Specifically, of the 12 corporate Foreign Corrupt Practices Act enforcement actions in 2020, 5 (42%) 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 $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).
The OECD’s recent Phase 4 review report of the U.S. (see here for the prior post) nicely captures several (but not all) of these reasons.
For instance, at a most basic level, exposure to bribery risk is a function of real-world point of contacts with “foreign officials” – including in high-risk countries and industries.
In this regard, the OECD report notes under the heading “The United States’ Exposure to Foreign Bribery Risks”
As highlighted in this prior post, in 2014 Netherlands-based SBM Offshore resolved a $240 million Dutch law enforcement action alleging improper payments to sales agents and foreign government officials in Equatorial Guinea, Angola and Brazil between 2007 through 2011.
As highlighted in this prior post, in 2017 SBM Offshore and its wholly owned U.S. subsidiary, SBM Offshore USA Inc. resolved a $238 million FCPA enforcement action concerning conduct in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq.
As highlighted in this prior post, in 2018 SBM Offshore announced a leniency agreement with Brazil law enforcement authorities pursuant to which it agreed to pay over $300 million for conduct occurring in the country.
Earlier this week, SBM Offshore disclosed:
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).
It is fair to say that the current COVID-19 crisis has the ability to potentially impact pretty much anything in the world at this point.
Recently the OECD Working Group on Bribery (made up of representatives from the States Parties to the OECD Convention) released a statement indicating that it is “going to examine the possible impact and consequences of the coronavirus pandemic on foreign bribery.”
The statement reads in full: