FCPA Update 1 January 2020 Volume 11 Number 6 FCPA Update A Global Anti‑Corruption Newsletter
In this issue: The Year 2019 in Review: A Record-Breaking 2 United States
34 United Kingdom Year of Anti-Corruption Enforcement
44 France For those who predicted the demise of the FCPA under the Trump Administration, 51 Germany 2019 again proved them wrong. This year included record-breaking corporate 56 Asia resolutions and significant activity against individuals, including four criminal
62 Latin America convictions at trial. U.S. monetary sanctions reached an all-time high of $2.65 billion, including the two largest corporate resolutions in FCPA history. Also, DOJ and the Click here for an index of SEC reported receiving assistance from enforcement counterparts in more than all FCPA Update articles 24 jurisdictions around the world. If there are additional individuals within Elsewhere, the level of anti-corruption enforcement activity was more mixed. The your organization who United Kingdom seemingly was preoccupied by the politics of Brexit, and some would like to receive FCPA Update, please email jurisdictions in Asia and Latin America assumed less aggressive postures than recently, [email protected], though China continued its domestic anti-corruption campaign. At the same time, [email protected], or various countries continued developing and refining their anti-corruption regimes. [email protected]
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www.debevoise.com FCPA Update 2 January 2020 Volume 11 Number 6
The UK Serious Fraud Office issued important guidance for cooperation in corporate investigations, France released guidelines regarding its unique form for deferred prosecution agreements, and Germany considered adopting corporate criminal liability. In this first issue of 2020, we survey the past year’s most significant anti- corruption developments in the United States, the United Kingdom, France, Germany, Asia, and Latin America. United States
In 2019, U.S. authorities announced the resolution of 14 corporate enforcement actions that accounted for the largest total recovery by U.S. authorities under the FCPA in a single year. Before taking a closer look at the more noteworthy corporate and individual resolutions, case law, and policy announcements, below are a few highlights from this past year: • Ericsson’s $1.06 billion resolution with U.S. authorities in December became the largest-ever FCPA settlement, surpassing the $850 million record set eight months earlier by fellow foreign telecom company MTS. In total, five corporate settlements announced in 2019 each exceeded $200 million in penalties. • DOJ secured four trial convictions in 2019, the highest in any given year, and also notched an appellate win regarding a narrow definition of bribery confined to “official acts.” The Second Circuit Court of Appeals held that the Supreme Court’s “official act” requirement in McDonnell does not apply to the FCPA. DOJ also had a high-profile loss at trial, when Jean Boustani, the Lebanese shipbuilding salesman allegedly involved in the Mozambique “Tuna Bonds” scandal, was acquitted in December. • FCPA enforcement fell disproportionately on foreign companies: only five of the 14 companies charged this year were based in the United States. Foreign companies also paid the vast majority of the fines, driven primarily by the record-setting Ericsson and MTS settlements, which together accounted for $1.91 billion of the total $2.65 billion (nearly 72%). • Interestingly, despite DOJ’s perennial attempts to increase self-reporting (see page 30, infra), only three companies received credit for self-reporting. Two of these companies obtained declinations from DOJ pursuant to its FCPA Corporate Enforcement Policy (“Enforcement Policy”),1 though the SEC still brought charges and required disgorgement.
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1. See U.S. Dep’t of Justice, Criminal Division, 9-47.120–FCPA Corporate Enforcement Policy (updated Nov. 2019), https://www.justice.gov/ jm/jm-9-47000-foreign-corrupt-practices-act-1977 [hereinafter “Enforcement Policy”]. www.debevoise.com FCPA Update 3 January 2020 Volume 11 Number 6
United States • DOJ issued updated guidance to assist prosecutors with evaluating corporate Continued from page 2 compliance programs and companies’ inability-to-pay claims and announced several updates to its Enforcement Policy, including clarifying expectations concerning voluntary self-disclosure, the use of ephemeral messaging applications, and de-confliction.
I. Corporate Enforcement Trends A. Enforcement Actions Led by Ericsson’s $1.06 billion settlement and Russian telecom company MTS’s $850 million resolution, five corporate FCPA resolutions each resulted in more than $200 million in penalties, as noted above. Like in prior years, large-dollar resolutions were supplemented by a number of smaller cases, including declinations by DOJ pursuant to its Enforcement Policy.
“In 2019, U.S. authorities announced the resolution of 14 corporate enforcement actions that accounted for the largest total recovery by U.S. authorities under the FCPA in a single year.”
As this chart shows, more than half of the corporate resolutions involved settlements with both DOJ and the SEC: Corporate Enforcement Actions