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And The Apple Goes To …

Debevoise & Plimpton’s FCPA Update is consistently one of the best periodic Foreign Corrupt Practices Act publications around.

The most recent issue contains a dandy article by Andrew Levine, Bruce Yannett, Philip Rohlik which focuses on the DOJ’s recent so-called declinations.

For not believing the hype regarding the DOJ’s so-called declinations – as several [1] FCPA commentators have [2] – but rather analyzing the salient question posed by the so-called “declinations,” the Debevoise authors are awarded the FCPA Apple Award which recognizes informed, candid, and fresh thought-leadership on the Foreign Corrupt Practices Act or related topics.

As highlighted in prior posts here [3] and here [4], the salient question that should be asked in connection with the DOJ’s recent so-called “declination” letters to Johnson Controls, Nortek and Akamai Technologies is what viable criminal charges did the DOJ actually decline? From the only information in the public domain (the SEC’s resolution documents in each matter) the answer appears to be none.

The basic issue was nicely addressed in Debevoise & Plimpton’s most recent FCPA Update [5].

Not Declinations, Uncertain Benefits

“The DOJ refers to its decisions with regard to Akamai, Nortek, and JCI as declinations, and the SEC, in its press release with regard to Akamai and Nortek, stated that because of prompt self-reporting and cooperation, the NPAs “stipulate that the companies are not charged with violations of the Foreign Corrupt Practices Act (FCPA).” While a resolution that does not involve any alleged violation of the anti-bribery provisions of the FCPA is understandably preferable to almost any company, such an alleged breach would require a US nexus. No such allegation can be found in the admittedly sparse statement of facts in the NPAs, describing “bribes” and a “bribery scheme” in Akamai or Nortek, or in the lengthier allegations in the JCI Order. In all three cases, the misconduct is alleged to have occurred purely at the level of the Chinese subsidiaries.

Assuming, based on the lack of an allegation, that no such nexus existed, arguably none of the companies truly “benefitted” from not being charged with a violation that they did not commit and it would seem that none of these cases can properly be called “declinations,” at least in the traditional sense.”

*****

The FCPA Apple Award recognizes informed, candid, and fresh thought-leadership on the Foreign Corrupt Practices Act or related topics. There is no prize, medal or plaque awarded to the FCPA Professor Apple Award recipient. Just recognition by a leading FCPA website visited by a diverse group of readers around the world. There is no nomination procedure for the Apple Award. If you are writing something informed, candid and fresh about the FCPA or related topics, chances are high that I will find your work during my daily searches for FCPA content.