The Anti-Corruption Report

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

Articles By Topic

By Topic: FCPA Resource Guide

  • 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. 5 No.15 (Jul. 27, 2016)

    Managing Corruption Risk When Hiring and Training Foreign Officials and Their Relatives Overseas: Risks and Challenges (Part One of Two) 

    Companies in the extractive sector are often subject to local content laws requiring them to develop the local workforce by providing on-the-job training and educational funding for employees of government and state-owned entities. Such requirements, while generally well-intentioned, present an array of compliance challenges. In a two-part guest article series, Andrew Costa, the general counsel and assistant secretary of the Atlantic Methanol Companies, along with Jeremy Levin, a partner at Baker Botts, and his associate Louie Layrisson, discuss how to overcome overseas hiring and training challenges for extractive companies. In this first article, they distill insights from U.S. settlements regarding the government’s expectations for hiring practices and training programs. The second article will provide guidance on mitigating risks associated with training foreign officials and hiring their relatives. See “Kevin Abikoff of Hughes Hubbard Discusses the Benefits and Risks of African Local Content Laws” (Feb. 10, 2016).

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  • From Vol. 4 No.9 (Apr. 29, 2015)

    Brazil’s Evolving Anti-Corruption Environment

    It has been over a year since the landmark Brazilian Anti-Corruption Act (BAA) has taken effect, and as the widespread investigation into Petrobras reveals, there is both official and grassroots disgust with the corruption that has historically plagued Brazil.  How have these current developments (which also include investigations into bribery involving the recent World Cup, the upcoming Olympics, and the aerospace conglomerate Embraer) affected the Brazilian corruption landscape and the risks of doing business there?  During a recent program presented by The Network, Matteson Ellis, a member of Miller & Chevalier, discussed those risks in the current anti-corruption environment in Brazil, detailed the new BAA regulations and offered strategies for assuring compliance with the FCPA and the BAA when doing business in Brazil.  See also “Corruption Risk and the Changing Legal Climate in Latin America,” The FCPA Report, Vol. 3, No. 4 (Feb. 19, 2014).

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  • From Vol. 3 No.21 (Oct. 22, 2014)

    Management Compliance Committees: Risks and Benefits (Part One of Three)

    As companies strive to integrate compliance into the fiber of their business cultures, many are turning to compliance committees to enhance their compliance programs.  A compliance committee at the management level can help mitigate corruption risk for companies operating multi-nationally, it can facilitate the relationship between compliance and business personnel and it can demonstrate to regulators that a company is serious about compliance.  But, a compliance committee can also add additional bureaucracy, result in the loss of privilege protections for sensitive information and facilitate enterprise-wide chatter about sensitive issues.  This article weighs the pros and cons and discusses what types of companies may benefit from having a compliance committee.  The second article in this series will discuss the mechanics of forming and operating such a committee; a third article will discuss best practices for operating a compliance committee.  See also “How to Structure Chief Compliance Officer Reporting Lines to Maximize the Efficacy of Anti-Corruption Compliance (Part One of Three),” The FCPA Report, Vol. 2, No. 22 (Nov. 6, 2013), Part Two of Three, Vol. 2, No. 23 (Nov 20, 2013), Part Three of Three (Dec. 4, 2013).

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  • From Vol. 3 No.12 (Jun. 11, 2014)

    Mitigating FCPA Risks Associated with Incentive Awards to Third Parties

    The use of incentive awards to recognize outstanding sales staff, dealers or downstream business partners who market or sell a company’s goods and services is a well-established business practice.  Such incentive awards can take the form of cash, gifts or vouchers for retail shopping, travel and dining.  For top sales staff or dealers, the incentive may be an off-site retreat that includes both training, promotion of products and services, and hospitality.  In a guest article, Adam Safwat, counsel at Weil, Gotshal & Manges, explains that when transparently administered between commercial parties, such incentive awards can be legitimate promotional activities without any intent on the part of the sponsor to corruptly influence the recipient’s conduct.  When the incentive awards are given to sales staff of state enterprises, however, there is a risk they may transgress the FCPA.  See also Gifts, Travel, Entertainment and Anti-Corruption Compliance: Sources of Authority, Best Practices and Benchmarking,” The FCPA Report, Vol. 2, No. 22 (Nov. 6, 2013).

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  • From Vol. 3 No.7 (Apr. 2, 2014)

    Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics

    At this year’s Momentum Global Anti-Corruption Congress, Charles Cain, Deputy Chief of the SEC’s FCPA Unit and Jeffrey H. Knox, Chief of the Fraud Section of the DOJ, Criminal Division, lifted the veil on the government’s thinking in FCPA investigations.  The discussion, led by David H. Resnicoff, a member at Miller & Chevalier, covered a range of topics on the minds of FCPA practitioners and compliance officers, including the timing of voluntary self-disclosures, the kinds of cases the government may decline to pursue, effective cooperation with FCPA investigations, the role of audit committees in compliance strategies and the programmatic success of the FCPA Guidance released in 2012.  See “When Should a Company Voluntarily Disclose an FCPA Investigation?,” The FCPA Report, Vol. 3, No. 4 (Feb. 19, 2014); and “DOJ and SEC Officials Provide Candid Insight into the Recently Issued FCPA Guidance,” The FCPA Report, Vol. 1, No. 13 (Nov. 28, 2012).

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  • From Vol. 3 No.2 (Jan. 22, 2014)

    Four Hallmarks of Permissible Gifts and Entertainment: Insight from PepsiCo and Paul Hastings

    Providing gifts, travel and entertainment to business associates is a time-honored and legitimate means of promoting a company’s products and services and developing business relationships.  However, when foreign officials are involved, a company must be particularly vigilant to avoid crossing the line from appropriate business development to prohibited bribery and, as always, a company must accurately record gifts, travel and entertainment to avoid running afoul of the FCPA’s recordkeeping provisions.  A recent program hosted by the Ethisphere Institute and Thomson Reuters and featuring Nathaniel B. Edmonds, partner at Paul Hastings LLP and David Yawman, Senior Vice President and Chief Compliance & Ethics Officer of PepsiCo, Inc., addressed the appropriate parameters of gift-giving in the context of the FCPA, with a focus on four key “hallmarks” of permissible gifts.  See also “Gifts, Travel, Entertainment and Anti-Corruption Compliance: Sources of Authority, Best Practices and Benchmarking,” The FCPA Report, Vol. 2, No. 22 (Nov. 6, 2013).

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  • From Vol. 2 No.24 (Dec. 4, 2013)

    Charles Duross and Kara Brockmeyer Discuss Five FCPA Enforcement Trends That Matter to Regulators: Individual Prosecutions, Administrative Proceedings, Global Coordination, Corporate Monitors and Third Parties (Part One of Two)

    At ACI’s International Conference on the Foreign Corrupt Practices Act in Washington D.C., Charles Duross, Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, and Kara Brockmeyer, Chief of the FCPA Unit of the Division of Enforcement of the SEC, provided candid and detailed insight into elements of FCPA enforcement that matter to leading regulators.  They discussed the government’s charging philosophies, investigative techniques and enforcement priorities, and dispensed advice about how companies can avoid or decrease FCPA penalties.  This article summarizes the most noteworthy insights shared by Duross and Brockmeyer, and discusses the practical implications of the regulators’ points.  See also “Five Lessons from 2013 FCPA Enforcement: Transaction Monitoring, International Cooperation, Documenting Hiring Decisions, Risk Assessments and Individual Prosecutions,” The FCPA Report, Vol. 2, No. 22 (Nov. 6, 2013).

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  • From Vol. 2 No.22 (Nov. 6, 2013)

    How to Structure Chief Compliance Officer Reporting Lines to Maximize the Efficacy of Anti-Corruption Compliance (Part One of Three)

    The structure of a chief compliance officer’s reporting line within a company fundamentally affects the authority and efficacy of the CCO.  Operating, investment and other companies generally agree on the stakes of appropriately structuring CCO reporting lines – they agree that the right reporting design is essential to revenue and risk mitigation – but industry practice on the topic is by no means settled.  Companies routinely ask, for example: Does having the CCO report to the company’s CEO – as opposed to the board of directors – confer sufficient authority?  Can the CCO operate effectively while reporting to the general counsel?  Is a direct line from the CCO to the board a requirement for an effective compliance program?  To help companies answer these questions, The FCPA Report is publishing a three-part series examining the pros and cons of various reporting structures.  This article, the first in the series, (1) assesses the recent trend of companies shifting away from direct reporting of compliance to the legal department, (2) discusses guidance provided by the government on this topic, (3) outlines various issues a company should consider when choosing a reporting structure and (4) explains why there is no one-size-fits-all solution to this compliance quandary.  See also “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two),” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013); Part Two of Two, Vol. 2, No. 8 (Apr. 17, 2013).  On evaluating compliance programs generally, see “Best Practices for Reviewing Anti-Corruption Compliance Programs: Implementation, Remediation and Documentation (Part Three of Three),” The FCPA Report, Vol. 2, No. 18 (Sep. 11, 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.22 (Nov. 6, 2013)

    DOJ FCPA Unit’s John Buretta and Shearman & Sterling’s Dan Newcomb Offer Public and Private Perspectives on Key FCPA Challenges

    At Momentum’s recent Anti-Corruption Experts conference in New York City, John Buretta – Principal Deputy Assistant Attorney General and Chief of Staff for the Criminal Division of the DOJ – reinforced the DOJ’s emphasis on continued vigorous FCPA enforcement.  “There’s no question you will see plenty of activity this year and also next year and into the foreseeable future,” Buretta said.  “You’ll be hearing about both resolutions or charges that involve all different manner of defendants at different levels of companies in various industries.”  In addition, Buretta discussed: increasing FCPA prosecution of individual defendants; enhanced DOJ resources committed to the FCPA; increased cooperation between the SEC and the DOJ, and between the DOJ and its non-U.S. counterparts; the DOJ’s view on explaining declinations; parent-subsidiary liability; and the DOJ’s perspective on travel expenses and foreign officials.  Danforth Newcomb, Of Counsel at Shearman & Sterling LLP, engaged Buretta in a clarifying dialogue on how the DOJ’s policies, perspectives and activities should inform corporate compliance efforts.  See also “Top Government and Private FCPA Practitioners Discuss Global Enforcement, Self-Reporting, Facilitation Payments, M&A Due Diligence, Jurisdiction and NPAs,” The FCPA Report, Vol. 2, No. 11 (May 29, 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.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)

    Unforeseen Corruption Liability: How to Avoid a Post-Acquisition “Oh My!” Moment

    In the “Wizard of Oz,” when Dorothy, the Scarecrow and the Tin Man are already deep in the haunted forest, Dorothy asks her guides what dangers could be present.  “Oh my!” she exclaims when she is told of the perils around her.  It is too late to turn back.  Such is the plight of many public companies when they acquire or merge with entities doing business in countries with a high corruption risk.  Without proper anti-corruption guidance, many companies discover too late that they have placed themselves – and their shareholders – in great potential danger by effectively buying a target’s legal liability for past FCPA violations.  The legal liability extends well beyond the U.S., as many countries such as the U.K. and, recently, Brazil, have enacted their own anti-corruption laws.  In a guest article, John Carney and Christina Tsesmelis, partner and senior associate, respecitvely, at BakerHostetler LLP, discuss best practices for merger and acquisition due diligence in light of U.S. precedent and the newly-passed Brazilian law.

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  • From Vol. 2 No.16 (Aug. 7, 2013)

    Best Practices for Reviewing Anti-Corruption Compliance Programs: Government Expectations, Scheduling and Staffing (Part One of Three)

    The recent joint DOJ/SEC Guidance reflects the government’s view that, in order to be effective, an FCPA compliance program must be periodically reviewed and improved.  However, neither the Guidance nor any other authority specifies how frequently such reviews should be conducted, how expansive such reviews should be or what steps companies should take to improve discovered shortcomings.  In the absence of concrete and authoritative direction on this topic, how should companies approach the ambiguous but critical task of reviewing and improving their compliance programs?  This article is the first in a three-part series addressing this question.  Specifically, this article discusses the importance of regular anti-corruption compliance reviews; details the government’s expectations about reviews; outlines how to create an efficient and effective compliance review schedule; and specifies how companies should staff their compliance reviews.  The second installment will discuss the biggest challenges companies face when conducting a review; what a company should consider when preparing for a review; how a company should prepare to perform a review; and what areas the review should address.  The third and final article in the series will provide strategies for conducting the actual review; discuss what a company should do post-review; outline issues surrounding documentation of the review; and examine how FCPA settlement agreements affect reviews.  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.15 (Jul. 24, 2013)

    Buyer Beware: Understanding and Mitigating Parent Company FCPA Liability in the Context of Private Equity Acquisitions

    The DOJ and SEC’s recent actions against financial services entities such as Direct Access Partners may be a harbinger of more scrutiny to come.  The increased focus on the financial services industry, along with the government’s aggressive expansion of its theories of parental liability for actions taken by subsidiaries and other business units (as revealed in the recent Ralph Lauren enforcement action), has special relevance both to standalone private equity firms and to investment banks and similar entities with private equity arms or subsidiaries.  Parent companies may be facing greater exposure than ever before for the misconduct of their subsidiaries, and thus face a greater risk of being the subject of the next enforcement action.  In a guest article, Seth C. Farber and Riche T. McKnight, partners at Winston & Strawn LLP, and Ryan D. Fahey, an associate at Winston & Strawn LLP, review relevant enforcement actions under the FCPA’s anti-bribery, books and records and internal control provisions, and outline critical steps that private equity firms and investment banks with private equity arms can take to reduce their overall FCPA exposure.  See also “FCPA Charges against Broker-Dealer Stemming From Routine SEC Examination Is ‘Wake-Up Call’ to the Financial Services Industry,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013); “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. 2 No.12 (Jun. 12, 2013)

    Anti-Corruption Compliance Best Practices for Boards of Directors

    The board of directors is now viewed by regulators, shareholders and other stakeholders as a central bulwark in a company’s anti-corruption infrastructure – the result of a dramatic increase in FCPA enforcement actions, issuance of the joint SEC/DOJ FCPA Resource Guide and related factors.  Boards and their committees are taking a more vigorous and proactive approach to FCPA compliance and monitoring, but few board members have deep experience in the area, and fewer still are conversant with relevant best practices.  A recent Practising Law Institute panel offered insights that can help board members identify issues, ask the right questions and accurately measure corruption risk.  The panel was moderated by F. Joseph Warin of Gibson, Dunn & Crutcher LLP, and approached the issues of a board’s role in anti-corruption compliance from three perspectives: that of a seasoned board member (Nina Henderson), a prosecutor (Jason Jones of the DOJ) and outside counsel (Martin J. Weinstein of Willkie Farr & Gallagher LLP).

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  • From Vol. 2 No.11 (May 29, 2013)

    Digging Deep into M&A Anti-Corruption Due Diligence Best Practices: An Interview with William Michael, Partner at Mayer Brown LLP

    Anti-corruption due diligence before, during and after a merger or acquisition is an area of increasing focus for companies.  Members of the FCPA bar report that more and more of their work involves ensuring target companies are free from corruption, and handling the situation if corruption is discovered.  The FCPA Report recently spoke with William Michael, Co-Chair of the White Collar Defense & Compliance group at Mayer Brown LLP in Chicago, about his experience with these issues.  Previously, Michael served for more than 10 years as a federal prosecutor with the Department of Justice.  Among other things, Michael discussed important questions to ask during a risk assessment; strategies for negotiating for more access to the target company during due diligence; the effect of blocking statutes on due diligence; the risks and benefits of voluntarily disclosing a violation before or after a transaction; whether and how the Resource Guide clarified best practices; and advice on increasing the odds of achieving a declination from the SEC or DOJ if misconduct is discovered post-transaction.  See also “How to Perform Effective FCPA Due Diligence in Private Equity Transactions and Strategic Mergers and Acquisitions,” The FCPA Report, Vol. 2, No. 5 (Mar. 6, 2013).

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  • From Vol. 2 No.8 (Apr. 17, 2013)

    Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part Two of Two)

    A highly qualified chief compliance officer (CCO) is necessary but not sufficient to implement and enforce a best-in-class FCPA compliance program.  In addition to being inherently capable, that CCO also must be empowered.  Even the best CCOs need certain tools to perform effectively in an FCPA compliance role; absent such tools, the work of otherwise effective CCOs can be dangerously undermined.  Unfortunately, studies have consistently shown that when it comes to FCPA compliance, CCOs feel under-resourced, overworked and not as impactful as they can and should be.  How can companies bridge the divide between their FCPA compliance aspirations and the reality of insufficiently empowered CCOs?  This is the second article in a two-part series designed to address this fundamental question.  Fortunately for companies, the most productive answer does not involve throwing more money at the problem, but rather rethinking the solution.  In particular, through a series of conversations with high-level sources with direct experience on this challenging topic, we have identified five essential tools that a CCO needs to do effective FCPA compliance.  Those tools include an appropriate title and actual authority, direct access to the board and management, sufficient budget and resources, a bona fide culture of compliance and an incentive structure that reinforces the culture.  The first article in this series addressed the first three tools – see “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two),” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013) – and this article addresses the last two.  Notably, this article gives content and structure to the elusive but all-important concept of a culture of compliance.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    A Guide to Anti-Bribery Issue Spotting in China: Enforcement Trends, Third-Party Risks, Gift Giving, Travel Expenses, Foreign Officials and Due Diligence

    Recent news reports, such as the downfall of Bo Xilai, as well as reports of watchdog groups such as Transparency International, emphasize the heightened corruption risk that companies doing business in China face.  Not only does the Chinese culture value gift giving and relationship building, but, because of the government structure, a large proportion of employees there are foreign officials.  This increases the range of business activity that may give rise to FCPA liability.  Plus, China’s top leaders have been paying more attention to official corruption and have taken steps to strengthen their own laws against bribery and step up enforcement.  A recent webinar focused on the topic of Chinese corruption risk.  The panelists, partners at Gibson Dunn & Crutcher LLP and Herbert Smith Freehills LLP, discussed: the current state of anti-corruption law and enforcement in China; China-specific anti-corruption issues; FCPA enforcement actions stemming from bribery in China; and ways to mitigate the FCPA risks of doing business there.  This article summarizes the key takeaways from the webinar, focusing in particular on the lessons for companies that do business in China and lawyers that represent such companies.

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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.7 (Apr. 3, 2013)

    How to Maintain an Anti-Corruption Reporting Hotline That Complies with Data Privacy Laws

    The November 2012 FCPA Resource Guide emphasized that a confidential reporting hotline is one of the hallmarks of an effective FCPA compliance program.  However, operating such a hotline requires a company to collect personal data about employees.  Accordingly, maintaining a reporting hotline may conflict with applicable data privacy laws, particularly in non-U.S. jurisdictions.  How can companies both abide by data privacy laws and maintain a reporting hotline, consistent with best compliance practices?  This article addresses this question and, in doing so, offers guidance on setting up a hotline; processing and investigating complaints; and post-investigation procedures.

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  • From Vol. 2 No.6 (Mar. 20, 2013)

    How Broad Is the FCPA’s Reach Over the Acts of Foreign Nationals?

    Within the last few months, U.S. courts, the Department of Justice and the Securities and Exchange Commission clarified the reach of the FCPA over foreign nationals, and courts determined that physical presence is required to begin the statute of limitations for bribery claims.  In a guest article, Palmina M. Fava and Mor Wetzler, partner and associate, respectively, at Paul Hastings LLP, distill important takeaways from those authorities and provide insight on those issues, harmonizing the holdings of SEC v. Straub and SEC v. Sharef and the FCPA Resource Guide.

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  • From Vol. 2 No.5 (Mar. 6, 2013)

    Facilitation Payments, Foreign Officials, Bona Fide Expenditures and More: Actionable Insight from the Authors of “Defending Clients in FCPA Investigations”

    Mark P. Goodman and Bruce E. Yannett, partners at Debevoise & Plimpton LLP, and Daniel J. Fetterman, a partner at Kasowitz, Benson, Torres & Friedman LLP, are the FCPA experts behind “Defending Clients in Foreign Corrupt Practices Investigations,” a chapter in the 2012 treatise “Defending Corporations and Individuals in Government Investigations.”  Their chapter addresses the hot button issues companies are facing today as the SEC and DOJ continue to increase the pressure on global companies to implement and enforce best of breed FCPA compliance programs.  Goodman and Fetterman recently shared their insight on some of these pressing issues with The FCPA Report.  In our interview, they discussed how far the FCPA’s jurisdiction reaches in light of recent case law and the FCPA Guidance, including the jurisdictional implications for aiders, abettors and conspirators; details regarding rewards under the new Dodd-Frank whistleblower provisions; who is a foreign official and whether it matters; how companies should handle facilitation payments; advice on reasonable business expenses after the Guidance; the concept of virtual strict liability in accounting violations of the FCPA; how judicial review will impact settlements; the collateral effects of an FCPA settlement; and when to self-report an FCPA violation.

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  • From Vol. 2 No.5 (Mar. 6, 2013)

    Six Steps for Converting a “Paper” FCPA Compliance Program into a Pervasive Culture of Anti-Bribery Compliance (Part Two of Two)

    Breathing life into even a comprehensive compliance manual is a challenge for most companies.  How can a company ensure that its program is proactive and dynamic, and that it is working at every level of the company?  How can the company ensure that third parties are being vetted at every stage of the process?  A recent webinar featuring H. David Kotz, Director at Berkeley Research Group and former Inspector General of the SEC, and Paul Zikmund, Director of Global Ethics and Compliance at Bunge Limited, tackled these and other hard questions head on, incorporating their long and relevant experience, as well as lessons from the recently-issued FCPA Guidance.  This article, the second in a two-part series, discusses the panelists’ advice regarding the best path forward after a risk score is assigned to a third party, including details about a “boots-on-the-ground” approach to due diligence; ways to monitor third parties on an ongoing basis; compliance advice for smaller companies; and how to incentivize employees to report complaints internally before going to the government.  The first article in the series discussed how the hypotheticals in the Guidance provide insight into the government’s enforcement strategy and what the “flavor of the month” FCPA cases are; six ways to ensure an FCPA compliance program is best-in-class; and integral steps to take when conducting risk assessments of third parties.  See “Six Steps for Converting a ‘Paper’ FCPA Compliance Program into a Pervasive Culture of Anti-Bribery Compliance (Part One of Two),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013).

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  • From Vol. 2 No.5 (Mar. 6, 2013)

    Knowing Your Partners: Three Steps to Reduce FCPA Risk from Third Party Intermediaries

    The failure to pre-screen and monitor third party intermediaries (TPI) are the root causes of many recent FCPA investigations.  Thus, devising and implementing a consistent process for TPI due diligence and auditing, as well as understanding regulatory differences across the globe, are “must do” items for companies operating overseas.  Marc Miller, a partner in the New York forensic and risk consulting practice of KPMG LLP, recently shared his advice on identifying and mitigating risks involving TPIs in a webinar sponsored by compliance software developer Aravo Solutions, Inc. entitled “The Increasing Business Risk of FCPA Failures.”  Miller suggested that companies focus on three steps when it comes to third parties, each of which is described in detail in this article.  Miller also discussed his view on recent enforcement trends, informed by the Guidance.

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  • From Vol. 2 No.4 (Feb. 20, 2013)

    Six Steps for Converting a “Paper” FCPA Compliance Program into a Pervasive Culture of Anti-Bribery Compliance (Part One of Two)

    Recent enforcement actions have highlighted the bribery risk inherent in retaining third parties in foreign countries.  To adequately address such risks, companies need more than a compliance manual sitting on the shelf – they need a culture of compliance that pervades the organization.  Drafting a thorough and customized compliance manual is the first step in this process.  But how can companies bring a complete compliance program to life?  A recent webinar tackled this hard question head on, incorporating the long and relevant experience of the webinar participants, as well as lessons from the recently-issued FCPA Guidance.  This is the first article in a two-part series summarizing the key takeaways from the webinar.  This article discusses: how the hypotheticals in the Guidance provide insight into the government’s enforcement strategy and what the “flavor of the month” FCPA cases are; six ways to ensure an FCPA compliance program is best-in-class; and integral steps to take when conducting risk assessments of third parties.  The second article will address: steps to take after a risk score is assigned to a third party, including details about a “boots-on-the-ground” approach; ways to monitor third parties on an ongoing basis; compliance advice for smaller companies; and how to incentivize employees to report complaints internally before going to the government.  See also “Five Themes for General Counsel to Monitor with Respect to Dodd-Frank Whistleblowers and the FCPA,” The FCPA Report, Vol. 1, No. 9 (Oct. 3, 2012).

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  • From Vol. 2 No.2 (Jan. 23, 2013)

    Designing Effective FCPA Compliance Programs and Monitoring Third Parties After the Guidance: An Interview with H. David Kotz, Michael Volkov and Paul Zikmund

    Relationships with third parties are a constant pressure point for companies trying to comply with the FCPA.  How should the recently-issued FCPA Resource Guide change a company’s strategy for dealing with third parties, during and after initial due diligence?  On February 6, 2013, LeClairRyan, Berkeley Research Group (BRG) and The FCPA Report will host a complimentary CLE-eligible webinar that will address this and other pressing regulatory questions.  The webinar, entitled “After the Guidance: Designing Effective Compliance Programs and Monitoring Third Parties,” will feature three FCPA experts: former SEC Inspector General and current BRG Director H. David Kotz; LeClairRyan Partner Michael Volkov; and Paul Zikmund, Director of Global Ethics and Compliance at Bunge Limited.  Rebecca Hughes Parker, Editor-In-Chief of The FCPA Report, will moderate the webinar.  Topics to be covered include the FCPA Resource Guide’s specific requirements for compliance programs; how to review and enhance compliance programs to get maximum credit; and best practices for monitoring third parties in a cost-effective manner following initial due diligence.  To register for the webinar, click here.  As a preview of the webinar, The FCPA Report interviewed the three participants on topics including: the elements of an effective third party risk assessment and the categories it should include; the utility of open source databases; common mistakes companies make when designing risk assessments; streamlining risk assessments and due diligence; the differences between due diligence for third parties and for M&A transactions; and effective ways to monitor third parties after they are “on board.”  An edited transcript of our interview is included in this issue of The FCPA Report.

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  • From Vol. 2 No.1 (Jan. 9, 2013)

    How Private Fund Managers Can Manage FCPA Risks When Investing in Emerging Markets

    Anti-corruption enforcement efforts have dramatically increased over the last few years.  Every day it seems there is a new headline about an investigation involving alleged violations of the FCPA.  Federal authorities have indicated that their FCPA enforcement efforts are increasingly focused on the financial services industry and, in particular, private fund managers that invest in emerging markets.  Given this heightened level of government scrutiny, it is important that private equity firms, hedge fund managers and other investors that conduct business in foreign markets understand the associated FCPA risks.  Such risks can arise in the context of raising funds overseas, working with joint venture partners and third party agents, and investing in companies that operate in countries known for corruption.  A potential misstep in these areas can result in a fund manager and its employees facing significant civil penalties and possible criminal prosecution or, at a minimum, having to respond to government subpoenas or requests for information in connection with an investigation by federal authorities, thus resulting in the unnecessary expenditure of time and money and the attraction of unwanted attention.  In a guest article, Justin V. Shur and Joel M. Melendez, partner and associate, respectively, at Molo Lamken LLP, consider some of the important and recurring FCPA risks that arise for investors in emerging markets, and offer practical guidance to help private fund managers and their employees avoid or minimize liability in this area.

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Top Practitioners Analyze the DOJ & SEC FCPA Guidance (Part Two of Two)

    On November 14, 2012, the SEC and DOJ jointly issued long-awaited guidance on the FCPA (Guide or Guidance), spurred in part by the Organisation for Economic Cooperation and Development’s recommendation, and business pressures for more clarity about the FCPA and the government’s enforcement of it.  This article continues our extensive coverage of the Guidance and the practical implications of it, offering concrete suggestions to anti-bribery professionals on avoiding, handling and settling enforcement actions, conducting internal investigations and executing mergers and acquisitions.  This article – the second in a two-part series – uses input from leading FCPA experts to extract practical lessons from the Guide, including what it says about compliance programs and internal controls; whether the Guide sheds any light on what constitutes a facilitation payment and who constitutes a foreign official, and whether those distinctions are important; the Guide’s insight on third-party due diligence, successor liability and statute of limitations issues; and whether the Guide affects the self-reporting calculus.  The first article in this series addressed the backstory of the Guide and why it was issued; how companies and their counsel can use the Guide and the hypotheticals included in it; advice that can be distilled from the Guide on gifts, travel and entertainment; deficiencies in the Guide and which areas of the law remain unclear; and the highlights and lowlights of the Guide’s declination section.  See “Top Practitioners Analyze the DOJ & SEC FCPA Guidance (Part One of Two),” The FCPA Report, Vol. 1, No. 13 (Nov. 28, 2012).

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Chamber of Commerce Speaks Out About the FCPA Guidance

    Some FCPA practitioners have observed that the recently issued Resource Guide to the U.S. Foreign Corrupt Practices Act (Guide or Guidance) directly responded to criticism of the FCPA by the Chamber of Commerce (Chamber).  See “Top Practitioners Analyze the New FCPA Guidance (Part One of Two),” The FCPA Report, Vol. 1, No. 13 (Nov. 28, 2012).  The Guidance did not formally amend the FCPA and is non-binding, but it did provide hypotheticals and some clarity on application and enforcement of the statute.  Was the Chamber satisfied?  The FCPA Report recently had a far-reaching discussion with Harold Kim, Executive Vice President of the Chamber’s Institute for Legal Reform (ILR), about the Guidance.  Kim has general oversight of many of the Chamber’s federal and state initiatives relating to legal reform.  In our interview, Kim discussed: the Chamber’s FCPA advocacy efforts; its reaction to the Guidance, including the Chamber’s opinion of the Guidance relating to parent-subsidiary and successor liability; gifts and hospitality; declination decisions and compliance programs; areas where the Guidance fell short; and steps the ILR will take to move its agenda forward after the Guidance.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    Top Practitioners Analyze the DOJ & SEC FCPA Guidance (Part One of Two)

    A large part of this issue of The FCPA Report is dedicated to explaining the practical implications of the “Resource Guide to The U.S. Foreign Corrupt Practices Act” (Guide or Guidance), jointly issued on November 14, 2012 by the DOJ and SEC.  Generally, this issue analyzes the Guidance from two perspectives: the practitioner perspective and the regulator perspective.  Specifically, this issue contains two articles from each of the two perspectives.  From the practitioner perspective, this article – the first in a two-part series – surveys a wide range of leading law and accounting firm partners focused on the FCPA on the most important issues covered by the Guidance.  In particular, this article discusses: why the Guide was created and issued; how companies and their counsel can use the Guide, including how the hypotheticals provided can inform decision-making; advice that can be distilled from the Guide on gifts, travel and entertainment; deficiencies in the Guide and which areas of the law remain unclear; and the highlights and lowlights of the declination section of the Guide.  Our multi-perspective coverage is intended to offer a 360-degree view of the Guidance and its practical import.  At a granular level, our coverage is intended to offer specific strategies to law, accounting and compliance professionals seeking to bring their compliance policies into conformity with regulator expectations.  In addition, our coverage of the Guidance is intended to offer concrete suggestions to anti-bribery professionals on avoiding, handling and settling enforcement actions, conducting internal investigations and executing mergers and acquisitions.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    Comprehensive FCPA Guidance Provides a Roadmap for Companies to Reevaluate and Revise Their Compliance Policies

    On November 14, 2012, the DOJ and SEC jointly published “A Resource Guide to the U.S. Foreign Corrupt Practices Act” (Guidance), their long-awaited and highly anticipated guidance on the FCPA.  The Guidance did not pronounce any new defenses or radically reinterpret any of the FCPA’s provisions, but it does provide useful insights into the government’s enforcement considerations and should serve as a roadmap for companies to reevaluate and revise their FCPA compliance policies.  In a guest article, Paul E. Pelletier and Aaron M. Tidman, member and associate, respectively, at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., analyze the guidance and outline how practitioners may use the guidance to update their compliance policies and procedures.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    DOJ and SEC Officials Provide Candid Insight into the Recently Issued FCPA Guidance

    On November 14, 2012, the DOJ and the SEC provided unprecedented guidance on the FCPA, releasing a Resource Guide to the Foreign Corrupt Practices Act (Guide or Guidance).  See “DOJ and SEC Jointly Issue Long-Awaited Guidance on the FCPA,” The FCPA Report, Vol. 1, No. 12 (Nov. 14, 2012) and the articles analyzing the Guide in this issue of The FCPA Report.  Two days later, at the American Conference Institute’s 28th Annual Conference on the Foreign Corrupt Practices Act, top officials from the DOJ and the SEC addressed the FCPA community.  In what moderator Homer Moyer, member at Miller & Chevalier Chartered, described as an “impressive exercise in transparency,” Charles Duross, the Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, Kara Brockmeyer, Chief of the FCPA Unit of the Division of Enforcement of the SEC and Jeffrey Knox, Principal Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, answered the legal and business community’s most pressing questions about the Guidance.  Topics addressed included: reasons for providing the Guidance; whether companies should rely on the Guidance; a company’s potential liability for the acts of a foreign subsidiary; successor liability under the FCPA; gifts and entertainment; definition of the term “foreign official”; corporate compliance programs; and corporate criminal liability.  This article relays the officials’ most noteworthy points on each of the foregoing topics.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    Lanny Breuer, William Jacobson and F. Joseph Warin Discuss FCPA Guidance at ACI’s 28th National Conference on the FCPA

    On November 15, 2012, at the opening session of the American Conference Institute’s 28th Annual FCPA Conference, the conference chairs, William Jacobson and F. Joseph Warin, shared their perspectives on the recently-released joint DOJ/SEC “Resource Guide” to the FCPA (Guide or Guidance).  For additional insight from Warin, see “Five Themes for General Counsel to Monitor with Respect to Dodd-Frank Whistleblowers and the FCPA,” The FCPA Report, Vol. 1, No. 9 (Oct. 3, 2012).  Lanny Breuer, Assistant Attorney General for the Criminal Division of the DOJ, also shared his views the following day on both the Guide and the DOJ’s broad enforcement goals.  This article summarizes the remarks of Jacobson, Warin and Breuer.

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  • From Vol. 1 No.12 (Nov. 14, 2012)

    DOJ and SEC Jointly Issue Long-Awaited Guidance on the FCPA

    On November 14, 2012, the DOJ and SEC released long-awaited guidance on the FCPA in the form of a 120-page booklet called “FCPA: A Resource Guide to The Foreign Corrupt Practices Act” (Guide).  The foreword, signed by both Lanny Breuer at the DOJ and Robert Khuzami at the SEC, touts the Guide as “an unprecedented undertaking by DOJ and SEC to provide the public with detailed information about our FCPA enforcement approach and priorities.”  The Guide addresses a variety of the hot topics that many in the space have been debating, including the definition of a “foreign official” (which is currently before the Eleventh Circuit); gifts, travel and entertainment expenses; facilitation payments; how successor liability applies in the mergers and acquisitions context; the hallmarks of an effective corporate compliance program; as well as the various tools the DOJ and SEC have at their disposal to resolve cases.  The government also provided a fact sheet about the Guide in which it boasts that there “may [be] no other area of the law where DOJ or SEC has provided the public with as much information about our enforcement approach and priorities.”

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