Alex Rene, co-chair of Ropes & Gray’s anti-corruption / international risk practice and managing partner of the firm’s Washington, D.C. office, discusses recent FCPA enforcement activity as well as international risk challenges facing companies.
Interestingly, many people assumed that President Trump might have taken a lax enforcement approach to the FCPA because during the presidential campaign, he criticized the FCPA for putting American businesses at a disadvantage. However, that hasn’t proven to be the case. In 2017, 11 companies paid over $1.92 billion to resolve FCPA cases. Although the total number of cases is on the low end, the monetary value represents the second largest sum over the past ten years. In addition, by one count, last year saw eight individuals sentenced, one convicted, 11 enter guilty pleas, seven be indicted by DOJ and two be charged by the SEC for violations of the FCPA. In November 2017, Deputy Attorney General Rod Rosenstein announced a new FCPA Corporate Enforcement Policy that formalizes guidance on voluntary disclosures but also stresses the importance of developing robust compliance programs. Importantly, Rosenstein continued to stress that DOJ would rigorously enforce the FPCA.
One of the challenges facing many of our clients with significant operations overseas is that they have to contend with a large number of distinct laws and regulations. Just from a U.S. perspective, clients with overseas operations can face enforcement actions or regulatory inquiries relating to both the FCPA and:
- Economic sanctions and regulations;
- Export control regulations; and
- Import laws and regulations.
The FCPA has historically been one of the most enforced U.S. laws or regulations in the international risk space, and so companies have appropriately focused significant attention on anti-corruption compliance. However, many of the same factors that lead to anti-corruption risk can also to lead to liability under international trade laws. Many high-risk jurisdictions from an FCPA perspective also have a higher incidence of sanctioned parties. Interactions with customs agents, and the use of customs brokers and freight forwarders, can present both anti-corruption and import/export risks. It is increasingly essential for companies to have sophisticated compliance programs that address all areas of international risk.
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