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Identifying Chinese Companies For FCPA Violations Conflicts With The OECD Convention

chinese

Perhaps it is neither here nor there 40 years later, but the FCPA’s legislative history is clear that Congress enacted the Foreign Corrupt Practices Act motivated primarily by selfish foreign policy reasons, not altruistic do-good reasons. (See here for the article “The Story of the FCPA”).

I was reminded of this when reading this recent DOJ press release announcing its China Initiative. Among the ten specifically identified components of the initiative is the following: “identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses.”

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FCPA Flash Podcast – A Conversation With Jonathan Rusch Regarding DOJ Policy

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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 Jonathan Rusch (former official in the DOJ fraud section, former in-house FCPA counsel at Wells Fargo, and current a principal at DTG Risk & Compliance). During the podcast, Rusch discusses his 2016 published open memo to the DOJ for how it can do its job better and discusses recent events such as the DOJ abandoning its prior formal compliance counsel position, the DOJ’s new monitor policy and the DOJ’s “anti-piling” on policy.

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Principal Deputy Assistant AG Cronan Delivers Yet Another FCPA Speech

Cronan

On October 18th, Principal Deputy Assistant Attorney General John Cronan delivered a speech in Brazil at an event hosted by a for-profit business that generally charges people to attend (see here for the prior post). On October 25th, Cronan delivered another speech in Washington, D.C. at another event hosted by the same for-profit business.

Why DOJ (and SEC) officials allows themselves to be used in such a way by profit-seeking businesses to drive attendance to their events is beyond me. (See prior posts here and here, among many others, for why the selling of FCPA enforcement attorneys needs to stop).

Ethics aside, in his speech Cronan talked about the DOJ’s priorities with respect to corporate enforcement, what the DOJ expects “from companies who choose to voluntarily self-disclose misconduct and seek to cooperate with law enforcement,” and the DOJ’s “commitment to reaching fair and equitable resolutions, including through the principles reflected in the Criminal Division’s policy with respect to monitors.”

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DOJ Recognizes “The Need For Better Defined ‘Rules Of The Road’ In Corporate Enforcement

rules of the road

Yesterday, Principal Deputy Assistant Attorney General John Cronan delivered this FCPA speech in Brazil.

In the speech, Cronan stated that the DOJ recognizes “the need for better defined ‘rules of the road’ in corporate enforcement” and that the DOJ “has taken affirmative steps to make our prevailing ‘rules of the road’ as plain and predictable as possible” citing as evidence, among other things, the DOJ’s November 2017 Corporate Enforcement Policy (CEP). (See here for numerous prior posts).

In honor of the start of the basketball season, I call a time out – a full time out!

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Obvious Parallels To Certain FCPA Enforcement Actions In The SEC’s Recent Report Of Investigation

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I’ve long believed that in certain instances, the SEC should use its Section 21(a) report of investigation powers to address emerging Foreign Corrupt Practices Act issues rather than bring an actual enforcement action.

Recently the SEC did just that in this report “regarding certain cyber-related frauds perpetrated against public companies and related internal accounting controls requirements.”

As highlighted below, in the report the SEC cites FCPA legislative history, prior SEC FCPA guidance, and otherwise takes positions in the report that seemingly undermine its internal controls enforcement theories in many traditional FCPA enforcement actions involving alleged foreign bribery.

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