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International Regulatory Enforcement

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.
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.
Harvard Professor Arrested for Allegedly Hiding Ties to China: What Universities Can Do to Protect National Security While Promoting an Open Academic Environment
On January 28, 2020, Charles Lieber, chair of the Chemistry and Chemical Biology Department at Harvard University, was arrested and charged with making false statements to U.S. Government agencies regarding his ties to Wuhan University of Technology (“WUT”). On the same day, two Chinese nationals who worked as researchers in Massachusetts were separately indicted for their involvement in transferring sensitive research to China.
Enhancing Workforce Confidence in Internal Investigations
While each company will have different approaches to reviewing potential policy and regulatory breaches, we offer five steps that companies can take right now to enhance workforce confidence in internal investigations.
CFTC Paying for a Company's Dirty Laundry: New Whistleblower Initiatives and Rewards Suggest Increased Enforcement in the Virtual Currency, Foreign Corrupt Practices, Insider Trading, and BSA Spaces
The Commodity Futures Trading Commission (“CFTC”) recently issued a series of four whistleblower alerts aimed at seeking information from would-be whistleblowers in the areas of virtual currency fraud, foreign corrupt practices, insider trading, and violations of the Bank Secrecy Act (“BSA”). These alerts suggest that the CFTC seeks to further incentivize whistleblower cooperation—particularly in areas typically policed by the Financial Crimes Enforcement Network (“FinCEN”) and the U.S. Department of Justice (“DOJ”)—consistent with the CFTC’s previously stated intent to focus its investigative resources on foreign corruption and increasingly active enforcement activity in the virtual currency space.
New German Act to Combat Corporate Crime
On 22 August 2019, the German Federal Ministry of Justice presented the draft bill for the introduction of the Corporate Sanctions Act (Verbandssanktionengesetz, the “Act"). Once the German Parliament enacts the Act, it will enhance enforcement against corporations against business-related crimes, facilitate punishment, promote internal investigations, and incentivize investment in compliance.
FATF Adopts New Anti-Money Laundering Guidelines for Virtual Assets and Related Providers
On June 21, 2019, the Financial Action Task Force—an independent intergovernmental body that develops and promotes policies to protect the global financial system from money laundering and terrorist financing—released new Guidance governing virtual assets and virtual asset service providers. The Guidance clarifies the obligations of member jurisdictions with respect to licensing, supervision, and enforcement of covered virtual asset activities and virtual asset service providers. The Guidance also clarifies the compliance obligations of private sector entities engaged in virtual asset activities, particularly with respect to the obligation to obtain, hold, and transmit required originator and beneficiary information.
Something Familiar, Something New: OFAC’s Compliance Program Framework
The U.S. Department of the Treasury’s Office of Foreign Asset Controls (“OFAC”), the U.S. agency responsible for administering and enforcing economic and trade sanctions has released “A Framework for OFAC Compliance Commitments” (the “Framework”). The Framework outlines what OFAC views to be the five essential components of a Sanctions Compliance Program: (i) management commitment; (ii) risk assessment; (iii) internal controls; (iv) testing and auditing; and (v) training. Companies engaging in cross-border transactions would be well-advised to review and update their compliance programs to ensure that they incorporate these essential sanctions compliance benchmarks.
Clarity or Confusion: New DOJ Guidance for Evaluating Corporate Compliance Programs
On April 30, 2019, the U.S. Department of Justice's Criminal Division released an updated version of its Evaluation of Corporate Compliance Programs, which provides guidance to prosecutors in evaluating a corporation's compliance program. The announcement and publication of the updated evaluation guidance, while anticipated by many, came with no forewarning from DOJ. As such, the question remains: does the new guidance provide additional clarity or just increase confusion with regard to how federal prosecutors will evaluate corporate compliance programs? Upon close review, our assessment is that DOJ's 2019 update takes the next step in providing clarity and a structure to understand what DOJ expects in an effective compliance program.
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