Last Friday, the SEC announced that London-based WPP (the world’s largest advertising agency and a company with depositary shares traded on the New York Stock Exchange) agreed to resolve a $19.2 million Foreign Corrupt Practices Act enforcement action.
The enforcement action focused on WPP subsidiary conduct in India, China, Brazil and Peru.
In summary fashion, the SEC’s order finds:
As highlighted in this prior post, in late 2019 Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.) resolved a $1.06 billion net FCPA enforcement action concerning conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.
Regarding Djibouti, the enforcement action alleged that Ericsson (through certain subsidiaries and agents) provided approximately $2,100,000 in bribe payments to, and for the benefit of, foreign officials in Djibouti, including a high-ranking government official in the executive branch of the Djibouti government who had influence over decisions made by a state-owned telecommunications company and the CEO of the state-owned telecom company, in order to secure an improper advantage in order to obtain and retain business with the Telecom Company and to win a contract valued at approximately €20,300,000 with the Telecom Company.”
In connection with this prong of the Ericsson enforcement action, the DOJ announced yesterday that Afework “Affe” Bereket (pictured – a dual citizen of Ethiopia and Sweden) was criminally charged with one count of conspiracy to violate the FCPA’s anti-bribery provisions and one count of conspiracy to commit money laundering “for his alleged role in a scheme to pay approximately $2.1 million in bribes to high-level government officials in the Republic of Djibouti and conspiring to launder funds to promote the scheme.”
A guest post from Tokyo-based Latham & Watkins attorneys Kaede Toh and Junyeon Park.
In May 2021, the Ministry of Economy, Trade and Industry (METI) revised the Guidelines for the Prevention of Bribery of Foreign Public Officials (Guidelines). Although the Guidelines do not impose legal obligations on companies, METI expects each company to create and implement an appropriate compliance system with reference to the Guidelines. The revised Guidelines include detailed guidance on due diligence prior to executing an acquisition or retaining a third-party agent — largely consistent with US government expectations under the US Foreign Corrupt Practices Act (FCPA) — and urge Japanese companies and global companies with business operations in Japan to prohibit small facilitation payments. Companies that have business operations in Japan should understand and incorporate the most recent changes to the Guidelines into their local company compliance system to the extent appropriate.
This prior post highlighted the net $17.7 million FCPA enforcement action against U.K. companies Amec Foster Wheeler Energy, which was acquired by Amec Plc in 2014, which in turn, was acquired by John Wood Group Plc in 2017.
This post continues the analysis by highlighting additional issues to consider.
Timeline
As highlighted in this previous post, in Spring 2017 the company disclosed:
Approximately 7-10 years ago, a U.K. corporation (#1) engaged in alleged improper conduct with alleged Brazilian officials largely through a Brazilian intermediary company with the assistance of an Italian agent. Approximately 7 years ago, a different U.K. corporation (#2) acquired U.K. corporation #1 and then approximately 4 years ago another U.K. corporation (#3) acquired U.K. corporation #2.
And then, the U.S. government brought an FCPA enforcement action against U.K. corporation #1 because, at one time, the company had shares traded on NASDAQ – even though in connection with the same core conduct the U.K. Serious Fraud Office and Brazil law enforcement also brought an enforcement action.
That pretty much sums up last Friday’s net $17.7 million FCPA enforcement action against Amec Foster Wheeler Energy, which was acquired by Amec Plc in 2014, which in turn, was acquired by John Wood Group Plc in 2017.
The enforcement action was the first corporate FCPA enforcement action of the Biden administration and closed the approximate six month gap in corporate FCPA enforcement.
