March 31, 2020
[This post is part of a periodic series regarding “old” FCPA enforcement actions]
In 2005, the DOJ and SEC brought a coordinated enforcement action against Diagnostic Products Corp. (DPC – a California-based company which provided immunodiagnostic systems and immunochemistry kits) and its wholly-owned subsidiary DPC (Tianjin) Co. Ltd. (See here and here).
The conduct at issue focused on DPC Tianjin making cash commission payments to laboratory personnel and doctors employed by hospitals owned by the Chinese government to obtain and retain certain business involving the sale of immunodiagnostic systems, immunochemistry kits, and other medical equipment.
The overall settlement amount was approximately $4.8 million (a $2 million criminal fine and approximately $2.8 million in disgorgement and prejudgment interest paid to the SEC).
March 30, 2020
If a government enforcement agency makes an allegation in a bribery enforcement action and a risk averse corporation agrees to resolve the enforcement action in the absence of any meaningful judicial scrutiny, does that mean the allegations are true?
As highlighted in this prior post, a portion of the U.K. enforcement action against Airbus concerned a sports sponsorship in Malaysia. As alleged by the Serious Fraud Office:
March 28, 2020
FCPA Professor has been described as “the Wall Street Journal concerning all things FCPA-related,” and “the most authoritative source for those seeking to understand and apply the FCPA.”
Set forth below are the topics discussed this week on FCPA Professor.
As highlighted here, Stanley Sporkin died. As head of SEC enforcement in the mid-1970’s, Sporkin played a role in development of the FCPA’s books and records and internal controls provisions and thereafter advocated for certain FCPA reforms.
March 27, 2020
Monitor costs, scrutiny alert, quotable, and survey says. It’s all here in the Friday roundup.
As highlighted in prior posts here and here, in late 2019 Ericsson resolved a Foreign Corrupt Practices Act enforcement action and the $1.06 billion settlement amount was the largest net FCPA settlement amount in history. As a condition of settlement, Ericsson was required to engage an independent compliance monitor for a three-year period.
Recently, Ericsson disclosed “a provision of SEK 0.6 billion [approximately $60 million] was made to cover future monitoring costs.” (See here for the article “FCPA Ripples.”)
March 26, 2020
This recent post discussed how the COVID-19 crisis once again demonstrates that there is a difference between the FCPA anti-bribery provisions (the statute) and how the FCPA’s anti-bribery provisions are enforced by the DOJ/SEC.
In the current crisis, some have raised legitimate concerns that doing risk assessments, due diligence of third parties, monitoring of third parties, in-country audits, and a host of other internal controls “best practices” have become difficult if not practically impossible – and thus Foreign Corrupt Practices Act violations are lurking. After all, the DOJ says a business organization should do the above-listed things (among others) in its Evaluation of Corporate Compliance Programs (“ECCP”)
Compliance professionals – take a deep breath. The ECCP is not the law and courts have held that failure to follow supposed “best practices” is not a legal violation.
Rather, in times like these remember that the internal controls standard is “reasonable.” “Reasonable” is a term used throughout the law and when used the standard contemplates a variety of factors including the circumstances in which conduct occurs. Indeed, this position finds grounding in the FCPA itself, its legislative history, FCPA judicial decisions, and even prior FCPA enforcement agency guidance.