I must admit, I was yesterday days old when I learned that there is a specific federal statute which prohibits “commercial bribery” in the alcohol beverage industry.
27 U.S.C. § 205 (titled “Unfair Competition and Unlawful Practices”) states:
“It shall be unlawful for any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer or wholesaler, of distilled spirits, wine, ormalt beverages, or as a bottler, or warehouseman and bottler, of distilled spirits, directly or indirectly or through an affiliate:
(c) Commercial Bribery
To induce through any of the following means, any trade buyer engaged in the sale of distilled spirits, wine, or malt beverages, to purchase any such products from such person to the exclusion in whole or in part of distilled spirits, wine, or malt beverages sold or offered for sale by other persons in interstate or foreign commerce, if such inducement is made in the course of interstate or foreign commerce, or if such person engages in the practice of using such means, or any of them, to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products, or if the direct effect of such inducement is to prevent, deter, hinder, or restrict other persons from selling or offering for sale any such products to such trade buyer in interstate or foreign commerce: (1) By commercial bribery; or (2) by offering or giving any bonus, premium, or compensation to any officer, or employee, or representative of the trade buyer.”
The Foreign Corrupt Practices Act has always been a law much broader than its name suggests.
Sure, the FCPA contains anti-bribery provisions which concern foreign bribery.
Sure, the FCPA’s books and records and internal controls provisions can be implicated in foreign bribery schemes.
However, the fact remains that most FCPA enforcement actions (that is enforcement actions that charge or find violations of the FCPA’s books and records and internal controls provisions) have nothing to do with foreign bribery. For lack of a better term, these enforcement actions have longed been called non-FCPA, FCPA enforcement actions by this site.
The latest example concerns an SEC enforcement action against Dada Nexus Limited.
This post highlights FCPA enforcement actions concerning conduct (in whole or in part) in Azerbaijan.
The enforcement action against Cyrus Ahsani and Saman Ahsani (the former CEO and Chief Operations Officer of Monaco-based Unaoil) concerned conduct in Iraq, Kazakhstan, Libya, Algeria, Iran, Azerbaijan, Angola, Syria, the Democratic Republic of the Congo, and elsewhere.
Although the criminal information makes general reference to a corrupt scheme in Azerbaijan, there were no specific substantive allegations in the information concerning Azerbaijan.
This post highlights thirteen FCPA enforcement actions concerning conduct (in whole or in part) in Kazakhstan.
The enforcement action against Cyrus Ahsani and Saman Ahsani (the former CEO and Chief Operations Officer of Monaco-based Unaoil) concerned conduct in Iraq, Kazakhstan, Libya, Algeria, Iran, Azerbaijan, Angola, Syria, the Democratic Republic of the Congo, and elsewhere.
As to Kazakhstan, the allegations concerned various schemes involving officials at state-owned oil and gas companies to obtain and retain business for Unaoil and its client companies. In one instance, the information alleged that although the promise to pay bribes occurred while Kazakh Official worked for an SOE, Unaoil “did not make payments to Kazakh Official 1 until [the official] stopped working” for the SOE. The information does allege however that C. Ahsani did “arrange for the purchase of an automobile and furniture for Kazakh Official 1 while Kazakh Official 1 was still employed” by SOE. The information further alleged that C. Ahsani and others caused Unaoil “to make payments to a company they knew was beneficially owned and controlled by Kazakh Official 1.”
Foreign Corrupt Practices Act enforcement has existed for approximately 50 years.
From time to time, criminal charges that are brought are dismissed.
In some instances, a judge dismisses the charges against the DOJ’s wishes. (See here, here, here, here, here, here, here, here, here, here, here, and here).
In other instances, criminal charges are dropped at some point during the litigation process (or even after) per the DOJ’s request.