Source: Stanford Foreign Corrupt Practices Act Clearinghouse
2022 Q1 Report
The FCPA Clearinghouse’s quarterly report provides an overview of some of the more notable trends and statistics in FCPA enforcement activity to emerge during the first quarter of 2022.
There are a number of different ways to define FCPA enforcement activity and to count the number of new actions initiated each year. The FCPA Clearinghouse does not advocate one counting methodology over another, but instead presents the data in a number of different ways so that users can make their own informed judgments. Because our counting methodologies rely on defined terms (which are denoted below in bold), we make those definitions available at the “Definitions” tab of the About Us page.
Enforcement activity remained slow in the first quarter of 2022, with the DOJ filing two FCPA-related Enforcement Actions and issuing one declination with disgorgement pursuant to the FCPA Corporate Enforcement Policy during the quarter and the SEC initiating one enforcement action. Below is a list of all enforcement actions filed, announced, or unsealed between January and March of 2022.
- In the Matter of KT Corporation – Filed and announced on February 17, KT Corporation agreed to pay sanctions of $6,300,278.
- In Re: Jardine Lloyd Thompson Group Holdings Ltd. – Issued on March 18, this declination was announced on March 22, and Jardine Lloyd Thompson Group Holdings agreed to disgorgement of $29,081,951.
- U.S. v. Carlos Ramon Polit Faggioni – Filed under seal on March 24, this enforcement action was announced on March 29 and is ongoing.
- U.S. v. Charles Hunter Hobson – Filed under seal on March 29, this enforcement action was announced on March 31 and is ongoing.
For the second year in a row, Q1 enforcement activity has tracked well below the ten-year average of eight actions. Notably, in each of the last ten years, full year enforcement activity has trended above or below average in line with Q1 enforcement activity. If this loose correlation persists, then 2022 may see fewer enforcement actions than average. Figure 1 compares the level of enforcement activity between January and March with annual totals in each of the last ten years.
- Leidos Holdings, Inc. – The company first disclosed DOJ and SEC investigations on February 15 into possible FCPA-related misconduct in undisclosed countries.
According to information disclosed in SEC filings and charging and settlement documents, the SEC and DOJ each concluded two publicly-disclosed FCPA-related investigations in the first three months of 2021. The SEC brought an enforcement action against KT Corporation. The DOJ issued a declination pursuant to its FCPA Corporate Enforcement Policy to Jardine Lloyd Thompson Group Holdings Ltd. (JLT). The declination concludes the investigation at March & McLennan Companies, Inc., which acquired JLT in 2019. Both agencies closed their investigations into Cisco Systems, Inc. without taking any further action. Braskem S.A. also closed its internal investigation into possible FCPA-related misconduct in Mexico, although it is unknown whether the DOJ or SEC ever opened independent investigations into the company.
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 DoJ’s FCPA Opinion Procedure.
Transparency International’s 2021 Corruption Perceptions Index shows that the U.S. has started to score under 70, ranking just below Buthan and the UAE.
On December 6, 2021, the Biden administration announced a sweeping new anti-corruption strategy. The “United States Strategy on Countering Corruption“ (SCC) follows President Biden’s declaration, in a June 3, 2021 Memorandum, that corruption enforcement is a “core United States national security interest.” This strategy is even more striking in the context of multiple Department of Justice (DOJ) announcements made throughout the fall to “surge resources” for corporate enforcement, revise its corporate criminal enforcement policies, and adopt a new stance on corporate recidivism. This series of recent developments—and folding them into the national security agenda—make clear that the Biden administration is serious about leading the efforts to “prevent and combat corruption at home and abroad.”
It has been reported that of the nine open Foreign Corrupt Practices Act (FCPA) investigations disclosed by public companies in 2021, all nine are of non-U.S. companies. Additionally, of the top ten FCPA fines of all time, nine were levied against non-U.S. companies. This underscores the importance of implementing an effective compliance program that can withstand the scrutiny of aggressive FCPA enforcement.
Note: Many professionals are anticipating an increase in FCPA enforcement actions in 2022, so now is a good time to review your compliance programs and make any necessary improvements.
Chronological List (1977-2021)
Chronological List 2021 (Updated December 22, 2021)
United States v. Arturo Carlos Murillo Prijic : Docket No. 21-cr-60340
Filed: December 7, 2021
United States v. Frederick Cushmore, Jr.
Filed: November 3, 2021
United States v. Credit Suisse (DPA)
Filed: October 19, 2021
United States v. Jorge Cherrez Mino and John Luzuriaga Aguinaga
Filed: October 15, 2021
United States v. Afework Bereket
Filed: June 30, 2020
Guilty Plea: September 8, 2021
United States v. Naman Wakil
Filed: July 29, 2021
United States v. Anthony Stimler
Filed: July 26, 2021
United States v. Carmelo Urdaneta Aqui
Filed: July 24, 2018
Plea: July 21, 2021
United States v. Luis Alvarez Villamar
Filed: June 25, 2021
Plea: July 7, 2021
United States v. Amec Foster Wheeler Energy Limited (DPA)
Filed: June 25, 2021
United States v. Peter Weinzierl and Alexander Waldstein
Filed: September 18, 2020
Announced: May 25, 2021
United States v. Naeem Riaz Tyab, Mahamoud Adam Bechir and Youssouf Hamid Takane
Filed: February 7, 2019
Guilty Plea: May 24, 2021
United States v. Carlos Enrique Urbano Fermin
Filed: March 20, 2020
Guilty Plea: April 19, 2021
United States v. Jose Carlos Grubisich
Filed: February 27, 2019
Announced: November 26, 2019
Guilty Plea: April 15, 2021
United States v. Jose Luis De Jongh-Atencio
Filed: July 16, 2020
Announced: August 6, 2020
Guilty Plea: March 22, 2021
United States v. Raymond Kohut
Filed: March 4, 2021
Announced: April 6, 2021
United States v. Jorge Cherrez Miño
Filed: February 19, 2021
Announced: March 2, 2021
United States v. John Robert Luzuriaga Aguinaga
Filed: February 10, 2021
Announced: March 2, 2021
United States v. Daniel Comoretto Gomez
Filed: January 27, 2021
United States v. Deutsche Bank Aktiengesellshaft
Filed: December 22, 2020
Announced: January 8, 2021
United States v. Luis Martinelli
Filed: June 27, 2020
United States v. Ricardo Martinelli
Filed: June 27, 2020