investigating and prosecuting transnational corruption and ... · investigating and prosecuting...
TRANSCRIPT
Investigating and Prosecuting Transnational Corruption and Bribery
November 16, 2016
Kevin Feldis U.S. Department of Justice Resident Legal Advisor U.S. Embassy, Jakarta
FCPA Overview
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Foreign Bribery Was Made Illegal
in the United States in 1977
Foreign Corrupt
Practices Act
(“FCPA”)
FCPA Overview
Anti-bribery provisions:
• Prohibit payment, offer of payment, or authorization of payment of
bribes, directly or indirectly, to foreign officials, foreign parties,
foreign party officials, and foreign candidates for public office
Accounting provisions:
• Books and Records: make and keep books, records, and accounts,
which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the issuer; and
• Internal Controls: devise and maintain a system of internal
accounting controls
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FCPA Overview
Criminal and Civil Enforcement
Justice Department - Criminal and civil enforcement authority
• Criminal enforcement authority over issuers, domestic
concerns, and foreign persons and entities (acting within the
territory of the U.S.)
• Civil (anti-bribery) enforcement authority over persons and
non-issuers subject to the FCPA
Securities and Exchange Commission - Civil enforcement authority
• Civil enforcement authority over issuers (and their officers,
employees, etc.) only
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FCPA Overview
“Put simply corruption undermines the promise of democracy.
It imperils development, stability, and faith in our markets.
And it weakens the rule of law.”
− U.S. Attorney General Eric Holder, May 2010
• No matter where or how it happens or what it is
called, bribery has the same corrosive effect:
− Weakened economic development
− Lost confidence in the marketplace
− Imperils political stability
− Unfair and distorted competition
− Undermines U.S. interests abroad
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FCPA Overview
The Foreign Corrupt Practices Act (FCPA)
• Prohibits U.S. and certain foreign persons and companies from:
• Paying or promising to pay anything of value;
• To foreign officials, foreign political parties (or officers
thereof) or candidates for foreign office;
• For the purposes of:
• Influencing any act or decision of the official in his/her
official capacity;
• Inducing the official to take any action or refrain from
taking any action in violation of his/her lawful duty;
• Obtaining any improper advantage; or
• Inducing the official to use his/her influence to affect or
influence any act of a government;
• In order to assist the company in obtaining or retaining
business or directing business to any person.
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FCPA Overview
Directly and Indirectly…
• Third party agents or consultants
• Intermediaries
• Hiring a company “owned” by a relative of the officials
• You do not need to know what actually happens to the
money to violate the FCPA
• It makes no difference if the third party agent does not pass a single
penny on to the official
• The FCPA does not require that a corrupt act succeed in its purpose
• “Willful blindness”
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FCPA Overview
To Obtain or Retain Business…
• Payments made for specific contracts
• To secure a successful bid
• To extend an existing contract
• Payments that may indirectly relate to obtaining business
• Payments that “provide an unfair advantage over competitors” –
U.S. v. Kay, 359 F.3d 738, 749 (5th Cir. 2004)
• Examples: Tax benefits, customs clearance
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FCPA Overview
Exceptions and Defenses…
• Exception for Routine Government Action (facilitation payments):
• Small payments to secure, facilitate or expedite routine government action;
• Applies only to government action to which a company is already entitled
without the exercise of discretion by a foreign official;
• Does not apply to small payments to avoid otherwise applicable requirements.
• Affirmative Defenses:
• Reasonable and bona fide expenditures that are directly related to:
• Promotion, demonstration or explanation of products;
• Execution or performance of a contract;
• Testing equipment; training; visiting the plant where product is
manufactured for a demonstration
• Payments, gifts and offers that are legal under the written laws and regulations
of the official’s country 10
The Foreign Corrupt Practices Act
Accounting Provisions
• Public companies must “make and keep books,
records and accounts” which “accurately and fairly
reflect the transactions and dispositions of the assets of
the issuer”
• Public companies must “devise and maintain a system
of internal accounting controls” that provide reasonable
assurances that the transactions are properly
authorized
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FCPA Overview
FCPA Enforcement
• Origins of FCPA Investigations:
• Corporate voluntary self disclosures
• Mergers and acquisitions
• Undercover investigations
• Whistleblowers
• Foreign law enforcement partners
• Tips from U.S. embassies / Anonymous tips
• Pro-active investigations on other matters
• Data analysis (bank records / SARs)
• Media reports
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FCPA Enforcement: Investigative Tools
• Subpoenas
• Search warrants
• MLATs
• Interviews
• Confidential informants
• Cooperating defendants
• Wire taps
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FCPA Enforcement: Cooperation
• Increasing Methods of International Cooperation
• Formal evidence requests by treaty
• Multilateral Organizations (OECD, UNCAC, Eurojust)
• Informal Intelligence Sharing
• Parallel Investigations and Prosecutions
• Division of wrongful conduct / defendants
• Referrals of Investigations
• US referral of entire investigation
• US referral of foreign public officials
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FCPA Voluntary Disclosure Program
• DOJ Pilot Program for Voluntary Disclosures:
• Company must voluntarily self-disclose
• Must provide full cooperation
• Must remediate the harm done
If Voluntary Disclosure requirements are all satisfied:
• Up to 50% penalty fine/reduction
• No post conviction monitoring will be required
• Potential for non-prosecution agreement
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