ABB DPA Ends
The first time ABB resolved a Foreign Corrupt Practices Act enforcement action was in 2004 concerning conduct in Nigeria, Angola and Kazakhstan.
The second time ABB resolved an FCPA enforcement action was in 2010 concerning conduct in Mexico as well as in connection with the Iraqi U.N. Oil for Food program.
The third time ABB resolved an FCPA enforcement action was in 2022 concerning conduct in South Africa. The criminal charges were resolved through a three year deferred prosecution agreement. In the DPA, the DOJ stated: “based on the Company’s remediation and the state of its compliance program, and the Company’s agreement to report to the Offices … the Offices determined that an independent compliance monitor is unnecessary;”
It Doesn’t Fit
Remember that game you may have played as a child in which you tried to assert different shape objects into a box and perhaps were left perplexed how the square would fit through the circle. Short answer: the square didn’t fit through the circle.
Likewise, the DOJ’s recent ABB Foreign Corrupt Practices Act enforcement action (the third time ABB has resolved an FCPA enforcement action) does not fit with the DOJ’s September 2022 policy document titled “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group.” (See here for the prior post).
Issues To Consider From The ABB Enforcement Action
This recent post highlighted the net $147.5 million Foreign Corrupt Practices Act enforcement action against ABB concerning conduct in South Africa. In resolving the matter, ABB became the first company to resolve three separate FCPA enforcement actions. (See here).
This post highlights additional issues to consider from the enforcement action.
Timeline
As highlighted in this prior post, in early 2017 it was reported that “ABB said it was cooperating with anti-fraud authorities in the United States and Britain and had reported past dealings with Monaco-based engineering and construction group Unaoil, including alleged improper payments to third parties.” This probe was seemingly dropped in mid-2020 (see here).
DOJ Principal Associate Deputy AG Miller On …
Recently, Principal Associate Deputy Attorney General Marshall Miller gave this speech in which he talked about the DOJ’s “recent and ongoing changes to the … policies regarding corporate criminal enforcement …”.
In pertinent part, Miller discussed voluntary disclosure (a topic the DOJ has discussed for nearly 15+ years) as well as compensation clawbacks.
ABB Becomes The First Company To Resolve THREE FCPA Enforcement Actions
The first time ABB resolved a Foreign Corrupt Practices Act enforcement action was in 2004 concerning conduct in Nigeria, Angola and Kazakhstan.
The second time ABB resolved an FCPA enforcement action was in 2010 concerning conduct in Mexico as well as in connection with the Iraqi U.N. Oil for Food program.
Since 2017 (see here for the prior post), ABB has been under additional FCPA scrutiny and last Friday ABB became the first company to resolve an FCPA enforcement action for a third time. The latest enforcement action concerned conduct in South Africa and the net FCPA settlement amount was $147.5 million (a DOJ component of net $72.5 million and an SEC component of net $75 million).