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DOJ Charges Well-Known Venezuelan Billionaire Raul Gorrin With FCPA And Related Offenses

Gorrin

I recently had a conversation with a lawyer who speculated that the recent spate of Venezuela-focused Foreign Corrupt Practices Act enforcement actions was part of a U.S. government effort to facilitate regime change in the country.

Who knows, but it is hard to ignore the many recent FCPA enforcement actions focused on conduct in Venezuela (see hereherehere and here for prior posts).

The latest is this recently unsealed criminal indictment against Raul Gorrin Belisario, a well-known Venezuelan businessman and described by the DOJ as a citizen and national of Venezuela who at various time periods relevant to the charges was a resident of the U.S. with a residence in Florida.

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And Herein Lies The Compliance Challenge

flipcoin

I have no doubt that the individuals associated with the International Forum on Business Ethical Conduct for the Aerospace and Defense Industry (IFBEC) who drafted these recently released “model business courtesies and hospitality guidelines” did so in good faith with sincere efforts to reduce risk under the Foreign Corrupt Practices Act and related laws.

However, following its guidelines in certain instance will actually increase risk and herein lies the compliance challenge: one can follow so-called best practices and still be exposed to FCPA or related scrutiny. In other words, FCPA compliance is sometimes like a game of heads I win, tails you lose.

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Foreign Subsidiaries Of French Pharma Company Sanofi Allegedly Bribe Kazakh And Middle Eastern “Foreign Officials” – Uncle Sam Collects $25.2 Million

Uncle Sam3

If history is any guide, September is likely to be an active month for Foreign Corrupt Practices Act enforcement as the SEC’s fiscal year ends.

Sure enough, yesterday the SEC announced an enforcement action against Paris-based pharmaceutical company Sanofi. The conduct at issue focused on employees and agents of the company’s subsidiaries in Kazakstan and various Middle Eastern countries providing things of value to “foreign officials, including healthcare professionals, in order to improperly influence them and increase sales of Sanofi products.”

In doing so, the enforcement action once again raises the policy issue of the U.S. bringing an enforcement action against a foreign company (domiciled in a country also party to the OECD Convention) for its interaction with non-U.S. officials. (See here for a prior post).

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Cryptocurrencies And The FCPA: So What?

crypto

There are many things that are FCPA relevant, but not all things are FCPA relevant. As to the later, I’ve been asked several times in recent months different versions of the same general question: what is your view of cryptocurrencies and the FCPA?

I suppose if I wanted to I could blast out (like many FCPA Inc. participants often do) an alert or article highlighting the “emerging risks” and or “hidden dangers” of cryptocurrencies and then use this trigger to market Foreign Corrupt Practices Act compliance services. But this is not what motivates me to write or consistent with my goal of being candid and calling the “balls and strikes” as I see them the regardless of what it may mean for my pocketbook.

Thus, as highlighted below in more detail, my general answer to the above question has been: I don’t really have a view because I don’t think cryptocurrencies – from the standpoint of liability under the FCPA’s anti-bribery provisions – present any unique issues.

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Legg Mason Also Ponies Up $64 Million To Resolve FCPA Enforcement Action Concerning Conduct In Libya That Occurred 9-14 Years Ago By “Only Two Mid-To-Lower Level Employees Of A Subsidiary”

LG

A few hours after the DOJ announced a net $293 million Foreign Corrupt Practices Act enforcement action against Société Générale S.A concerning conduct in Libya that occurred 9-14 years ago (see here for the prior post), the DOJ also announced that investment management firm Legg Mason also agreed to pony up $64 million to resolve a related enforcement action.

Pursuant to a three-year NPA, Legg Mason agreed to pay $64 million based on the conduct of “only two mid-to-lower level employees of a subsidiary of the company” (specifically Permal Group Ltd.). According to the DOJ: “Permal’s financial statements were consolidated into Legg Mason’s financial statements and they participated in a net revenue sharing arrangement, and all employees of Permal were subject to Legg Mason’s code of conduct.”

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