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Issues To Consider From The Corficolombiana / Grupo Aval Enforcement Action

Issues

This previous post highlighted the net $60.6 million Foreign Corrupt Practices Act enforcement action against Colombian entities Corficolombiana / Grupo Aval.

This post continues the analysis by highlighting additional issues to consider.

Cash Cow?

In the minds of some (including former FCPA enforcement officials), FCPA enforcement is a convenient cash cow for the U.S. government.

Those who believe this will find support in the Corficolombiana / Grupo Aval enforcement action.

The allegations were basically as follows.

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Thus Far From The SEC

SEC

Thus far in 2023, the SEC has brought four FCPA enforcement actions.

All of the enforcement actions have been against foreign issuers.

All of the enforcement actions have been resolved through an administrative order (meaning there was no judicial scrutiny whatsoever).

All of the enforcement actions have lacked related enforcement actions against individuals.

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Bill Seeks To Codify DOJ’s Prior China Initiative

senatorscott

As highlighted in this prior post, in November 2018 the Department of Justice announced a China Initiative. Among the numerous goals of the China Initiative was to ‘identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses.”

In February 2022, the DOJ scrapped the China Initiative. According to this article, “the decision to end the program comes after a months-long review ordered by the new head of the National Security Division, Assistant Attorney General Matthew Olsen. “While I remain focused on the evolving, significant threat that the government of China poses, I have concluded that this initiative is not the right approach.”

Recently, Senator Rick Scott (R-FL) “announced a package of five national security focused bills to hold Communist China accountable and better protect American families. This legislative package contains bills which prohibit the U.S. Government from buying drones made by America’s adversaries, protect Taiwan from Communist China’s growing aggression, sever all financial transactions between the U.S. and Communist China once it engages in armed aggression against Taiwan, reestablish the China Initiative at Department of Justice, and require a list to be published listing all countries who have a bilateral security arrangement with Communist China to protect Americans abroad and prevent CCP police stations in the US.” (See here).

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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 hereherehereherehere and here) much of the largeness of 2022 FCPA enforcement resulted from corporate enforcement actions against foreign companies.

Specifically, of the ten corporate Foreign Corrupt Practices Act enforcement actions in 2022, six (60%) 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 $923 million in FCPA settlement amounts from 2022 corporate enforcement actions, $747 million (80%) was from enforcement actions against foreign companies.

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“Civil Society” Groups Don’t Like Judicial Scrutiny Either

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.

As highlighted in this recent post, in its Phase 4 report on Italy’s Implementation of the OECD Anti-Bribery Convention, the OECD went from implicit to explicit and specifically called out judicial scrutiny in Italy of bribery cases because it “yielded a high number of dismissals.” In doing so, the reputation of the OECD took another hit.

Recently a collection of “civil society” groups joined the frayed calling on the U.S. to “repair the damage Italy has done to the OECD Anti-Bribery Convention.”

The sophomoric letter from the “civil society” groups to U.S. Attorney General Merrick Garland states in pertinent part:

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