On Permits …
The root cause of many Foreign Corrupt Practices Act enforcement actions is a foreign law or regulation that forces a company (through an employee or agent) into a relationship with a “foreign official.”
This root cause analysis is often fairly straightforward: the foreign law or regulation often creates bureaucracy; bureaucracy creates points of contact with foreign officials; points of contact with foreign officials create discretion; discretion creates the opportunity for a foreign official to misuse their position by making bribe demands.
This analysis is not meant to excuse or condone the conduct at issue, but rather to understand how and why there was a “point of contact” with a foreign official in the first place.
Liberty Mutual Resolves $4.7 Million Enforcement Action
The DOJ recently released this so-called declination with disgorgement letter regarding Liberty Mutual Insurance.
The letter begins:
“Consistent with the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy, the Department of Justice, Criminal Division, Fraud Section and the United States Attorney’s Office for the District of Massachusetts (collectively, the “Government”) have declined prosecution of your client, Liberty Mutual Insurance Company (“Liberty Mutual” or the “Company”), a global insurance company with its principal place of business in the United States, for violations of the Foreign Corrupt Practices Act (“FCPA”), 15 U.S.C. § 78dd-2. We have reached this conclusion despite evidence of bribery committed by certain employees of the Company’s subsidiary in India who were acting as agents of the Company.”
A Closer Look At The DOJ FCPA (And Broader) Enforcement Action Against Various Individuals Associated With Adani Group and Azure Power
As indicated in this prior post, the SEC’s FCPA enforcement action against Cyril Sebastien Dominique Cabanes (“Cabanes” an individual associated with Azure Power – a former U.S. issuer) and the SEC’s securities fraud action against two senior executives of Adani Green (Gautam Adani and Sagar Adani) in connection with an alleged Indian bribery scheme were just one prong of a broader enforcement action announced earlier this week.
As highlighted in this post, the DOJ also announced unsealing of a criminal indictment (originally filed on October 24th) against the following individuals in connection with the same alleged Indian bribery scheme.
SEC Brings First FCPA Individual Action Since 2020
Yesterday, the SEC announced a Foreign Corrupt Practices Act enforcement action against Cyril Sebastien Dominique Cabanes (“Cabanes”) – a French citizen and resident of Singapore who was previously a member of the board of directors of Azure Power Global Limited (a Mauritius company with its principal place of business in India). During the time period relevant to the enforcement action, Azure was a publicly traded company with shares traded on the New York Stock Exchange.
The Cabanes enforcement action is the first SEC FCPA enforcement action against an individual since October 2020.
Moog Inc. Resolves $1.7 Million FCPA Enforcement Action Based On Indian Subsidiary Conduct
Moog Inc. (“Moog”) is a worldwide designer and manufacturer of motion controls systems for a broad range of applications in aerospace, defense, industrial and medical markets. The New York headquartered company – with four operating segments: military aircraft, commercial aircraft, space and defense, and industrial – has shares traded on the New York Stock Exchange and has sales, engineering, and manufacturing facilities in twenty-six countries.
Moog is the latest company to resolve a Foreign Corrupt Practices Act enforcement action.