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On What Makes An FCPA Enforcement Action Important


Recent posts (here and here) on the FCPA Blog have posed the question: “what’s the most important FCPA case ever” and answer the question, from a corporate enforcement perspective, by referencing big settlement amount cases such as Siemens, Telia, and the many Bonny Island, Nigeria bribery cases.

My own two cents is that from a teaching and compliance take-away standpoint, the large, egregious, no reasonable minds could differ bribery cases such as Siemens, Telia, Bonny Island, etc. are the least important and least instructive.

Sure these cases are important if one’s definition of important is which cases are in the top ten list of FCPA settlements (see here for the current list). However, jurisdiction issues aside, none of these cases raised any unique interpretations of law or new compliance challenges. The phrase “just don’t bribe” is sometimes used in reference to  FCPA compliance and how it should be easy. While the phrase is naive and simplistic as applied to many FCPA enforcement actions, the phrase “just don’t bribe” pretty much sums the enforcement actions mentioned above.

From a teaching and compliance take-away standpoint, the most important FCPA enforcement actions are those that take the statute in a new direction, involve unique interpretations of law (not subjected to any judicial scrutiny of course) and thus pose new compliance challenges.

Consider the numerous FCPA enforcement actions involving travel and entertainment, corporate hospitality, charitable donations, internships and hiring practices, etc. These are the most important and instructive FCPA enforcement actions because they concern normal business conduct that is not problematic in the vast majority of situations, but in the eyes of the enforcement agencies become problematic in certain instances (that is when such things of value are directed to alleged “foreign officials”). As to the term “foreign official” consider (as highlighted in this post) that in 2002 the government invented, yes literally invented, the enforcement theory that physicians, lab personnel and others associated with many foreign health care systems are “foreign officials” and thus occupy the same status as a President or Prime Minister. This single enforcement theory has since been used approximately 25 times in corporate enforcement actions (never once in an individual enforcement action) and largely explains why the pharmaceutical, medical device and healthcare sector has FCPA scrutiny.

It is these types of enforcement actions (not Siemens and the like) that “expand” (albeit in the absence of judicial scrutiny) FCPA enforcement and are the enforcement actions companies competing in good faith in the global marketplace worry about because they largely involve normal everyday business activity.

In short, while it may seem counter-intuitive, the biggest FCPA compliance lessons (at least based on FCPA enforcement theories) are often found in the less egregious cases.

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