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By Robert W Tarun and Peter P Tomczak

Now fully updated and expanded, The Foreign Corrupt Practices Act Handbook is a comprehensive guide for attorneys, at every level, who represent businesses doing international work.

ABA CLE

Join authors Robert W. Tarun and Peter P. Tomczak as they present a comprehensive analysis of potential FCPA liabilities and sound practical suggestions as to how to deal with them. This webinar will offer guidance on anti-bribery conventions and conducting and defending an FCPA Investigation.

How much is the FCPA fine?

The FCPA is a criminal statute for which sentences of individuals and corporations are considered in the context of the United States Sentencing Guidelines (U.S.S.G.).63 Individuals who commit willful violations of the FCPA anti-bribery provisions may be punished by up to $250,000 in fines and/or five years imprisonment.64 Individuals who violate the FCPA accounting provisions may be fined up to $5,000,000 and imprisoned up to 20 years.65 Corporations may be fined up to $2,500,000 per violation of the FCPA accounting provisions66 and $2,000,000 for violation of the FCPA anti-bribery provisions.67 Moreover, under the Alternative Fines Act, these fines can be much higher: the actual fine may be up to twice the loss to the victim or benefit the defendant did or sought to obtain by making the corrupt payment.68 Fines imposed on individuals may not be paid by their employer or principal.69 An unlawful payment under the FCPA is not deductible under the tax laws as a business expense.70

Who is Hans Bodmer?

In August 2003, Hans Bodmer, a Swiss citizen and lawyer with the law firm von Meiss Blum & Partners, was charged with conspiracy to violate the FCPA in connection with a plan to bribe Azerbaijan officials to be able to invest in the privatization of oil enterprises. Bodmer acted as an agent for Oily Rock Group, Ltd., a British Virgin Islands corporation with its primary place of business in Baku, Azerbaijan; Minaret Group, Ltd., another BVI corporation based in Baku; and Omega Advisors, Inc., a Delaware corporation with its principal place of business in New York; and various other members of the investment consortium. As an agent for the consortium, Bodmer paid bribes and authorized payments of bribes to Azeri officials in an attempt to convince the officials to allow the investment consortium to participate in the privatization auctions of the State Oil Company of the Azerbaijan Republic (SOCAR) and to acquire a controlling interest in SOCAR. In October 2004 Bodmer pled guilty to a money laundering conspiracy charge.211

Why are in-country interviews important?

In-country interviews and investigation are usually essential to a full understanding of a company or an agent’s, consultant’s or contractor’s efforts or services in a foreign country. They can strengthen the facts and arguments that a company’s officers or employees did not have reason or a high probability to know that improper payments to foreign officials would be or were made. To the extent a company elects to voluntarily disclose or otherwise cooperate, visits and interviews at the locations of the alleged improper activity will enhance the credibility of the reporting.

What are the provisions of the FCPA?

The FCPA’s anti-bribery provisions apply to three categories of persons: (1) “issuers6”; (2) “domestic concerns7”; and (3) other persons8 who take any act in furtherance of the corrupt payment while within the territory of the United States. “Issuers” means any company whose securities are registered in the United States or which is required to file periodic reports with the SEC.9 “Domestic concerns” means any individual who is a citizen, natural or resident of the United States and any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of a state of the United States, or a territory, possession, or commonwealth of the United States.10 The Act now covers persons who commit bribery on U.S. territory regardless of whether the person is a resident or does business in the U.S.11

When was the FCPA enacted?

In enacting the FCPA in 1977, Congress originally limited its jurisdictional scope to U.S. companies and individuals. The 1998 amendments expanded the Act’s jurisdiction to include foreign individuals and corporations. In particular, Congress amended the FCPA to implement the provisions of the Convention on Combating Bribery of Foreign Officials in International Business Transactions adopted by the Organization for Economic Cooperation and Development (“OECD”) on December 17, 1997 (“the OECD Convention”). The OECD Convention, which the U.S. Senate ratified on July 31, 1998, required signatories to conform their laws to its terms. The United States did so with the International Anti-bribery and Fair Competition Act of 1998, which President William J. Clinton signed on November 10, 1998.80

Who must certify the accuracy of periodic filings with the SEC?

Under the Sarbanes-Oxley Act of 2002, the chief executive officers and chief financial officers of public companies must certify the accuracy of periodic filings with the SEC.130 A CEO or CFO must certify that he has reviewed the report, and to his knowledge the report does not contain any material misstatements or omissions, and the financial statements and other information contained in the report fairly represent in all material respects the company’s financial condition and results of operations of the issuer for the periods presented in the reports.131

What is the FCPA prohibition?

The FCPA prohibition extends only to corrupt payments (or offers, promises to pay or authorizations of payment) to a foreign official, foreign political party or party official, or any candidate for foreign political office.