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DOJ Releases Memo Titled “Evaluating A Business Organization’s Inability To Pay A Criminal Fine Or Criminal Monetary Penalty”

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Prior posts here and here highlighted several Foreign Corrupt Practices Act enforcement actions in which a company received a reduction in the settlement amount based on a claimed inability to pay. In certain instances, it appears as if the DOJ / SEC were duped (see here for example).

Thus, yesterday’s release of this non-binding DOJ policy memo titled “Evaluating a Business Organization’s Inability to Pay a Criminal Fine or Criminal Monetary Penalty,” while not FCPA specific, is FCPA relevant.

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It’s Ridiculous That Walmart Has A Monitor, Nevertheless The Monitor Agreement Is Interesting

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As highlighted in prior posts here and here, in October 2018 the DOJ released a new monitor policy titled “Selection of Monitors in Criminal Division Matters.”

The memo was not Foreign Corrupt Practices Act specific, but FCPA relevant as it established “standards, policy, and procedures for the selection of monitors in matters being handled by Criminal Division attorneys” and “shall apply to all Criminal Division determinations regarding whether a monitor is appropriate in specific cases and to any deferred prosecution agreement (“DPA”), non-prosecution agreement (“NPA”), or plea agreement between the Criminal Division and a business organization which requires the retention of a monitor.”

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FCPA Flash Podcast Must Listen: A Conversation With Recently Departed DOJ FCPA Unit Assistant Chief Ephraim Wernick Regarding The Walmart Monitor, The Long Time Periods Associated With FCPA Scrutiny, And Other Issues

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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 Ephraim (Fry) Wernick who recently joined Vinson & Elkins after departing from the DOJ as Assistant Chief of the FCPA Unit. While Wernick was not involved in the Walmart matter during his tenure at the DOJ, he has plenty to say about the enforcement action including the imposition of a monitor during the podcast. Wernick also discusses the long time periods associated with FCPA scruitny and highlights two things about the DOJ’s FCPA unit and its enforcement program that he believes are not well understood or appreciated by the business community or FCPA bar. In short, the podcast is a must listen.

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DOJ Releases “The Evaluation Of Corporate Compliance Programs” Guidance Document

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Earlier this week, the DOJ Criminal Division released this guidance document titled “The Evaluation of Corporate Compliance Programs” (ECCP).

The latest version of the guidance document which “sets forth topics that the Criminal Division has frequently found relevant in evaluating a corporate compliance” is likely to generate a substantial amount of coverage. However, there is little new substantive information in the document compared to the DOJ’s February 2017 release of its Evaluation of Corporate Compliance Programs (see here for the prior post) and in fact there was little new information in the February 2017 document as it cited to sources long in the public domain). Indeed, the ECCP contains a spot-on footnote which states that many of the topics discussed appear in other resources long in the public domain.

While the ECCP is not Foreign Corrupt Practices Act specific, it is FCPA relevant. Nevertheless, the policy issue raised with the ECCP (as well as other forms of DOJ guidance) is what should happen if a business organization acts consistent with the factors, but an employee nevertheless exposes the entity to legal liability. Consistent with the FCPA-like laws of many peer countries, this should be relevant as a matter of law and not merely in the opaque, inconsistent, and unpredictable world of DOJ decision making. (See here).

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Fresenius Medical Care Pays Approximately $232 Million To Resolve Its Long-Standing FCPA Scrutiny

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German healthcare firm Fresenius Medical Care AG (a company with American Depositary Receipt shares traded on the NYSE) has been under FCPA scrutiny since 2012 (no that is not a typo).

Today the DOJ and SEC announced (here and here) an approximate $232 million enforcement action ($84.7 million to the DOJ and $147 million to the SEC) against the company for alleged bribery schemes involving physicians and other healthcare personnel in Angola, Saudi Arabia, Morocco, Spain, Turkey, Gabon, Benin, Burkina Faso, Senegal, Ivory Coast, Niger, Cameroon China, Serbia, Bosnia, and Mexico.

While not specified in any of the resolution documents, the DOJ’s non-prosecution agreement and SEC’s administrative order make generic reference to the Angola and Saudi Arabia conduct involving ‘agents and employees utiliz[ing] the means and instrumentalities of U.S. interstate commerce, including the use of internet-based email accounts hosted by numerous service providers located in the United States.”

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