One reason to read FCPA Professor is it allows you to stay ahead of the curve and gain insight into the issues others will be talking about months or years later.
For instance, this July 2014 post highlighted how Biomet’s 2013 deferred prosecution agreement (concerned alleged conduct in Brazil, Argentina, and China) was at risk of being extended based on the company’s additional FCPA scrutiny in Brazil and Mexico.
Sure enough, recently Biomet disclosed:
“On March 13, 2015, the DOJ informed Biomet that the DPA and the independent compliance monitor’s appointment have been extended for an additional year.
Pursuant to the DPA, the DOJ has sole discretion to determine whether conduct by Biomet constitutes a violation or breach of the DPA. The DOJ has informed Biomet that it retains its rights under the DPA to bring further action against Biomet relating to the conduct in Brazil and Mexico disclosed in 2014 or the violations set forth in the DPA. The DOJ could, among other things, revoke the DPA or prosecute Biomet and/or the involved employees and executives. Biomet continues to cooperate with the SEC and DOJ and expects that discussions with the SEC and the DOJ will continue.”
Two thoughts regarding the extension of Biomet’s DPA.
First, the extension makes the DOJ look foolish.
Well, for many years the DOJ advanced the policy position that DPAs (and NPAs) “have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.” (See here for the prior post). Specifically in the FCPA context, the DOJ stated that “the companies against which DPAs and NPAs have been brought have often undergone dramatic changes.” (See here for the prior post).
Yet, Biomet’s post FCPA enforcement action FCPA scrutiny puts it in a category of several other companies (such as Orthofix International, Willbros Group, Marubeni, Diebold, IBM, Tyco, Aibel Group, and Ingersoll-Rand) that have become the subject of additional scrutiny or enforcement after resolving FCPA enforcement actions through a DPA or agreeing to an SEC permanent injunction.
Second, and completely distinct from the first point, is the extension of the Biomet DPA shows how difficult FCPA compliance can be.
Because Biomet’s post FCPA enforcement action FCPA scrutiny demonstrates that not even companies with the greatest incentive to comply with the FCPA because they are:
(i) subject to post-enforcement action compliance obligations; and
(ii) subject to “double prosecution” for failure to do so
are able to ensure FCPA compliance across its business organization or eliminate FCPA scrutiny. In short, FCPA compliance can not be guaranteed in a business organization, rather steps can be taken that only minimize the risk of non-compliance occurring.