This post is authored by Foley & Lardner attorneys David Simon, Rohan Virginkar, James Peterson, Kristen Maryn and Stephanie Cash.
Experienced practitioners and dealmakers understand there may be Foreign Corrupt Practices Act risks in an acquisition and have adopted procedures designed to identify and address these issues as part of the M&A diligence process. Most acquirers ask the right questions, conduct risk-based probes of the target’s compliance program and operations, take steps to allocate the risk of compliance issues in the transaction documents and, in some circumstances, structure the transaction as an asset purchase rather than as a stock purchase or merger.
Where FCPA issues are discovered in the due diligence process, there is an increasingly well-established playbook for addressing and mitigating the exposure created by these issues, including mitigating the resulting risks by taking advantage of the Department of Justice’s (DOJ’s) Corporate Enforcement Program (CEP), requiring voluntary self-disclosure by the target, and thus avoiding a carry-over enforcement action against the acquirer.
