Bill Seeks To Codify DOJ’s Prior China Initiative
As highlighted in this prior post, in November 2018 the Department of Justice announced a China Initiative. Among the numerous goals of the China Initiative was to ‘identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses.”
In February 2022, the DOJ scrapped the China Initiative. According to this article, “the decision to end the program comes after a months-long review ordered by the new head of the National Security Division, Assistant Attorney General Matthew Olsen. “While I remain focused on the evolving, significant threat that the government of China poses, I have concluded that this initiative is not the right approach.”
Recently, Senator Rick Scott (R-FL) “announced a package of five national security focused bills to hold Communist China accountable and better protect American families. This legislative package contains bills which prohibit the U.S. Government from buying drones made by America’s adversaries, protect Taiwan from Communist China’s growing aggression, sever all financial transactions between the U.S. and Communist China once it engages in armed aggression against Taiwan, reestablish the China Initiative at Department of Justice, and require a list to be published listing all countries who have a bilateral security arrangement with Communist China to protect Americans abroad and prevent CCP police stations in the US.” (See here).
That Stinks: Safran S.A. Quietly Resolves $17.2 Million Enforcement Action Involving “Train Lavatory Contracts”
Some Foreign Corrupt Practices Act enforcement actions are accompanied by DOJ press releases and much fanfare and some are not.
In the later category, earlier this week this letter was quietly posted to the DOJ’s FCPA website indicating that Safran S.A. (a French company) resolved a $17.2 “declination with disgorgement” enforcement action.
According to the DOJ letter, bribery was “committed by employees and agents of the Company’s U.S. subsidiary Monogram Systems (Monogram) and its German subsidiary EVAC GmbH (EVAC).”
The FCPA Is Not The Place For Country Specific Foreign Policy
As highlighted in this post, Senator Marco Rubio recently introduced in the Senate a bill titled “Countering Corporate Corruption in China Act of 2022.”
In this release, Senator Rubio states that the legislation is “to modernize the Foreign Corrupt Practices Act by clarifying that the definition of corrupt intent includes actions that excuse the genocide in Xinjiang, advance the Chinese Communist Party’s (CCP) propaganda efforts, or “invest” in core CCP activities, among other actions. The legislation would require companies engaged in suspicious behavior to demonstrate that their actions are related to their underlying business, not part of a corrupt bargain with the Chinese Government or the CCP to gain or retain market access or receive any other benefit.”
Regardless of the merits of the foreign policy objectives, the Foreign Corrupt Practices Act is not the place for country specific foreign policy.
New Chinese Anti-Bribery Guideline Calls For Blacklisting And Expulsion Of Foreign Companies That Pay Bribes In China
Today’s post is from Dechert attorneys Andrew Boutros, Shriram Harid, David Kelley, Jay Schleppenbach, and Maria Sit.
China’s top anti-corruption watchdogs recently released a new anti-bribery Guideline designed to focus on multi-national corporations and individuals that pay bribes in China, as opposed to bribe recipients, the Chinese Communist Party’s traditional focus. With the threat of being barred from doing business in China, the Guideline raises significant concerns for entities doing business there.
In particular, business organizations should be aware that resolving bribery allegations that involve China elsewhere in the world (say, in the United States) could potentially result in a “carbon copy prosecution” in China with the full range of potentially devastating penalties. Similarly, multi-national corporations that face bribery charges (or even just an investigation) in China could later find themselves prosecuted in the United States or elsewhere in the world based on the same facts.
Bad Advertising – Ad Group WPP Resolves $19.2 Million FCPA Enforcement Action
Last Friday, the SEC announced that London-based WPP (the world’s largest advertising agency and a company with depositary shares traded on the New York Stock Exchange) agreed to resolve a $19.2 million Foreign Corrupt Practices Act enforcement action.
The enforcement action focused on WPP subsidiary conduct in India, China, Brazil and Peru.
In summary fashion, the SEC’s order finds: