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Potpourri

Deficient FCPA Reporting

In this New York Times article [1], journalists once again demonstrate their deficient FCPA knowledge. In reference to Microsoft’s possible purchase of TikTok and the potential of the U.S. Treasury receiving a portion of the sale, the article states: “In essence, the president is promising to orchestrate the kind of pay-to-play bounty that the United States prohibits companies from making to governments of other countries under the Foreign Corrupt Practices Act.”

However, the FCPA does not prohibit business organizations from providing things of value to foreign governments – just foreign officials. As stated in the U.S. government FCPA Guidance “”The FCPA prohibits payments to foreign officials, not to foreign governments.”

Interesting Choice of Words

This lawyer authored article [2] is titled “SEC Examines Relationship Between Bad Books and Bribery Schemes.” The articles contains the following words: “now getting the spotlight,” “recently,” “increasingly willing” “new approach,” “growing trend,” “shift in emphasis” in describing the books and records and internal controls provisions.

These are interesting choice of words given that the SEC/DOJ have been enforcing the FCPA’s accounting provisions for 40+ years.

2 out 3

As highlighted here [3], in early July the DOJ and SEC released a Second Edition of the FCPA Guidance. Soon thereafter, one of the signatories Brian Benczkowski (Assistant Attorney General Criminal Division Department of Justice) left the government. Later this week, another signatory Steven Peikin (Co-Director, Division of Enforcement SEC) will leave the government (see here [4]). This will soon leave Stephanie Avakian (Co-Director, Division of Enforcement SEC) as the only signatory of the recent Second Edition of the FCPA Guidance still with the government.

Scrutiny Alert

In 2009, KBR Inc. resolved an FCPA enforcement action in connection with Bonny Island, Nigeria issues. (See here [5] and here). recently disclosed [6]:

“Unaoil Investigation. We previously disclosed that the DOJ, SEC, and the SFO had been conducting investigations of Unaoil, a Monaco based company, in relation to international projects involving several global companies, including KBR.  The DOJ and SEC have informed us that their investigations with regard to KBR are now closed. The SFO has informed us that its KBR investigation is no longer focused on allegations of corruption involving Unaoil although some lines of inquiry remain under investigation. To the extent necessary, KBR will continue to cooperate with the authorities in their investigations.”

[7]

Sentenced to Probation

As highlighted in this prior post [8], in connection with the 2019 TechnipFMC enforcement action, the DOJ also criminally charged Zwi Skornicki (a citizen of Brazil) with conspiracy to violate the FCPA’s anti-bribery provisions. According to the DOJ, Skornicki and others “knowingly and willfully conspired to pay, and paid, approximately $55 million in bribes in connection with at least 13 projects in Brazil tendered by Petrobras and, later, a company that employed several former Petrobras officials.”

As highlighted in this article [9], Skornicki was recently sentenced to 18 months probation and ordered to pay a $50,000 fine. According to the article, Skornicki previously spent six months in prison in Brazil and paid a fine there exceeding $25 million.

Monitor Over

As highlighted in this prior post [10], in 2017 Biomet became an FCPA repeat offender as it resolved parallel DOJ and SEC enforcement actions for approximately $30 million. As a condition of settlement, ZimmerBiomet (as the company is now known) agreed to engage a compliance monitor.

The company recently disclosed [11]:

“On July 17, 2020, the independent compliance monitor submitted a letter to the SEC and DOJ certifying that our compliance program, including its policies and procedures, is reasonably designed and implemented to prevent and detect violations of the FCPA and is functioning effectively. We expect the monitorship to conclude no later than August 7, 2020 and the charges against us to be dismissed with prejudice.”

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