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The OECD Doesn’t Like Judicial Scrutiny

OECDcry

For years, these pages have highlighted how the OECD and other so-called “civil society” organizations and groups have seemingly prioritized the quantity of bribery enforcement actions (regardless of the enforcement theories and/or the resolution vehicles used) over the quality of enforcement actions.

Implicit in this prioritization is that quality enforcement actions (for instance those subjected to judicial scrutiny) might result in dismissal of charges and dismissal of charges must be bad because – after all – the charges were for bribery.

In its recent Phase 4 report on Italy’s Implementation of the OECD Anti-Bribery Convention, the OECD goes from implicit to explicit and specifically calls out judicial scrutiny in Italy of bribery cases because it has “yielded a high number of dismissals.”

In doing so, the reputation of the OECD has taken yet another hit.

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Issues To Consider From The Gol Enforcement Action

Issues

This post highlighted the recent net $38.1 million Foreign Corrupt Practices Act enforcement action against Gol Linhas Aereas Inteligentes S.A. (Gol) – an airline headquartered in Sao Paulo, Brazil with shares traded on the New York Stock Exchange – for bribing Brazilian officials.

This post highlights additional issues to consider from the enforcement action.

Timeline

As highlighted in this prior post, Go’s FCPA (and related) scrutiny began in late 2016.

Thus from start to finish, Gol’s FCPA scrutiny lasted an approximate six years.

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Second Circuit Judge Raymond Lohier Is Just Plain Wrong

Lohier

Compared to many other federal statutes, there has been little caselaw interpreting the Foreign Corrupt Practices Act in its 45 years of existence.

Substantive opinions by appellate courts are even more rare.

Thus, it is often a big deal when there is an appellate court decision interpreting the FCPA. Even a dissenting opinion – even a policy statement in a dissenting opinion – is notable.

As highlighted in this post, recently the Second Circuit – once again – sided with FCPA defendant Lawrence Hoskins on an FCPA issue. Specifically, the court held “that the district court properly granted Hoskins’s motion for judgment of acquittal for violations of the FCPA because there was no agency or employee relationship between Hoskins and Alstom Power, Inc.”

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Issues To Consider From The KT Corp. Enforcement Action

Issues

This recent post highlighted the $6.3 million Foreign Corrupt Practices Act enforcement action against KT Corp. – a South Korea based telecommunications company with American Depositary Shares registered with the SEC and traded on the New York Stock Exchange.

This post highlights additional issues to consider.

Proper?

In the FCPA’s modern era, much of the largeness of enforcement activity is from enforcement actions against foreign companies from peer OECD Convention countries.

The first corporate FCPA enforcement action of 2022 is another example.

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FCPA Enforcement Actions Against Foreign Companies From OECD Convention Peer Countries

Globe

As highlighted in this post, like prior years (see herehereherehere and here) much of the largeness of 2021 FCPA enforcement resulted from corporate enforcement actions against foreign companies.

Specifically, of the four corporate Foreign Corrupt Practices Act enforcement actions in 2021, four (100%) were against foreign companies (based in many instances on mere listing of securities on U.S. markets or in a few instances on sparse allegations of a U.S. nexus in furtherance of a bribery scheme). Of the net approximate $259 million in FCPA settlement amounts from 2021 corporate enforcement actions, $259 million (100%) was from enforcement actions against foreign companies.

Of the net approximate $2.78 billion in FCPA settlement amounts from 2020 corporate enforcement actions, approximately $910.5 million (33%) was from enforcement actions against foreign companies. (Note: the record setting $1.26 billion FCPA enforcement action against U.S. company Goldman Sachs significantly reduced this number from prior years).

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