HHR Fall 2018 FCPA Alert
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alertFall 2018 FCPA & Anti-Bribery Hughes Hubbard & Reed LLP A New York Limited Liability Partnership • One Battery Park Plaza New York, New York 10004-1482 • +1 (212) 837-6000 Attorney advertising. Readers are advised that prior results do not guarantee a similar outcome. No aspect of this advertisement has been approved by the Supreme Court of New Jersey. © 2018 Hughes Hubbard & Reed LLP ANTI-CORRUPTION AND INTERNAL INVESTIGATIONS PRACTICE GROUP PARTNERS COUNSEL Tony Andriotis Kevin T. Abikoff Olivier Dorgans Alan G. Kashdan Derek J.T. Adler Daniel J. McLaughlin Sean M. Reilly Robert B. Bell Michael R. Silverman Nicolas Tollet Benjamin S. Britz Roel C. Campos ASSOCIATES & INTERNATIONAL SPECIALISTS Sarah L. Cave Ayoka Akinosi Dorsaf Matri Charles W. Cohen Ernesto J. Alvarado Jonathan Misk Athena Arbes Megan Mollat Ryan Fayhee Rayhan Asat Babaka Mputu Ya’ara Z. Barnoon Robby Naoufal Terence Healy Tabitha Bartholomew Marie-Agnès Nicolas Elizabeth A. Beitler Jessica Norrant-Eyme Michael H. Huneke Justin Ben-Asher Miles Orton Gil Ben-Ezra Jordan Pate Edward J.M. Little Arnaldo Bernardi N. Tien Pham Megan Buckley Antonio Pimentel* Salim Saud Neto* Julia Calafiori* Debbie Placid Ana Carolina Chaves* Landon D. Reid Matthew R. Nicely Michael A. DeBernardis Matthew Reynolds Jan Dunin-Wasowicz Caroline Rosa* Neil J. Oxford Lucie Dzongang Mathieu Rossignol Stephen A. Fowler Samuel Salyer Anne Hukkelaas Gaustad Laura N. Perkins Sergon Sancar Jaclyn M. Genchi Yoshinori Sasao Chloe Gouache Bryan J. Sillaman Markus A. Stadler Jiaxing Hao Aleea Stanton Ashley R. Hodges Nicolas Swerdloff Jennifer Suh Maureen A. Howley Laura Trumbull Clothilde Humbert George A. Tsougarakis Inès Vally Aylin Ictemel Shayda Vance Adriana Ingenito Marc A. Weinstein Bernardo Viana* Sigrid Jernudd Laura Vittet-Adamson Jack Kilgard Vivian Wang Robert Kolick Adam Weinstein Tamara Kraljic Scott Yakaitis Clinton T. Lipscomb Mei Li Zhen Calvin K. Liu Jonathan Zygielbaum * Saud Advogados, Rio de Janeiro, Brazil in strategic cooperation with Hughes Hubbard & Reed We wrote the book... and we're still writing them. Introducing the definitive book on Corporate Governance, the latest in a distinguished line of books by Hughes Hubbard authors dating back to Charles Evans Hughes himself. Hughes Hubbard & Reed LLP We wrote the book... again. Introducing the definitive new book on anti-corruption law and compliance, the latest in a distinguished line of books by Hughes Hubbard authors dating back to Charles Evans Hughes himself. A powerful and comprehensive resource for anyone dealing “with anti-corruption compliance enforcement. —The FCPA Blog Kevin T. Abikoff Michael H. Huneke Hughes Hubbard & Reed LLP Hughes Hubbard & Reed LLP CONTRIBUTIONS Editorial Kevin T. Abikoff Michael H. Huneke Laura N. Perkins Panel: +1 202 721-4770 +1 202 721-4714 +1 202 721-4778 [email protected] [email protected] [email protected] Bryan J. Sillaman Benjamin S. Britz +33 (0) 1 44 05 80 03 +1 202 721-4772 [email protected] [email protected] Drafting Michael A. DeBernardis, N. Tien Pham, Jonathan Zygielbaum, Ya’ara Z. Barnoon, Calvin Liu, Clinton T. Lipscomb Committee Ayoka Akinosi, Ernesto Alvarado, Rayhan Asat, Tabitha Bartholomew, Justin Ben-Asher, Gil Ben-Ezra, Megan Buckley, Jan Dunin-Wasowicz, Stephen A. Fowler, Anne Hukkelaas Gaustad, Chloe Gouache, Jiaxing Hao, Contributors Clothilde Humbert, Robert Kolick, Leonardo Kozlowski, Tamara Kraljic, Daniel J. McLaughlin, Megan Mollat, Marie-Agnès Nicolas, Jessica Norrant-Eyme, Miles Orton, Jordan Pate, Landon Reid, Mathieu Rossignol, Samuel Salyer, Sergon Sancar, Yoshinori Sasao, Salim Saud Neto, John Schifalaqua, Markus Stadler, Jennifer Suh, Katherine Taylor, Katherine Thomas, Nicolas Tollet, Esther Ullberg, Bernardo Viana, Laura Vittet-Adamson, Vivian Wang, Scott Yakaitis Page iii Hughes Hubbard & Reed LLP INTRODUCTION “I can tell a young person where the mines are, but he’s probably going to step on them anyway.” – Burt Reynolds The above quote from the late Burt Reynolds could just as easily have been from a dispirited anti- corruption compliance professional in 2018. Despite greater awareness, companies and individuals continue to step on the same proverbial anti-corruption mines. Late 2017 through 2018 saw a considerable number of investigations, prosecutions and settlements based on common and well- established landmarks of violative conduct: the misuse of third party relationships, abuse of gifts, hospitality, and travel, and failure to properly control hiring. It is clear at this point that just knowing the risks and common mistakes is not sufficient to avoid them. Companies must provide both guidance for avoiding the “mines” and controls to prevent employees from stepping on them. With this Alert, we hope to help in both respects. Using the past 24 months of enforcement, cases, news, announcements, and policy changes, we will try to help identify the most prevalent and current anti-corruption risks and put them in a context so they can be better understood. It is only after understanding the risks that companies can develop guidance and controls to avoid the risks. This Alert is divided into six chapters. Chapter 1 is devoted to analysis of certain critical enforcement highlights, trends, and lessons from recent settlements, prosecutions, and other related developments. Following that analysis, Chapter 2 is dedicated to the U.S. FCPA. Chapter 2 provides a description of each FCPA-related settlement for 2017 and 2018 organized alphabetically by year. Chapter 2 also includes other relevant FCPA-related developments, including court rulings, guidance, and results from recent FCPA-related civil litigation. Chapter 3 is dedicated to developments in enforcement of the U.K. Bribery Act, including a description of certain recent investigations and enforcement actions of note. Chapter 4 covers enforcement updates in other select countries: Brazil, China, France, and Norway. Chapter 5 provides an update related to the activities of multilateral development banks in the global fight against corruption. Chapter 6 is left for other international developments in the context of anti- corruption enforcement, this year focusing on an update on the status of EU data protection laws and regulations. For those so inclined, more information is included in our FCPA and Anti-Bribery Compendium, which is freely available on our website (www.hugheshubbard.com) and contains (i) descriptions of all FCPA settlements and criminal matters from 2005 through 2018 (including relevant updates), (ii) a summary of each DOJ Review and Opinion Procedure Release issued from 1980-present, (iii) further details and background information on the U.K. Bribery Act and multilateral development bank enforcement, and (iv) a discussion of various international developments and compliance guidance. For more information about the matters discussed in this Alert or our Anti-Corruption and Internal Investigations practice generally, please contact us or any member of our Practice Group. Kevin T. Abikoff Laura N. Perkins +1 202 721-4770 +1 202 721-4778 [email protected] [email protected] Page iv Hughes Hubbard & Reed LLP CHAPTER 1: HIGHLIGHTS, TRENDS & LESSONS ................................................................................ 1 I. Recent Highlights ................................................................................................................ 1 II. Trends & Lessons ............................................................................................................... 4 Trends .................................................................................................................... 5 Lessons from Recent Enforcement Activity ........................................................... 8 CHAPTER 2: FCPA ................................................................................................................................. 12 I. FCPA Elements and Penalties .......................................................................................... 12 Anti-Bribery Provisions ......................................................................................... 12 The Exception and Defenses to Alleged Anti-Bribery Violations ......................... 13 Accounting Provisions .......................................................................................... 14 Penalties .............................................................................................................. 14 II. Recent Policy Changes ..................................................................................................... 15 Corporate Enforcement Policy ............................................................................. 15 1. Elements of the FCPA Corporate Enforcement Policy ........................... 15 2. Declination and Penalty Reduction ......................................................... 18 3. Application beyond FCPA Matters .......................................................... 19 4. Declinations under the Pilot Program and Corporate Enforcement Policy ................................................................................. 19 Piling On ............................................................................................................... 23 III. FCPA Settlements and Enforcement Actions ................................................................... 24 2018 ....................................................................................................................