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FCPA Enforcement Officials Address COVID-19 Related Questions

Earlier this week, Daniel Kahn (Sentior Deputy Chief, DOJ Criminal Division – Fraud Section) and Charles Cain (SEC FCPA Unit Chief) participated in this webinar [1].

During the webinar, Kahn and Cain addressed a variety questions related to their respective enforcement agencies relative to the COVID-19 crisis.

Set forth below are the issues addressed and their responses.

Issue: has COVID-19 impacted FCPA work? 

CAIN: “We are still very much focused on FCPA violations in the FCPA Unit.”

KAHN: “We are certainly still pressing ahead on all our FCPA investigations and related investigations as well.”

Issue: Has there been a diversion of resources away from FCPA enforcement to other COVID-19 priority areas?

CAIN: “Within the specialized units [at the SEC of which the FCPA is one specialized unit] we are all still focused on our subject matter expertise.”

KAHN: “At this point I don’t see a lot of resources being reallocated from the FCPA Unit. […] The FCPA Unit is very focused on ensuring the investigations they already had, new investigation they are opening, and trying to close out cases they already have.”

Issue: What does cooperation mean in the COVID-19 environment? 

KAHN: “Do what you would normally do, and what you can’t do because of the situation – explain that to us.” Kahn went on to add that if a business organization can’t satisfy a DOJ request, the business organization is going to have to explain why. Kahn stated: “We will want to understand why [a company can’t comply], is it a financial reason, is it a safety issue with our request?” According to Kahn, the DOJ is “not looking to be unreasonable in this time” and is “not [going to] plac[e] undue burdens on an already burdened society.”

Issue: Do you expect more inability to pay claims because of COVID-19?

KAHN: Kahn stated that COVID-19 is “absolutely” going to play into the discussion regarding inability to pay “for a number of companies.” He stated: “One of the considerations that will probably become much more prevalent in this crisis is not so much … a final inability to pay, but rather a temporary inability to pay. That is a conversation we can also have with companies if they have a sort of short term or temporary financial issue that they expect to deal with over the next 6-12 months.”

[2]