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Is This A Reason Walmart Did Not Receive Full Cooperation Credit – If So It Is Distubring

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1960s MAN THINKING HAND PENCIL ON CHIN WEARING EYEGLASSES SERIOUS EXPRESSION

In the recent Walmart enforcement action, the DOJ’s NPA states that the company received “full credit” for its cooperation with the DOJ “into conduct in Brazil, China, and India and partial cooperation credit for its investigation into conduct in Mexico.”

The NPA further states: “the Company received partial credit for the conduct in Mexico because, in the view of the DOJ, Walmart did not timely provide documents and information to the DOJ in response to certain requests and did not deconflict with the DOJ’s request to interview one witness before the Company interviewed that witness.”

It would appear that the DOJ’s decision was based, in least in part, on this June 2018 Fourth Circuit decision in which the court, interpreting an agreement that the DOJ drafted, ruled against the DOJ. If true, it is disturbing that the DOJ would penalize a company for making legal arguments that were upheld by an appellate court.

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Friday Roundup

Roundup

Scrutiny alert, the irony of it all, just saying …, not sure why, no more third parties, and for the reading stack. It’s all here in the Friday roundup.

Scrutiny Alerts

AAR Corp.

The company, a provider of aviation services with numerous U.S. government contracts, recently disclosed:

“The Company retained outside counsel to investigate possible violations of the Company’s Code of Conduct, the U.S. Foreign Corrupt Practices Act, and other applicable laws, relating to the Company’s activities in Nepal and South Africa.  Based on these investigations, we self-reported these matters to the U.S. Department of Justice, the U.S. Securities and Exchange Commission and the UK Serious Fraud Office.  The Company will fully cooperate in any review by these agencies, although we are unable at this time to predict what action, if any, they may take.”

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

ridiculous

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

Podcast Logo

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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The Underwhelming Walmart Enforcement Action

Wal-Mart

Last week Walmart resolved its long-standing Foreign Corrupt Practices Act scrutiny by agreeing to pay approximately $283 million to the DOJ/SEC (see here and here for prior posts).

$283 million is $283 million.

However, as highlighted in this post (a post informed by FCPA practice experience including conducting FCPA internal investigations around the world and having read and analyzed every FCPA enforcement action in the 40+ year history of the FCPA), the actual allegations / findings in the enforcement action are truly underwhelming and bear little resemblance to the “bribery” and “corruption” headlines that have been written by various media outlets in recent days.

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