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FCPA Flash Podcast – A Conversation With Joseph Moreno Regarding The Limits Of An FCPA Compliance Program

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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 Joseph Moreno (a former federal prosecutor and currently a partner in Cadwalader’s White Collar Defense and Investigations Group). Moreno, along with other Cadwalader attorneys, recently authored this article “When Realities Test the Limits of Your FCPA Program” that caught my eye. During the podcast, Moreno discusses: the origins of the article; how excessive risk aversion regarding corporate hospitality can have negative consequences; what Congressional leaders in the mid-1970’s who led the FCPA movement might think about certain current enforcement theories; and what might happen if certain enforcement theories were actually subjected to judicial scrutiny.

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A Focus On Third Parties

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Navex Global recently released this report titled “2018 Third-Party Risk Management Benchmark Report.” I am always a bit skeptical of such survey data given that the results often seem to dovetail nicely with the product offering of the company publishing the survey. Indeed, a final section of the report is titled “About Navex Global’s Third-Party Risk Management Solution.”

Moreover, I often wonder whether such surveys are even statistically valid.

In any event, there were certain survey findings which caught my eye.

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And Herein Lies The Compliance Challenge

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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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Assistant AG Benczkowski Announces That The DOJ Has Ditched The “Shortsighted” Compliance Counsel Position And Announces A New Corporate Monitor Policy

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In 2015 when the DOJ announced that it had retained a “compliance expert” to “provide expert guidance to Fraud Section prosecutors,” I called the move little more than a public relations move (see here for the prior post).

In mid-2017, the DOJ’s compliance counsel left her position and in doing so attempted to draw much attention to herself and her politics. (See here and here for prior posts).

This March 2018 post checked in with the DOJ regarding its compliance counsel vacancy and mum was the word from the DOJ. The prior post suggested that if the position was that important it would have been filed after nine months, but then again it never was that important but rather a public relations move.

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Stryker Joins The FCPA Repeat Offender Club

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The end of September is traditionally an active period for Foreign Corrupt Practices Act enforcement as the SEC’s fiscal year comes to a close.

On the heels of yesterday’s Petrobras enforcement action (see here and here for prior posts), the SEC announced a $7.8 million enforcement action against medical device company Stryker for not having internal accounting controls “sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait” and because “Stryker’s India subsidiary failed to maintain complete and accurate books and records.”

In doing so, Stryker joins the list of FCPA repeat offenders (see here). As highlighted in this prior post, in 2013 Stryker resolved a $13.2 million enforcement action based on alleged conduct in Mexico, Poland, Romania, Argentina, and Greece.

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