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Trump’s Pick For SEC Chairman Has An Informed And Sophisticated Understanding Of FCPA Issues

Jay Clayton

As has been widely reported, President-elect Donald Trump has nominated Jay Clayton (a lawyer at Sullivan & Crowell) to lead the SEC.

This post largely reboots this December 2011 FCPA Professor which highlighted a report titled “The FCPA and its Impact on International Business Transactions – Should Anything Be Done to Minimize the Consequences of the U.S.’s Unique Position on Combating Offshore Corruption?” by the International Business Transactions Committee of the Association of the Bar of the City of New York. The chairman of the Committee that drafted and reviewed the report was Jay Clayton.

The cheerleaders of more FCPA enforcement (regardless of enforcement theory, regardless of resolution vehicle used, regardless of settlement amount, and regardless of long-term collateral consequences) will likely get agitated by Clayton’s nomination.

However, those with actual FCPA practice experience, an informed understanding of global business conditions, and a desire for smart FCPA enforcement will be interested to learn of the report previously released by Clayton’s committee.

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Attorney General Nominee Jeff Sessions – “I was taught if they violated a law, you charge them. If they didn’t violate the law, you don’t charge them.”


Non-prosecution agreements and deferred prosecution agreements have distorted many areas of law, perhaps none more than the Foreign Corrupt Practices Act.

As highlighted in the article “Measuring the Impact of NPAs and DPAs on FCPA Enforcement,” since introduced to the FCPA context in 2004, alternative resolution vehicles have become the dominant way the DOJ resolves corporate FCPA scrutiny and serve as an obvious reason for the general increase in FCPA enforcement over the past decade. To the many cheerleaders of increased FCPA enforcement, NPAs and DPAs are thus worthy of applause.

Yet in a legal system based on the rule of law, quality of enforcement is more important than quantity of enforcement. Through empirical data and various case studies, the above article measures the impact NPAs and DPAs have on the quality of FCPA enforcement and concludes that NPAs and DPAs — while resulting in higher quantity of FCPA enforcement — result in lower quality of FCPA enforcement.

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FCPA Flash – A Conversation With Mark Srere About FCPA Reform And The Best Positive Incentives

FCPA Flash

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 expect from the written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Mark Srere (Bryan Cave). In the episode, Srere articulates why the current FCPA enforcement environment does not offer business organizations the best positive incentives and he offers an FCPA reform proposal that he believes would. In addition, Srere critiques the hindsight driven nature of certain FCPA enforcement actions as it relates to the internal controls provisions.

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The Significant Differences Among OECD Convention Countries On Legal Person Criminal Liability

Apples to Oranges

Fact # 8 in “Ten Seldom Discussed FCPA Facts That You Need to Know” concerns how it is an apples to oranges comparison to compare Foreign Corrupt Practices Act enforcement to enforcement of similar foreign laws in the 41 other countries that are party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“OECD Convention).

There are a couple reasons for this.

First, the U.S. is rare among OECD Convention countries in resolving alleged FCPA violations via non-prosecution agreements, deferred prosecution agreements, or administrative actions. The common thread in all three resolution vehicles is the absence or practical absence of any judicial scrutiny of FCPA enforcement theories. In contrast, in nearly every other OECD Convention country, law enforcement agencies must do something that may be considered old-fashioned by current U.S. standards and that is prove actual legal violations to someone other than itself. In doing so, these foreign law enforcement agencies have two choices (charge or do not charge) vs. the three choices in the U.S. (charge, do not charge, or use an alternative resolution vehicle).

Another reason, and the topic of this post, is the wide differences among OECD Convention countries when it comes to legal person liability for alleged bribery offenses. As demonstrated in this post, the U.S. appears to be unique among all other 41 OECD Convention countries when it comes to legal person criminal liability for alleged bribery offenses.

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Rep. Perlmutter, Once Again, Introduces FCPA Reform Bill


If nothing else, U.S. Representative Ed Perlmutter (D-CO) is persistent.

In 2009 he introduced the “Foreign Business Bribery Prohibition Act” in the House to no avail. (See here and here for prior posts).

In 2011, he introduced the “Foreign Business Bribery Prohibition Act” in the House to no avail. (See here for the prior post).

Last week, he again introduced the “Foreign Business Bribery Prohibition Act” in the House (H.R. 5438).

What is the “Foreign Business Bribery Prohibition Act?”

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