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Friday Roundup

Asset recovery, export finance, Och-Ziff related, and for the reading stack.

It’s all here in the Friday roundup.

Asset Recovery

Efforts by the U.S. government to combat foreign corruption are broader than just the Foreign Corrupt Practices Act. For instance, approximately ten years ago the DOJ announced [1] a Kleptocracy Asset Recovery Initiative.

Recently, the DOJ announced [2]:

“The Department of Justice filed a civil forfeiture complaint seeking the forfeiture of a Maryland property acquired with approximately $3,500,000 in corruption proceeds by the ex-president of The Gambia, Yahya Jammeh, through a trust set up by his wife, Zineb Jammeh. According to the complaint, Yahya Jammeh corruptly obtained millions of dollars through the embezzlement of public funds and the solicitation of bribes from businesses seeking to obtain monopoly rights over various sectors of the Gambian economy.  The complaint further alleges that Yahya Jammeh conspired with his family members and close associates to utilize a host of shell companies and overseas trusts to launder his corrupt proceeds throughout the world, including through the purchase of a multimillion-dollar mansion in Potomac, Maryland, which the United States seeks to forfeit through the filing of the civil forfeiture complaint.”

Export Finance

As highlighted in this prior post [3], an origin of the recent Airbus enforcement action was that the company obtained export credit financing from Export Credit Agencies (“ECAs”), including UK Export Finance (“UKEF”), a government body. As described in the enforcement action “UKEF wrote to Airbus regarding UKEF’s anti-bribery due diligence procedures in respect of agents and made specific references to UKEF’s obligation to report all suspicious circumstances to the SFO.”

[4]

Against this backdrop, according to this article [5]:

“UK Export Finance (UKEF) says it carries out rigorous and ongoing due diligence on all transactions it supports, after anti-corruption investigators warned of “multiple red flags” in its activities in Sub-Saharan Africa. The UK’s export credit agency (ECA), which provides government-backed insurance for export transactions as well as direct lending facilities, was handed a major funding boost this year as Britain looks to boost trade with non-EU markets. But Spotlight on Corruption, a UK-focused campaign group, says stress-testing of the ECA’s latest anti-bribery and corruption procedures suggests it is “taking on extraordinarily high risk” across much of its current portfolio. A detailed report published this week says that of the 11 recent UKEF-backed transactions in Sub-Saharan Africa that the group reviewed, three posed “exceptionally high” risks in terms of corruption or bribery. They involved trade with Angola, Ghana and Uganda and carried a total value of over £270mn.”

Och-Ziff Related

As highlighted in this 2018 post [6], in the aftermath of the 2016 Och-Ziff Foreign Corrupt Practices Act enforcement action (see here [7] and here [8] for prior posts) former shareholders of Canadian mining company Africo Resources Ltd. (“Claimants”) sough restitution pursuant to the Mandatory Victims Restitution Act for losses allegedly incurred as a result of Och-Ziff’s bribery of corrupt officials in the Democratic Republic of the Congo.

The DOJ opposed the request arguing, among other things, that Claimants had not show direct or proximate causation of quantifable harm from Och-Ziff’s conduct and that damages were too speculative.

However, as highlighted here [9], in August 2019 the court rejected the DOJ’s position and found that Claimants are victims of Och-Ziff’s crime under the MVRA and “directed the parties to submit supplemental briefing regarding how to calculate the appropriate restitution amount.”

As highlighted in this article [10]:

“Investors who claim their rights to a Congolese mine were stolen by the African unit of Och-Ziff Capital Management Group told a New York federal judge the parties have “structured a settlement framework” that could resolve their bid for $421.8 million in restitution. In a letter to U.S. District Judge Nicholas G. Garaufis on Monday, the investors in Africo Resources Ltd. said the deal reached with OZ Africa Management GP LLC could only go forward if the judge agreed to order that only the victims already represented in the action would be entitled to the still-undisclosed restitution payment, and that the payment would fully satisfy the Och-Ziff unit’s restitution obligations.”

For the Reading Stack

Gibson Dunn’s FCPA mid-year review is here [11]. The firm’s mid-year update on corporate NPAs and DPAs is here [12].

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