Practical Tips for Handling International Investigations & Anti-Corruption Compliance

Transcription

1 Practical Tips for Handling International Investigations & Anti-Corruption Compliance July 20, 2011 Wally Dietz Ross Booher

2 Overview I. Recent Developments II. Compliance Policies & Procedures III. Internal Investigations IV. Key Takeaways V. Q&A 2

3 I. Recent Developments U.K. Bribery Act U.S. Dodd-Frank Act Whistleblower Provisions ( 922) FCPA Enforcement Developments China, India, Brazil & Russia Developments 3

4 I. Recent Developments A. U.K. Bribery Act Went into force July 1, 2011 Global reach Key differences from FCPA Applies to private sector bribery No exception for facilitation payments Strict corporate criminal liability for failure to prevent bribery but adequate procedures affirmative defense Adequate procedures 1. proportionate procedures 2. top-level commitment 3. risk assessment 4. due diligence 5. communication (including training) 6. monitoring and review 4

5 I. Recent Developments B. Dodd-Frank Act Whistleblower Provisions ( 922) SEC rules in force August 12, % - 30% awards May report anonymously through counsel 120 day window Certain excluded persons but exceptions after 120 days 5

6 I. Recent Developments [A]n officer, director, auditor or one of the other designated persons can become a whistleblower after at least 120 days have elapsed since the whistleblower provided the information to the entity s audit committee, chief legal officer, chief compliance officer (or their equivalents)... or to his or her supervisor, or since the whistleblower received the information, if he or she received it under circumstances indicating that the entity s audit committee, chief legal officer, chief compliance officer (or their equivalents), or his or her supervisor was already aware of the information. -- SEC Release No , p.75 6

7 I. Recent Developments C. FCPA Developments Litigation re Foreign Official Foreign official means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization. (Cont d on next slide) 7

8 New Case Law re Foreign Official (cont d) An instrumentality of a foreign government is any entity through which a foreign government achieves an end or purpose, and can include stateowned entities. In determining whether an entity is an instrumentality of a foreign government, you should consider the following: 1. the circumstances surrounding the entity s creation; 2. the foreign government s characterization of the entity and the entity s employees, and whether the entity is widely perceived and understood to be performing official (i.e., governmental) functions; 3. the foreign government s control over the entity, including the foreign government s power to appoint key directors or officers of the entity; 4. the purpose of the entity s activities, including whether the entity provides a service to the citizens of the jurisdiction; 5. the entity s obligations and privileges under the foreign country s law, including whether the entity exercises exclusive or controlling power to administer its designated functions; 6. the extent of the foreign government s ownership of the entity, including the level of financial support by the foreign government (e.g., subsidies, special tax treatment, and loans) - DOJ Proposed Jury Instructions, U.S. v. Carson, No. 8:09-cr JVS-1 (C.D. Cal., S. Div.). 8

9 I. Recent Developments FCPA Developments (cont d) DOJ Opinion release DOJ sting case update Armor Holdings ($16M public international organization ) 9

10 I. Recent Developments D. Other Global Anti-Corruption Developments China new anti-corruption law (May 11, 2011) Russia OECD Working Group on Bribery in International Business Transactions (May 2011) Brazil pending anti-corruption law (No /2010) India pending Citizen s Ombudsman bill designed to deter corruption 10

11 II. Tips Regarding Compliance Policies & Procedures Review & Update: 1. Current policies Commercial bribery Facilitation payments Adequate procedures 2. Due diligence procedures Intermediaries Employees Mergers, acquisitions & joint ventures 11

12 II. Tips Regarding Compliance Policies & Procedures Review & Update: 3. Controls & Monitoring 4. Training & Tone at the Top 5. Procedures for Reports & Red Flags Early review by counsel Prompt response 12

13 III. International Investigations Who in company should lead investigation? Two questions: Who directs investigation? Who conducts investigation? Factors: Independence Privilege Capabilities/Capacity 13

14 III. International Investigations Who Directs Investigation? Two options: 1. Management 2. Audit Committee Key issue: Independence 14

15 III. International Investigations Who Conducts Investigation? Several options: Internal Audit or Compliance In-house Counsel Outside Counsel Key Factor: Privilege 15

16 III. International Investigations How to Protect Attorney Client or Legal Professional Privilege Especially Difficult in International Investigations Cannot Assume U.S. Process is Best Example: People s Republic of China 16

17 III. International Investigations Privilege Issues Courts in U.S. Courts outside U.S. Example: European Court of Justice view on inhouse attorneys. Akzo Chemicals case 17

18 III. International Investigations Next topic: How to Preserve, Collect and Protect Evidence in International Investigation Biggest Mistake for U.S. Counsel? Assuming U.S. procedures are correct and proper 18

19 III. International Investigations Case Study: Belgian Data Protection Act Applies to processing or collection lawfulness principle finality principle proportionality principle 19

20 III. International Investigations Next Case Study: People s Republic of China Risk: trespassing or espionage allegations Key Issue: State Secrets Act definition of state secret 20

21 III. International Investigations How to mitigate risk? Belgium: Informed Consent China: Authorization with Chop Think before exporting, or do not export data All Jurisdictions: Reliable Local Counsel 21

22 IV. Key Takeaways 1. Beyond just FCPA multi-jurisdictional risk 2. Review & update your current policies & procedures 3. Very important to swiftly assess and respond to reports & red flags 4. Protecting the privilege is critical 5. Make sure your team understands local laws 22

23 V. QUESTIONS?

24 Practical Tips for Handling International Investigations & Anti-Corruption Compliance July 20, 2011 Wally Dietz: T: (615) Ross Booher: T: (615) The views expressed by the speakers are their own and may not represent the views of Bass, Berry & Sims PLC or the ACC