The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from the written posts on FCPA Professor.
This FCPA Flash episode is a conversation with Anthony Mirenda (a partner in the Boston office of Foley Hoag). Mirenda recently co-authored an article “Bridging the Cultural Gap in International Arbitrations Arising from FCPA Investigations” that caught my eye because it discusses a seldom explored corner of the general FCPA space.
The article nicely frames the issue of what can happen when a business organization, acting consistent with best practices upon learning of red flags, suspends payments to a foreign third party. Such action may prompt the foreign party to initiate legal proceedings (often an arbitration proceeding) to get paid and as noted in the article:
“The company is then placed in a difficult position: if it meets the expectations of U.S. regulators and halts all payments to its corrupt contractor agent, the company exposes itself to an arbitration brought by the consultant or agent. On the other hand, if the company keeps paying its corrupt agent, it exposes itself to further criminal liability in the United States.”
In the episode Mirenda specifically discusses this dilemma and other issues present in such arbitrations as well as other general issues regarding foreign third parties.
FCPA Flash is sponsored by the Red Flag Group. The Red Flag Group assists companies in developing and maintaining efficient and effective corporate governance and compliance programs, and has a proven track record in providing integrity due diligence investigations in 194 countries.