A “foreign official.”
Without one, there can be no FCPA anti-bribery violation (civil or criminal). Who were the alleged “foreign officials” of 2018?
This post highlights the alleged “foreign officials” from 2018 corporate DOJ and SEC FCPA enforcement actions.
There were 17 FCPA core corporate enforcement actions in 2018. Of the 17 enforcement actions 9 (53%) involved, in whole or in part, employees of alleged state-owned or state-controlled entities (“SOEs) with an additional 2 actions (12%) involving, in whole or in part, individuals associated with foreign health care systems.
By way of comparison:
- in 2017, 54% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here)
- in 2016, 78% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2015, 55% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2014 60% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2013, 77% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2012, 42% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 348-353);
- in 2011, 81% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 29-41);
- in 2010, 60% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 108-119); and
- in 2009, 66% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 410-44).
In 2014, in an issue of first impression for an appellate court, the 11th Circuit set forth a control and function test for whether an alleged SOE can be “instrumentality” under the FCPA such that its employees are “foreign officials” under the FCPA. As highlighted here and more extensively in my Supreme Court amicus brief supporting the cert petition, there were many flaws in the 11th Circuit’s reasoning. The Supreme Court declined to hear the case. As to whether Congress intended employees of SOEs to be “foreign officials” under the FCPA, see here for my “foreign official” declaration.
The remainder of this post describes (as per DOJ/SEC allegations) the “foreign officials” of 2018. As is apparent from the descriptions below, in certain instances the enforcement agencies describe the “foreign official” with reasonable specificity (sometimes even “naming names”). In other instances there is virtually no specificity as to the alleged “foreign officials.”
[Note: as in prior years, certain of the enforcement actions below technically only involved FCPA books and records and/or internal control charges or findings. In fact, of the 14 corporate FCPA enforcement actions brought by the SEC in 2018, only three (United Technologies, Panasonic and Credit Suisse) found violations of the FCPA’s anti-bribery provisions. As most readers know, actual charges in many FCPA enforcement actions hinge on voluntary disclosure, cooperation, collateral consequences, and other non-legal element issues. Thus, even if an FCPA enforcement action is resolved without FCPA anti-bribery charges, most such actions remain very much about the “foreign officials” involved – a fact evident when reading the actual enforcement action.
Polycom
SEC
“officials at Chinese government agencies and government-owned enterprises”
“in connection with a project with a state-owned entity,” “in connection with a transaction with a state-owned entity,” “in connection with a deal with a public institution,” “in connection with a sale of products to a government entity”
DOJ
Not specified
Eletrobras
SEC
“Brazilian political parties and Brazilian government officials”
Vantage Drilling
SEC
“officials at Petroleo Brasileiro SA Petrobras (“Petrobras”), a Brazilian state-owned oil and gas company”
Stryker
SEC
“health-care professionals (“HCPs”) in India,” “Kuwaiti HCPs” generic reference to HCPs in China
Petrobras
DOJ
“politicians and political parties in Brazil”
SEC
“politicians and political parties in Brazil”
United Technologies
SEC
“Baku Liftremont officials (a municipal entity in Azerbaijan)”
Individuals at Chinese state-owned airlines
An individual at a Chinese state-owned bank
Officials of the Republic of Korea Air Force
Generic reference to officials from China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia
Sanofi
SEC
Healthcare professionals in Jordan, Lebanon, Syria,Palestine, Bahrain, Kuwait, Qatar, Yemen, Oman, and the United Arab Emirates
Societe General
DOJ
Individuals associated with the Central Bank of Libya, Libyan Arab Foreign Bank, Economic and Social Development Fund, and Libyan Investment Authority
Legg Mason
DOJ
Individuals associated with the Central Bank of Libya, Libyan Arab Foreign Bank, Economic and Social Development Fund, and Libyan Investment Authority
SEC
Individuals associated with state-owned financial institutions in Libya
Insurance Corp. of Barbados
DOJ
Donville Inniss – member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce, and Small Business Development of Barbados.
Credit Suisse
DOJ
Individuals associated with various state-owned enterprises in China, individual with a Chinese government executive agency that administered macroeconomic policy, budget, and government expenditures
SEC
Individuals at various Chinese SOEs or foreign government ministers with influence over the business decisions of SOEs
Beam
SEC
Indian officials with discretion regarding the various issues: importation of distilled mixes, shipments to bottling facilities, plant inspections, shipments to distribution warehouses, label registrations, licensing of warehouses, sales to retail stores that were operated by the Indian government.
Dun & Bradstreet
SEC
Individuals associated with the Chinese State Administration of Industry and Commerce (AIC)
Panasonic
DOJ
Individual “employed as a senior contracts official at Middle East Airline”
SEC
Individuals associated with government owned airlines in the Middle East
Kinross Gold
SEC
Generic references to interactions with officials in Mauritania and Ghana including a Ghanaian government customs officer
Elbit Imaging
SEC
Generic references to Romanian government officials in connection with real estate projects
Transport Logistics International
DOJ
Vadim Mikerin, a national of the Russian Federation, who was a Director of TENEX and also the President of TENAM. TENEX is described as being “indirectly owned and controlled by, and performed functions of, the government of the Russian Federation.” TENAM is described as being located in the U.S. and a wholly-owned subsidiary of TENEX. TENAM was TENEX’s official representative office in the United States and owned and controlled by, and performed functions of, the government of the Russian Federation.
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