- FCPA Professor - https://fcpaprofessor.com -

Friday Roundup

Not true, DOJ appeal, scrutiny alert, and monitor extended. It’s all here in the Friday roundup.

Not True

In this recent Trace International sponsored podcast [1] about the 2014 Esquenazi decision, Bill Steinmen (Senior Editor at the FCPA Blog) asserts that the FCPA’s “legislative history doesn’t really shed any light” on the meaning of “instrumentality” in the FCPA.

Not true.

There is much information in the FCPA’s legislative history relevant to the issue of whether Congress intended the phrase “instrumentality” in the “foreign official” definition to cover state-owned or state-controlled enterprises (“SOEs”).

See here [2] for my 152 page declaration filed in U.S. v. Carson (another foreign official challenge). The purpose of the declaration was to “provide the Court with a detailed overview of the FCPA’s extensive legislative history, particularly as to the “foreign official” element of the FCPA’s anti-bribery provisions, so that a full and complete analysis of the FCPA’s “foreign official” element can be made for the first time, particularly a complete analysis of whether Congress intended the phrase“instrumentality” to cover SOEs and for employees of SOEs to thus be deemed “foreign officials.”

The declaration was based on approximately 150 hours of personally reviewing and analyzing thousands of pages of original source documents and information that collectively make up the FCPA’s legislative history.

DOJ Appeal

As highlighted in this prior post [3], in mid-March a judge ordered a new trial for Joseph Baptiste and Roger Boncy (individuals previously convicted in connection with a Haitian bribery scheme) based on ineffective assistance of counsel.

Recently the DOJ filed a notice of appeal to the First Circuit.

Scrutiny Alert

CHS Inc., a a farmer- and cooperative-owned company providing grain, foods and energy, recently disclosed:

“[I[n the fourth quarter of fiscal 2018, we contacted the DOJ and the SEC to voluntarily self-disclose potential violations of the FCPA in connection with a small number of reimbursements made to Mexican customs agents in the 2014-2015 time period for payments customs agents made to Mexican customs officials in connection with inspections of grain crossing the U.S.-Mexican border by railcar. In connection with its review of this matter, we have cooperated with the DOJ’s and SEC’s evaluation of other areas of potential interest relating to the FCPA. On February 25, 2020, we received a letter from the DOJ stating that it had closed its inquiry into each of these matters without taking any action against us and acknowledging its appreciation of our cooperation. We are still fully cooperating with the SEC’s ongoing evaluation of these FCPA-related matters. At this time, the SEC has not taken a position on these FCPA-related matters and we are unable to predict when the SEC’s review of these matters will be completed or what regulatory or other outcomes may result.”

Monitorship Extended

As highlighted in this prior post [4], in October 2016 Embraer resolved a wide-ranging FCPA enforcement involving conduct in the Dominican Republic, Saudi Arabia, Mozambique, and India. As a condition of settlement, Embraer was required to engage an independent compliance monitor for a three year period. Embraer recently disclosed [5]:

“As part of the agreements, the Company agreed to appoint an external and independent monitor, for three years starting in the beginning of 2017, to accompany the fulfillment of the terms of the agreement. Subsequent to the execution of the agreements, the Committee acted on the recommendation of external monitors for the DOJ, which resulted in the selection of one of the nominees, Attorney Alex Rene, from the law firm Ropes & Gray. Embraer and the DOJ agreed to extend the monitoring term for a period of 90 days to allow the completion of the monitoring tests for the assessment of compliance, by Embraer, with the final agreements entered into with the DOJ, the SEC and the CVM. Accordingly, the monitoring term will end on April 22, 2020. The matters related to the investigation and to the execution of the agreements were presented by the Board of Executive Officers and discussed with the Committee in all of the regular meetings held in 2019. In particular, the Committee monitored, analyzed, and made recommendations regarding the work related to (i) the agreements to be entered into in other countries; (ii) investigations and related actions in Brazil and abroad; (iii) the monitoring, through in-person and virtual meetings.”

[6]