share Proven Strategies on Third-Party Due Diligence, M&A, Training, Nepotism and Regional Risk

    Anti-corruption compliance can feel like a battlefield, with potential landmines at every turn.  But what do practicing in-house compliance professionals view as their biggest challenges?  What issues keep them up at night?  And, most importantly, what have they done to address those issues?  In a panel hosted by the American Conference Institute, three in-house compliance experts shared their practical experience.  They discussed specific challenges they have faced and outlined the strategies they used to effectively address those challenges.  The expert panelists included Matthew Hsu, Senior Counsel, Global Fraud and Anti-Corruption at Abbott Laboratories; Shannon Masson, Senior Counsel at Navistar, Inc.; and Kevin Matthews, Associate General Counsel at GE Oil and Gas.  See also “Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).

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  • From Vol. 2 No.18 (Sep. 11, 2013)

    Who Is a Foreign Official?

    The FCPA’s broad definition, and the government’s broad interpretation, of the term “foreign official” have caused many companies operating internationally serious consternation.  The definition of “foreign official” for FCPA purposes – which arguably includes any employee of an institution that has some degree of state ownership or control, based on a list of considerations – does not match up with the more narrow way the term is used in common parlance.  This disconnect and the lack of perceived clarity on the issue under U.S. law and that of other countries causes companies to struggle with identifying potential risk areas and implementing effective compliance programs.  During a recent program, leading FCPA practitioners provided valuable insight into how the government defines the critical terms and how companies should structure their policies in response to the government’s interpretations.  The panelists included James G. Tillen, a Member of Miller & Chevalier Chartered; Matteson Ellis, a Special Counsel at that firm; and Mark Gough, Deputy Head for Compliance Investigations at Siemens.   See also “The Expanding Definition of ‘Foreign Official’ and its FCPA Implications,” The FCPA Report, Vol. 2, No. 11 (May 29, 2013).

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  • From Vol. 2 No.17 (Aug. 21, 2013)

    SEC Investigation of JPMorgan Hiring Practices Demonstrates FCPA Nepotism Risks

    Should banks with global presences be concerned that their hiring practices may cause FCPA headaches?  The recent revelation that JPMorgan Chase & Co., the nation’s largest bank, is being investigated by the SEC for possible FCPA violations stemming from its hiring of the children of two high-placed Chinese officials, may cause other banks to scrutinize who they are hiring and how they are documenting their hiring decisions, especially if the new hires are related to foreign officials.  This article discusses the JPMorgan investigation and how companies can mitigate FCPA risks in their hiring practices.  See also “Friendly Relations? When Nepotism May Violate the FCPA,” The FCPA Report, Vol. 1, No. 10 (Oct. 17, 2012).

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  • From Vol. 1 No.10 (Oct. 17, 2012)

    Friendly Relations? When Nepotism May Violate the FCPA

    The FCPA prohibits covered entities from providing, with corrupt intent, anything of value to a foreign official to obtain or retain a business advantage.  The “anything of value” prong of the FCPA is quite broad, encompassing non-cash benefits.  But what about helping the relative of a foreign official get a job or internship?  Is that too prohibited by the FCPA?  In a guest article, Joel M. Cohen and Matthew W. Knox, partner and associate, respectively at Gibson, Dunn & Crutcher LLP, discuss the form a proper employee relationship between a domestic concern and the relative of a foreign official may take.  In particular, Cohen and Knox review recent FCPA cases that included allegations of nepotism and then consider DOJ opinion releases that outline the broad contours of a defensible employment relationship between a domestic concern and the relative of a foreign official.  From these cases and releases, the authors derive practical considerations that should bear on the decision to employ otherwise qualified relatives of foreign officials.

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  • From Vol. 1 No.10 (Oct. 17, 2012)

    DOJ Issues Opinion Release Containing Guidelines on Whether a Royal Is a “Foreign Official” Under the FCPA

    On September 18, 2012, the DOJ issued its first Opinion Procedure Release of 2012 (Release), providing guidelines on whether a royal family member may be deemed a “foreign official” under the FCPA.  The definition of “foreign official” has been the subject of considerable debate and litigation in recent years.  Among the controversial issues is the DOJ’s view that “foreign officials” include employees of state-owned entities, a view that the district courts have generally accepted but that is currently being challenged before the U.S. Court of Appeals for the Eleventh Circuit.  See “Defendants in Haiti Teleco Case Urge the Eleventh Circuit to Limit ‘Instrumentalities’ to Entities that Perform Government Functions,” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012); and “U.S. Government Counters Foreign Official Challenge in the Eleventh Circuit,” The FCPA Report, Vol. 1, No. 7 (Sep. 5, 2012).  This article describes the factual background and legal analysis in the Release.

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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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