If you enjoy keeping up with the latest FCPA developments and digesting expert commentary and analysis, then you are sure to have that “kid in the candy store” type feeling with this post.
Summarized (and linked) below are various law firm mid-year or periodic reviews of the FCPA and related topics. For previous posts on what you need from Q1 and Q2 of 2011, see here and here.
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Shearman & Sterling’s always informative “Recent Trends and Patterns in the Enforcement of the Foreign Corrupt Practices Act” (see here) begins as follows. “For years, we and other FCPA practitioners have focused our analysis on statistics and the validity – or lack thereof – of the government’s interpretation and application of the statute. The first half of 2011 provides a welcome relief in terms of actual court decisions, trials, congressional hearings, possible additional industry sweeps, interesting developments in litigation, and new foreign legislation.” Lead author Philip Urofsky (here – a former DOJ FCPA enforcement attorney) always provides an excellent analysis of the enforcement agencies ever expanding territorial jurisdiction theories against non-U.S. companies. In the latest installment, it is noted that JGC of Japan (see here for a prior post) “had no apparent commercial connection with the United States whatsoever” and that in the Tenaris enforcement action (see here for the prior post) “neither agency saw fit to allege any territorial basis for jurisdiction over the foreign bribes …”. As to territorial jurisdiction in general, the Shearman report states that the “U.S. government has long been exploring innovative (some would say aggressive) ways to expand territorial jurisdiction over foreign companies.” As to Judge Leon’s recent decision in the Africa Sting regarding the dd-3 prong of the FCPA (see here for the prior post), the Shearman report states that the ruling may be limited by the facts but ” on the other hand, the court’s ruling may presage a stricter application of the territorial jurisdictional element, perhaps even calling into question the correspondent banking theory, in which the U.S. territorial acts are taken by unwitting and non-culpable third parties without the physical presence of the bribe-payor in the U.S.”
Gibson Dunn’s 2011 Mid-Year FCPA Update (here) similarly begins as follows. ” For years now, we have been documenting the unprecedented surge of anti-corruption enforcement activity by the two regulators charged with enforcing the Foreign Corrupt Practices Act (“FCPA”)–the U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”). As the wave crested, these FCPA enforcers became increasingly aggressive in both their investigative tactics and their expansive interpretations of the statute’s text and jurisdictional reach. Yet even in the face of this onslaught, the trend had been for nearly all defendants to settle these enforcement actions short of litigation, leaving the DOJ and SEC positions largely untested. This year, that is changing.” Gibson Dunn also recently issued its informative 2011 Mid-Year Update on DPAs and NPAs (see here). As noted in the Update, “DOJ and the SEC entered into or received court approval for 17 reported agreements in the first half of 2011.” As set forth in a detailed chart, 8 of the 17 (47%) NPAs or DPAs were used to resolve FCPA enforcement actions. This figure is consistent with the 50% figure Gibson Dunn calculated in 2010 (see here).
Miller & Chevalier recently released its FCPA Summer Review (here). Of note, the review states the following concerning Judge Leon’s dd-3 ruling in the Africa Sting case. “The court’s dismissal of the charge against Patel suggests that jurisdiction is only appropriate under Section 78dd-3 when a non-U.S. citizen or company takes an act in furtherance of an improper payment while physically in the territory of the United States. This position directly conflicts with the DOJ’s broad interpretation of 78dd-3 articulated in its “Lay-Person’s Guide to the FCPA Statute,” which can be viewed as a statement of the DOJ’s enforcement position. The Guide states that “a foreign company or person is now subject to the FCPA if it causes, directly or through agents, an act in furtherance of the corrupt payment to take place within the territory of the United States” [emphasis added]. Thus, according to the DOJ’s interpretation, Section 78dd-3 does not require a physical presence by the non-US national or company, it only requires that the individual or company cause an act in the United States (i.e., a defendant can be subject to jurisdiction under a “cause/effect” theory).”
Covington & Burling’s Anti-Corruption Mid-Year Review (here) covers FCPA developments as well related developments around the globe. As to the U.K. Bribery Act, the review notes, among other things, that the Bribery Act “recognizes – in a
way that the US adherence to the respondeat superior doctrine does not – that robust compliance by companies should insulate the company from criminal liability.”
Paul Hasting Q2 FCPA Report (here) begins as follows – “the second quarter of 2011 was an action packed three months for the Foreign Corrupt Practices Act which included judicial opinions, jury verdicts, and a Congressional hearing” – and it provides an overview of recent FCPA developments.
Last, but certainly not the least, is Dorsey & Whitney’s monthly Corruption Digest (see here for the most recent issue). Like prior issues of the Corruption Digest, the July issue provides, among other things, a useful and informative update on non-U.S. bribery and corruption enforcement actions, investigations, and developments.
