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Harry Cassin
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Thomas Fox
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Bill Waite
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Sanctions Enforcement: Embracing the FCPA playbook?

Early last year, when Deputy Attorney General Lisa Monaco began describing sanctions as “the new FCPA,” she didn’t mean sanctions enforcement would replace the FCPA. She meant the DOJ is working to replicate the success of FCPA enforcement by using some of the same strategies  — a high-intensity focus on finding and punishing violators, deploying innovative tools, promoting international cooperation, and so on. So, is sanctions enforcement following the FCPA’s trajectory?

In the way Deputy AG Monaco meant it, yes, it is. Here’s how that’s happening.

Breakthrough Cases. In April this year, the DOJ resolved a mega-case against an overseas company, British American Tobacco (BAT). BAT and a Singapore subsidiary paid $629 million for violating sanctions against North Korea under the International Emergency Economic Powers Act (IEEPA) and bank fraud laws. BAT’s three-year deferred prosecution agreement requires the company to implement a compliance and ethics program.

It was “the largest North Korean sanctions penalty in the history of the Justice Department,” according to a DOJ release.

The BAT case and the way the DOJ announced it are reminiscent of the $800 million FCPA enforcement action in 2008 involving Siemens AG. Siemens was nearly 20 times larger than any previous FCPA case and is still on the FCPA Blog’s top ten list. It propelled the FCPA into the headlines.

(The Siemens case changed my life. I published the FCPA Blog for over a year to a loyal but minuscule audience. After Siemens broke, our style of “news and commentary” about the FCPA and compliance became a hot commodity and transformed the FCPA Blog overnight.)

The BAT case didn’t shift the enforcement landscape as drastically as Siemens did. But BAT caught the attention of all compliance professionals and managed to crack the general news cycle.

More Prosecutors. In March this year, Deputy AG Monaco announced that the DOJ would add “more than 25 new prosecutors who will investigate and prosecute sanctions evasion, export control violations and similar economic crimes.” Again there are echoes of  FCPA history. The DOJ’s FCPA unit tripled between 2011 and 2016 and grew more after that. Senior DOJ leaders pointed to the growth as a sign of prosecutorial intentions.

Linking National Security. In the decade after 9/11, White House occupants from both parties equated the fight against overseas corruption to U.S. national security. I began exploring the FCPA’s role in national security sometime around 2010.

Today’s sanctions enforcement flows directly from concerns about the intentions of bad actors toward the United States. That’s why Washington regulates the export and use of technology and materiel needed for high-tech weapons and weapons of mass destruction. Deputy AG Monaco, who once headed the DOJ’s National Security Division, describes the objectives of sanctions enforcement this way:

To use the vernacular of national security lawyers, our goal is not only to hold people accountable, but to disrupt these threats using all the tools available to us.

Domestic Task Forces. Russia’s invasion of Ukraine in February 2022 dramatically boosted sanctions awareness. A month after the invasion, Attorney General Merrick Garland announced Operation KleptoCapture — a domestic interagency task force to hunt for and seize mansions, yachts, jets, and bank accounts belonging to Russian oligarchs. Mainstream news outlets still feature the exploits of Operation KleptoCapture.

That task force (and its descriptive name) are reminders of 2010 when the DOJ launched the Kleptocracy Asset Recovery Initiative. Some of the seizures and forfeiture actions under it grew out of FCPA cases, such as 1MDB.

International Cooperation. A prominent aspect of the Russia sanctions is international cooperation. The DOJ and Treasury Department helped create REPO — the Russian Elites, Proxies, and Oligarchs Task Force. It’s a U.S. collaboration with the EU, Australia, Canada, France, Germany, Italy, and Japan. In March this year, REPO said it has blocked or frozen more than $58 billion worth of sanctioned Russians’ assets.

International cooperation was an innovation of FCPA enforcement that started with the Siemens case in 2008. The head of the DOJ’s FCPA unit then was Mark Mendelsohn. When he left the DOJ in 2012, I said:

[H]is FCPA team partnered with counterparts in England and Germany, Italy and France, Switzerland, Hungary, Costa Rica, Nigeria and elsewhere, forging ties that led to the first real global enforcement actions. Those cases helped change attitudes everywhere.

Voluntary disclosures? Self-reporting contributed directly to the growth of FCPA enforcement and is still important. Most companies that appear today on FCPA Tracker have made voluntary disclosures to enforcement agencies at the start of their internal investigations.

In January this year, the DOJ published a revised version of its corporate enforcement policy — now called the Corporate Enforcement and Voluntary Self-Disclosure Policy. On the FCPA Blog, Harry called it an “interesting mix of carrot and stick.” There’s not enough public information yet to know whether the “carrot and stick” are bringing in more sanctions investigations and prosecutions, but it’s likely.


So, yes, the DOJ’s sanctions enforcement is following the FCPA playbook in a surprising number of ways. But there are big differences too.

I’ll look at those differences next time.

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