On February 10th, President Trump issued an Executive Order titled “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security.”
Conduct in violation of the FCPA or involving the same core facts may also be actionable under other laws. (See here for the article FCPA Ripples).
Recently, California Attorney General Rob Bonta issued this Legal Advisory titled “Alert to Businesses on Violations of the Foreign Corrupt Practices Act.”
In pertinent part, the Advisory states:
“The Attorney General emphasizes the need for all businesses and individuals to continue complying with all applicable laws, including the FCPA, regardless of the federal administration’s pronouncements.
Violations of the FCPA are actionable under California’s Unfair Competition Law (UCL). . The UCL, which was enacted to preserve fair business competition and protect consumers, prohibits unlawful, unfair, and fraudulent business acts and practices. (Bus. & Prof. Code, § 17200 et seq.) The UCL “borrows violations of other laws and treats them as unlawful practices that the statute makes independently actionable.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) Violations of federal laws and of criminal laws may serve as the predicate for a UCL cause of action. (E.g., Rose v. Bank of America, N.A. (2013) 57.Cal.4th 390, 394 [federal law]; Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 559-560 [criminal law], abrogated by statute on other grounds.)The Attorney General may bring enforcement actions against businesses and individuals for violations of the UCL, including actions predicated on FCPA violations. (See Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144 [noting Court of Appeals’ decision that UCL claim may be predicated on FCPA violation]. In addition to civil penalties, restitution, and injunctive relief, the Attorney General may obtain disgorgement as a remedy for UCL violations. (Gov. Code, § 12527.6.) Violations of the FCPA may also constitute unfair, deceptive, or abusive acts or practices under other states’ laws, or give rise to liability under state or federal tax or securities laws. Accordingly, businesses should continue to maintain rigorous internal accounting controls and to ensure that they and their agents do not offer or pay anything of value to foreign officials to obtain or retain business.”
In this accompanying press release Bonta stated: ““Illegal activity is still illegal. Paying bribes to foreign officials is not only unethical, it’s also bad for business. Bribery erodes consumer confidence in the market and rewards corruption instead of competition. As the fifth largest economy in the world, California has a vested interest in defending honest business. Despite the Trump Administration’s actions, I remind businesses in California that bribing foreign officials is illegal under California law and will not be tolerated.”
