Healthcare Professionals As “Foreign Officials”
It is one of the more dubious FCPA enforcement theories there is. It has never been subjected to judicial scrutiny. It is a relatively new enforcement theory when one considers that the Foreign Corrupt Practices Act was enacted in 1977. It is an enforcement theory that has been used 35 times since introduced to the FCPA context in 2002 and thus is one of the more obvious reasons for the general increase in FCPA enforcement in the modern era.
It is the enforcement theory that employees (such as physicians, nurses, mid-wives, lab personnel, etc.) of certain foreign health care systems are “foreign officials” under the FCPA and thus occupy a status akin to a President or Prime Minister.
This post traces the origins and prominence of this theory, contains comments from the former DOJ FCPA enforcement attorney who came up with this theory, and highlights a data point relevant to the legitimacy and validity of this theory.
Healthcare Professionals As “Foreign Officials”
It is one of the more dubious FCPA enforcement theories there is. It has never been subjected to judicial scrutiny. It is a relatively new enforcement theory when one considers that the Foreign Corrupt Practices Act was enacted in 1977. It is an enforcement theory that has been used 35 times since introduced to the FCPA context in 2002 and thus is one of the more obvious reasons for the general increase in FCPA enforcement in the modern era.
It is the enforcement theory that employees (such as physicians, nurses, mid-wives, lab personnel, etc.) of certain foreign health care systems are “foreign officials” under the FCPA and thus occupy a status akin to a President or Prime Minister.
This post traces the origins and prominence of this theory, contains comments from the former DOJ FCPA enforcement attorney who came up with this theory, and highlights a data point relevant to the legitimacy and validity of this theory.
Issues To Consider From The 3M Enforcement Action
This recent post highlighted the $6.5 million enforcement action against 3M based on findings that the company was duped by certain China subsidiary employees.
This recent post discussed how the type of conduct at issue in the 3M enforcement action would seem to fit squarely within prior SEC policy for when an enforcement action would not be warranted.
This post highlights additional issues to consider from the enforcement action.
Timeline
Duped By Certain China Subsidiary Employees, 3M Resolves A $6.5 Million Enforcement Action
The SEC announced today that 3M resolved a $6.5 million Foreign Corrupt Practices Act enforcement.
The basics are as follows.
Approximately 6-10 years ago, a former Marketing Manager of a 3M China-based subsidiary “secretly” provided “tourism activities” for Chinese health care officials.
The Marketing Manager “would create a travel itinerary that included various legitimate business, training and marketing activities for submission to 3M-China’s compliance personnel for approval,” however there were “alternate itineraries” that “consisted of various tourism activities at or near the location of the educational events.”
There is no suggestion that anyone at 3M headquarters knew of or approved of the conduct. Indeed, subsidiary employees, among other things, “falsified internal compliance documents that affirmatively denied and/or omitted mention of the Tourism Activities that were planned as part of the overseas trip.”
Healthcare Professionals As “Foreign Officials”
It is one of the more dubious FCPA enforcement theories there is. It has never been subjected to judicial scrutiny. It is a relatively new enforcement theory when one considers that the Foreign Corrupt Practices Act was enacted in 1977. It is an enforcement theory that has been used 35 times since introduced to the FCPA context in 2002 and thus is one of the more obvious reasons for the general increase in FCPA enforcement in the modern era.
It is the enforcement theory that employees (such as physicians, nurses, mid-wives, lab personnel, etc.) of certain foreign health care systems are “foreign officials” under the FCPA and thus occupy a status akin to a President or Prime Minister.
This post traces the origins and prominence of this theory, contains comments from the former DOJ FCPA enforcement attorney who came up with this theory, and highlights a data point relevant to the legitimacy and validity of this theory.