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Friday Roundup

Monitor costs, scrutiny alert, quotable, and survey says. It’s all here in the Friday roundup.

Monitor Costs

As highlighted in prior posts here [1] and here [2], in late 2019 Ericsson resolved a Foreign Corrupt Practices Act enforcement action and the $1.06 billion settlement amount was the largest net FCPA settlement amount in history. As a condition of settlement, Ericsson was required to engage an independent compliance monitor for a three-year period.

Recently, Ericsson disclosed “a provision of SEK 0.6 billion [approximately $60 million] was made to cover future monitoring costs.” (See here [3] for the article “FCPA Ripples.”)

Scrutiny Alert

As highlighted here [4]:

“Mexico’s president (Andres Manuel Lopez Obrador) … alleged corruption in brewery project worth more than $1 billion that was rejected in a referendum over the weekend, promising to review how permits were issued to the venture by U.S. brewer Constellation Brands.

[…]

Lopez Obrador on Wednesday suggested irregularities in how water permits were obtained for the plant, without offering proof against one of the biggest U.S. beer brewers, which makes the Corona and Modelo brands for the American market.”

Quotable

In this recent article [5] about the post-trial acquittal of Lawrence Hoskins on FCPA charges (see here [6] for the prior post), Fried Frank lawyers observe:

“Hoskins demonstrates the value of litigating FCPA matters in appropriate circumstances, especially when defending individuals who face jail time and other life-changing penalties. For most of the FCPA’s 43-year history, the law relating to the FCPA has largely consisted of negotiated resolutions.

The FCPA resource guide confirms this reality, in that much of the authority cited in the guide concerns negotiated — rather than fully litigated — resolutions in which the government typically has the upper hand in framing and describing the issues and facts.”

Spot On.

Survey Says

According to PwC’s recent “Global Economic Crime and Fraud Survey”

“Bribery and corruption remain a big challenge. One-third of all respondents say they had either been asked to pay a bribe or had lost an opportunity to a competitor who they believed had paid a bribe.

Among the responses, there were a few blind spots and surprises:

• 6 in 10 organisations don’t have a programme to address bribery and corruption risk.

• Nearly half of all respondents either don’t perform a risk assessment or only perform an informal one.

• Half of all respondents either don’t perform, or perform only informal, risk-based due diligence and ongoing monitoring of third-parties.

• Fewer than 3 in 10 companies perform limited testing of the operating effectiveness of their controls, and another 12% do no testing at all.”

[7]