Dun & Bradstreet Resolves $9.2 Million Enforcement Action Based On Conduct Of Two Indirect Chinese Subsidiaries From 6-12 Years Ago
As highlighted in this prior post, over six years ago Dun & Bradstreet (a leading source of commercial information and insight on businesses) announced that it was under Foreign Corrupt Practices Act scrutiny concerning conduct in China.
Yesterday, the SEC (Snails-Pace Enforcement Commission) announced that D&B agreed to resolve an FCPA enforcement action by paying approximately $9.2 million to “arising from improper payments made by two Chinese subsidiaries.”
This administrative order states, in summary fashion:
Various Individuals Associated With Rolls-Royce Criminally Charged In Connection With Kazakhstan – Chinese Pipeline Project
As highlighted in prior posts here and here, in January 2017 the DOJ announced a $170 million Foreign Corrupt Practices Act enforcement action against U.K. based Rolls-Royce. The allegations included several generic references to employees at Rolls-Royce and Rolls-Royce Energy Systems (RRESI, an indirect subsidiary located in Ohio) who conspired to cause “to make over $35 million in commission payments to commercial advisors and others, knowing that the commission payments would be used to bribe foreign officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq and elsewhere, in exchange for foreign officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI, and affiliated entities.”
Earlier this week, the DOJ announced an FCPA enforcement action against five individuals based on the same Kazakhstan conduct alleged in the prior corporate action. That is, bribery in connection with an RRESI contract to supply gas turbine units to Asia Gas Pipeline LLC (AGP) for approximately $145 million.
U.S. Government Reportedly Investigating Chinese Government For Bribery In Nigeria
Regarding the above headline, technically, as noted in this Bloomberg report, the DOJ and SEC are investigating China Petroleum & Chemical Corporation (Sinopec – a Chinese state-owned entity) with shares traded on a U.S. exchange for bribery in Nigeria.
However, given that the DOJ and SEC consider certain state-owned entities like Sinopec to be “instrumentalities” of a foreign government, the above headline is accurate.
This previous post highlighted how there has never been an FCPA enforcement against a Chinese-based issuer, but this is likely just a matter of time as the previous post noted that Sinovac Biotech [a Beijing based company with shares traded on NASDAQ] is currently under FCPA scrutiny.
Add Sinopec to the list.
Friday Roundup
Quotable, no reliable way to measure, Microsoft explains, scrutiny alert, a direct selling license in China, and offensive use of the FCPA. It’s all here in the Friday roundup.
Quotable
Some think – or at least I’ve been told – that certain of my Foreign Corrupt Practices Act views are controversial or out of the “main stream” (whatever the “main stream” actually is or means). Yet, I am confident that much of what I write and talk about represents silent majority views.
Indeed, as I’ve commented before, one of the interesting things about writing about the FCPA and related issues on a daily basis is that often I just need to wait for a former FCPA enforcement official to say the same thing.
Might Sinovac Become The First Chinese Issuer To Resolve An FCPA Enforcement Action?
A long, long time ago (September 2009 to be exact) FCPA Professor highlighted how Chinese companies were increasingly seeking to raise capital in the U.S. and by registering securities in the U.S. becoming subject to a variety of U.S. laws including the Foreign Corrupt Practices Act.
There has never been an FCPA enforcement against a Chinese-based issuer, but that could change.
This post highlights the FCPA scrutiny of Beijing-based Sinovac Biotech, a company with shares traded on NASDAQ, including its recent disclosure that it is unable to file its annual report because of a bribery internal investigation.