October 18, 2017
As highlighted in this previous post, Misonix has been under FCPA scrutiny since September 2016 and in March 2017 Cicel (Beijing) Science & Technology Co. Ltd. brought a variety of civil claims against Misonix concerning its business relationship with the company.
Among the claims brought by Cicel was a breach of contract claim. Misonix acknowledged that it terminated the contract, but argued that it “was justified in doing so because of Misonix’s FCPA investigation” regarding Cicel. In response, Cicel claimed that the investigation “was a ruse for breaching the contract.” Recently, U.S. District Court Judge Arthur Spatt (E.D.N.Y.) allowed Cicel’s claim to proceed beyond the motion to dismiss stage. (See 2017 WL 4535933).
October 17, 2017
There is often discussion of “victims” of Foreign Corrupt Practices Act violations. Yet, I genuinely believe that one of the seldom-discussed “victim” categories of this new era of FCPA enforcement and resulting compliance “best practices” is foreign third parties.
For starters, a business organization can be exposed to FCPA anti-bribery violations based on the conduct of various third parties (assuming the “knowledge” component of the third-party payment provisions is met). Moreover, based on current enforcement theories, the mere “improper” recording of foreign third-party transactions may constitute a books and records violation and the enforcement agencies frequently find internal controls violations based on various alleged deficiencies concerning a business organization’s relationship with foreign third parties.
Because of these legal provisions (and aggressive and dubious enforcement of these provisions), an extensive and elaborate series of “best practices” have developed around pre-engagement, engagement, and post-engagement of foreign third parties.
October 16, 2017
[This post is part of a periodic series regarding “old” FCPA enforcement actions]
In 2002, the SEC announced the filing of a settled civil complaint against BellSouth Corporation charging the telecommunications company with violations of the FCPA’s books and records and internal controls provisions.
The conduct at issue focused on an indirect subsidiary in Venezuela (and BellSouth’s inability to “reconstruct the circumstances of purpose” of certain payments) and an indirect subsidiary in Nicaragua (which retained the wife of the chairman of a Nicaraguan legislative committee with oversight of telecommunications).
As frequently highlighted on these pages, the root cause of many FCPA enforcement actions are foreign trade barriers and restrictions and in this regard, as the complaint notes, Nicaraguan law prohibited foreign companies from acquiring a majority interest in Nicaraguan telecommunications companies.”
October 15, 2017
Interested in elevating your Foreign Corrupt Practices Act knowledge and practical skills?
For professionals in the FCPA space – or wishing to join the FCPA space – this is what the FCPA Institute is all about and the next FCPA Institute will be in Phoenix on Jan. 11-12, 2018.
The FCPA Institute is different than a typical FCPA conference.
At the FCPA Institute, information is presented in an integrated and cohesive manner by an expert instructor with FCPA practice and teaching experience. Moreover, the FCPA Institute promotes active learning by participants through issue-spotting videos, skills exercises, small-group discussions and the sharing of real-world practices and experiences. To best facilitate the unique learning experience that the FCPA Institute represents, attendance at each FCPA Institute is capped at 25 participants.
October 13, 2017
The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.
This FCPA Flash episode is a conversation with Kevin Muhlendorf (Wiley Rein and former Assistant Chief in the Fraud Section of the DOJ’s Criminal Division and former Senior Counsel in the SEC’s Enforcement Division). During the podcast, Muhlendorf discusses: the DOJ and SEC’s FCPA enforcement programs; FCPA enforcement and the rule of law; whether business organizations cooperate too much in FCPA enforcement actions including as to statute of limitation issues; and whether the FCPA – as it approaches forty – has been successful.