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A Closer Look At The U.K.’s First Deferred Prosecution Agreement

Closer Look

As highlighted in this post, there were two firsts in last week’s U.K. Serious Fraud Office enforcement action against Standard Bank Plc (currently known as ICBC Standard Bank Plc): (i) the first use of Section 7 of the Bribery Act (the so-called failure to prevent bribery offense) in a foreign bribery action; and (ii) the first use of a deferred prosecution agreement in the U.K.

This prior post analyzed “what” was resolved (an alleged violation of Sec. 7 of the Bribery Act for failure to prevent bribery).

This post continues the analysis by highlighting “how” the enforcement action was resolved (through a deferred prosecution agreement).

That the U.K’s first DPA was used to resolve a Bribery Act offense is perhaps fitting as U.K. anti-corruption enforcement officials have long expressed a fondness for U.S. alternative resolution vehicles used to resolve alleges instances of FCPA violations. Such fondness was widely seen as a significant driver for the U.K. to adopt DPAs (as highlighted in this prior post, the U.K. rejected NPAs) although DPA’s are authorized to resolve other alleged instances of financial crime as well.

Knowledgeable observers already know that U.K. style DPAs are significantly different than U.S. style DPAs, but in analyzing the U.K.’s first DPA, this fact bears repeating.

Sir Brian Leveson’s Approved Judgment and Preliminary Judgment provide a detailed overview of the U.K’s process for DPAs, including the judicial review aspect of the process, and should be required reading for anyone trying to better understand the DPA process in the U.K.. (This aspect is largely absent in U.S. style NPAs and DPAs – indeed the DOJ has argued on several occasions that the judiciary has no substantive role to play in the DPA process – an issue that is currently before the D.C. Circiut in Fokker Services).

If a nation is to have DPAs, the U.K. model is far more sound than the U.S. model and an initial observation from the U.K.’s first DPA is that it was incredibly refreshing to read a document relevant to an alleged bribery offense drafted by someone other than the prosecuting authority.

The Standard Bank (SB) DPA is similar in many respects to DPAs used to resolve alleged FCPA violations. For starters, the term of the DPA is three years (the typical term of U.S. DPAs tends to be from 18 months to three years).

In the DPA, SB accepted responsibility for the alleged conduct at issue, agreed to on-going cooperation with the SFO and other law enforcement agencies, and agreed to pay the components of the settlement amount. In the DPA, SB also agreed to post-enforcement action compliance reviews and enhancements, including the engagement of PwC to conduct an independent review of the company’s progress.

Similar to U.S. DPAs, the SB DPA also contains a so-called “muzzle clause” in which:

“Standard Bank agrees that it shall not make, and it shall not authorise its present or future lawyers, officers, directors, employees, agents, its parent company, sister companies, subsidiaries or shareholders or any other person authorised to speak on Standard Bank’s behalf to make any public statement contradicting the matters described in the Statement of Facts.”

That the U.K.’s first DPA contains a “muzzle clause” is interesting given that, as discussed in this previous post, Lord Justice Thomas was critical of the SFO’s attempt to insert a “muzzle clause” into the Innospec resolution documents.  Lord Justice Thomas stated: “It would be inconceivable for a prosecutor to approve a press statement to be made by a person convicted of burglary or rape; companies who are guilty of corruption should be treated no differently to others who commit serious crimes.”

Despite the similarities between the SB DPA and U.S. style DPA’s, there are key differences.

For instance, in U.S. DPAs the DOJ claims unilateral power to declare a breach of the agreement (a contractual term many have criticized see here). The SB DPA states, under the heading “Breach of Agreement,” as follows.

“If, during the Term of this Agreement, the SFO believes that Standard Bank has failed to comply with any of the terms of this Agreement, the SFO may make a breach application to the Court. In the event that the Court terminates the Agreement the SFO may make an application for the lifting of the suspension of indictment associated with the DPA and thereby reinstitute criminal proceedings.

In the event that the SFO believes that Standard Bank has failed to comply with any of the terms of this Agreement the SFO agrees to provide Standard Bank with written notice of such alleged failure prior to commencing proceedings resulting from such failure. Standard Bank shall, within 14 days of receiving such notice, have the opportunity to respond to the SFO in writing to explain the nature and circumstances of the failure, as well as the actions Standard Bank has taken to address and remedy the situation. The SFO will consider the explanation in deciding whether to make an application to the Court.”

Another difference, albeit rather minor, concerns the time period to resolve the action. The SFO’s release states that SB’s counsel made the voluntary disclosure in late April 2013. Thus, the time period from start to finish was a relatively swift 2.5 years (at least compared to the typical time frame in the U.S.).

Other interesting aspects of the U.K’s first DPA are as follows.

Regarding SB’s voluntary disclosure and cooperation, Sir Leveson stated:

“Standard Bank immediately reported itself to the authorities and adopted a genuinely proactive approach to the matter […] In this regard, the promptness of the self-report and the extent to which the prosecutor has been involved are to be taken into account […] In this case, the disclosure was within days of the suspicions coming to the Bank’s attention, and before its solicitors had commenced (let alone completed) its own investigation.

Credit must also be given for self-reporting which might otherwise have remained unknown to the prosecutor. […] In this regard, the trigger for the disclosure was incidents that occurred overseas which were reported by Stanbic’s employees to Standard Bank Group. Were it not for the internal escalation and proactive approach of Standard Bank and Standard Bank Group that led to self-disclosure, the conduct at issue may not otherwise have come to the attention of the SFO.


Standard Bank fully cooperated with the SFO from the earliest possible date by, among other things, providing a summary of first accounts of interviewees, facilitating the interviews of current employees, providing timely and complete responses to requests for information and material and providing access to its document review platform. The Bank has agreed to continue to cooperate fully and truthfully with the SFO and any other agency or authority, domestic or foreign, as directed by the SFO, in any and all matters relating to the conduct which is the subject matter of the present DPA. Suffice to say, this self-reporting and cooperation militates very much in favour of finding that a DPA is likely to be in the interests of justice.”

Regarding “Compensation,” Sir Levenson stated in pertinent part:

“A DPA may impose on an organisation the requirement to compensate victims of the alleged offence and to disgorge profits made from the alleged offence.”


In the present DPA, Standard Bank would be required to pay the Government of Tanzania the amount of US $6 million plus interest of US $1,153,125. This sum represents the additional fee of 1% of the proceeds of the private placement, paid to EGMA the local partner engaged by Stanbic and very swiftly withdrawn in cash. The fee was paid from the US $600 million capital raised by the placement and the consequence was that the Government of Tanzania received US $6 million less than it would have received but for that payment. The interest figure of US $1,153,125 is calculated by reference to interest paid on the loan and, by the time of repayment, will amount to US $1,153,125.”

That the Government of Tanzania was a victim is speculative and an open to question.

The private placement bond offering SB facilitated was unrated (and thus risky) and represented, according to SB, the first ever benchmark-sized private placement by a sub-Saharan sovereign. According to SB, “the transaction was privately placed with 116 investors with a wide geographic mix of accounts and resulted in the government raising substantial funds for infrastructural investment in a most efficient and cost-effective manner.”

To properly analyze whether the Government of Tanzania was a “victim” of SB’s conduct, two factors would have to be analyzed: (i) did the government have other options in the transaction or was SB the only investment bank willing to facilitate the transaction given its risky nature?; and (ii) if there were other options, what was the fee structure for the other options – more specifically did other investment banks offer to structure the transaction for less than 2.4% of the proceeds (representing the original 1.4% fee plus the additional 1% fee at issue in the enforcement action)? In this regard, it must be noted, as the SEC found in its related enforcement action, that the Government of Tanzania “had been unsuccessful in obtaining a credit rating, making a EuroBond offering unfeasible.”

Regarding disgorgement, Sir Levenson stated:

“The legislation specifically identifies disgorgement of profit as a legitimate requirement of a DPA. […] The provision is clearly underpinned by public policy which properly favours the removal of benefit in such circumstances. In this case, no allowance has been made for the costs incurred by Standard Bank (to such extent as they can be put into money terms) and the proposal is that it should disgorge the fee which Standard Bank and Stanbic received as joint lead managers in relation to this transaction, namely 1.4% or US $8.4 million. Again, there is no suggestion that Standard Bank does not have the means and ability to disgorge this sum.”

The above logic is simplistic – as it often is in many FCPA enforcement actions – and ignores basic causation issues. (See prior posts hereherehere, and here). Moreover, the disgorgement in the SB action follows the oft criticized “no-charged bribery disgorgement” approach often used in the U.S.

Regarding the financial penalty, Sir Levenson stated:

“[F]or offences of bribery, the appropriate figure will normally be the gross profit from the contract obtained, retained or sought as a result of the offending. As has been discussed in regard to appropriate disgorgement of profits, in this case, it has been taken as the total fee retained in respect of the transaction by Standard Bank and Stanbic as the Joint Lead Managers, that is to say, the sum of US $8.4 million. The Sentencing Council Guideline identifies the starting point for a medium level of culpability as 200% of the ‘harm’ i.e. gross profit, with a range of 100% to 300% (cf. a starting point of 300% with a category range of 250-400% for high culpability).

It is then necessary to fix the level by reference to factors which increase and reduce the seriousness of the offending. As regards aggravation, although not an offence of bribery, there were serious failings on the part of Standard Bank in regard to the conduct at issue at a time when the Bank was well aware that further regulatory enforcement measures were in train: these led to a fine by the FCA for failings in internal controls relating to anti-money laundering. Further, in this context, it must be underlined that the predicate offending by Stanbic resulted in substantial harm to the public and, in particular, the loss of US$ 6m. from the money being borrowed by the Government of Tanzania for much needed public infrastructure projects.

On the other side of the coin, the mitigating features include the fact that Standard Bank (a company without previous convictions) volunteered to self-report promptly and both facilitated and fully cooperated with the investigation which the SFO conducted. Further, there is no evidence that the failure to raise concerns about antibribery and corruption risks (as opposed to money laundering concerns which led to the FCA regulatory action) was more widespread within the organisation. Finally, the transaction took place when the Bank was differently owned and, additionally, the business unit that carried it out is no longer owned by Standard Bank.

In the circumstances, I consider it appropriate that the provisional agreement is to take a multiplier of 300% which is the upper end of medium culpability and the starting point of higher culpability. This leads to a figure of US $25.2 million before the court must (following Step 5 of the Sentencing Council Guideline) ‘step back’ and consider the overall effect of its orders such that the combination achieves “removal of all gain, appropriate additional punishment and deterrence”. Bearing in mind, inter alia, the value, worth or available means of the offender and the impact of the financial penalties including on employment of staff, service users, customers and local economy (but not shareholders), the guideline is clear that: “The fine must be substantial enough “to have a real economic impact which will bring home to both management and shareholders the need to operate within the law”.

In assessing the financial penalty, Sir Levenson found comfort as follows.

“Bearing in mind the observations of Thomas LJ in Innospec Ltd [see here for the prior post], a useful check is to be obtained by considering the approach that would have been adopted by the US authorities had the Department of Justice taken the lead in the investigation and pursuit of this wrongdoing. Suffice to say that the American authorities have been concerned with the circumstances and have been conducting an inquiry in connection with possible violations of the Foreign Corrupt Practices Act, 15 USC para. 78dd-1. Noting the co-operation of Standard Bank and Stanbic with them, the Department of Justice has confirmed that the financial penalty is comparable to the penalty that would have been imposed had the matter been dealt with in the United States and has intimated that if the matter is resolved in the UK, it will close its inquiry. In the circumstances, there is nothing to cast doubt on the extent to which these aspects of the proposed approach are fair, reasonable and proportionate.”

In  conclusion, Sir Levenson stated:

“It is obviously in the interests of justice that the SFO has been able to investigate the circumstances in which a UK registered bank acquiesced in an arrangement (however unwittingly) which had many hallmarks of bribery on a large scale and which both could and should have been prevented. Neither should it be thought that, in the hope of getting away with it, Standard Bank would have been better served by taking a course which did not involve self report, investigation and provisional agreement to a DPA with the substantial compliance requirements and financial implications that follow. For my part, I have no doubt that Standard Bank has far better served its shareholders, its customers and its employees (as well as all those with whom it deals) by demonstrating its recognition of its serious failings and its determination in the future to adhere to the highest standards of banking. Such an approach can itself go a long way to repairing and, ultimately, enhancing its reputation and, in consequence, its business. It can also serve to underline the enormous importance which is rightly attached to the culture of compliance with the highest ethical standards that is so essential to banking in this country.”

That SB “far better served its shareholders” and other stakeholders by voluntarily disclosing is of course an opinion.

In this regard, it bears repeating that SB voluntarily disclosed “within days of the suspicions coming to the Bank’s attention, and before its solicitors had commenced (let alone completed) its own investigation.” In the minds of many, SB’s disclosure is likely to be viewed as premature, careless and indeed reckless.

As it turned out – as further explored in yesterday’s post – the conduct at issue in the SB enforcement action involved just one transaction, against the backdrop of SB having various policies and procedures designed to minimize the same conduct giving rising to the enforcement action, and against the further backdrop of – in the words of the judge – “Standard Bank [having] no previous convictions for bribery and corruption nor has it been the subject of any other criminal investigations by the SFO” and “there is no evidence that the failure to raise concerns about anti-bribery and corruption risks … was more widespread within the organization.”

Given these circumstances, an alternative to voluntary disclosure – and an approach that would have likely better served SB’s shareholders – would have been, after a thorough investigation, promptly implementing remedial measures, and effectively revising and enhancing compliance policies and procedures – all internally and without disclosing to the SFO or other law enforcement agencies.

Let’s Pause Before We Dole Out Dollars

Out of thin air

Previous posts here and here addressed the calls of some that settlement amounts in an FCPA enforcement action be, at least in part, returned to the so-called victims of the underlying bribery.

Today’s post is from Joe Murphy.

Murphy is the author of 501 Ideas for Your Compliance and Ethics Program (SCCE; 2008) and a frequent commentator on compliance issues.


There was recently an online posting championing the idea of the Department of Justice using some of the $9 billion criminal penalty imposed on one company for violations of sanctions against Sudan, Iran and Cuba to compensate victims of the regimes in those countries.  The Department would explore who those victims were and determine how to compensate them.

As a student of political science, I find this worrisome.  Any figure with that many zeros behind it is real money.  And, it can fairly be said, that money is a form of power.  Here we would have unelected enforcement officials making policy decisions about how to spend large pools of funds. Determining exactly who were the victims of such systemic violations is not simply an administrative task; there will be important policy decisions to be made, including matters of foreign policy.

When the fines were small this could be considered an incidental function. But when the amounts are in the billions, this is cause for much more consideration. Sure, we are often frustrated by the slow process of legislative deliberation, but that is the governmental system we have chosen. The raising and allocation of funds is subject to a system of checks and balances.  We live in a democracy, not a government of selected elites who choose to spend money as they think best. Enforcement officials should be enforcing the law and taking steps to prevent violations. Courts should be hearing disputes and resolving conflicts. But they are not legislatures and should not be selecting where to dole out billions of dollars in funds.

As the size of criminal fines has ballooned we have passed the point where this issue can be ignored.  There are serious policy issues.  If, on the one hand, the funds were simply added to the general funds of the government we would also have the troublesome issue of law enforcement being converted into a revenue-raising operation.  This specter is seen in Europe, where the EU’s competition law enforcers sometimes seem more like revenue agents than public servants dedicated to preventing violations. Consider the institutional bias this would introduce if an enforcement agency is a funding source for government operations.  Instead of having an incentive to stamp out violations, there would at least appear to be an opposite interest:  let the violations ripen into large cases so there is more revenue to harvest.

On the other hand, if the proceeds go elsewhere, then what is done with the money and who decides?  In the US at the federal level the proceeds go to victim reimbursement.  But as the cases deal with systematic violations or ones where victims are not clearly defined, this is not so easy.  When the violations are not simply theft, how do we determine who the victims are?  Who makes those decisions?  Is there a process in place capable of handling this?  And in a system where the victims are capable of pursuing their own compensation through litigation, what happens to the penalty funds generated by government?

If enforcers are allocating billions of dollars, can lobbying for that money be far behind?  What alert non-profit would pass up the opportunity to have access to those funds? And, as the enforcers should know well, dealing in those sums eventually invites fraud.  Will the enforcers require reports on how the funds were spent?  Will they audit or investigate this?  Will they then be allocating resources to monitor their grants to the victims and those who purport to benefit the victims?  Is this a business we want enforcers conducting?

Giving this level of power to enforcement officials should at least cause us to stop and think more about the process. They were not trained in how to do this, they were not selected for this, and they are not accountable to the public for what they do. Up until now, this question has not only not been answered, but for the most part it is not even being asked.  I find this at least a cause for concern.

Am I A Victim?

What woudl you do

In just the past two months, the Department of Justice has announced that:

a former Drug Enforcement Administration employee pleaded guilty to defrauding the government out of more than $113,000 using fraudulently issued government credit cards;

two former federal agents were criminally charged with money laundering and other fraud offenses in connection with a U.S. government investigation;

a Customs and Border Protection Officer was criminally sentenced for personally benefiting from a government program he was charged with overseeing;

a former U.S. Army specialist was criminally indicted for accepting bribes from Afghan truck drivers in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market.

a former U.S. Air Force captain pleaded guilty to various criminal charges in connection with serving as a contracting official at Camp Eggers, near Kabul, Afghanistan (in which he administered at least three major U.S. government contracts, all held by the same Afghan company, for the purchase of clothing and footwear for Afghan National Security Forces (ANSF)) while at the same negotiating his future employment with the same Afghan company that held the contracts he administered.

a  former U.S. Postal Service contracting officer was criminally indicted for engaging in a scheme to defraud the Postal Service through bribery and kickbacks in connection with the awarding of contracts to deliver the mail.

An Army National Guard recruiter and recruiting assistant were criminally convicted for their roles in a bribery and fraud scheme.

An Army National Guard official pleaded guilty for accepting a $30,000 bribe in exchange for steering a $3.6 million contract to a retired sergeant major of the Minnesota Army National Guard and his consulting company.

The above examples are from just the past two months.  Search DOJ press releases for the past six months or year and the list grows much, much longer.

The common thread in the above criminal prosecutions is that a U.S. official abused a position of authority and trust for their own personal enrichment and placed their interests ahead of the public interest.

I am a U.S. citizen.

Am I thus a victim of the above criminal conduct?  Do I deserve compensation?  Does my community deserve a new school or playground?

I personally believe that the answers to the above questions is no as there is little direct casual link to the alleged activity and me.

Why then in the context of FCPA enforcement actions (actions which allege that a person or entity subject to the FCPA made or offered money or anything of value to a foreign official who abused a position of authority and trust for their own personal enrichment) have some advocated compensating the “victims” of the conduct violating the FCPA – namely the citizens of the foreign official’s country?  (See here for example).

I have long opposed such feel good measures for a variety of reasons. (See here, here and here) (See here for my most recent explanation).

Perhaps though I need to start viewing myself as a victim of the numerous U.S. bribery and corruption schemes involving U.S. officials.

Will anyone start advocating on my behalf?



Friday Roundup


Looking for talent – got talent, FBI announcement, Bourke related, to FCPA Inc., and for the reading stack.  It’s all here in the Friday Roundup.

Looking for FCPA Talent?  Got Talent

If your firm or organization is looking for either a summer associate or full-time lawyer with a solid foundation in the FCPA, FCPA enforcement, and FCPA compliance, please e-mail me at I teach one of the only FCPA specific law school classes in the country (see here) and my Southern Illinois University law students who excelled in the class have, I am confident in saying, more practical skills and knowledge on FCPA topics than other law students.

I can recommend several students and I encourage you to give them an opportunity.

FBI Announcement

The FBI recently announced the establishment of international corruption squads.  In pertinent part, the release states:

“The FCPA … makes it illegal for U.S. companies, U.S. persons, and foreign corporations with certain U.S. ties to bribe foreign officials to obtain or retain business overseas. And we take these crimes very seriously—foreign bribery has the ability to impact U.S. financial markets, economic growth, and national security. It also breaks down the international free market system by promoting anti-competitive behavior and, ultimately, makes consumers pay more.

We’re seeing that foreign bribery incidents are increasingly tied to a type of government corruption known as kleptocracy, which is when foreign officials steal from their own government treasuries at the expense of their citizens. And that’s basically what these foreign officials are doing when they accept bribes in their official capability for personal gain, sometimes using the U.S. banking system to hide and/or launder their criminal proceeds.

The FBI—in conjunction with the Department of Justice’s (DOJ) Fraud Section—recently announced another weapon in the battle against foreign bribery and kleptocracy-related criminal activity: the establishment of three dedicated international corruption squads, based in New York City, Los Angeles, and Washington, D.C.

Special Agent George McEachern, who heads up our International Corruption Unit at FBI Headquarters, explains that the squads were created to address the national and international implications of corruption. “The FCPA allows us to target the supply side of corruption—the entities giving the bribes,” he said. “Kleptocracy cases allow us to address the demand side—the corrupt officials and their illicit financial assets. By placing both threats under one squad, we anticipate that an investigation into one of these criminal activities could potentially generate an investigation into the other.”

Corruption cases in general are tough to investigate because much of the actual criminal activity is hidden from view. But international corruption cases are even tougher because the criminal activity usually takes place outside of the U.S. However, members of these three squads—agents, analysts, and other professional staff—have a great deal of experience investigating white-collar crimes and, in particular, following the money trail in these crimes. And they’ll have at their disposal a number of investigative tools the Bureau uses so successfully in other areas—like financial analysis, court-authorized wiretaps, undercover operations, informants, and sources.

Partnerships with our overseas law enforcement counterparts—facilitated by our network of legal attaché offices situated strategically around the world—are an important part of our investigative arsenal. The FBI also takes part in a number of international working groups, including the Foreign Bribery Task Force, to share information with our partners and help strengthen investigative efforts everywhere. And we coordinate with DOJ’s Fraud Section—which criminally prosecutes FCPA violators—and the Securities and Exchange Commission—which uses civil actions to go after U.S. companies engaging in foreign bribery.

Our new squads will help keep the Bureau at the forefront of U.S. and global law enforcement efforts to battle international corruption and kleptocracy.”

Bourke Related

This October 2013 post highlighted a Democracy Now program that attempted to re-script the Frederic Bourke FCPA enforcement action.

Democracy Now returns to the story in this recent interview with former U.S. Senator George Mitchell.  Mitchell, like Bourke, invested in the Azeri project at issue, but unlike Bourke was not prosecuted.

Set forth below is the Q&A:

Democracy Now: Do you believe [Bourke] is a whistleblower, and do you believe that he should be exonerated.

Mitchell: Well, I believe that he should not have been convicted in the trial, in which conviction did occur. I think it was a very unfortunate circumstance, and as you describe it, regrettable from Rick Bourke’s standpoint.

Democracy Now: Do you believe he should now be exonerated, to be able to clear his name fully?

Mitchell: Well, yes, but I’m not sure what process would occur. He was tried, convicted. The conviction was upheld on appeal. But, as I said, I repeat, I do not believe he should have been convicted in the first place.

As noted in the prior post, while each is entitled to his/her own opinion about the Bourke case, the fact is – the case received more judicial scrutiny than arguably any other FCPA enforcement action.

To FCPA Inc.

It happens so often it is difficult to keep track of, but I try my best.

In the latest example of a DOJ FCPA enforcement attorney departing for FCPA Inc., Sidley Austin recently announced that James Cole (former DOJ Deputy Attorney General) ” has joined the firm in Washington, D.C. as a partner in its White Collar: Government Litigation & Investigations practice.”  As stated in the release, ““[Cole’s] experience at the highest levels of law enforcement will enable him to counsel our clients facing the most difficult and complex challenges.”  Cole’s law firm bio states that he will focus “his practice on the full range of federal enforcement and internal investigation matters, with a particular emphasis on cross-border and multi-jurisdictional matters.”

While at the DOJ, Cole frequently articulated DOJ FCPA positions and enforcement policies.  (See here for example).

For the Reading Stack

From Professor Peter Henning in his New York Times Dealbook column – “Lawmakers Focus on How the SEC Does Its Job.”

From Miller & Chevalier attorneys – “DOJ is Losing the Battle to Prosecute Foreign Executives.”  An informative article regarding the DOJ’s struggles to prosecute foreign nationals for a variety of offenses (antitrust, FCPA, etc.).

An informative article here in the New York Law Journal by Marcus Asner and Daniel Ostrow  titled “A New Focus On Victims’ Rights in FCPA Restitution Cases.”

An interesting read here from the Wall Street Journal regarding China National Cereals, Oils and Foodstuffs Corp (Cotfco), a state-owned enterprise.

“In a few short years, Cofco has spent a couple billion dollars quietly buying up Australian cane fields, French vineyards and soybean pastures in Brazil, helping it become one of the world’s largest food companies. Now, Cofco is exploring deals in the world’s biggest exporter of agricultural commodities: the U.S.”

Weekend assignment:  are Cofco employees Chinese “foreign officials” under the 11th Circuit’s Esquenazi decision?


A good weekend to all and “On Wisconsin.”

Friday Roundup


Scrutiny alerts, asset recovery, and for the reading stack.  It’s all here in the Friday roundup.

Scrutiny Alerts

Akamai Technologies

Akamai Technologies, Inc., a company that provides cloud services for delivering, optimizing and securing online content and business applications, recently disclosed:

“We are conducting an internal investigation, with the assistance of outside counsel, relating to sales practices in a country outside the U.S. that represented less than 1% of our revenue in each of the years ended December 31, 2014, 2013 and 2012. The internal investigation includes a review of compliance with the requirements of the U.S. Foreign Corrupt Practices Act and other applicable laws and regulations by employees in that market.  In February 2015, we voluntarily contacted the U.S. Securities and Exchange Commission and Department of Justice to advise both agencies of this internal investigation.”

Soco International

As reported by Global Witness:

“A leader of a cross-party anti-corruption group of British MPs yesterday called for UK and US authorities to investigate claims that Soco International, a London-listed oil company, may have breached anti-corruption legislation in the course of its work in Africa’s oldest national park in the Democratic Republic of Congo.”


[At a recent] Westminster Hall debate Tessa Munt, Liberal Democrat MP for Wells and vice-chair of the All-Party Parliamentary Group on Anti-Corruption, said: “It is surely incumbent on the UK government and its agencies to ensure that any credible evidence of corruption and other criminal behaviour by a UK company, as we have here, is fully investigated by the relevant authorities.”

Munt explained that Soco’s American executive directors are employed by a Delaware-registered subsidiary. As a result, she said, “these individuals fall within the jurisdiction of the United States, and there seems to be a case to be made that Soco International, under their stewardship, has breached the terms of America’s Foreign Corrupt Practices Act.” Anas Sarwar MP, co-chair of the anti-corruption group, also raised concerns about the involvement of offshore companies in Soco’s corporate structure.

“The questions raised by British Members of Parliament highlight the urgent need for both Soco and the relevant authorities in the UK and the US to closely examine the company’s conduct in Virunga,” said Nathaniel Dyer, a campaigner at Global Witness. “Companies cannot be allowed to get away with criminal behaviour just because it happens in remote locations like Congo – if Soco is found to have broken the law, it must face the consequences.”

David Lidington MP, a Foreign Office Minister responding on behalf of the government, said that the UK’s Serious Fraud Office was aware of allegations against Soco and that he would look into the channels for exchanging information with US authorities.”

Asset Recovery

Separate from FCPA enforcement, another prong of the DOJ’s fight against global corruption is its Kleptocracy Asset Recovery Initiative which seeks return of the proceeds of foreign official corruption to benefit the people harmed by acts of corruption and abuse of office.

As noted in this recent release:

“[The] Department of Justice has reached a settlement of its civil forfeiture cases against $1.2 million in assets in the United States traceable to corruption proceeds accumulated by Chun Doo Hwan, the former president of the Republic of Korea.  The department also assisted the government of the Republic of Korea in recovering an additional $27.5 million in satisfaction of an outstanding criminal restitution order against former President Chun.”

In the release, Assistant Attorney General Leslie Caldwell stated:

“Chun Doo Hwan’s campaign of corruption and bribery while serving as Korea’s president betrayed the trust of the Korean people, deprived Korea’s government of precious resources and undermined the rule of law. Fighting corruption is a global imperative that demands a coordinated global response.  The close cooperation between the United States and Korea in successfully recovering corruption proceeds stands as a testament to our resolve to battle the scourge of corruption through international collaboration.”

Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Field Office stated:

“The U.S. will not idly standby and serve as a money laundering haven for foreign officials to hide corrupt activities. The FBI will continue to collaborate with our foreign partners by leveraging its resources in order to identify those engaged in foreign corruption and to recover their ill-gotten gains.”

For the Reading Stack

Proposals for U.S. FCPA enforcement agencies to share FCPA settlement amounts with so-called victims in the country at issue may sound good, but are not warranted.  In this Center for International Private Enterprise article I explain why.

A Q&A with the author of “Thieves of State: Why Corruption Threatens Global Security.”  For additional coverage of the book, see here.


A good weekend to all.

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