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Congress Knows How To Draft Legislation That Expressly Captures SOEs

Capital Hill

Recently, H.R. 5105 titled “Better Utilization of Investments Leading to Development Act” passed the House of Representatives. The bill has little to do with the Foreign Corrupt Practices Act, however the bill expressly addresses (and defines) state-owned enterprises (SOEs) and once again demonstrates that Congress is fully capable of enacting legislative that expressly captures SOEs (something Congress failed to do in the FCPA).

As highlighted in numerous prior posts and my 2014 amicus brief urging the Supreme Court to hear the Esquenazi “foreign official” challenge, if Congress wanted to include SOE employees in the FCPA’s statutory definition of “foreign official,” it easily could have done so — when enacting the FCPA in 1977, when amending the FCPA in 1998, or on any other occasion.

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Issues To Consider From The Legg Mason Enforcement Action

Issues

This previous post went in-depth into the DOJ’s recent Foreign Corrupt Practices Act enforcement action against Legg Mason. This post continues the analysis by highlighting additional issues to consider.

SEC Enforcement Action Is Forthcoming

Given Legg Mason’s recent disclosure (see here for the prior post), it was a bit of a surprise that this week’s enforcement action included only a DOJ component. FCPA enforcement actions against issuers that involve a DOJ and SEC component are almost always announced on the same day.

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SETAR Describes Itself As A “Private Sector Business,” But The DOJ Alleges That It Is A Foreign Government “Instrumentality”

What's the Difference

As highlighted here, in last week’s Foreign  Corrupt Practices Act enforcement action against Lawrence Parker in connection with a telecommunications bribery scheme in Aruba the DOJ alleged that Servicio di Telecommunicacion di Aruba N.V. (SETAR) was an instrumentality of the Aruban government such that Egbert Yvan Ferdinand Koolman (a product manager at SETAR) was a “foreign official.”

That’s interesting because since 2003 SETAR has described itself as a “private sector business.”

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The “Foreign Officials” Of 2017

shadows

A “foreign official.”

Without one, there can be no FCPA anti-bribery violation (civil or criminal).  Who were the alleged “foreign officials” of 2017?

This post highlights the alleged “foreign officials” from 2017 corporate DOJ and SEC FCPA enforcement actions.

There were 13 core corporate enforcement actions in 2017. Of the 13 enforcement actions 7 (54%) involved, in whole or in part, employees of alleged state-owned or state-controlled entities (“SOEs) with an additional 2 actions (15%) involving, in whole or in part, individuals associated with foreign health care systems.

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“Foreign Official” Notable

important2

This previous post highlighted various issues to consider in the recent SBM Offshore enforcement action.

Buried deep in the approximate 170 pages of resolution documents was another important issue to consider deserving of its own post.

This important issue was likely not a significant factor in the overall resolution of the matter (after all, as highlighted in the previous post, the conduct at issue “lasted over 16 years, was carried out by employees at the highest level of the organization, including two high-level executives who were at times directors of a wholly-owned U.S. domestic concern, involved large bribe payments, and included deliberate efforts to conceal the scheme”).

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