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FCPA Enforcement Actions Against Japanese Companies

Japan

When thinking of foreign companies that have resolved Foreign Corrupt Practices Act enforcement actions, most people likely think of German and French companies.

Yet, the top domiciliary of foreign companies to resolve FCPA enforcement actions is actually Switizerland (6) and not far behind is Japan (5), likely soon to be 6 after Japan-based Olympus resolves it FCPA scrutiny (see here for the prior post).

This post highlights the five FCPA enforcement actions against Japanese Companies (all in the past 4.5 years) that have netted the U.S. treasury approximately $403 million.

JGC Corp. (Apr. 2011)

See here for the prior post.

The company was a joint venture partner in the so-called TSKJ consortium that was formed for purposes of bidding on and performing a series of engineering, procurement, and construction contracts to design and build a liquefied natural gas plant on Bonny Island, Nigeria. Previous Bonny Island FCPA enforcement actions involved: KBR / Halliburton (see here), Technip (see here) and Snamprogetti (see here).

The settlement amount was $218.8 million and the criminal charges were resolved via a DOJ deferred prosecution agreement.

In the DPA, the DOJ stated:  “after initially declining to cooperate with the Department based on jurisdictional arguments, JGC began to cooperate, and has agreed to continue to cooperate, with the Department.” There is no mention of voluntary disclosure in the settlement documents ((something the DOJ typically mentions in resolution documents if indeed it has occurred).

Bridgestone (Sept. 2011)

See here for the prior post.

The company pleaded guilty to conspiracy to violate the Sherman Act and conspiracy to violate the FCPA. The FCPA conduct related to allegations of improper payments to officials in Latin America related to the sale of marine hose and other industrial products.

The overall settlement amount was $28 million and from the DOJ’s resolution documents it appears that approximately 80% of the $28 million fine was for the FCPA conduct.

In the DOJ’s release, it “recognized Bridgestone’s cooperation with the investigations, including conducting a worldwide internal investigation, voluntarily making employees available for interviews, and collecting, analyzing and providing to the department voluminous evidence and information.” There is no mention of voluntary disclosure in the settlement documents (something the DOJ typically mentions in resolution documents if indeed it has occurred).

Marubeni (Jan. 2012).

See here for the prior post.

The conduct at issue involved the same Bonny Island, Nigeria conduct in the JGC enforcement action and Marubeni was hired by the TSKJ consortium in connection with the project.

The settlement amount was approximately $56 million and the criminal charges were resolved via a DPA. The DOJ made no mention of voluntary disclosure or cooperation in the resolution documents (something the DOJ typically mentions in resolution documents if indeed it has occurred).

Marubeni (Mar. 2014)

See here for the prior post.

The company was a consortium partner along with Alstom in bidding on and carrying out the Tarahan power project in Indonesia and pleaded guilty to making improper payments to a consultant knowing that a portion of the payments were intended for Indonesian officials in exchange for their influence and assistance in awarding the Tarahan Project to Marubeni and Alstom.

The settlement amount was $88 million and in the plea agreement the DOJ stated that the fine amount was based on, among other things, “the Defendant’s failure to voluntarily disclose the conduct; the Defendants refusal to cooperate with the Department’s investigation when given the opportunity to do so; the lack of an effective compliance and ethics program at the time of the offense; the Defendant’s failure to properly remediate: and the Defendant’s history of prior criminal misconduct.”

Hitachi (Sept. 2015).

See here for the prior post.

According to the SEC, Hitachi violated the FCPA’s books and records and internal controls provisions “when it inaccurately recorded improper payments to South Africa’s ruling political party in connection with contracts to build two multi-billion dollar power plants.”

The settlement amount was $19 million and there was no mention of voluntary disclosure or cooperation in the SEC resolution documents (something the SEC typically mentions in resolution documents if indeed it has occurred).

Olympus (?)

As highlighted in this prior post, the company’s most recent disclosure states:

“Olympus Corporation hereby announces that Olympus Latin America, Inc. (“OLA”), an indirect U.S. subsidiary of ours, and Olympus Optical do Brasil, Ltda. (“OBL”), a Brazilian subsidiary of OLA, have been under investigation by the U.S. Department of Justice (the “DOJ”) relating to the Foreign Corrupt Practices Act concerning their medical business, and that we have recognized an extraordinary loss in connection with such investigation for the first quarter of the fiscal year ending March 2016.

Background of this matter. In October 2011, Olympus Corporation of the Americas (“OCA”), a U.S. subsidiary of ours and the parent company of OLA, self-reported to the DOJ potential issues concerning OLA’s and OBL’s medical businesses in 2011 or earlier. OCA is currently continuing discussions with the DOJ towards a resolution, but in view of the progress at the present time, we have recorded an extraordinary loss of approximately 2,421 million yen (approximately $19 million) as a provision.”

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