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International Regulatory Enforcement

UK implements sanctions on Somalia in preparation for Brexit
Within three days of announcing the first-ever sanctions implemented under the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA"), the UK Government has announced further SAMLA-based sanctions. On 9 July 2020, the Somalia (Sanctions) (EU Exit) Regulations 2020 ("Somalia Regulations") were put in place to facilitate the continuation of a sanctions regime targeting Somalia on the exit of the European Union at 11pm on 31 December 2020.
At Long Last DOJ and SEC Update Their FCPA Resource Guide
In July 2020, the DOJ released the second edition of its Resource Guide to the U.S. Foreign Corrupt Practices Act (the “2020 FCPA Guide” or the “Guide”); an update of the first edition released in November 2012 (the “2012 FCPA Guide”) by the U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”). The 2020 FCPA Guide continues to serve the main purposes of its previous edition: (i) to outline the Government's interpretation of the law; (ii) provide insight into its enforcement priorities; and (iii) communicate a clear understanding of how the Government exercises its discretion. Reflecting the increased volume of U.S. Foreign Corrupt Practices Act (“FCPA”) investigations since 2012 and resulting litigation, the 2020 FCPA Guide also incorporates the DOJ's and SEC's interpretations of a number of important federal court decisions
Watch Out the Blind Spot: Export Credit and the Fight Against Corruption
The UK NGO “Spotlight on Corruption” just issued a report entitled “WEAK LINK OR FIRST LINE OF DEFENCE? THE ROLE OF UK EXPORT FINANCE IN FIGHTING CORRUPTION IN A POST-CORONAVIRUS AND POST-BREXIT TRADE DRIVE”
Sacré Bleu! France Sends a Message in the Fight Against Foreign Bribery
On June 2, 2020, French Minister of Justice Nicole Belloubet issued a « circulaire » (hereafter, the “Circular”) on “criminal policy related to international bribery,” which provides guidance to French prosecutors on the priority of enforcing France’s anti-corruption laws. The Circular reflects another significant French development in the corruption enforcement landscape and sends two important messages to French and foreign companies.
UK Government Uses Sanctions to Target Human Rights Contraventions
In the wake of the ongoing Brexit process, the UK Government has today (6 July) signalled its intention to use unilateral financial sanctions to target foreign nationals alleged to be involved in human rights abuses. The UK Office of Financial Sanctions (“OFSI”) announced targeted sanctions against 47 foreign nationals in furtherance of that intention.
Key Takeaways from the Novartis $345 Million FCPA Settlement
On Thursday, June 25, 2020, the United States Department of Justice (“DOJ”) announced a pair of deferred prosecution agreements with one current and one former subsidiary of Swiss pharmaceutical giant Novartis AG to resolve criminal Foreign Corrupt Practices Act (“FCPA”) allegations to the tune of a combined $233 million. In a parallel resolution, Novartis AG agreed to pay the Securities and Exchange Commission (“SEC”) $112 million to settle charges that it violated the FCPA in connection with misconduct by its subsidiaries. Novartis’s combined $345 million resolution represents the largest FCPA resolution of this calendar year since the monumental Airbus resolution in January, as well as the third largest FCPA resolution of all time in the life sciences industry. Additionally, this resolution is the second time within the last four years that Novartis AG has fallen under regulatory scrutiny for alleged FCPA misconduct; it reached a $25 million resolution with the SEC in March 2016 related to two of its Chinese subsidiaries. With Thursday’s resolution, Novartis is the first FCPA recidivist manufacturer in the pharmaceutical sector.
Foreign Investment Control and COVID-19 in Germany
In June 2020, the German government tightened again the rules of screening of foreign direct investments by revising the Foreign Trade and Payments Ordinance ("AWV"). The initiative is a response to the COVID-19 pandemic emphasizing the importance of protecting critical technology and assets in the current crisis and extends the ability of the German Ministry for Economic Affairs and Energy to scrutinize, intervene in, and prohibit the acquisition of companies in critical sectors—with an emphasis on the health care sector—by non-EU investors. Moreover, the German Parliament is currently revising the Foreign Trade and Payments Act ("AWG") to streamline the screening of foreign direct investments and to implement the EU Regulation on the Screening of Foreign Direct Investments ("EU Screening Regulation").
The Trend Continues: As Outward Bound Investments from Japanese Multinationals Continue to Grow, So Do ABAC Compliance and Other Enforcement Risks
In 2016, we advised Japanese multinationals that their growing significance in the global economy, primarily as a key source of outward bound investment and merger & acquisition (“M&A”) activity, translated into growing anti-bribery, anti-corruption (“ABAC”) compliance and other enforcement risks. In that article, found here, we detailed booming economic activity alongside significant then-recent enforcement activity against Japanese multinationals by the U.S. government, primarily under the Foreign Corrupt Practices Act (“FCPA”) but also the U.S. Anti-Kickback Statute (“AKS”), for activities in major targets of Japanese outward bound investment—the U.S., China, and emerging Asia markets such as Vietnam. In particular, the May 2016 $646 million mega-resolution with Olympus Corp. for FCPA and AKS violations (to this day still the largest medical device company and AKS resolution of all time) constituted a foreboding example of economic expansion without sufficient compliance controls. Consequently, we advised Japanese multinationals to take a proactive approach to ABAC compliance.
CFIUS Extends its Reach to Order the Termination of Ekso Bionics' Role in Joint Venture in China
On May 20, 2020, Ekso Bionics Holdings, Inc. (“Ekso Bionics”), a U.S. manufacturer of robotic mechanical suits (“exoskeletons”), announced that it had received an ultimatum from the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) to terminate its role in a 2019 joint venture with Chinese partners.
Commerce Department Adds Thirty Three Companies to the Entity List as Trade Tensions with China Escalate
On Friday, May 22, 2020, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced via press releases that it would be adding a total of 33 new companies to the Entity List based on national security concerns involving activities in China. These public announcements came a full two weeks before BIS formalized the addition of the companies by publishing a notice in the Federal Register on Friday, June 5, 2020.
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