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Harry Cassin
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Julie DiMauro
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Thomas Fox
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Compliance And Enforcement: By The Book

The case made headlines last month when seven companies settled FCPA-related charges for $236.5 million dollars.

Logistics company Panalpina was named, along with its customers Shell, Transocean, Pride, Tidewater, Noble, and GlobalSantaFe.

There was no mentioned, however, of another Panalpina customer from the oil-and-gas services industry —  Global Industries. It was named in the first reports from 2007 about the case but disappeared from the story. Why?

Because for Global Industries, the case had a different ending.

The company suspected problems with Panalpina even before the Vetco Gray case — which triggered the investigations into Panalpina — was announced. Once alerted to the potential problems, the company took immediate action through its executive management and board of directors. Outside FCPA counsel was hired and the matter was self-disclosed to the DOJ and SEC. The board of directors authorized, and the company and outside counsel conducted, a thorough internal investigation of its operations in West Africa and turned the results over to the government.

In March, Global Industries announced that, “Early this year, representatives of the Securities and Exchange Commission and the Department of Justice informed the Company that each agency had concluded its FCPA investigation. Neither agency recommended any enforcement action or the imposition of any fines or penalties against the Company.”

How did Global achieve that result?

Its general counsel and director of compliance gave these reasons:

  • Historical evidence of a strong FCPA compliance program
  • Global’s internal controls identified the FCPA issues
  • Management took prompt and effective action
  • Implementation of an enhanced compliance program
  • Thorough investigation and cooperation with the enforcement authorities

What’s the lesson?

The general counsel told us: “Having gone through a two-and-a-half year investigation has been an eye opener. But it proved to us that a good compliance program does help, not only to identify potential problems when they arise, but also when you’re in front of the DOJ and SEC.”

Kudos to Global Industries, and to the DOJ and SEC.

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1 Comment

  1. So why is that one part of the Department of Justice – the Criminal Division – takes such an inteligent approach to compliance and ethics programs, while the Antitrust Division seems not to care at all about a company's efforts to prevent violations. Does the Criminal Division know something that the Antitrust Division does not? Maybe the Criminal Division actually wants to prevent violations, while the Antitrust Division only cares about getting convictions. Cheers, Joe

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