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International Regulatory Enforcement

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.
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.
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.
“Lessons Learned” by DOJ Provide Further Guidance on Developing a Dynamic Compliance Program
The U.S. Department of Justice (“DOJ”) latest guidance demonstrates that DOJ is listening to its own advice—making adjustments to its own guidance documents based on what its prosecutors have learned from investigations, compliance presentations, and monitorships during the past year. DOJ’s (now periodic) updates to the Evaluation of Corporate Compliance Programs guidelines sets forth some important modifications.
Human Rights Diligence Catching Up To Anti-Corruption
An April 29 announcement from Didier Reynders, the Commissioner for Justice of the EU may be the final step in elevating human rights due diligence to a business imperative, akin to anti-corruption diligence.
Anti-Corruption and Contractual Relations: Beyond Words, Legal Consequences
Recently, the Court of Cassation had the opportunity to rule on the effectiveness of anti-corruption clauses in contracts and their consequences with regards to the termination of a business relationship between a French subsidiary of a U.S. company and a French company. This decision is rich in concrete lessons regarding the effects of such clauses, too often inserted without their scope being really measured in terms of the rights and obligations they generate for the contracting parties.
COVID-19 and Corruption-Related Risks: High on the International Agenda
As countries around the world grapple with providing quick relief from the COVID-19 pandemic to individuals and companies, many governments have taken a two-pronged response: providing significant public funds while simultaneously implementing regulatory changes aimed at quickly addressing the ongoing crisis. The availability of public funding, combined with changes in the regulatory environment, presents new opportunities for fraud and corruption, and a number of international organizations and enforcement agencies have begun to sound the alarm regarding this rising risk. Their concerns highlight the fact that this new risk environment may be one of the most troubling and unintended (but not unique) consequences of the response of governments around the world to the COVID-19 pandemic. To paraphrase George Santayana (later borrowed by Winston Churchill), “those who do not learn from history, are doomed to repeat it.”
All Eyes on Me: Practical Tips for Anti-Corruption Compliance In and After a Time of Crisis
Many in-house compliance and legal officers, as well as others in gatekeeper roles with compliance responsibilities, are balancing increasing scrutiny with decreasing resources as they navigate unprecedented crises and find a path toward a new, post-crisis normal. Others may find their resources unchanged, but their compliance programs and plans may no longer be well-tailored to their company’s risk profile if the company has radically changed operations or business models. We offer some practical questions to ask and tips to consider when confronting peak crisis mode and charting the course forward.
French Anticorruption Agency Issues Detailed New Guidelines for Compliance with Sapin II
The new French Anticorruption Agency recently issued a set of guidelines detailing the agency’s expectations for corporate compliance programs. The guidelines, which are not legally binding but are required by France’s Sapin II law, provide public and private commercial organizations with a framework for ensuring that their compliance programs adequately protect the organizations from corruption-related risks. The guidelines are also intended to help certain commercial organizations meet the statutory requirements of Article 17 of Sapin II, which requires certain French companies to adopt identified compliance program requirements. The AFA Guidelines are far more detailed than similar anticorruption compliance guidance documents issued by U.S. and U.K. authorities. Although many multinationals may have implemented compliance programs based on international best practices previously highlighted by the U.S., the U.K., and other authorities, such companies may wish to revisit elements of those programs in light of the AFA’s most recent guidance.
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