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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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Issues To Consider From The MTS Enforcement Action

Issues

This previous post went in-depth into the recent Foreign Corrupt Practices Act enforcement action against Russia-based MTS for bribing alleged Uzbekistan telecom officials. As highlighted in this prior post, the overall $850 million FCPA settlement amount is the largest in history.

This post continues the analysis by highlighting additional issues to consider.

Timeline

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In Connection With MTS Enforcement Action, DOJ Also Announces Individual FCPA Criminal Charges As Well As Money Laundering Charges Against Alleged “Foreign Official”

Karimova

In connection with the recent MTS Foreign Corrupt Practices Act enforcement action (see here for the prior post), the DOJ also announced FCPA and related criminal charges against Bekhzod Akhmedov (a citizen of Uzbekistan and former executive of an MTS entity) as well as money laundering charges against Gulnara Karimova (pictured – the former Uzbek official at the center of the telecom bribery scheme who allegedly had influence over the Uzbek governmental body that regulated the telecom industry).

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Next Up – MTS Resolves $850 Million FCPA Enforcement Action

mts

First it was Netherlands-based VimpelCom which resolved a net $398 million FCPA enforcement action in February 2016 for bribing an alleged Uzbekistan telecom official (see here and here for prior posts).

Then it was Sweden-based Telia which resolved a net $483 million FCPA enforcement action in September 2017 based on the same alleged core conduct. (see here and here for prior posts).

Recently, the SEC and DOJ announced (see here and here) that Russia-based Mobile TeleSystems PJSC (MTS) agreed to resolve an $850 million DOJ/SEC FCPA enforcement action based on the same alleged core conduct. This is the largest settlement amount in an FCPA enforcement action in history. (See here for a list of the top ten corporate enforcement actions).

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