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Observations From The OECD’s Phase 4 U.S. Review Report

oecd

Recently, the OECD released its Phase 4 review of the United State’s implementation of the OECD Anti-Bribery Convention … in effect a review of the FCPA, its enforcement, and related issues.

The first question one needs to ask themselves is whether they care what “experts from Argentina and the United Kingdom” (as stated by the OECD “the report and its recommendations reflect the findings of experts from Argentina and the United Kingdom”) think about the U.S. Foreign Corrupt Practices Act, U.S. law enforcement (DOJ and SEC) policies and practices, and U.S. jurisprudence.

In any event, the Phase 4 Report “explores issues such as detection, enforcement, corporate liability, and international cooperation, as well as covering unresolved issues from prior reports.” (See here for a 2010 post summarizing the OECD’s Phase 3 review).

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Survey Says …

Survey Results

The OECD recently released this study titled “Corporate Anti-corruption Compliance Drivers, Mechanisms and Ideas for Change.” The study largely relies on results of a survey “to better understand the extent to which companies are currently motivated to take measures to prevent and detect bribery and other forms of corruption in their business dealings.”

The survey size was very small (only 130 survey respondents – largely individuals in a legal or compliance role in their companies – with the U.S. having the most respondents – with the largest number of respondents in the healthcare industry). As a result the survey was not representative as even the report recognized: “a company that does not have a compliance program probably would not have an interest in participating in a study of such program – thus it is important to remember that the percentage of respondents who indicated that their companies have such a program is not at all indicative of the percentage of overall companies in the world that have such programs.”

Even as to this survey group, as highlighted below several survey responses caught my eye and call into question whether “soft” enforcement of the FCPA (and related laws) has been successful (see here for the article “Has the FCPA Been Successful in Achieving Its Objectives”) or whether compliance can best be incentivized with a compliance defense (see here for the article “Revisiting an FCPA Compliance Defense”).

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Shallow Commentary Regarding The Facilitation Payments Exception

shallow

Once again, the FCPA Blog has served up some shallow commentary – this time regarding the facilitation payments exception to the FCPA’s anti-bribery provisions.

In this post, Richard Cassin talks about 2010 FCPA enforcement action against Noble Corporation based on payments to customs officials in Nigeria in which Noble agreed to resolve parallel DOJ and SEC for approximately $8 million. (See here for the prior post). According to the post, the resolution documents (not subject to any meaningful scrutiny) “set out legal intricacies of the facilitating payments exception.”

Not mentioned at all in the post is that certain individuals civilly charged by the SEC put the SEC to its burden of proof, the judge in an issue of first impression ruled that the SEC has the burden of negating the facilitation payments exception, and the SEC was unable to do so resulting in the SEC offering the defendants very lenient settlement in advance of trial.

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

reminder

Recently, the U.S. State Department released 2020 “Investment Climate Statements.”  The annual reports cover over 170 foreign markets and are prepared by “economic officers at U.S. embassies and diplomatic missions” to help U.S. companies make informed business decisions.

Corruption is prominently mentioned in most country investment climate statements.

However, this “2020 Mongolia Investment Climate Statement” particularly caught my eye – not because Mongolia is a prominent market for U.S. businesses – but rather because the statement provides a nice reminder why Congress chose to exempt facilitation payments from the reach of the FCPA’s anti-bribery provisions.

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Friday Roundup

Roundup

More false information, scrutiny alert, points of contact, and ineffective communication. It’s all here in the Friday roundup.

More False Information

More false information from the FCPA Blog in this post which asserts that “anyone relying on the [FCPA’s facilitation] exception should be prepared to defend it — that is, the burden of proof is on the one asserting the exception as a defense to an FCPA violation.”

This is a false statement.

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