As outlined in a recent Corporate Counsel article, the DOJ and SEC have continued to vigorously enforce the FCPA in the first half of 2014. Notable FCPA enforcement highlights include:
- The Eleventh Circuit's ruling in U.S. v. Esquenazi, which upheld the convictions of two former executives of a U.S. company, Terra Telecommunications Corp., for participating in a scheme to bribe officials at Haiti Teleco, that country's state-owned telecom. (For more information about the case, click here to review Bruce Reinhart's and Robin Kaplan's recent McDonald Hopkins white collar client alert.) The Eleventh Circuit rejected the defendants' argument that Teleco was not enough of a part of Haitian government functions to count as an "instrumentality" within the meaning of the FCPA. The Corporate Counsel article quotes Mayer Brown white collar attorney Larry Urgenson, who predicts that companies will have to keep an eye on this issue because an extension of the FCPA to cover more commercial, state-owned enterprises could have a huge impact in countries like China.
- Cooperation with prosecutors during FCPA proceedings continues to make a positive difference in the outcome for a company. In two of the most significant FCPA settlements of 2014 so far (involving Alcoa Inc. and Hewlett-Packard Co.), cooperation helped the companies negotiate a lower payout than they likely would have otherwise. For example, although Alcoa paid $384 million to settle the FCPA case, it is still far better than the $446 million initial minimum base fine set by the government. For more information about the Hewlett-Packard settlement, click here for my recent blog post.
- Other governments are interested in thwarting corruption and international white-collar crime. For example, Brazil's antibribery law -- the Clean Company Act -- went into effect in January, and the UK Bribery Act has been strengthened. Additionally, click here to review my recent post outlining China's anticorruption statutes and here for details about China's bribery investigation into British drug manufacturer GlaxoSmithKline.
Interested in learning how your company can avoid inadvertently running afoul of the FCPA? Click here to
learn how to mitigate the inherent FCPA risks presented business gifts and entertainment, here for 5 key points about the FCPA, and here to identify the common red flags of corruption.