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Canadian Court Finds That Bribery Is A Specific Intent Offense And That Government Failed To Prove That Defendant Knew That Bribe Recipient Was A “Foreign Public Official”

Judicial Decision

This 2014 post highlighted Canadian charges against Robert Barra and Shailesh Govindia (individuals previously associated with Cryptometrics) for bribing Indian officials including those associated with Air India.

As highlighted in the below post, a Canadian court recently concluded that violations under Canada’s FCPA-like law – the Corruption of Foreign Public Officials Act (CFPOA) – are a specific intent offense and that Barra did not know the individual he allegedly bribed was a “foreign public official.”

As further highlighted below, the Canadian court’s specific intent ruling conflicts with certain FCPA jurisprudence while the Canadian court’s ruling regarding knowledge of the status of a “foreign public official” ruling is consistent with certain U.S. jurisprudence – namely U.S. v. Carson – in which the court issued a “knowledge of status of foreign official” jury instruction prior to trial. (See here).

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U.S. Secures Approximately $1.7 Billion In FCPA Settlements Largely On The Theory That Gulnara Karimova Is A “Foreign Official” – But Swedish Court Says No She Is Not!

whatdidyousay

If I ever update my 2009 article “The Facade of FCPA Enforcement” there is going to be special mention of the facts and circumstances discussed in this post.

Over the last couple of years, the U.S. government has secured approximately $1.7 billion in net Foreign Corrupt Practices Act settlement amounts in related FCPA enforcement actions against telecommunications companies VimpelCom, Telia, and most recently MTS. The enforcement actions have largely been based on the theory that Gulnara Karimova is a “foreign official” under the FCPA’s anti-bribery provisions and have not been subjected to any meaningful judicial scrutiny.

Interesting then, that in this recent Swedish court decision (English transaction) concerning the 2017 prosecution of former Telia executives Tero Kivisaari, Olli Tuohimaa and Lars Nyberg the court acquitted the defendants because Karimova was not a “public official” under the relevant law.

In the decision, the court also cared little that Telia resolved an FCPA enforcement action based on this enforcement theory because – in the words of the court – there were “strong commercial reasons” for Telia to do this and that therefore the FCPA resolution “is without probative value or impact in this case.”

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The “Foreign Officials” Of 2018

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A “foreign official.”

Without one, there can be no FCPA anti-bribery violation (civil or criminal).  Who were the alleged “foreign officials” of 2018?

This post highlights the alleged “foreign officials” from 2018 corporate DOJ and SEC FCPA enforcement actions.

There were 17 FCPA core corporate enforcement actions in 2018. Of the 17 enforcement actions 9 (53%) involved, in whole or in part, employees of alleged state-owned or state-controlled entities (“SOEs) with an additional 2 actions (12%) involving, in whole or in part, individuals associated with foreign health care systems.

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A Few Observations On The Anticorruption Chapter Of The United States – Mexico – Canada Agreement

USMCA

Recently, the Office of the U.S. Trade Representative released the text of the United States – Mexico – Canada agreement (USMCA). The extensive agreement has a specific chapter (chapter 27) titled anticorruption and this post offers a few observations regarding the agreement compared to the Foreign Corrupt Practices Act specifically as it relates to “foreign official” issues and the express facilitation payments exception.

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Judge Finds The Term Instrumentality “Unclear” And Narrowly Construes “Foreign Official” Element Contrary To The DOJ’s Position

Judicial Decision

There is little substantive Foreign Corrupt Practices Act case law, even fewer judicial decisions of precedent. Nevertheless, in the aftermath of FCPA enforcement actions or merely FCPA scrutiny, plaintiffs counsel (no doubt representing shareholders on a contingent fee basis) frequently file securities fraud class actions hoping some get past the motion to dismiss stage.

In deciding motions to dismiss, federal trial court judges occasionally directly comment upon FCPA issues and this post highlights a recent example in a matter involving Rio Tinto. As discussed below, a federal court judge found the term “instrumentality” in the FCPA’s “foreign official” definition “unclear” and otherwise narrowly construed the term in a way contrary to the DOJ’s current position.

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