The Anti-Corruption Report

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

Articles By Topic

By Topic: Local Content Laws and Offsets

  • From Vol. 6 No.15 (Aug. 2, 2017)

    Content Requirements in Angola Cost Halliburton More Than $29 Million in SEC Disgorgement and Penalties

    In the SEC’s first FCPA settlement of the Trump administration, Halliburton has agreed to pay disgorgement and penalties of more than $29 million for books and records and internal controls violations related to a local partner in Angola. The case may signal that SEC enforcement under Jay Clayton will continue in a similar vein as it did under the Obama administration. A former vice president at the company who circumvented numerous internal controls to close a deal settled individually as well. We spoke with a number of anti-corruption experts to digest the case and find out what companies can do to avoid similar problems. See “First FCPA Actions Under Sessions’ DOJ Are Declinations With Disgorgement” (Jul. 19, 2017).

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  • From Vol. 6 No.1 (Jan. 18, 2017)

    Teva’s $519 Million FCPA Settlement Highlights Hazards of Local Production Requirements 

    The DOJ and the SEC recently announced a $519 million settlement with Israel-based Teva Pharmaceutical Industries and its Russian subsidiary Teva LLC over claims the company violated the FCPA by bribing government officials in Mexico, Russia and Ukraine. The settlement was announced as the “largest criminal fine imposed against a pharmaceutical company for violations of the FCPA” in the DOJ press release. The deal shows how complying with laws requiring local production can get a company in trouble and how tricky properly scaling an investigation can be. See “Familiar Schemes Land AstraZeneca $4 Million of Disgorgement and Small Penalty” (Sep. 14, 2016).

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  • From Vol. 5 No.23 (Nov. 23, 2016)

    Industry Risk Spotlight: Orrick Partner William Jacobson Examines Extractive Industry Corruption

    The FCPA Report’s Regional Risk Spotlight has made it clear that where a company operates can have a big impact on the level of corruption risk it faces. But risk does not just vary from region to region; it can also vary widely from industry to industry. Most multinational companies will find themselves interacting with business partners and third parties in a multitude of industries, and familiarity with the risks specific to each sector will help a company better assess its overall level of risk. In this first installment of The FCPA Report’s Industry Risk Spotlight series, we spoke with Billy Jacobson, a partner at Orrick and the former chief compliance officer of Weatherford International Ltd., to shine a light on the extractive industry, which has historically faced steep hurdles for anti-corruption compliance. See also “Corruption Risks and Compliance Programs in the Oil & Gas Industry: An Interview With Samuel Cooper of Paul Hastings” (Mar. 19, 2014).

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  • From Vol. 5 No.21 (Oct. 26, 2016)

    Regional Risk Spotlight: Riyadh-Based Attorney Robert Thoms Talks Formal and Informal Anti-Corruption Control in Saudi Arabia

    With the price of oil down precipitously, Saudi Arabia finds itself in a time of economic change. While the country has recently enacted a significant number of laws and regulations targeting corruption, secrecy around enforcement leaves many companies unsure of what is expected of them. Such confusion is particularly concerning for multinationals doing business with the country’s three largest companies, all of which are at least partially state-owned. The FCPA Report recently spoke with Riyadh-based attorney Robert Thoms, a senior attorney at The Law Firm of Salah Al-Hejailan, to discuss Saudi Arabia’s anti-corruption climate and the many ways the country controls corruption both inside and outside of the legal system. See previously “Regional Risk Spotlight: John Vincent Lonsberg of Baker Botts Helps Untangle the U.A.E.’s Web of Anti-Corruption Laws” (Oct. 21, 2015).

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  • From Vol. 5 No.3 (Feb. 10, 2016)

    Kevin Abikoff of Hughes Hubbard Discusses the Benefits and Risks of African Local Content Laws

    Foreign investment in a country has historically been a double-edged sword. While investment may allow elites to prosper, often the benefits do not flow to the general population. In response to this pattern, many countries have adopted “local content laws” that require a certain level of reinvestment by foreign companies into the countries where they operate. While these programs can have clear benefits in terms of technology transfer and local ownership, they can also be a source of corruption risk, as Japanese conglomerate Hitachi learned in 2015 when it was fined $19 million for corruption related to its local partner. The FCPA Report discussed how to navigate these programs when doing business in African countries, where they are prevalent, with Hughes Hubbard partner Kevin Abikoff. He explained why local content laws are beneficial but also how they can lead to corruption, and what companies can do to avoid problems when working with local partners. See “Lack of Training and Due Diligence Leads to $19 Million Penalty for Hitachi” (Oct. 7, 2015).

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  • From Vol. 3 No.18 (Sep. 10, 2014)

    Analyzing and Addressing Corruption Risks in Southeast Asia

    Companies operating in Southeast Asia stand to profit significantly from the unique business opportunities in the region but also face extensive corruption risks – risks rooted in that region’s politics, traditions, laws and more.  At a recent webinar hosted by Strafford Publications, anti-corruption experts discussed the intricacies of operating in ASEAN countries.  The panelists included: Edward Fishman, a partner at K&L Gates; Neil McInnes and Barry Vitou, partners at Pinsent Masons and Matthew Reinhard, a member at Miller & Chevalier.  This article outlines region-wide and country-specific corruption risks as well as some of the best practices the panelists discussed for addressing those risks.

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  • From Vol. 3 No.5 (Mar. 5, 2014)

    Six Common FCPA Risks in Southern Africa and Strategies for Managing Those Risks

    Conducting business in Southern Africa, as in other emerging markets, offers both risks and rewards.  At a recent webinar hosted by Momentum Events Group, Baker & McKenzie’s Reagan R. Demas detailed common corruption risks for businesses that operate in Southern Africa and strategies for managing those risks.  He provided practical examples from Angola, Congo, Mozambique, South Africa and Uganda.  The presentation focused on six common areas of risk: community finds, security and protection payments, cash economies, influential political parties, “local content” laws, and customs and immigration issues.  See “How Can Companies Capture the Telecom, Energy and Resources Opportunities in Africa While Mitigating Corruption Risks?,” The FCPA Report, Vol. 2, No. 20 (Oct. 9, 2013).

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  • From Vol. 3 No.3 (Feb. 5, 2014)

    A Comparison of Anti-Bribery Laws in the U.S., U.K., China, Germany and India

    In this era of increasing international cooperation, anti-corruption compliance programs cannot consider only the FCPA.  Various anti-bribery regimes must be addressed in a multi-national company’s program to adequately protect the company from the growing threat of global enforcement and “carbon copy” prosecutions.  This chart, developed by T. Markus Funk and Sambo “Bo” Dul, partner and associate, respectively, at Perkins Coie LLP, helps with the task of creating a comprehensive anti-bribery program by comparing the main provisions of five anti-bribery laws that companies should be wary of – laws in the U.S., the U.K., China, Germany and India.  See “Assessing the Year in FCPA Enforcement and Looking Ahead,” The FCPA Report, Vol. 3, No. 2 (Jan. 22, 2014) (T. Markus Funk and Bo Dul).

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  • From Vol. 1 No.4 (Jul. 25, 2012)

    International Corruption Risks Facing Financial Institutions

    For many years, financial institutions had not been frequent targets of FCPA enforcement.  However, the past two years have revealed that regulators have not forgotten about this industry.  The financial crisis increased regulatory scrutiny both from an investigative and a legislative perspective.  The SEC and DOJ are investigating financial institutions for violations of securities laws, the FCPA, anti-money laundering rules, and similar regulations.  As discussed in this article, and as the various reviews by regulators reveal, banks, private equity firms, and other financial institutions face several avenues of potential liability due to the nature of their overseas business under a myriad of domestic and international statutes.  To properly navigate this complex regulatory framework requires an effective and regularly updated compliance program, consistent with the recommended government standards (and perhaps building off of their current anti-money laundering procedures), and any responses to regulatory requests demand a carefully structured internal review.  In a guest article, Palmina Fava and Alan Brudner, both partners at Paul Hastings LLP, and Mor Wetzler, an associate at Paul Hastings, discuss: the regulatory focus on financial firms; guidance for anti-corruption compliance derived from anti-money laundering initiatives; the potential for anti-corruption liability without actual knowledge of the relevant corruption; the strict liability provisions of the U.K. Bribery Act; common sources of liability for financial institutions; specific compliance considerations raised by dealings with sovereign wealth funds and state-owned enterprises; and the risk of required offset funds.

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