With the start of a new year and the Foreign Corrupt Practices Act 40 years strong, it seems like an opportune time to reflect on what FCPA enforcement trends have withstood, and likely will continue to withstand, the test of time.
Vigorous and aggressive enforcement. Because FCPA enforcement numbers themselves fluctuate year-to-year, discussing them is a moot point. Numbers aside, and even as enforcement personnel and priorities change one presidential administration to the next, FCPA enforcement has not only survived, it has arguably morphed into an untamed beast.
Over the years, the Department of Justice has adopted a markedly broad interpretation of both the FCPA itself and the law’s territorial jurisdiction, provoking increasing criticisms about enforcement overreach. But because FCPA corporate defendants typically opt to settle FCPA cases with the government rather than go through the time and expense of litigation, the government’s interpretation of the FCPA and its scope have largely gone untested in the courts. That being said, the legal and compliance community can be certain that aggressive enforcement of the FCPA, and the tactics used to prosecute FCPA violations, will continue so long as the government continues to flex and stretch its enforcement muscles.
Expanding multi-jurisdictional prosecutions. The $422 million combined criminal penalty that Singapore-based Keppel Offshore & Marine and its wholly owned U.S. subsidiary agreed to pay in December 2017 to resolve charges with authorities in the United States, Brazil, and Singapore arising from a decade-long bribery scheme represented the first coordinated FCPA resolution with Singapore and the most recent of several coordinated resolutions with Brazil.
Companies that make a concerted effort to implement a state-of-the-art anti-bribery compliance program and internal controls are far more likely than those that don’t to realize the rewards of those efforts in the face of an FCPA investigation.
The resolution with Keppel Offshore is just one example of expanding multi-jurisdictional prosecutions—an FCPA enforcement staple that companies can no longer afford to ignore. Aside from Brazil and Singapore, other countries that have coordinated with the Justice Department in FCPA cases have included the United Kingdom, Netherlands, Sweden, and Switzerland, just to name a few. To be clear, the Justice Department has received assistance from foreign partners in several countries on just about every continent—Europe, Asia, South America, and elsewhere.
For companies that become the target of a multijurisdictional anti-corruption investigation, taking a careful and calculated approach toward a resolution could mean the difference between a favorable outcome and a legal disaster. Working with counsel with knowledge and experience in the respective jurisdiction involved, and knowing how to navigate local rules—both written and unwritten—is essential.
A deeper focus on compliance programs. As demonstrated by the publication of its “Evaluation of Corporate Compliance Programs,” the Justice Department’s Fraud Section continues to refine its evaluation of compliance programs to better determine whether those programs are functioning as it expects. Ethics and compliance officers will find the guidance useful, as it provides a more explicit and transparent explanation as to what the Fraud Section considers relevant in assessing a compliance program within the context of a criminal investigation. This document, in combination with the announced permanency of the FCPA Corporate Enforcement Policy, speaks to the overall strategic role that the compliance function must play within companies today, serving as a vital part of the senior management team.
In the context of FCPA enforcement trends, overall, compliance programs today can no longer simply be an afterthought, implemented reactively by an enforcement action or existing only on paper to appease enforcement authorities. Companies that make a concerted effort to implement a state-of-the-art anti-bribery compliance program and internal controls are far more likely than those that don’t to realize the rewards of those efforts in the face of an FCPA investigation.