A Reminder Why Congress Chose To Exempt Facilitating Payments From The Reach Of The FCPA’s Anti-Bribery Provisions
Recently, the U.S. State Department released 2020 “Investment Climate Statements.” The annual reports cover over 170 foreign markets and are prepared by “economic officers at U.S. embassies and diplomatic missions” to help U.S. companies make informed business decisions.
Corruption is prominently mentioned in most country investment climate statements.
However, this “2020 Mongolia Investment Climate Statement” particularly caught my eye – not because Mongolia is a prominent market for U.S. businesses – but rather because the statement provides a nice reminder why Congress chose to exempt facilitation payments from the reach of the FCPA’s anti-bribery provisions.
Herbalife Resolves $123 Million Enforcement Action – Becoming The Latest Company To Resolve A Matter In Connection With Obtaining A Direct Selling Permit In China
In 2014, Avon resolved a Foreign Corrupt Practices Act enforcement based in large part on obtaining a direct selling permit in China. (See here for the prior post).
In 2016, Nu Skin Enterprises resolved an FCPA enforcement action based in large part on obtaining a direct selling permit in China. (See here for the prior post).
In the latest enforcement action involving another company in the same general industry involving the same general conduct, the DOJ and SEC recently announced (here and here) that Herbalife agreed to pay approximately $123 million to resolve a parallel DOJ and SEC enforcement action. The corporate action follows the DOJ and SEC’s November 2019 enforcement action against former Herbalife China executives Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head the External Affairs Department of a Chinese division of Herbalife).
Alexion Pharmaceuticals Resolves $21.5 Million Enforcement Action
Yesterday, the SEC announced that Alexion Pharmaceuticals (a company that has been under scrutiny since mid-2015) agreed to approximately $21.5 million to resolve an enforcement action based on the actions of foreign subsidiaries involving the company’s primary drug Soliris.
The conduct at issue focused on Alexion Illac Ticarent Limited Sirketi (Alexion Turkey), Alexion Pharma OOO (Alexion Russia), Alexion Pharma Brazil and Alexion Pharma Colombia SAS (all wholly-owned subsidiaries whose books and records were consolidated into Alexion’s financial statements).
Former Herbalife China Executives Criminally Charged By DOJ, SEC Also Charges Former Executive
In 2014, Avon resolved a Foreign Corrupt Practices Act enforcement based in large part on obtaining a direct selling permit in China. (See here for the prior post).
In 2016, Nu Skin Enterprises resolved an FCPA enforcement action based in large part on obtaining a direct selling permit in China. (See here for the prior post).
In 2017, Herbalife disclosed that it was under FCPA scrutiny concerning its conduct in China. With the company’s scrutiny still pending, yesterday the DOJ announced that Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head the External Affairs Department of a Chinese division of Herbalife) were criminally charged “for their roles in a scheme to violate the anti-bribery and the internal controls provisions of the FCPA.” Not surprisingly, the alleged conduct focused on obtaining a direct selling permit.
Hot Off The Press – Printing Company Quad/Graphics Resolves $10 Million FCPA Enforcement Action
This post earlier this week told you that there would likely be more Foreign Corrupt Practices Act enforcement this week as the SEC’s fiscal year draws to a close.
Sure enough as late yesterday the SEC announced an approximate $10 million enforcement action against Wisconsin-based printing company Quad/Graphics for “engaging in multiple bribery schemes in Peru and China.”