This recent post compared corporate FCPA enforcement actions in 2024 to prior years.
However, before a Foreign Corrupt Practices Act enforcement action is announced, scrutiny must first arise.
This post highlights the origins of the eleven corporate enforcement actions in 2024. (See here for a similar post highlighting the origins of 2023 corporate enforcement actions; here for 2022; here for 2021; here for 2020; here for 2019, here for 2018, here for 2017, and here for 2016).
In summary, of the eleven corporate enforcement actions from 2024, four enforcement actions (36%) originated with a voluntary disclosure (albeit in two instances the DOJ found the disclosures to be imperfect).
SAP
In 2017, SAP issued a press release which stated that it “had initiated its voluntary disclosure” to the DOJ and SEC concerning its South Africa business.
The SEC’s administrative order refers to “SAP’s self-reporting of certain conduct.” However, the DOJ resolution document states: “the Company did not receive voluntary disclosure credit … because it did not voluntarily and timely disclose to the Fraud Section and the Office the conduct …”. The DOJ’s rationale appears to be based on the notion that “South African investigative reports made public allegations of the South Africa-related misconduct in 2017.”
So how to score this? Let’s just call it perhaps an “imperfect” voluntary disclosure.
Gunvor
The Gunvor enforcement action was based on the same core conduct as the DOJ’s previous criminal enforcement action against Raymond Kohut (an individual who worked in business development for Gunvor). The Kohut enforcement action began – at the latest – in August 2020 when the DOJ filed this complaint.
As highlighted in this prior post, the Gunvor enforcement action is related to several other enforcement actions against companies and individuals in the commodities industry which appear to have begun in 2019.
Trafigura
As highlighted in this prior post, the Trafigura enforcement action is related to several other enforcement actions against companies and individuals in the commodities industry which appear to have begun in 2019.
Boston Consulting Group
Voluntary disclosure.
Deere & Co.
Unclear from the resolution documents.
Moog
Voluntary disclosure
RTX
The company previously disclosed:
“[I]n 2019, Raytheon Company received a subpoena from the SEC seeking information in connection with an investigation into whether there were improper payments made by Raytheon Company, our joint venture known as Thales-Raytheon Systems (TRS), or anyone acting on their behalf, in connection with TRS or Raytheon Company contracts in certain Middle East countries since 2014. In the first quarter of 2020, the DOJ advised Raytheon Company it had opened a parallel criminal investigation. In the third quarter of 2020, Raytheon Company received an additional subpoena from the SEC, seeking information and documents as part of its ongoing investigation.”
Telefonica Venzuela
Beginning in early 2020, the annual report of Telefónica S.A. contained the following disclosure.
“Although the Group has internal policies and procedures designed to ensure compliance with the abovementioned applicable anti-corruption laws and sanctions regulations, there can be no assurance that such policies and procedures will be sufficient or that the Group’s employees, directors, officers, partners, agents and service providers will not take actions in violation of the Group’s policies and procedures (or, otherwise in violation of the relevant anti-corruption laws and sanctions regulations) for which the Group, its subsidiaries or they may be ultimately held responsible. In this regard, the Group is currently cooperating with governmental authorities (and, where appropriate, conducting the relevant internal investigations) regarding requests for information potentially related, directly or indirectly to possible violations of applicable anti-corruption laws. Telefónica believes that, considering the size of the Group, any potential penalty as a result of matters relating to those specific information requests would not materially affect the Group’s financial condition.”
BIT Mining / 500.com
Foreign law enforcement (Japan) investigation.
McKinsey
Foreign law enforcement / media (South Africa) investigation
AAR
The DOJ resolution document states:
“the Company self-reported to the Offices conduct that forms, in part, the basis for this Agreement; however, the Company’s self-report did not constitute a “voluntary self-disclosure” as defined in the Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy. Prior to the self-report, several English-language articles had been published in media outlets in Nepal and South Africa that described potential irregularities in the relevant contracts in both countries, including that an AAR subsidiary had been summoned by a Nepalese agency investigating irregularities and corruption in connection with the procurement of aircraft. Moreover, twelve days before the Company’s self-report, an independent source reported the allegations regarding the Nepal conduct to the Offices. Although the Company did not receive voluntary disclosure credit pursuant to the Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy or the U.S. Sentencing Guidelines (“U.S.S.G.” or “Sentencing Guidelines”) § 8C2.5(g)(1), the Offices gave significant weight in evaluating the appropriate disposition of this matter—including the appropriate form of the resolution, the reduction in the penalty amount based on cooperation and remediation credit, and the length of the Term—to the Company’s self-report of the misconduct before the Company was aware the conduct had already come to the attention of the Offices”
