I am no different from the other FCPA aficionados.
I maintain and publish yearly FCPA statistics even though I fully acknowledge that year-to-year FCPA enforcement statistics, and the arbitrary cutoffs associated with such statistics, may be of marginal value given that many non-substantive factors can influence the timing of an actual FCPA enforcement action.
For instance, was the individual FCPA enforcement action announced earlier this week against former executives of PetroTiger a 2013 enforcement action (when the criminal charges were filed) or a 2014 enforcement action (when the criminal charges were unsealed and announced)?
Accepting year-to-year FCPA statistics for what they are, the issue remains: how does one best analyze and interpret these statistics over time?
Consider the following hypothetical. In year 1, a city issues 100 speeding tickets and collects $20,000 in fines associated with those tickets. In year 2, a city issues 90 speeding tickets, but because certain drivers were going really fast, the city collects $25,000 in fines associated with those tickets. Was there less enforcement in year 2 compared to year 1? I assume most of you would say that enforcement in year 2 was less than in year 1 even though in year 2 the city collected more money.
The some logic applies to year-to-year FCPA statistical data and for this reason I believe it is most accurate to conclude that corporate FCPA enforcement in 2013 was down from historical averages.
Previous posts this week (here and here) provided various facts and figures from 2013 DOJ FCPA enforcement and SEC FCPA enforcement. Viewing FCPA enforcement statistics this way is useful and informative given that the DOJ and SEC are separate law enforcement agencies and different issues arise in DOJ and SEC FCPA enforcement actions.
As indicated by the below charts and by using the “core” approach to FCPA enforcement statistics (an approach the DOJ endorses), both DOJ and SEC corporate enforcement in 2013 was down from historical averages
Corporate DOJ FCPA Enforcement Actions
|
Year |
Core Actions |
|
2013 |
7 |
|
2012 |
9 |
|
2011 |
11 |
|
2010 |
17 |
Corporate SEC FCPA Enforcement Actions
|
Year |
Core Actions |
|
2013 |
8 |
|
2012 |
8 |
|
2011 |
13 |
|
2010 |
19 |
However, if one analyzes corporate FCPA enforcement statistics based on settlement amounts, corporate FCPA enforcement was up in 2013.
Corporate DOJ FCPA Enforcement Action Settlement Amounts
|
Year |
Settlement Amounts |
|
2013 |
$420 million |
|
2012 |
$142 million |
|
2011 |
$355 million |
|
2010 |
$870 million |
Corporate SEC FCPA Enforcement Action Settlement Amounts
|
Year |
Settlement Amounts |
|
2013 |
$300 million |
|
2012 |
$118 million |
|
2011 |
$148 million |
|
2010 |
$530 million |
Viewing FCPA enforcement in the aggregate (DOJ and SEC combined) is of course also useful and informative and in 2013 the DOJ and SEC combined collected approximately $720 million in 9 corporate FCPA enforcement actions. The below chart provides a summary of corporate FCPA enforcement data (DOJ and SEC combined) for the years 2007-2013, as well as notable circumstances that significantly skewed enforcement data statistics for a particular year (an occurrence that happens in most years including 2013). The below chart has been updated since its first publication here.
Corporate FCPA Enforcement Actions (2007-2013)
|
Year |
Core Actions |
Settlement Amounts |
Of Note |
|
2007 |
15 |
$149 million |
Six enforcement actions involved Iraq Oil for Food conduct and these enforcement actions comprised 40% of all enforcement actions and approximately 50% of the $149 million amount. |
|
2008 |
10 |
$885 million |
The $800 million Siemens enforcement action comprised approximately 90% of the $885 million amount. |
|
2009 |
11 |
$645 million |
The $579 million KBR / Halliburton Bonny Island, Nigeria enforcement action comprised approximately 90% of the $645 million amount. |
|
2010 |
21 |
$1.4 billion |
Six enforcement actions, all resolved on the same day, centered on various oil and gas companies use Panalpina in Nigeria. Panalpina also resolved an enforcement action on the same day.Two enforcement actions (Technip and Eni / Snamprogetti) involved Bonny Island conduct. In other words, there were 14 unique corporate enforcement actions in 2010. Of further note, the two Bonny Island enforcement actions, Technip($338 million) and Eni/Snamprogetti ($365 million) comprised approximately 50% of the $1.4 billion amount. |
|
2011 |
16 |
$503 million |
The $219 million JGC Corp. Bonny Island, Nigeria enforcement action comprised approximately 44% of the $503 million amount |
|
2012 |
12 |
$260 million |
None that significantly skewed the statistics |
|
2013 |
9 |
$720 million |
The $398 million Total enforcement action comprised approximately 55% of the $720 million amount
|
| TOTALS |
94 |
$4.63 billion |
In short, the number of core corporate FCPA enforcement actions in 2013 was the lowest in seven years.
Thus, corporate FCPA enforcement in 2013 was down. Yet, the amount collected in these FCPA enforcement actions in 2013 was more than in 2012 and 2011. Thus, corporate FCPA enforcement in 2013 was up.
In closing, have it your way.
However, the way I believe is the more accurate and reliable way to keep and analyze FCPA enforcement statistics is by focusing on unique instances of FCPA scrutiny (not settlement amounts) and tracking enforcement actions using the “core” approach.
