International Business Transactions. FCPA, OECD Convention and OECD Member States New Legislation

Transcription

1 International Business Transactions Introduction to the International Anti-bribery Laws FCPA, OECD Convention and OECD Member States New Legislation Analysis, Comparison and Risk Management A European View Pierre Charpie Attorney at Law, 1976 LL.M., Banking, Securities and Corporate Law, 1995 LL.M., International Business and Trade Law, 1996 Fordham University Foreword by John D. Feerick Dean & Professor of Law Fordham University School of Law New York, NY

2 Foreword Preface Acknowledgments v vii xiii Introduction l Parti International Anti-bribery Laws 5 Chapter 1 Historical Evolution of Global Initiatives Against International Bribery 5 A. Concise History 5 B. Anti-bribery Initiatives 11 C. The Push of The United States 21 Chapter 2 General Structure of International Bribery Laws 29 A. Purpose 29 B. Approach 31 C. Fundamental Provisions Prohibitions Exemptions and Defenses Penalties Enforcement Procedural Aspects 34 XV

3 Part II Comparative Study 35 Chapter 3 Aspects of the Comparative Study 35 Chapter 4 The U.S. Legislation: from the 1977 Foreign Corrupt Practices Act (FCPA) to the U.S. International Anti-Bribery and Fair Competition Act of A. Historical Development, Purpose and Aims 39 B. Prohibited Conduct Prohibitions Against Paying Bribes Pursued Companies or Individuals Mental State Standard Mails or Instrumentalities of Interstate Commerce Prohibited Exchanges Official Recipients or "Any Person" Official Players Foreign Official International Organizations Providing Commercial Communications Services "Any Person" - Third Party Payments Business Purpose Payment Purpose Prohibitions Against False Accounting Practices Books and Records Requirements 75 XVI

4 2.2. Books and Records requirements for Subsidiaries Exemptions anddefenses Exempt Transactions: "Facilitating Payments" Affirmative Defenses Lawful Payments Payments for Reasonable and Bona Fide Promotional Expenses 88 C. Sanctions and Injunctions Penalties Injunctions Additional Fines Negative Business Consequences 93 D. Enforcement Power of the U.S. Department of Justice and the Securities and Exchange Commission The Department of Justice Opinion Procedure The Secretary of Commerce Annual Report 99 E. Procedural Considerations Jurisdiction: Applicable Parties and Scope of Application Statute of Limitations 112 F. Foreign Barriers to FCPA Prosecution Sovereign Immunity The Act of State Doctrine Commercial Exception Corruption Exception Imposing the Doctrine 125 XVU

5 3. Sovereign Compulsion 129 Chapter 5 FCPA Litigation 133 A. Early FCPA Cases The "Pemex" Cases United States v. Carver United States v. Kenny International Corp United States v. Silicon Contractors, Inc United States v. Carpenter Securities and Exchange Commission v. Katy Industries, Inc Securities and Exchange Commission v. Page Airways, Inc Securities and Exchange Commission v. Tesoro Petroleum Co Securities and Exchange Commission v. Sam P. Wallace Co 152 B. Other FCPA Cases United States v. Lockheed Corp Securities and Exchange Commission v. Montedison S.p.A Securities and Exchange Commission v. Triton Energy Corp 156 Chapter 6 The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 159 A. Historical Development 159 B. Purpose of the OECD Convention 161 C. Prohibited Conduct Prohibitions Against Paying Bribes Prohibited Exchanges Recipients 165 XVUl

6 1.3. Mental State Standard Proscribed Purpose Third Party Payments Prohibitions Against False Accounting Practices 169 D. Exemptions anddefenses 171 E. Penalties 172 F. Enforcement 173 G. Procedural Considerations Jurisdiction: Applicable Parties and Scope of Application Statute of Limitations 176 Chapter 7 Comparative Analysis 177 A. Prohibited Conduct Prohibitions Against Paying Bribes Prohibitions Against False Accounting Practices 181 B. Exemptions and Defenses 183 C. Penalties 184 D. Enforcement 185 E. Procedural Considerations Jurisdiction: Applicable Parties and Scope of Application Statute of Limitations 187 F. Comparative Conclusion 187 XIX

7 Part III Bribery Risk Management 189 Chapter 8 Corporate Risk Management Procedures Based on FCPA Principles 189 Chapter 9 Bribery Risk Management Program 191 Chapter 10 Specific Elements of a Bribery Risk Management Program 195 A. Red Hags Suspect Payments Cash Payments Request for Payments to a Third Party Payments in Third Countries Excessive Payments Suspect Agents Close Ties with Foreign Government Officials Reputation for Bribery Suspect Countries Suspect Industries 200 B. Due Diligence Third Party Due Diligence Selection Conducting an Investigation Evaluation 204 XX

8 5. Due Diligence and the Relevant Law Due Diligence and the Contract Representation and Warranty Clauses Payment Clause Miscellaneous and Travel and Entertainment Clause Right to Terminate 206 C. Corporate Compliance Program Written Corporate Policy or Code of Conduct Education and Training Reporting Mechanisms Internal Audit Program 208 Conclusion 211 Part IV Anti-Bribery Legislation 213 A. Foreign Corrupt Practices Act of B. International Agreements Concerning Acts Prohibited with Respect to Issuers and Domestic Concerns; Report to Congress 269 C. Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention) 273 D. Commentaries on the Convention on Combating Bribery of Officials in International Business Transactions Adopted by the Negotiating Conference on 21 November XXI

9 PartV Comparative Overview: OECD Convention /FCPA 307 A. Prohibitions Against Paying Bribes 308 B. Mental Standards 310 (a) Primary Party Mental Standard 310 (b) Third Party Mental Standard 311 C. Illegal Payments 312 (a) Payment Standard 312 (b) Payment Recipient 313 D. Prohibitions Against False Accounting Practices 314 E. Exemptions and Defenses 315 F. Penalties 316 G. Procedural Considerations 317 H. Statute of Limitations 318 I. Overview 319 Part VI Overview of OECD Member States and Non Member States' Implementation of the OECD Convention and Related Laws 321 ARGENTINA National Decree 164/ xxu

10 National Decree 102/ Law AUSTRALIA Criminal Code Amendment (Bribery of Foreign Public Officials) No. 43, AUSTRIA Penal Code Adjustment Law 1998, BGB1. Nr. I BELGIUM Act concerning the suppression of bribery; 10 February BRAZIL Decree 1171, of June 1994, on the Code of Ethics for Civil Servants 409 Official Gazette (DOU) of March 4, 1998 LAW N of 03/03/ BULGARIA Bill of Amendment to the Penal Code 445 Decree No CANADA Bill S CHILE Boletin N xxui

11 CZECH REPUBLIC Original wording of section HI. of the Czech Criminal Code - before amendment from April Amendment of the Criminal Code of April 29, 1999 Implementing the OECD Convention 490 DENMARK Law Number 228 of April 4, FINLAND Finnish Penal Code (Excerpts) 501 FRANCE Law No of June 30, 2000, Amending the Criminal Code and the Criminal Procedure Code on Combating Bribery 515 GERMANY Act on Combating Bribery of Foreign Public Officials In International Business Transactions dated 10 September Excerpts from the Criminal Code (StGB) of the Federal Republic of Germany 529 Excerpts from the Administrative Offences Act (OwiG) of the Federal Republic of Germany 559 GREECE Greek Legislation Relating to the Ratification and Implementation of the Convention of 17 December xxiv

12 HUNGARY Criminal Code 569 Act XXXVIII of 1996 on International Legal Assistance in Criminal Matters 588 ICELAND Icelandic General Penal Code Law No. 19/ Act on Criminal Responsibility of Legal Persons No. 144/ Code of Criminal Procedure No. 19/ IRELAND Prevention of Corruption (Amendment) Act Explanatory Memorandum 632 ITALY Senate Bill No JAPAN Unfair Competition Prevention Law 649 Supplementary Provisions 665 Supplementary Provisions (Excerpts) (Law No. 116, of 1994) 670 XXV

13 KOREA The Bribery Prevention Law For Foreign Government Officials In International Business Transactions 675 LUXEMBOURG Compilation of Legislation A - N 17; 7 February MEXICO Federal Criminal Code 691 THE NETHERLANDS Act dated 13 December 2000 for the review of a number of sanctions for criminal offences committed by persons in public office as contained in the Code of Criminal Law, the adaptation of certain provisions in the Code of Criminal Law, in article 51a of the Extradition Act and in articles 67 and 67a of the Code of Criminal Procedure concerning ratification and implementation of certain treaties on combating fraud and corruption (review of corruption legislation) 695 NEW ZEALAND Crimes (Bribery of Foreign Public Officials) Amendment Act NORWAY Amendments to the Norwegian Penal Code 22, May 1902 chapter XXVI

14 POLAND Law of September 9, 2000 Amending the Criminal Code, Code of Criminal Procedure; Law on the Prevention of Unfair Competition, Law on Public Orders, and Banking Law 725 PORTUGAL LawN 13/ Decree-Law N 28/84 of 20 January 748 SLOVAK REPUBLIC The Criminal Code (the Act No. 140/1961 of the Official Collection of Laws as amended) (Excerpts) 781 SLOVENIA Penal Code of the Republic of Slovenia (Excerpts) 799 SPAIN Criminal Code Chapter V 815 SWEDEN Swedish Implementing Legislation In Reference To The OECD Convention On Combating Bribery Of Foreign Public Officials In International Business Transaction Of December 17, 1997 Lagtext EU-Bedrageriereu Och Korruption 821 SWITZERLAND Revision of the Penal Code Governing Corruption (Modification of December 22, 1999) 829 Penal Code 829 Military Penal Code 836 XXVll

15 UNITED KINGDOM Anti-Terrorism, Crime And Security Act Chapter 24 PART Explanatory Notes to Anti-Terrorism, Crime And Security Act Chapter 24 PART UNITED STATES International Anti-Bribery and Fair Competition Act of Part VII 873 Synopsis 873 Review by the OECD Working Group of Implementing Legislations 875 ARGENTINA 877 AUSTRALIA 878 AUSTRIA 879 BELGIUM 880 BULGARIA 881 CANADA 882 CZECH REPUBLIC 883 DENMARK 884 FINLAND 885 XXV1U

16 FRANCE 886 GERMANY 887 GREECE 888 HUNGARY 889 ICELAND 890 ITALY 891 JAPAN 892 KOREA 893 LUXEMBOURG 894 MEXICO 895 THE NETHERLANDS 896 NEW ZEALAND 897 NORWAY 898 POLAND 899 PORTUGAL 900 SLOVAK REPUBLIC 901 SPAIN 902 SWEDEN 903 SWITZERLAND 904 UNITED KINGDOM 905 XXIX

17 UNITED STATES 906 Abbreviations 907 Bibliography 909 Internet Sources 917 Index 921 xxx