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The FOREIGN Corrupt Practices Act

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The “Foreign” in Foreign Corrupt Practices Act refers to the location of the bribe recipient (as in “foreign,” non-U.S. officials).

However, the “Foreign” in Foreign Corrupt Practices Act might as well refer to the location of the bribe payor as well – in other words the location of the company resolving the FCPA enforcement.

This recent post highlighted that approximately 75% of DOJ corporate enforcement actions since 2021 have been against foreign companies.

What do the numbers show regarding SEC FCPA enforcement?

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SAP Joins The Repeat Offender Club

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In 2016 SAP (a German software company with American Depository Shares registered with the SEC) resolved a $3.9 million Foreign Corrupt Practices Act enforcement action.

As highlighted here, in 2019 the company disclosed additional FCPA scrutiny and stated: “SAP has received communications and whistleblower information alleging conduct that may violate anti-bribery laws in South Africa, the United States (including the U.S. Foreign Corrupt Practices Act (FCPA)), and other countries.”

Yesterday, SAP joined the ever-growing FCPA repeat offender club as the DOJ and SEC announced (here and here) related FCPA enforcement actions against the company. The net FCPA settlement amount is $102.5 million: DOJ ($63.6 million) and SEC ($38.9 million).

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Chemical Company Albemarle Resolves A Net $218.4 Million Enforcement Action

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As highlighted in this prior post, in February 2018 Albemarle Corp. (a North Carolina based chemical company) disclosed Foreign Corrupt Practices Act scrutiny.

More than 5.5 years later, the DOJ and SEC announced a net $218.4 million FCPA enforcement action against the company.

The resolution included a DOJ non-prosecution agreement (pursuant to which the company agreed to pay a $98.2 million criminal penalty and $16.6 million in forfeiture) and an SEC administrative order (pursuant to which the company agreed to pay approximately $103.6 million in disgorgement and prejudgment interest).

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Billboard Worthy: Clear Channel Outdoor Resolves $26.1 Million Enforcement Action

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Approximately 5.5 years ago (see here for the prior post), Clear Channel Outdoor Holdings (a public subsidiary of iHeartMedia and one of the world’s largest outdoor advertising corporations) disclosed FCPA scrutiny based on the conduct of “several employees of Clear Media Limited, an indirect, non-wholly-owned subsidiary of the Company whose ordinary shares are listed …. on the Hong Kong Stock Exchange.”

Today, the SEC (an enforcement agency whose officials have previously stated that it “should focus on bringing matters to resolution swiftly”) announced a $26.1 million FCPA enforcement action against the company.

In summary fashion, this administrative order finds:

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Duped By Certain China Subsidiary Employees, 3M Resolves A $6.5 Million Enforcement Action

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The SEC announced today that 3M resolved a $6.5 million Foreign Corrupt Practices Act enforcement.

The basics are as follows.

Approximately 6-10 years ago, a former Marketing Manager of a 3M China-based subsidiary “secretly” provided “tourism activities” for Chinese health care officials.

The Marketing Manager “would create a travel itinerary that included various legitimate business, training and marketing activities for submission to 3M-China’s compliance personnel for approval,” however there were “alternate itineraries” that “consisted of various tourism activities at or near the location of the educational events.”

There is no suggestion that anyone at 3M headquarters knew of or approved of the conduct. Indeed, subsidiary employees, among other things, “falsified internal compliance documents that affirmatively denied and/or omitted mention of the Tourism Activities that were planned as part of the overseas trip.”

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