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2021 ended up as a relatively quiet year for enforcement of the
\nForeign Corrupt Practices Act (FCPA) in comparison to the past
\ncouple of years, which delivered some of the largest settlements of
\nall time. In 2021, the US Department of Justice (DOJ) entered into
\ndeferred prosecution agreements with two companies to resolve FCPA
\ncharges (versus eight in 2020 and seven in 2019), while the US
\nSecurities and Exchange Commission (SEC) resolved FCPA charges
\nthrough administrative cease-and-desist orders with four companies
\n(versus eight resolutions in 2020 and 13 in 2019). The DOJ has
\nreported that in 2021, similar to recent years, it charged a couple
\ndozen individuals with violations of the FCPA and other federal
\ncrimes, such as money laundering, for their roles in international
\ncorruption schemes. The SEC, however, did not bring any
\nbribery-related FCPA charges against individuals in 2021 (in
\ncontrast to charges against two individual in 2020 and eight the
\nyear before).<\/p>\n
Many have speculated about what’s behind the lower FCPA
\nenforcement numbers. New leadership at DOJ and SEC? Covid? Maturing
\ncorporate compliance programs?<\/p>\n
For what it’s worth, leading enforcement officials have
Below we discuss enforcement actions, judicial decisions, and
DOJ did not bring any new corporate FCPA charges in the second
Consistent with statements from high-ranking DOJ officials about
Many of the prosecutions concerned corruption in Latin America.
Furthermore, in the second half of 2021, DOJ prosecuted
Over the past few months, federal judges have added to the
In September, a federal judge in Brooklyn refused to set aside
In August, the US Court of Appeals for the First Circuit
The SEC awarded more than $3.5 million to a whistleblower whose
DOJ announced that it began the process of remitting a total of
Following the White House’s June 3, 2021 Memorandum on Establishing the Fight Against
In December, Arnold & Porter attorneys attended ACI’s
\n<\/ul>\n United Kingdom<\/strong>: In October, Petrofac Limited, a
Brazil<\/strong>: Although the “Operation Car
China<\/strong>: The past year saw several policy
OECD<\/strong>: In November 2021, the Organisation for
\n<\/ul>\n The content of this article is intended to provide a general
\ncautioned against reading into year-over-year statistical
\ncomparisons. They claim that the “pipeline is strong<\/a>” and international
\ncooperation is reaching new heights. The White House, moreover, has
\nunveiled a series of anti-corruption initiatives that may herald an
\nincreased use of the FCPA, anti-money laundering laws, sanctions,
\nand other tools to combat international corruption-which the
\nadministration has characterized as a “core national security
\ninterest.”<\/p>\n
\nother notable developments from the second half of 2021, with an
\neye toward what lies ahead in 2022. For more on what happened in
\nthe first half of 2021, see Arnold & Porter’s Global Anti-Corruption
\nInsights: Summer 2021<\/a>.<\/p>\nFCPA Enforcement Updates<\/h3>\n
Enforcement Against Companies<\/h3>\n
\nhalf of 2021. For its part, the SEC entered into three new
\ncorporate settlements of FCPA cases in the latter part of the year.
\nSee<\/em> Credit Suisse to Pay Nearly $475 Million to U.S.
\nand U.K. Authorities to Resolve Charges in Connection with
\nMozambican Bond Offerings<\/a> (10\/19\/21); SEC Charges World’s Largest Advertising Group
\nwith FCPA Violations<\/a> (9\/24\/21) (announcing agreement by WPP plc
\nto pay more than $19 million in connection with FCPA violations at
\nits subsidiaries in India, Brazil, China, and Peru); SEC Charges The Kraft Heinz Company and Two Former
\nExecutives for Engaging in Years-Long Accounting Scheme<\/a>
\n(9\/3\/21). Notably, the Kraft Heinz case, which the company settled
\nfor $62 million, did not concern any allegations of corruption, and
\nthus serves as a reminder of the breadth of the FCPA’s
\naccounting provisions (namely, the internal controls and
\nbooks-and-records provisions) that apply to public companies and
\ntheir employees.<\/p>\nCriminal Enforcement Against Individuals<\/h3>\n
\na focus on individual accountability for corporate crime, in the
\nsecond half of 2021 DOJ charged numerous individuals under the FCPA
\nand money laundering statutes for their alleged participation in
\ninternational corruption schemes.<\/p>\n
\nIn particular, DOJ continued to prosecute individuals for
\ncorruption at state-owned companies in Venezuela. See,
\ne.g.<\/em>, Executive Arrested and Charged for Bribery and
\nMoney-Laundering Scheme<\/a> (8\/4\/21); Colombian Businessman Charged with Money
\nLaundering Extradited to the United States from Cabo Verde<\/a>
\n(10\/18\/21); Five Individuals Charged with Money Laundering in
\nConnection with Alleged Venezuela Bribery Scheme<\/a> (10\/21\/21).
\nDOJ also brought money laundering charges against two brothers in
\nconnection with an FCPA case that the Brazil-based construction
\ncompany Odebrecht settled back in 2016. See<\/em> Panamanian Intermediary Pleads Guilty in
\nConnection with International Bribery and Money Laundering
\nScheme<\/a> (12\/2\/21); Panamanian Intermediary Extradited to the United
\nStates Pleads Guilty to International Bribery and Money Laundering
\nScheme<\/a> (12\/14\/21).<\/em><\/p>\n
\nnumerous individuals under the FCPA in connection with alleged
\ncorruption in African countries.<\/em> See Texas Woman Pleads Guilty to Schemes to Procure
\nAdoptions from Uganda and Poland through Bribery and Fraud<\/a>
\n(11\/17\/21); Former Ericsson Employee Charged for Role in
\nForeign Bribery Scheme<\/a> (9\/8\/21); Information<\/a>, U.S. v. Frederick Cushmore,
\nJr.<\/em> (11\/3\/21); Information<\/a>, U.S. v. Anthony Stimler<\/em>
\n(7\/26\/21).<\/p>\nJudicial Decisions in FCPA Cases<\/h3>\n
\nrelatively sparse body of FCPA case law in connection with
\nprosecutions of individual defendants. Most notably, in November, a
\njudge in the Southern District of Texas granted a motion to dismiss
\nFCPA and money laundering charges against a Swiss wealth manager
\naccused of helping US companies launder bribes to employees of
\nVenezuela’s state-owned oil company. United States v.
\nBlueler<\/em>, No. 4:17-cr-0514-7 (S.D. Tex. Nov. 10, 2021). The
\njudge rejected the government’s argument that the wealth
\nmanager was acting as an agent of a “domestic concern”
\nand therefore subject to the FCPA. According to this District Court
\njudge, “[w]hen there is no allegation that an agent of a
\ndomestic concern acted unlawfully while in the United States,
\nestablishing that agency exists as the jurisdictional basis for a
\ncriminal charge requires direct evidence of an agency relationship,
\napart from other types of professional relationship.” The
\ngovernment has filed a notice of appeal and will likely challenge
\nthe court’s narrow construction of agency. For prior
\ndiscussions of the fact-specific nature of agency in the FCPA
\ncontext, see our coverage of United States v. Hoskins<\/em> here<\/a> and here<\/a>.<\/p>\n
\nFCPA charges against a former banker who had been extradited to the
\nUnited States for his alleged role in the massive bribery scheme
\ninvolving Malaysia’s sovereign wealth fund, known as 1MDB.
\nUnited States v. Ng Chong Hwa<\/em>, 18-CR-538 (E.D.N.Y. Sept.
\n3, 2021). The judge found that the government’s indictment
\nsufficiently alleged jurisdiction on the basis of Ng being an
\nagent, employee, and\/or stockholder of an “issuer”
\n(Goldman Sachs) at the relevant time. The judge also held that the
\nindictment adequately alleged that he had conspired to circumvent
\nthe issuer’s set of internal controls in violation of the FCPA.
\nNg is expected to stand trial this year.<\/p>\n
\naffirmed a Massachusetts federal judge’s grant of a new trial
\nto Joseph Baptiste based on ineffective assistance of counsel in an
\nFCPA prosecution. United States v. Baptiste<\/em>, No. 20-1400
\n(1st Cir. Aug. 9, 2021).<\/p>\nWhistleblower Awards<\/h3>\n
\n2012 tips regarding a bribery scheme involving Juniper Networks
\nInc. in Russia resulted in the company entering into a $11.7
\nmillion settlement with the SEC in 2019. See<\/em> Whistleblower Is Awarded Over $3.5 Million in
\nJuniper Bribery Case<\/a> (8\/10\/21).<\/p>\nRestitution<\/h3>\n
\n$201 million in funds to various international soccer organizations
\nthat were the victims of a widespread corruption scheme. The
\ninitial distribution was for $32.3 million. See<\/em> Justice Department Approves Remission of Over $32
\nMillion in Forfeited Funds to Victims in the FIFA Corruption
\nCase<\/a> (8\/24\/21)<\/p>\nPolicy Announcements<\/h3>\n
\nCorruption as a Core United States National Security Interest<\/a>,
\nthe Biden Administration continued to articulate its focus on
\nanti-corruption, with a particular emphasis on Latin America.<\/p>\n
\n39th International Conference on the FCPA in Washington, DC, and
\nrecapped noteworthy panel discussions on our Enforcement Edge
\nblog:<\/p>\n\n
\nPipeline Is Strong,” “If We Find You, It Is Going to Be a
\nWorse Result”: FCPA Enforcers Talk About the Past Year and
\nWhat’s to Come<\/a> (12\/1\/21)<\/li>\n
\n
<\/p>\n
\nCriminal Division Priorities, Where Resources Are Going<\/a>
\n(12\/1\/21)<\/li>\n
\n
<\/p>\n
\nWork With the Corporate World”: UK SFO Director Lays Out
\nAgency’s Mindset and Priorities<\/a> (12\/1\/21)<\/li>\n
\n
<\/p>\n
\nAnti-Bribery Area”: SEC Enforcement Official Discusses the
\nFCPA’s Internal Controls Provision<\/a> (12\/2\/21)<\/li>\n
\n
<\/p>\n
\nAgencies<\/a> (12\/2\/21)<\/li>\n
\n
<\/p>\n
\nThat’s a Good Thing”: US Enforcement Officials Discuss
\nIntensified Anti-Corruption Drive in Latin America<\/a>
\n(12\/3\/21)<\/li>\n
\n
<\/p>\n
\nPandemic, Compliance, Investigations, and Tone at the Top<\/a>
\n(12\/3\/21)<\/li>\n
\n
<\/p>\n
\nwith SEC, DOJ, and FBI Officials<\/a> (12\/3\/21)<\/li>\nSelected International Updates<\/h3>\n
\nBritish oilfield services provider, pleaded guilty to charges
\nbrought by the UK’s Serious Fraud Office (SFO) that the company
\nfailed to prevent former executives from paying bribes between 2011
\nand 2017. Petrofac agreed to pay \u00a377 million ($104.6 million)
\nin penalties for Bribery Act offenses in Iraq, Saudi Arabia, and
\nthe United Arab Emirates. See<\/em> Serious Fraud Office secures third set of Petrofac
\nbribery convictions<\/a>. In December, however, the SFO suffered a
\nsetback in another case stemming from an investigation into the
\nenergy company Unaoil, when an appeals court overturned<\/a> the bribery conviction of a former
\nUnaoil executive.<\/p>\n
\nWash” scandal involving Petrobras has been winding down, in
\nOctober Brazil’s Office of the Comptroller General and Attorney
\nGeneral’s Office announced a $27.8 million settlement<\/a> with UK
\nengineering company Rolls-Royce to resolve charges concerning the
\nbribery of officials at Petrobras, Brazil’s state-owned oil
\ncompany. This resolution comes on top of, and includes a credit
\nfor, a prior settlement that Rolls-Royce had entered years earlier
\nwith Brazilian federal prosecutors and enforcement authorities in
\nthe United Kingdom and United States.<\/p>\n
\ndevelopments related to the enforcement anti-corruption laws in
\nChina. For example, in September 2021, the Central Commission of
\nDiscipline Inspection (CCDI) and the National Supervisory
\nCommission (“NSC”), together with other Chinese
\ngovernment organs, issued Opinions on Further Promoting the Investigation of
\nthe Acceptance and Payment of Bribes<\/a>. The Opinions reflect
\nincreasing attention on the investigation of those paying bribes,
\nnot just those accepting bribes. Earlier in 2021, the Supreme
\nPeople’s Procuratorate announced the expansion of a pilot program for
\ncorporate compliance reform<\/a>. This pilot program, which launched
\nin 2020, provides local procuratorates with the authority to
\nnegotiate with corporate defendants, defer prosecution, bring
\nlighter charges, seek lighter penalties, or otherwise give credit
\nfor a company’s compliance commitments. Also this past year,
\nthe SPP, in collaboration with other Chinese government agencies,
\nannounced preliminary guidance<\/a> on establishing
\na third-party evaluation mechanism for the pilot corporate
\ncompliance reform program.<\/p>\n
\nEconomic Co-operation and Development adopted a Recommendation of the Council for Further
\nCombating Bribery of Foreign Public Officials in International
\nBusiness Transactions<\/a>. This Recommendation, which updates prior
\nguidance from 2009, includes new sections “on key topics that
\nhave emerged or significantly evolved in the anti corruption area
\nsince 2009,” in particular:<\/p>\n\n
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\nguide to the subject matter. Specialist advice should be sought
\nabout your specific circumstances.<\/em><\/p>\n<\/div>\n