In Pursuit of a Level Playing Field: FCPA and the Global Anti-Corruption Movement

Transcription

1 In Pursuit of a Level Playing Field: FCPA and the Global Anti-Corruption Movement Ronald E. Wood, Moderator, Proskauer Rose Andrew Levine, Debevoise & Plimpton Paula Anderson, Shearman & Sterling March 26,

2 Learning Objectives (1) Scenarios that have led to enforcement action (2) Factors that help identify and mitigate risk (3) Cases that help define scope of FCPA reach (4) Foreign anti-corruption efforts (5) Factors favoring cooperation (6) Possible consequences of not cooperating 2

3 3 What is the FCPA?

4 FCPA Background - Enacted in Objectives - Combat bribery overseas - Ensure accurate books and records and financial reporting at home - Prohibits bribery of foreign officials 4

5 5 Why the FCPA should matter to you

6 Strong likelihood that some aspect of your business may be exposed to FCPA risk Due diligence is critical - Use of foreign agents/third parties - Total S.A. - Eli Lilly - Fund raising - Liaisons to sources of capital/finders - Government officials 6

7 Strong likelihood that some aspect of your business may be exposed to FCPA risk Licensing/obtaining permits - Local authorities - State/province level officials Investing in/managing an operating business Gifts, travel, and entertainment - Diebold - Weatherford Int l - Eli Lilly 7

8 Gift-Giving Even small gifts can constitute an FCPA violation if there is corrupt intent Corrupt intent = an intent or desire to wrongfully influence the recipient Nominal gifts related to product promotion or demonstration could qualify as a business promotion expense 8

9 FCPA is an enforcement priority for SEC and DOJ Past 10 years: more aggressive enforcement of anti-bribery provisions worldwide Direct Access Partners Kozeny/Bourke 9

10 10 Other lessons in compliance

11 A Helpful Tool: FCPA Resource Guide Can be downloaded for free from SEC or DOJ website Contains Hallmarks of Effective Compliance Programs (p. 57) 11

12 Morgan Stanley s Compliance Program Updated internal policies regularly to reflect regulatory developments Frequently trained employees Monitored and regularly audited transactions, employees, business units Due diligence on all new business partners Strict controls on payments made to business partners 12

13 Example of Cooperation: Parker Drilling Accused of bribery in Nigeria, but cooperated with DOJ and SEC, conducted an extensive internal investigation, and enhanced its compliance program DOJ took two points off Parker s overall culpability score due to the company s cooperation Also got a 20% reduction off the bottom of penalty range due in part to cooperation and remediation 13

14 Need to Self-Report: Bilfinger Accused of bribing Nigerian officials in developing a utilities joint venture Did not self-report; its joint venture partner voluntarily disclosed the violations Penalty of $32.3 million was within (rather than below) sentencing guidelines 14

15 15 FCPA Dos and Don ts

16 DO: Maintain an active and comprehensive compliance program. Upon finding any FCPA violations, consider self-reporting to the DOJ and SEC. Continue to cooperate with the DOJ and SEC throughout any investigation. Conduct remediation as soon as possible in the wake of an FCPA violation. 16

17 DON T: Rely on unsubstantiated assurances that third party transactions are legitimate. Assume that it s safe to bribe a particular person because he or she may not be a foreign official. Assume that small tokens, such as cigarettes or bottles of wine, are not improper gifts. 17

18 In Pursuit of a Level Playing Field: FCPA and the Global Anti-Corruption Movement Ronald E. Wood, Moderator, Proskauer Rose Andrew Levine, Debevoise & Plimpton Paula Anderson, Shearman & Sterling March 26, 2014 The information provided in this slide presentation is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the firm, our lawyers or our clients. No client-lawyer relationship between you and the firm is or may be created by your access to or use of this presentation or any information contained on them. Rather, the content is intended as a general overview of the subject matter covered. Proskauer Rose LLP (Proskauer) is not obligated to provide updates on the information presented herein. Those viewing this presentation are encouraged to seek direct counsel on legal questions. Proskauer Rose LLP. All Rights Reserved. 18