Nations across the globe increasingly focus on preventing bribery and corruption and are coordinating their efforts to do so more than ever before. In the United States, this effort is led by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), which share jurisdiction to enforce theForeign Corrupt Practices Act (FCPA).
To undergo an FCPA investigation entails significant risk. Since 2008, at least 10 corporations have agreed to pay more than US$300m in penalties to resolve such investigations. Defense costs associated with a global bribery or corruption investigation can also run into millions before any penalties are assessed.
Each year, we defend many corporations in FCPA investigations and counsel others on how to minimize FCPA risk. And of course, we track the enforcement landscape to best represent and advise our clients. A number of developments that emerged during 2016 will have broad implications for the coming year.
Corporate FCPA enforcement actions escalate
DOJ resolved two corporate FCPA investigations in 2015 — its fewest number of resolved corporate cases in a year since 2003. In 2016, Andrew Weissmann, Chief of DOJ Criminal Division’s Fraud Section, promised that this dip did not “tell the whole story.” He emphasized that a different picture would emerge over the long term. But, he also pointed out that the complexity of prosecuting more individuals has affected the speed at which corporate investigations get resolved.1 A jump in criminal FCPA resolutions in 2016 and a stream of actions against individuals support his assertions. More significantly, the SEC resolved 23 FCPA corporate actions in 2016, more than double the nine corporate actions it resolved the year before.
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