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Are FCPA Third-Party “Best Practices” Xenophobic?

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There is often discussion of “victims” of Foreign Corrupt Practices Act violations. Yet, I genuinely  believe that one of the seldom-discussed “victim” categories of this new era of FCPA enforcement and resulting compliance “best practices” is foreign third parties.

For starters, a business organization can be exposed to FCPA anti-bribery violations based on the conduct of various third parties (assuming the “knowledge” component of the third-party payment provisions is met). Moreover, based on current enforcement theories, the mere “improper” recording of foreign third-party transactions may constitute a books and records violation and the enforcement agencies frequently find internal controls violations based on various alleged deficiencies concerning a business organization’s relationship with foreign third parties.

Because of these legal provisions (and aggressive and dubious enforcement of these provisions), an extensive and elaborate series of “best practices” have developed around pre-engagement, engagement, and post-engagement of foreign third parties.

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FCPA Flash – A Conversation With Jonathan Drimmer (VP & Deputy GC of Barrick Gold Corp.)

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 have come to expect from written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Jonathan Drimmer (V.P. & Deputy General Counsel of Barrick Gold Corp. a Canadian company with shares traded in the U.S.). During the podcast, Drimmer answers which law (the FCPA or Canada’s Corruption of Foreign Public Officials Act) and its enforcement keeps him up more at night; the challenges of compliance including third party due diligence; and training best practices including whether there is compliance fatigue.

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DOJ Quietly Releases Another “Declination With Disgorgement” – This One $4 Million Regarding CDM Smith Inc.

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Those who were predicting that FCPA enforcement would wane in a Trump administration were encouraged to take a deep breath. (See here for the prior post). Among other things, it was noted that “if you believe that FCPA enforcement will decline in a Trump administration then you presumably must think that the DOJ and the SEC will start refusing to “process” corporate voluntary disclosures” (the single largest source of corporate FCPA enforcement actions).

Here is a fact to contemplate. The number of DOJ corporate FCPA enforcement actions in the first five months of the Trump administration (2 – both originating from corporate voluntary disclosures) equals the number of DOJ corporate FCPA enforcement actions in 2015 (2).

Yesterday, the DOJ once again quietly updated its FCPA Pilot Program “declinations” page to release this June 21st letter agreement addressed to Nathaniel Edmonds (Paul Hastings) counsel for CDM Smith Inc. (“CDM Smith”), a privately held engineering and construction firm incorporated and headquartered in Boston, Massachusetts.

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About That New Yorker Trump Organization Azerbaijan Story

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On February 23rd, I received an e-mail from Adam Davidson with a re: line “New Yorker Magazine on the FCPA” which stated in pertinent part “I’m writing an article about a fascinating case of potential FCPA violation and would welcome the chance to discuss.”

Since launching FCPA Professor in 2009, I’ve had hundreds of conversations with journalists writing about the Foreign Corrupt Practices Act, but my 45 minute conversation with Davidson on February 23rd was the strangest, most concerning conversation I’ve ever had with a journalist about the FCPA.

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Across The Pond, Rolls-Royce Also Resolves A $625 Million U.K. Enforcement Action

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This recent post went in-depth into the $170 million Foreign Corrupt Practices Act enforcement action against Rolls-Royce. As mentioned in the post, the FCPA enforcement action against Rolls-Royce was part of a broader $800 million global resolution that also included a U.K. Serious Fraud Office component as well as Brazil law enforcement action.

The approximate $625 million U.K. enforcement action comprised the bulk of $800 million global resolution (that would seem to make sense, Rolls-Royce is after all a U.K. company) and is summarized below including the several failure to prevent bribery counts under the Bribery Act.

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