With the recent upsurge in government enforcement actions, companies and their executives now, more than ever, must work diligently to ensure compliance with the Foreign Corrupt Practices Act (FCPA) and develop strategic investigative plans to address effectively potential violations of the Act and related government enforcement actions.
Since 2009, the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) have resolved over 60 FCPA actions with corporations resulting in fines and penalties totaling more than $3.55 billion. The DOJ has also charged 66 individuals criminally, and many of these cases have resulted in sentences of incarceration. Right now, more than 150 companies and individuals are reportedly the subject of FCPA investigations. Additionally, there are countless other investigations that are not yet public. Both the DOJ and SEC have made it clear that investigation and prosecution of the FCPA will remain a top enforcement priority and that they expect corporations and their senior leadership to implement effective corporate compliance programs to prevent FCPA violations. Moreover, with the publication of A Resource Guide to the U.S. Foreign Corrupt Practices Act, the DOJ and SEC have issued a detailed articulation of their positions on a number of critical legal and policy issues relating to FCPA compliance.
Wiley Rein’s multi-disciplinary FCPA Practice has the knowledge and expertise to navigate our clients through this high risk area of law. Wiley Rein’s FCPA attorneys are experienced in structuring and implementing effective corporate compliance programs designed to prevent violations. Should problems arise, our FCPA Team possesses the well-honed skills necessary to investigate and defend complex enforcement actions. Our work on FCPA matters includes:
- Developing and implementing corporate compliance programs;
- Conducting risk assessments and audits;
- Advising corporate clients regarding FCPA due diligence in mergers and acquisitions;
- Conducting corporate internal investigations;
- Defending criminal and civil proceedings before the DOJ and SEC, respectively, including corporate voluntary disclosures; and
- Representing individuals facing FCPA allegations.
Our FCPA Practice counsels a wide variety of clients, including government contractors, financial institutions, manufacturers, insurers, and oil, engineering, private equity, financial services, hospitality, and construction companies. We have effectively handled FCPA issues related to our clients’ business transactions in Africa, Asia, the Middle East, Europe, and Latin America. Our clients include Fortune 500 companies, privately held companies, trade associations, and senior corporate executives.
Our FCPA Team includes former federal prosecutors, experienced international attorneys, seasoned compliance counsel, and strategic litigators. Our FCPA attorneys work with and are supported by a highly sophisticated and comprehensive interdisciplinary team of lawyers from our Government Contracts, Telecommunications, Insurance, White Collar Defense & Government Investigations, International Trade, Election Law & Government Ethics, and Food & Drug Law groups, among others.
Daniel B. Pickard, Gregory M. Williams, and John R. Shane regularly counsel clients on FCPA issues, including the development and implementation of effective corporate compliance and training programs, due diligence on agents, joint venture partners, and other third parties, assisting buyers and sellers with regard to FCPA due diligence in mergers and acquisitions, and internal corporate investigations.
Ralph J. Caccia and Roderick L. Thomas represent companies and senior corporate executives in DOJ criminal and SEC civil investigative matters. They have conducted internal investigations for a wide range of clients, including defense contractors, insurers, aircraft manufacturers, and freight companies. Additionally, both attorneys regularly counsel clients on FCPA compliance matters.
Risk-Based, Cost-Effective Compliance Programs
Wiley Rein recognizes that a well-conceived compliance program is the single most essential element in preventing FCPA violations. However, if a compliance program is not appropriately tailored to a company’s actual risk profile, the associated cost can be great and the benefit negligible. To help our clients avoid FCPA entanglements, we encourage them to act proactively to deter and detect possible infringements. We assist clients in developing individualized compliance programs to minimize both the risk and the adverse consequences of improper conduct. We regularly help companies with:
- Devising formal policy statements;
- Publishing company-wide ethics manuals;
- Conducting training programs and seminars;
- Establishing mechanisms for coordinating/operating the compliance program (compliance clearinghouse);
- Conducting due diligence on third parties;
- Assisting with audits;
- Maintaining accurate accounting and record-keeping systems;
- Updating and revising existing corporate policies; and
- Setting up anonymous reporting procedures.
Wiley Rein recognizes that implementing an effective compliance program cannot be a “check-the-box” procedure. A company’s corruption risk differs based on, among other things, its industry, geographic regions, governance, and use of third parties (an area of particular FCPA concern). Wiley Rein effectively partners with its clients to conduct a risk-based assessment and customize the company’s compliance policies and procedures, which may evolve over time and experience. A well-designed, well-executed compliance program enables a company to defend its practices to U.S. regulators when confronted with a potential FCPA violation by its employees or partners.
Our relationships with the U.S. Departments of Treasury, State, and Commerce are invaluable to clients when conducting business checks, and we use our international relationships to keep clients abreast of developments in foreign countries in which they do business.
Mergers & Acquisitions
Wiley Rein’s attorneys methodically analyze mergers and acquisitions on behalf of both buyers and sellers to ascertain the potential for FCPA violations to affect transactions’ timeliness, overall cost, and practicability. Our FCPA analysis also looks for possible regulatory pitfalls and liability risks that may be assumed by the successor company. Our professionals counsel companies through the merger and acquisition process by:
- Assisting buyers and sellers in conducting FCPA due diligence;
- Conducting FCPA compliance reviews of both target entities and newly acquired companies;
- Handling internal investigations arising out of corporate due diligence;
- Providing for appropriate discipline of all offenders; and
- Implementing rigorous anti-corruption compliance policies and internal controls to avoid future FCPA problems.
Wiley Rein’s FCPA attorneys successfully handle all aspects of criminal and civil proceedings, as well as internal investigations and voluntary disclosures. We conduct internal FCPA investigations for companies in a wide-range of industries, including defense, financial, insurance, aircraft, freight, oil and gas, construction, pharmaceutical, and engineering with an eye toward minimizing our clients’ potential exposure. At the same time, our team is experienced and well-equipped to handle DOJ criminal or SEC civil proceedings, should they arise.
With our well-established presence in the nation’s capital, Wiley Rein stays apprised of current government enforcement trends and recent enforcement actions. We review enforcement trends, recent FCPA jurisprudence, and published guidance to discern how the FCPA is being interpreted and applied. Such legwork enables our team to determine which industries are under the greatest scrutiny, examine new laws that relate to foreign transactions, and help companies gain a better understanding of the United Nations Convention Against Corruption (UNCAC) and its provisions on criminalization, international cooperation, asset recovery, and prevention.
Wiley Rein’s involvement in enforcement actions and our ability to identify recurring SEC and DOJ enforcement patterns allow us to provide valuable counsel to clients on precautions they should take to protect themselves and determine their best course of action should agency intervention seem imminent. We help our clients identify FCPA “red flags,” including the following:
- The region of the world in which they are doing business is under strict FCPA scrutiny;
- Their industry is one facing especially high FCPA risk;
- The commissions being paid to foreign agents are likely to attract government attention;
- Their agent’s connection to the foreign government could be problematic;
- The proposed payments involving third parties or foreign financial institutions are unusually risky; and
- Large bonus payments to foreign agents could be considered as an FCPA violation.
Wiley Rein’s substantial FCPA experience includes the following highlights:
- Regularly counseling Fortune 500 clients on compliance with the FCPA;
- Conducting due diligence on target or newly acquired companies, international agents, joint venture partners, and other third parties across the globe;
- Advising U.S. and foreign companies on the development and implementation of corporate compliance programs concerning the FCPA;
- Providing annual audit and compliance advice to a company under a consent decree with the DOJ;
- Developing and providing regular FCPA training for publicly traded and privately held companies and private equity firms;
- Developing FCPA and anti-corruption compliance programs for entities in a variety of industries, especially in the defense, communications, and financial services sectors; and
- Representing companies and senior corporate executives of government contracting, manufacturing, and defense clients in DOJ criminal and SEC civil investigative matters.
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May 2014 | The Metropolitan Corporate Counsel Vol. 22, No. 5