New Investigation – Mobile Telesystems PJSC Mobile Telesystems Public Joint Stock Company (“MTS”), a provider of telecommunications services headquartered and incorporated in Russia, announced in an SEC filing on November 17, 2021, a new investigation into possible FCPA-related misconduct in Armenia. In March 2019, the SEC and DOJ resolved enforcement actions against MTS for FCPA-related misconduct in Uzbekistan. Under the terms of the settlements, MTS appointed an independent compliance monitor to review and test MTS’ anti-corruption compliance code, policies, and procedures. In its 6-K filed on November 17, MTS disclosed that in connection with the independent compliance monitorship, certain problematic transactions were identified relating to the company’s subsidiary in Armenia. MTS subsequently disclosed the transactions to the DOJ and SEC, and both agencies requested information regarding the transactions. MTS also initiated an internal investigation into the matter. Further information about MTS’ investigation can be found on Stanford Law School’s FCPA Clearinghouse.
New Enforcement Action – Credit Suisse Group AG October 19, 2021, the SEC, DOJ, and authorities in the U.K. announced a new FCPA-related global resolution against Credit Suisse Group AG, a multinational investment bank and financial services company based in Switzerland. According to the documents in this case, from 2013 to 2016, Credit Suisse, through subsidiaries based in the U.K., underwrote, structured, marketed, and distributed a syndicated loan and two securities offerings by Mozambican state-owned entities, ProIndicus S.A. and Empresa Mocambicana de Atum S.A. (“EMATUM”). These transactions raised over $1 billion and were used to perpetrate a hidden debt scheme, pay kickbacks to three former Credit Suisse investment bankers along with their intermediaries, and bribe corrupt Mozambique government officials. The offering materials created and distributed to investors by Credit Suisse hid the underlying corruption and falsely disclosed that the proceeds would help develop Mozambique’s tuna fishing industry. The investment bankers knew that ProIndicus and EMATUM were newly formed state-owned entities with no prior business operations, which allowed them to be used as vehicles through which the bankers and intermediaries received approximately $50 million in kickbacks and corrupt Mozambique government officials obtained bribes of approximately $150 million, which were paid by the intermediaries.
Under the terms of the settled administrative proceeding announced yesterday, the SEC ordered Credit Suisse to cease and desist violations of the books and records and internal controls provisions of the FCPA as well as other securities fraud violations, and Credit Suisse agreed to pay disgorgement of $26,229,233 plus prejudgment interest of $7,822,639 and a civil fine of $65 million. Additionally, according to a press release, the DOJ filed charges against Credit Suisse and one of its U.K. subsidiaries alleging a conspiracy to commit wire fraud. Credit Suisse entered into a deferred prosecution agreement with the DOJ, and the subsidiary agreed to plead guilty. However, because the documents in the DOJ proceedings remain unavailable, the Clearinghouse is unsure whether the case is sufficiently FCPA-related to include in the database at this moment. The Clearinghouse will continue to monitor the docket for these cases to determine if they should be included in the database. The SEC separately issued a cease-and-desist order against VTB Capital plc, a London-based investment banking arm of VTB Group, which is primarily owned by the Russian government, for its role in the securities fraud. However, the order notes that VTB was unaware of the bribery, so it was not charged with any violations of the FCPA. Accordingly, the Clearinghouse has opted not to include the SEC action against VTB in the database. Further information about the SEC proceeding against Credit Suisse can be found on the Clearinghouse here.
Justice Department Appoints Foreign Bribery Chief The U.S. Department of Justice has appointed David Last chief of a high-profile unit that investigates and prosecutes companies for paying bribes to public officials overseas. Mr. Last, who was made acting chief of the Foreign Corrupt Practices Act unit in April, was recently given the job on a permanent basis. Mr. Last was part of a team of prosecutors that investigated Brazilian petrochemicals company Braskem SA and its parent company, Odebrecht SA, which changed its name to Novonor last year. The companies in 2016 pleaded guilty to FCPA violations and agreed to pay a combined penalty of $3.5 billion to authorities in the U.S., Brazil and Switzerland.
SEC Enforcement Actions: FCPA Cases Enforcement of the Foreign Corrupt Practices Act (FCPA) continues to be a high priority area for the SEC. In 2010, the SEC’s Enforcement Division created a specialized unit to further enhance its enforcement of the FCPA, which prohibits companies issuing stock in the U.S. from bribing foreign officials for government contracts and other business. Please review a list of the SEC’s FCPA enforcement actions listed by calendar year.
Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest On June 7, DOJ issued a press release following the release of President Biden’s June 3, 2021 memorandum establishing anticorruption efforts as a core national security interest. The press release announced Attorney General Merrick Garland’s establishment of Joint Task Force Alpha, a DOJ and DHS joint operation targeting human smuggling and trafficking networks in El Salvador, Guatemala, Honduras, and Mexico. While the Attorney General’s memorandum announcing the task force focused exclusively on human smuggling and trafficking, the accompanying DOJ press release emphasized that Joint Task Force Alpha will also complement DOJ anticorruption efforts and that “DOJ will increase its focus on investigations, prosecutions, and asset recoveries relating to corruption in Northern Triangle countries through its Foreign Corrupt Practices Act enforcement program, counter narcotics prosecutions, and Kleptocracy Asset Recovery Initiative.”
Self-Evaluation Tool for Corruption Risk Assessment Processes On March 31, 2021, the Organisation of Economic Co-operation and Development (“OECD”) officially launched a Self-Evaluation Tool for Corruption Risk Assessment Processes, specifically tailored for small and medium-sized enterprises (“SMEs”). The launch took place during an OECD event on “Business Integrity Trends in Asia-Pacific: Beyond the Covid-19 crisis” Since 2018, the OECD has been carrying out the OECD South East Asia Anti-Corruption and Business Integrity (SEACAB) Project, which aims to promote business integrity in the region, including by strengthening businesses’ awareness of, and ability to mitigate, corruption risks. The Project is delivered in collaboration with key partners and projects in the region. Among the activities being carried out under the auspices of the SEACAB Project are: (i) regional thematic workshops and collective action events, (ii) capacity building, (iii) regional reports on anticorruption trends and corruption risk assessments. This last deliverable, launched under the name “Self-Evaluation Tool for Corruption Risk Assessment Processes”, is an interactive tool designed specifically for small and medium-sized enterprises (SMEs), whether they are operating in Southeast Asia or in other regions. This approach was chosen, in order to support companies in implementing corruption risk assessments throughout MNE supply chains. This tool is designed sufficiently broad such that it accounts for the diversity of SMEs, which may vary considerably in their characteristics, and that the proposed tool has the adequate length and complexity that it does not require large amounts of time and human resources, which is important from the viewpoint of SMEs. Therefore, this is not an exhaustive tool, and it is designed to be quick and clear, providing at the end of the questionnaire a list of sources of information that SMEs could use to improve their corruption risk assessments, depending on their score.
This Self-Evaluation Tool for Corruption Risk Assessment Processes builds on key topics found in national and international corruption risk standards. It may be used by SMEs to identify areas of potential improvement in established corruption risk assessment processes.
The Foreign Corrupt Practices Act: An Overview The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. (“FCPA”), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.
Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.
The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. § 78m. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls.
For particular FCPA compliance questions relating to specific conduct, you should seek the advice of counsel as well as consider using the Department of Justice’s FCPA Opinion Procedure, found here.
Chronological list (1977-2020)
|United States v. Claudia Patricia Diaz Guillen||Filed: December 15, 2020|
|United States v. Adrian Jose Velasquez Figueroa||Filed: December 15, 2020|
|United States v. Vitol Inc.||Filed: December 3, 2020|
|United States v. Natalino D’Amato||Filed: November 24, 2020|
|United States v. Beam Suntory Inc.||Filed: October 21, 2020||Announced: October 27, 2020|
|The Goldman Sachs Group, Inc||Filed: October 22, 2020|
|Goldman Sachs (Malaysia) Sdn. Bhd.||Filed: October 22, 2020|
|United States v. J&F Investimentos SA||Filed: October 14, 2020||Guilty Plea: October 14, 2020|
|United States v. Sargeant Marine Inc.||Filed: September 15, 2020||Guilty Plea: September 22, 2020|
|United States v. Herbalife Nutrition Ltd.||Filed: August 28, 2020|
|United States v. Margaret Cole||Filed: August 13, 2020||Announced: August 17, 2020|
|United States v. Dorah Mirembe||Filed: August 13, 2020||Announced: August 17, 2020|
|United States v. Debra Parris||Filed: August 13, 2020||Announced: August 17, 2020|
|United States v. Jose Luis De Jongh-Atencio||Filed: July 16, 2020||Announced: August 6, 2020|
|United States v. Javier Aguilar||Filed: July 10, 2020||Announced: September 22, 2020|
|United States v. Luis Enrique Martinelli Linares||Filed: June 27, 2020||Announced: July 6, 2020|
|United States v. Ricardo Alberto Martinelli Linares||Filed: June 27, 2020||Announced: July 6, 2020|
|United States v. Alcon Pte Ltd||Filed: June 25, 2020|
|United States v. Novartis Hellas S.A.C.I.||Filed: June 25, 2020|
|United States v. Jose Vicente Gomez Aviles||Filed: April 23, 2020||Guilty Plea: June 11, 2020|
|United States v. Leonardo Santilli||Filed: March 20, 2020|
|United States v. Carlos Enrique Urbano Fermin||Filed: March 20, 2020|
|United States v. Edoardo Orsoni||Filed: November 4, 2019||Announced: March 12, 2020|
|United States v. Lennys Rangel||Filed: November 4, 2019||Announced: March 11, 2020|
|United States v. Junji Kusunoki||Filed: February 26, 2015||Announced: February 18, 2020|
|United States v. Reza Moenaf||Filed: February 26, 2015||Announced: February 18, 2020|
|United States v. Eko Sulianto||Filed: February 26, 2015||Announced: February 18, 2020|
|United States v. Tulio Anibal Farias-Perez||Filed: February 7, 2020||Announced: February 19, 2020|
|United States v. Airbus SE||Filed: January 28, 2020||Announced: January 31, 2020|
|United States v. Donville Inniss||Filed: March 15, 2018||Announced: August 6, 2018
Convicted: January 17, 2020
|United States v. Armengol Alfonso Cevallos Diaz||Filed: May 9, 2019||Announced: May 10, 2019
Guilty Plea: January 23, 2020