A recent Compliance Week article reporting that Federal Express disclosed it is investigating potential FCPA violations relating to potential bribery payments made to Kenyan custom officials in exchange for clearing shipments without inspection highlights the high risk of doing business in Africa. A FedEx spokesperson stated that: “Allegations were brought to FedEx's attention in December 2013 regarding possible violations of the FCPA" and that “the company immediately began investigating these allegations, retaining an outside U.S. law firm, as well as an external audit team in East Africa." FedEx also reported that it informed the DOJ and SEC of the allegations of FCPA violations shortly after it learned of them. While FedEx says it is working with both governmental agencies and that "the investigation is ongoing," the company reports that "[t]o date, FedEx has not found anything to substantiate the allegations."
Africa has been a frequent source of FCPA investigations for the SEC. In 2013, the SEC charged the Swiss-based oilfield services Weatherford International with authorizing bribes and improper travel and entertainment for foreign officials in the Middle East and Africa to win business. Weatherford agreed to pay more than $250 million to settle cases with the SEC and other agencies. That same year, the SEC charged Parker Drilling Company, a worldwide drilling services and project management firm, with violating the FCPA by authorizing improper payments to a third-party intermediary in order to entertain Nigerian officials involved in resolving the company's customs disputes. Parker Drilling agreed to pay $4 million to settle the SEC's charges. And in 2012, the SEC charged three Noble Corporation oil services executives with bribing customs officials in Nigeria to obtain illicit permits for oil rigs in order to retain business under lucrative drilling contracts.
If your company is doing business in Africa and is concerned with staying on the right side of the FCPA, check out my recent blog post here. It explains why investing in a robust FCPA compliance program can save your company enormous costs by potentially avoiding prosecution for FCPA violations by rogue employees; it also gives 7 practical tips your company can take to implement an effective FCPA compliance program.