FCPA Repeat Offenders

November 18, 2024

If a wholly-owned subsidiary of a company resolves a Foreign Corrupt Practices Act enforcement action and thereafter another majority-owned subsidiary of the same company resolves an FCPA action based on different conduct, does that make the company an FCPA repeat offender?

It’s an open question, but for purposes of the FCPA Repeat Offender list complied by this site such a company will be included as a repeat offender.

For instance, last week Telefónica Venezolana (a wholly-owned subsidiary of Telefónica S.A.) resolved an FCPA enforcement action concerning conduct in Venezuela. In 2019, Telefônica Brasil (a majority-owned subsidiary of Telefónica S.A.) resolved an FCPA enforcement action concerning conduct in Brazil.

With this action, the FCPA repeat offender list now includes 23 companies (22 repeat offenders, and 1 company that has resolved three FCPA enforcement actions).

Three Time Offenders

ABB

Two Time Offenders

Telefónica

SAP

Philips

Oracle

Tenaris

Credit Suisse

Deutsche Bank

Novartis

Eni

Technip

Stryker

Halliburton

Biomet

Orthofix

Goodyear

Marubeni

Tyco

IBM

General Electric

Lucent / Alcatel-Lucent

Aibel Group / Vetco Gray

Baker Hughes

The number of FCPA repeat offenders calls into question whether the FCPA has been successful in achieving its objectives. (See here for the article). But then again, there are two ways to view corporate FCPA repeat offenders. (See here).

Of note, several instances of corporate FCPA repeat offenders involve companies whose first FCPA enforcement action (as well as second) was resolved via an NPA or DPA. For many years the DOJ has advanced the policy position that DPAs (and NPAs) “have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.” (See here for the prior post). Specifically in the FCPA context, the DOJ stated that “the companies against which DPAs and NPAs have been brought have often undergone dramatic changes.” (See here for the prior post).

Note: the term repeat offender means a business organization that has resolved more than one FCPA enforcement action regardless of which agency (DOJ or SEC) brought the enforcement action; regardless of the form of resolution (plea agreement, NPA, DPA, administrative order, etc.); and regardless of whether the charges or findings were anti-bribery violations or books and records and internal controls violations in connection with foreign bribery issues. The term repeat offender includes situations in which wholly-owned or majority-owned subsidiaries of the same company resolve separate enforcement actions over time. The term repeat offender does not include instances in which a company resolved an enforcement action concerning foreign bribery and then resolved an action implicating the books and records and internal controls in a so-called non-FCPA FCPA enforcement action. (See here and here for examples). Nor does it include instances in which there was a time gap between a DOJ enforcement action and an SEC enforcement action based on the same core conduct (for instance Las Vegas Sands and Beam).

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