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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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BellSouth Gets Hung Up In Latin America

bellsouth

[This post is part of a periodic series regarding “old” FCPA enforcement actions]

In 2002, the SEC announced the filing of a settled civil complaint against BellSouth Corporation charging the telecommunications company with violations of the FCPA’s books and records and internal controls provisions.

The conduct at issue focused on an indirect subsidiary in Venezuela (and BellSouth’s inability to “reconstruct the circumstances of purpose” of certain payments) and an indirect subsidiary in Nicaragua (which retained the wife of the chairman of a Nicaraguan legislative committee with oversight of telecommunications).

As frequently highlighted on these pages, the root cause of many FCPA enforcement actions are foreign trade barriers and restrictions and in this regard, as the complaint notes, Nicaraguan law prohibited foreign companies from acquiring a majority interest in Nicaraguan telecommunications companies.”

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The Chiquita Enforcement Action – A Bunch Of Bananas With A Slippery Origin

chiquita

[This post is part of a periodic series regarding “old” FCPA enforcement actions]

If you think strict liability enforcement of the FCPA books and records and internal controls provisions is a recent invention, think again.

If you think off-the-rails FCPA enforcement (that is enforcement theories seemingly in conflict with actual legal authority) is a recent invention, think again.

A dubious FCPA enforcement action occurred in 2001 when the SEC announced this administrative cease and desist order finding that Chiquita Brands International Inc. violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act.

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A Focus On Angola

Angola

Angola is probably not a country that tops most people’s list of the location of Foreign Corrupt Practices Act enforcement actions.

Yet, Angola is the second largest oil producing country in Africa. This means that oil and gas and related service companies are doing business in Angola. Add in the fact that control of the oil industry is overseen by Sonangol (a state-owned / state-controlled enterprise) and throw in some trade barriers and distortions, such as local content requirements, and you have the right conditions for FCPA issues to arise.

And arise they have. As highlighted in this post, the recent FCPA enforcement action against Halliburton was the 11th FCPA enforcement action involving, in whole or in part, conduct in Angola. (10 of the 11 actions have occurred since 2007).

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Issues To Consider From The Halliburton Enforcement Action

Issues

This prior post went in-depth into last week’s $29.2 million Foreign Corrupt Practices Act enforcement action against Halliburton and this post continues the analysis by highlighting additional issues to consider.

Timeline

Halliburton disclosed to the DOJ / SEC in December 2010 or perhaps early 2011. Regardless of the precise date, Halliburton’s FCPA scrutiny lasted approximately 6.5 years.

If the SEC wants the public to have confidence in its FCPA enforcement program, it must resolve instances of FCPA scrutiny much quicker. Having FCPA scrutiny linger for 6.5 years is inexcusable particularly since Halliburton, in the words of the SEC, “[cooperated] including making foreign witnesses available, compiling financial data and analysis relating to the transactions at issue, and making substantive presentations on key topics at the staff’s request.”

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