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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Hating on the FCPA won’t make it go away

The lawyer from Europe was quick to tell us what she thinks of the FCPA. “It’s really just a weapon against non-U.S. companies,” she said. “Very bad.”

As evidence she cited the FCPA Blog’s Top Ten list. “Eight of the companies are from outside the United States,” she said. “That’s not fair at all.”

So we talked to her (and the others in the room) about why some companies have the biggest FCPA cases.

First, most are from countries that weren’t prosecuting foreign bribery.

When BAE landed in the top ten in 2010, the UK Bribery Act didn’t exist, and there was no such thing as UK enforcement.

Enforcement in France took a big step forward this week with the SocGen action, and should rev up more under Sapin II. But by 2013, when Total resolved its FCPA enforcement action, and 2014, when Alstom settled its case, France hadn’t taken any action against overseas bribery.

Teva Pharmaceuticals landed fourth on our top ten list in 2016. Israel hadn’t started bringing corporate enforcement actions against foreign bribery. (Teva is now number six on the list.)

Keppel Offshore made the top ten last year. At the time, Singapore law capped fines for overseas bribery at about $75,000. The DOJ said Keppel Offshore paid $50 million in bribes to Brazilian officials and earned over $350 million from the tainted contracts.

Another common feature of the biggest FCPA cases is systemic corruption involving top management.

At Siemens, some of the management board, country managers, and segment bosses knew about the graft, and in some cases helped plan and pay the bribes, then cover them up.

Sweden’s Telia, currently on top of the top ten list, paid $80 million in bribes to the Uzbek president’s daughter, Gulnara Karimova. She then used some of the money to “buy” 26 percent of the Telia company that had won a 3G mobile contract for Uzbekistan. Bribes and deals that big couldn’t happen without OKs from top management, not local employees.

SocGen paid an intermediary over $90 million, according to its admissions. The C-suite would have noticed.

And at Keppel Offshore, as we’ve written, the problem wasn’t a rogue employee. It was widespread corruption.

Finally, we told the European lawyer, most companies in the top ten didn’t cooperate with the DOJ, and that led to bigger criminal fines under U.S. sentencing guidelines.

Just then another European lawyer jumped in and made our point.

“The concept of cooperating with prosecutors doesn’t exist in a lot of parts of Europe,” he said.

“It’s impossible to understand the American way of voluntary confession and cooperation. Our practice is to admit nothing and fight the prosecutors on everything.”

BAE stonewalled the DOJ and tried to use political clout. The company landed on the top ten list in 2010 and is still there.

Alstom, currently fourth on the top ten list, failed to voluntarily disclose the FCPA violations even though it knew about related misconduct at a U.S. subsidiary.

(Och-Ziff, one of two American companies in the top ten, also failed to voluntarily disclose its compliance problems. The SEC detected FCPA violations while examining the way Och-Ziff was winning investments from sovereign wealth funds.)

The DOJ said VimpelCom, currently third on the top ten list, didn’t receive “more significant mitigation credit” because the Netherlands company failed to voluntarily disclose its misconduct after an internal investigation uncovered wrongdoing.

So culture — in this case how lawyers and business people view the prosecutor’s role — can have a big impact on the size of FCPA settlements.


Some lawyers in Europe and other places will always resent the FCPA and the way it’s enforced. Sovereignty, legislative imperialism, American bullying and all that.

But those lawyers (lawyers everywhere, really) should understand why FCPA enforcement might seem skewed against non-U.S. companies. That could help them keep their clients off the Top Ten list.


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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  1. So, what you are saying is, to be safe, we make the rules and you "think like us, act like us, understand law like us". Well, that *is* imperialism and bullying, isn't?
    And I'm writing from one of the 3 countries in the world with lowest levels of corruption (way less than the U.S.of A. by the way) so I consider ourselves safer and out of that hook… I guess there are other ways of doing if you ever had the idea of consulting and working with other countries and not imposing your ways, always assuming without even thinking that "if it is good for us, is good for everyone", "the MacDonald business model". In my opinion, the extremely legalistic way that American Companies use to approach corruption fails the ethical and moral considerations that will simply encourage people to do what is right.

  2. Excuses for bribery. That is what I hear from those who kvetch about the FCPA. The FCPA would not matter – in fact, it would not need to exist – if people stopped making excuses for bribery and dedicated efforts to prevent it.

    The best approach I ever heard to bribery came from a young African, with the simple statement: “Evil should be called by its name.” Bribery is evil. The FCPA is only necessary because so many have accepted excuses for bribery.

    Business people who accept that bribery is evil and actually take steps to prevent it have nothing to fear from the FCPA or the UK Bribery Act or Sapin II. Blaming FCPA prosecutions on the US is just another of that series of worthless excuses.

    For those who find the FCPA complex, or legalistic, or too American, or have any other excuse, here’s an easy guide to compliance: Don’t pay bribes. Regards, Joe

  3. My dear Frisco. The Americans may be using inefficient and flawed approach but I assure you the problem is everywhere. I live in Iceland so corruption should be easily avoided. It is not. It is hidden and you have to open your eyes. For your info I rate Sigmundur David Gunnlaugsson as a number 5 on a scale from 0 to 10. But that is because I keep my eyes open. (I also know the full story.) We Europeans were past masters before America was found. At least in their bumbling way they acknowledge the problem.

    Due diligence and monetary fines? Christ!!! How inefficient.

  4. This is an excellent post, and addresses concerns I often hear from companies based in overseas jurisdictions. I understand the frustration, but it is important to remember that most non-U.S. companies that are penalized for violating the FCPA are issuers — that is, they have a class of securities registered with the SEC. Both the anti-bribery provisions and the accounting provisions of the FCPA unambiguously apply to issuers, regardless of whether they are incorporated in the United States or in another jurisdiction. It is simply a part of the compliance burden that comes along with issuing stock in the United States. I am not entirely sympathetic to companies that wish to avail themselves of a country’s capital markets, but then cry foul when they violate the securities laws that were enacted to regulate those markets. To suggest that some issuers, because of where they are incorporated, should be exempt from the FCPA is, in essence, asking for a non-level playing field. It is the equivalent of renting a car in a foreign jurisdiction and then complaining when you get pulled over for not obeying the local speed limit. Foreign companies that wish to avoid FCPA jurisdiction can refrain from issuing shares in the United States. Foreign companies that wish to trade on U.S. exchanges should simply take note of the fact that the privilege comes with a number of regulatory burdens, and it is no secret that the FCPA is one of them. Indeed, after almost 15 years of heightened enforcement, I find it somewhat surprising that many companies have failed to take notice.

  5. Excellent post. FCPA was amended by the International Anti-Bribery and Fair Competition Act of 1998 to achieve symmetry with the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions. This expanded the FCPA’s reach worldwide to within the OECD-Convention’s network countries of 43, subjecting violators of the FCPA to civil and criminal penalties and the risk of losing the benefits of doing business with a U.S. government agency.

    Parties to the Anti-Bribery Convention, signed on voluntarily and agreed to put in place measures that will reinforce efforts to prevent, detect and investigate foreign bribery. And ban tax deductibility of bribes.

    If parties to the Anti-Bribery Convention adhered to the terms of the Anti-Bribery Convention, there would be no need for the US SEC and DOJ to enforce violations of the FCPA with fines and penalties .

  6. The FCPA is the ONLY regulatory program in the world right now that is having an impact on reducing corruption. Is it perfect? No.

    It’s a work in progress and there needs to be a sustained effort to improve and finetune the regulatory regime, while not reducing the deterrent. In fact, from my perspective, the deterrent needs to be intensified, as many companies still view it as a cost of doing business. This is exemplified by repeat offenders.

    As for Frisco’s comment, regarding his/her residence in a country with the lowest level of corruption in the world……"You don’t know what you don’t know".

    I have experience in at least one country that has a low “perceived” level of corruption but has been accused recently of stifling efforts to investigate foreign corruption committed by its own nationally-based companies. It has also been accused of being a hub for money laundering.

    The fact that a country is exceptionally good at burying its head in the sand and portraying an image of a “clean” jurisdiction, does not mean that it is clean, especially in regard to the activities of their national companies operating overseas.

    Also, no one should be complacent in the fight against corruption. Billions of people suffer the ramifications of corruption worldwide every day and it is at the root of many of the world’s conflicts. I challenge anyone reading this article to travel to a developing nation and visit with that nation’s poorest. Ask them…..what is your biggest challenge every day? Why is it difficult for you to get food and medical treatment? Why is difficult for you to get a decent education for your children?

  7. This is a great article and I agree with David’s comments. We need the FCPA.

    I live in one of those countries that David mentions, where there is a low “perception” of corruption, and that country is Australia.

    Australia is fanatical about maintaining the façade of a clean and incorruptible country and its politicians work diligently in other countries, like the U.S., trying to maintain that façade.

    While Australia seems to think that bribery investigations into the activities of its national corporations in neighboring Asian Pacific countries will weaken the stability of the region, their short sightedness fails to recognize the reality on the ground. The corruption and instability is only getting worse.

  8. Interesting posts! I took for granted that efforts to reduce corruption should be continued relentless, this is why we are all here; and I'm conscientious that also in my country there are blunt examples of small and big corruption cases time to time, unluckily. No one is clean.

    My point was that international cooperation and alignment can go further beyond that the efforts of one individual country, for example to finish with "safe" harbors for illegal money like some locations in Asia and Europe, all these small little islands on the Caribbean, USA states like Delaware and Co. Why the USA has never tackled their own issues at home first?

  9. Frisco…I'm not sure I understand what additional international cooperation you are seeking? Despite the lapses of the current administration on other diplomatic issues, the US is actively working with other countries on anti-bribery and anti-corruption efforts. As mentioned above, the FCPA is consistent with the OECD Convention on Combating Bribery of Foreign Officials. And, the US SEC and DOJ go to great effort to partner with other international regulatory authorities (e.g. Keppel case).

    Also, from your earlier post I'm having a hard time understanding what approaches would work better than the "legalistic" approach of the US or the OECD? I think it would be helpful if you could elaborate on those "better ways".

  10. David,
    What is the value of having all employees of a Company signing that they have "read and understood" a Code of Business Conduct? I have surveyed that done electronically by a US Company with more than 30,000 employees. Average time reading the Code: 3 seconds. These kind of activities are just to cover your.. a-word, they bring nothing and alienate employees. Just one example of lawyer-thinking approach.

  11. Frisco…you are correct, perhaps. However, there is nowhere in the FCPA, or guidance, where it states that a signed certification is required from all employees. The training needs to be “effective”, and it’s up to the company to decide what is effective. The SEC also suggests that the program should be refreshed from time-to-time in order to maintain its effectiveness.

    I work with a number of companies on their compliance programs. I have found that the requirement for a certification, and frequency, is different in nearly all cases. Again, the FCPA does not require that employees certify, in writing, their understanding of the company’s policy. And, your comments are directed toward the improvement of the FCPA.

  12. I have personally witnessed this resentment to the American “FCPA imperialism” on numerous occasions in the EU, China, Russia, etc. Even apart from anger about the large fines, I suspect this resentment remains often unspoken when those outside the US have to sign a compliance certificate, submit to a due diligence review or operate under “American” compliance rules. How can compliance programs be effective when there is an underlying resentment to the FCPA overseas? Is there any other country that is serious about enforcing anti-corruption rules? Lanny Breuer’s words from 2012 are still true: “we in the United States are in a unique position to spread the gospel of anti-corruption, because there is no country that enforces its anti-bribery laws more vigorously than we do.” As somebody born in a corruption-infested country next to the EU whose sovereignty is now threatened party due to how corrupt it was/is, I support such “imperialism and bullying.”

    Despite the treaty commitments and new antibribery laws (UK Bribery Act, Sapin II) I am not sure that governments outside the U.S. truly care about international bribery. The EU Commission issued its first and last report on anti-corruption efforts across the EU in 2014. The report was supposed to be issued periodically every two years but it was scrapped because the Commission apparently did not want “to interfere or offer value judgments within the political life in a member state” (EU Commission spokesperson Margaritis Schinas on Feb. 2, 2017). The Treaty of Rome classifies bribery as a “euro-crime”; however, the Council of the EU and the Commission have so far chosen not to adopt an EU-wide anti-corruption law (either as a directive or regulation). Instead, as I wrote here before, the new GDPR puts significant obstacles to effective anti-bribery due diligence and corporate internal investigations.

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