Recent data indicates that there are over 125 open FCPA-related investigations — across 56 industries — into violations of the US federal law prohibiting bribery payments to foreign officials. Those numbers, however, only tell a small part of the story.
Legal experts generally agree that although case numbers for FCPA investigations and prosecutions ebb and flow, overall, there has been no significant shift or decline in FCPA enforcement under the current US administration, despite predictions to the contrary in 2017. Moreover, the size of FCPA settlements, penalties, and disgorgements remain high and, this year, record-breaking: DoJ and SEC assessed penalties and disgorgement against Brazil's state-owned energy titan Petrobras, for example, at $1.78 billion in September.
The bottom line is that FCPA enforcement is here to stay. We see this in evidence every day in our FCPA-focused diligence work. From extensive deep dives into potential business partners – especially in emerging and high-corruption-risk jurisdictions – to third-party screening and ongoing monitoring, our clients turn to us to stay ahead of the curve when it comes to enforcement shifts that may be in the offing:
— Earlier this month, the SEC's top foreign bribery enforcer, Charles Cain, suggested there is increased scrutiny on industries not previously seen as traditional targets for FCPA cases.
— In a recent interview, the author of the FCPA Professor law blog suggested compliance professionals focus on enforcement actions that "seemingly take the statute in a new direction and involve unique interpretations of laws that are not subjected to judicial scrutiny." The author also noted that compliance works best when it’s a "team sport," and individuals use "FCPA goggles to spot risk unique to their job function."
— Global anticorruption watchers noted that FCPA enforcement was more active in the first half of 2018 compared to the same period one year before. The DOJ had resolved five FCPA enforcement actions against companies by August, including a $585 million criminal penalty on a large European bank that included a coordinated settlement with French authorities. Moreover, SEC civil enforcement actions this year have touched on industries as diverse as transport services and real estate development, as well as a beverage company using third-party sales promoters and distributors to make illicit payments to government officials.
Contact us if you’d like to learn more about our FCPA diligence offerings. We’ll be at the upcoming November 27-30, 2018 International Conference on the Foreign Corrupt Practices Act - if you are also attending, please stop by and visit our booth.