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A Demand Side Prohibition Belongs In The FCPA And Here Is How To Accomplish It

extortion

Prior posts herehere and here in 2019 highlighted a bill introduced in the House of Representatives titled the Foreign Extortion Prevention Act which sought to capture the so-called “demand side” of bribery by foreign officials given that the FCPA’s current anti-bribery provisions only capture the so-called “supply side” of bribery.

The bill sought to prohibit such conduct – not through amending the FCPA – but through amending 18 USC 201 (the domestic bribery statute) and the prior post highlighted how this potential statutory placement was odd and could lead to several areas of incongruous between liability for the “bribe” payor (what the FCPA captures) and the “bribe” demander (what the Foreign Extortion Prevention Act sought to capture).

Recently, Representative Shelia Jackson Lee (D-TX), along with a bipartisan group of co-sponsors, reintroduced the bill (H.R. 4737). Once again, the bill seeks to capture the “demand side” of bribery through amending 18 USC 201 – and not the FCPA – and therefore presents the same issues as hinted at above.

Consistent with this post from 2019, I continue to believe that if Congress seeks to explicitly capture the “demand side” of bribery (the DOJ already uses the money laundering laws against alleged “bribe taking” foreign officials when there is jurisdiction), this goal is best accomplished through amending the FCPA and set forth here are FCPA amendments I previously drafted (and shared with certain legislative aides) to accomplish this task.

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Edwards Lifesciences Discloses A Potential FCPA Issue, But Why?

Edwards

Edwards Lifesciences, a California based corporation which describes itself as “the global leader in patient-focused medical innovations for structural heart disease, as well as critical care and surgical monitoring” is under Foreign Corrupt Practices Act scrutiny.

In a recent filing, the company disclosed:

“The Company is investigating whether the allocation of certain grants and other payments initiated by certain employees of the Company in Japan violate certain provisions of the Foreign Corrupt Practices Act (“FCPA”). The Company has voluntarily notified the SEC and the U.S. Department of Justice (“DOJ”) that it has engaged outside counsel to conduct this investigation. Any determination that the Company’s operations or activities are not in compliance with existing laws, including the FCPA, could result in the imposition of fines, penalties, and equitable remedies. The Company cannot currently predict the outcome of the investigation or the potential impact on its financial statements.”

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Hall Of Fame Honor

HOF

Pardon the off-topic post, but I am pleased to share that yesterday I was inducted as a player into the Wisconsin High School Basketball Hall of Fame.

Below is the Hall of Fame Bio.

Mike was born and raised in Elkhart Lake, WI, the son of a painter and nurse who sacrificed much to give him the opportunity to succeed. During his youth, Mike would keep his neighbors up with the sound of a dribbling basketball on the driveway court, was known to dribble around town while also riding his bike, and confesses to sneaking into the school gyms on more than one occasion.

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This Week On FCPA Professor

ThisWeekPost

FCPA Professor has been described as “the Wall Street Journal concerning all things FCPA-related,” and “the most authoritative source for those seeking to understand and apply the FCPA.”

Set forth below are the topics discussed this week on FCPA Professor.

As highlighted here, a former Glencore trader pleaded guilty to FCPA (and related) offenses for a bribery scheme involving Nigeria. This post highlights the consequential e-mails from the enforcement action relevant to the jurisdictional analysis.

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A Reminder Why Congress Chose To Exempt Facilitating Payments From The Reach Of The FCPA’s Anti-Bribery Provisions

reminder

The State Department recently released this Investment Climate Statement for the Dominican Republic. It caught my eye not because the Dominican Republic is a prominent market for U.S. business, but rather because information in the statement provides a nice reminder why Congress chose to exempt facilitation payments from the reach of the FCPA’s anti-bribery provisions.

In pertinent part, the statement reads:

“Foreign investors report numerous systemic problems in the Dominican Republic and cite a lack of clear, standardized rules by which to compete and a lack of enforcement of existing rules. Complaints include allegations of widespread corruption; requests for bribes; delays in government payments; weak intellectual property rights enforcement; bureaucratic hurdles; slow and sometimes locally biased judicial and administrative processes, and non-standard procedures in customs valuation and classification of imports. Weak land tenure laws and government expropriations without due compensation continue to be a problem. The public perceives administrative and judicial decision-making to be inconsistent, opaque, and overly time-consuming. Corruption and poor implementation of existing laws are widely discussed as key investor grievances.”

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