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FCPA Flash – A Conversation With Andrew Levine Regarding Nu Skin, Charitable Donations, And Strict Liability Enforcement

The FCPA Flash podcast [1] 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 the written posts on FCPA Professor.

This FCPA Flash episode [2] is a conversation with Andrew Levine [3] (Debevoise & Plimpton). Levine is a primary author of the always informative Debevoise & Plimpton FCPA Update and a recent update included an article [4] about the recent Nu Skin FCPA enforcement action that caught my eye.

As highlighted in this prior post [5], the SEC found that Nu-Skin violated the FCPA’s books and records and internal controls provisions based on a single charitable donation that its Chinese subsidiary made under circumstances in which subsidiary employees concealed relevant information from the parent company and otherwise acted inconsistent with parent company instructions. While the $765,000 settlement amount was not notable, often less high-profile FCPA enforcement actions present the most interesting and troubling issues.

In the podcast, Levine discusses: (i) legal authority relevant to the FCPA’s books and records and internal controls provisions; (ii) the SEC’s “virtual strict liability” enforcement theory in Nu Skin; and (iii) how FCPA enforcement actions based on charitable donations may represent a net negative because it induces excessive risk aversion by companies that otherwise want to be good corporate citizens.

FCPA Flash is sponsored by the Red Flag Group [6]. The Red Flag Group assists companies in developing and maintaining efficient and effective corporate governance and compliance programs, and has a proven track record in providing integrity due diligence investigations in 194 countries.