Post on 27-Aug-2018
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In Pursuit of a Level Playing Field: FCPA andthe Global Anti-Corruption Movement
Ronald E. Wood, Moderator, ProskauerRose
Andrew Levine, Debevoise & Plimpton
Paula Anderson, Shearman & Sterling
March 26, 2014
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Learning Objectives
• (1) Scenarios that have led to enforcement action
• (2) Factors that help identify and mitigate risk
• (3) Cases that help define scope of FCPA reach
• (4) Foreign anti-corruption efforts
• (5) Factors favoring cooperation
• (6) Possible consequences of not cooperating
FCPA Background
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- Enacted in 1977
- Objectives- Combat bribery overseas- Ensure accurate books and records and
financial reporting at home
- Prohibits bribery of foreign officials
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Strong likelihood that some aspect of yourbusiness may be exposed to FCPA risk
• Due diligence is critical- Use of foreign agents/third
parties
- Total S.A.
- Eli Lilly
- Fund raising
- Liaisons to sources ofcapital/finders
- Government officials
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Strong likelihood that some aspect of yourbusiness may be exposed to FCPA risk
• Licensing/obtaining permits
- Local authorities
- State/province levelofficials
• Investing in/managing anoperating business
• Gifts, travel, andentertainment- Diebold
- Weatherford Int’l
- Eli Lilly
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Gift-Giving• Even small gifts can constitute an
FCPA violation if there is corruptintent
• “Corrupt intent” = “an intent or desireto wrongfully influence the recipient”
• Nominal gifts related to productpromotion or demonstration couldqualify as a “business promotion”expense
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FCPA is an enforcement priority for SEC andDOJ
• Past 10 years: moreaggressive enforcement ofanti-bribery provisionsworldwide
• Direct Access Partners
• Kozeny/Bourke
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A Helpful Tool: FCPA Resource Guide
• Can be downloaded forfree from SEC or DOJwebsite
• Contains Hallmarks ofEffective CompliancePrograms (p. 57)
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Morgan Stanley’s ComplianceProgram
• Updated internal policies regularly toreflect regulatory developments
• Frequently trained employees
• Monitored and regularly auditedtransactions, employees, businessunits
• Due diligence on all new businesspartners
• Strict controls on payments made tobusiness partners
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Example of Cooperation: Parker Drilling
• Accused of bribery in Nigeria,but cooperated with DOJ andSEC, conducted an “extensiveinternal investigation,” andenhanced its complianceprogram
• DOJ took two points off Parker’soverall culpability score due tothe company’s cooperation
• Also got a 20% reduction off thebottom of penalty range due inpart to cooperation andremediation
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Need to Self-Report: Bilfinger
• Accused of bribingNigerian officials indeveloping a utilities jointventure
• Did not self-report; its jointventure partner voluntarilydisclosed the violations
• Penalty of $32.3 millionwas within (rather thanbelow) sentencingguidelines
DO:
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• Maintain an active and comprehensive
compliance program.
• Upon finding any FCPA violations, consider
self-reporting to the DOJ and SEC.
• Continue to cooperate with the DOJ and SEC
throughout any investigation.
• Conduct remediation as soon as possible in the
wake of an FCPA violation.
DON’T:
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• Rely on unsubstantiated assurances that third
party transactions are legitimate.
• Assume that it’s safe to bribe a particular
person because he or she may not be a foreign
official.
• Assume that small tokens, such as cigarettes
or bottles of wine, are not improper gifts.
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In Pursuit of a Level Playing Field: FCPA andthe Global Anti-Corruption Movement
Ronald E. Wood, Moderator, ProskauerRose
Andrew Levine, Debevoise & Plimpton
Paula Anderson, Shearman & Sterling
March 26, 2014
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