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Issues To Consider From The Gol Enforcement Action


This post highlighted the recent net $38.1 million Foreign Corrupt Practices Act enforcement action against Gol Linhas Aereas Inteligentes S.A. (Gol) – an airline headquartered in Sao Paulo, Brazil with shares traded on the New York Stock Exchange – for bribing Brazilian officials.

This post highlights additional issues to consider from the enforcement action.


As highlighted in this prior post, Go’s FCPA (and related) scrutiny began in late 2016.

Thus from start to finish, Gol’s FCPA scrutiny lasted an approximate six years.

I’ve said it many times, and will continue saying it until the cows come home, if the DOJ/SEC want their FCPA enforcement programs to be viewed as more credible and more effective the enforcement agencies must resolve instances of FCPA scrutiny much quicker. Indeed, who can forget a high-ranking DOJ official stating – around the same time that Gol initially disclosed its scrutiny – that FCPA investigations should be “measured in months, not years.”

This is particularly true in the Gol matter given the following language from the enforcement agencies.


“[T]he Company received full credit for cooperation … because it cooperated with the Fraud Section’s and Office’s investigation and demonstrated recognition and affirmative acceptance of responsibility for its criminal conduct; the Company also received credit for its cooperation pursuant to the FCPA Corporate Enforcement Policy, … by, including: (i) timely providing the facts obtained through the Company’s internal investigation-which included reviewing voluminous documents, interviewing witnesses, conducting background checks, and testing over two thousand transactions-which allowed the government to preserve and obtain evidence as part of its own independent investigation; (ii) making several factual presentations to the Fraud Section and the Office to share findings; (iii) translating key documents as needed; (iv) identifying information previously unknown to the Fraud Section and the Office; (v) making the Company’s current management and employees available to the Fraud Section and the Office, including several who traveled to the United States; and (vi) collecting, analyzing, and organizing voluminous evidence and information that it provided to the Fraud Section and the Office;”


“Gol’s cooperation included voluntarily summarizing and providing facts developed during its own internal investigation, translating certain documents, and making its current management available to the Commission staff, including those who needed to travel to the United States.”

Bribing “Domestic” Officials

As highlighted in this post, the 2016 FCPA enforcement action against Brazil-based Odebrecht/Braskem was unique in that it was believed to be the first FCPA enforcement action in FCPA history against a foreign company for allegedly bribing (in whole or in part) its own domestic officials.

FCPA enforcement actions fitting the same mold (that is a foreign company allegedly bribing its own “domestic” officials) soon followed: SQMPetrobrasEletrobrasTelefonica BrazilJ&F Investimentos, and KT Corp.

The Gol enforcement action was the most recent example.

From a policy standpoint, is the U.S. prepared for the flip side?

In other words, a foreign law enforcement agency bringing a bribery and corruption enforcement action against a U.S. company (based on the company’s mere listing of shares on its exchanges) based on the U.S. company’s alleged interactions with U.S. officials including alleged illegal political contributions?

As highlighted in this prior post, there once was a time in which FCPA enforcement officials seemingly believed that the FCPA’s anti-bribery provisions did not apply when a foreign company allegedly bribed its own “domestic officials.”

It’s an interesting question.

Does the “foreign” in the FCPA’s “foreign official” element mean as it relates to the specific company at issue or as to the U.S.?

I believe that the legislative history supports the later, but will also add that Congress likely never understood that it was legislating as to foreign issuers when the FCPA was passed in 1977 because there were few foreign issuers.  Today, there are approximately 1,000 foreign issuers.  (See here and here).

Regardless of the best answer, the related issue is that all of the above mentioned FCPA enforcement actions – including the GOL enforcement action – were against foreign companies from peer OECD Convention countries.

In other words, Brazil, Chile, and South Korea all have laws and law enforcement capable of capturing the conduct at issue (and in most examples brought related enforcement actions against the companies).

Article 4 of the OECD Convention states that “when more than one Party has jurisdiction over an alleged offence described in this Convention, the Parties involved shall, at the request of one of them, consult with a view to determining the most appropriate jurisdiction for prosecution.

Can it truly be said that the U.S. was “the most appropriate jurisdiction” to prosecute Brazilian companies for improper interactions with Brazilian officials, to prosecute a Chilean company for improper interactions with Chilean officials, to prosecute a South Korean company for improper interactions with South Korean officials?

As highlighted in this prior post, in 2017 DOJ officials stated that they “are working harder than ever to coordinate with global partners and avoid what some have termed “piling on” in attendant global resolutions.” As stated by the Principal Deputy Chief of the DOJ Fraud Section:

“Coordination with foreign countries will continue, and that number of coordinated resolutions will grow, including with new countries.  This is important for several reasons.  First and foremost, it is fair to companies.  It encourages companies to cooperate across the board, because we understand that, at the end of a case, money paid out is derived from one pie.  A resolving company should not have piled upon it duplicative fines via separate resolutions that do not credit one another.  Although the “piling on” problem is not entirely solved by doing this (other countries may certainly try to reach additional resolutions), our efforts do mitigate this problem, and we are trying to do better in this regard.”

As highlighted in this prior post, in 2018 the DOJ announced a “non-piling” policy stating:

“The Department should … endeavor, as appropriate, to coordinate with and consider the amount of fines, penalties, and/or forfeiture paid to other federal, state, local, or foreign enforcement authorities that are seeking to resolve a case with a company for the same misconduct.”

Call it what you want, but when the U.S. brings an FCPA enforcement action against a company from an OECD Convention country that has also been prosecuted in its home county, it is “piling on.”

From a historical perspective, it is worth noting that part of the FCPA reform discussion in the 1980’s were bills – introduced by Democrats – seeking to waive the FCPA’s provisions “in the case of any country which the Attorney General has certified to have (1) effective bribery or corruption statutes; and (2) an established record of aggressive enforcement of such statutes.” (See S. 1797, Competitive America Trade Reform Act of 1985, introduced on October 29, 1985 by Senator Gary Hart (D-CO) and H.R. 3813, Competitive America Trade Reform Act of 1985, introduced on November 21, 1985 by Representative Vic Fazio (D-CA)).

While waiving the FCPA’s provisions – as those bills sought to do – does not seem like a good idea, perhaps the time has come with the maturity of the OECD Convention – for U.S. enforcement agencies to adopt a policy of not bringing FCPA enforcement actions against foreign companies from peer OECD Convention countries.

Assumed Causation Plus An Interesting Issue

The Gol enforcement action concerned attempts by the company to influence Brazilian legislation concern payroll taxes and fuel tax reductions.

The legislation passed, but is it assumed causation to assert that the only reason the legislation passed was because of Gol’s conduct?

And then there is this interesting issue.

In the words of the DOJ

“These pieces of legislation involved certain payroll tax and fuel reductions that financially benefited GOL, along with other airlines.” (emphasis added).

In the words of the SEC

“These proceedings arise out of a scheme to bribe government officials in Brazil in exchange for certain payroll tax and fuel tax reductions that financially benefited Gol, along with other airlines.”

In most FCPA enforcement actions, competitor companies are often harmed by conduct of the company resolving the FCPA enforcement action. In the Gol enforcement action, per the DOJ/SEC, competitor companies benefited from the conduct of the company resolving the FCPA enforcement action.

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