fcpa-resource-guide

companies should be aware of the risks involved in engag-
ing third-party agents or intermediaries. The fact that a
bribe is paid by a third party does not eliminate the potential
for criminal or civil FCPA liability. 131
For instance, a four-company joint venture used
two agents—a British lawyer and a Japanese trading
company—to bribe Nigerian government officials in
order to win a series of liquefied natural gas construction
projects. 132 Together, the four multi-national corporations
and the Japanese trading company paid a
combined $1.7 billion in civil and criminal sanctions
for their decade-long bribery scheme. In addition, the
subsidiary of one of the companies pleaded guilty and a
number of individuals, including the British lawyer and
the former CEO of one of the companies’ subsidiaries,
received significant prison terms.
Similarly, a medical device manufacturer entered into
a deferred prosecution agreement as the result of corrupt
payments it authorized its local Chinese distributor to pay
to Chinese officials. 133 Another company, a manufacturer
of specialty chemicals, committed multiple FCPA violations
through its agents in Iraq: a Canadian national and
the Canadian’s companies. Among other acts, the Canadian
national paid and promised to pay more than $1.5 million
in bribes to officials of the Iraqi Ministry of Oil to secure
sales of a fuel additive. Both the company and the Canadian
national pleaded guilty to criminal charges and resolved
civil enforcement actions by SEC. 134
In another case, the U.S. subsidiary of a Swiss freight
forwarding company was charged with paying bribes on
behalf of its customers in several countries. 135 Although the
U.S. subsidiary was not an issuer under the FCPA, it was an
“agent” of several U.S. issuers and was thus charged directly
with violating the FCPA. Charges against the freight forwarding
company and seven of its customers resulted in
over $236.5 million in sanctions. 136
Because Congress anticipated the use of third-party
agents in bribery schemes—for example, to avoid actual
knowledge of a bribe—it defined the term “knowing” in a
way that prevents individuals and businesses from avoiding
liability by putting “any person” between themselves and
chapter 2
The FCPA:
Anti-Bribery Provisions
the foreign officials. 137 Under the FCPA, a person’s state of
mind is “knowing” with respect to conduct, a circumstance,
or a result if the person:
• is aware that [he] is engaging in such conduct,
that such circumstance exists, or that such result is
substantially certain to occur; or
• has a firm belief that such circumstance exists or
that such result is substantially certain to occur. 138
Thus, a person has the requisite knowledge when he is
aware of a high probability of the existence of such circumstance,
unless the person actually believes that such circumstance
does not exist. 139 As Congress made clear, it meant to
impose liability not only on those with actual knowledge
of wrongdoing, but also on those who purposefully avoid
actual knowledge:
[T]he so-called “head-in-the-sand” problem—variously
described in the pertinent authorities as “conscious
disregard,” “willful blindness” or “deliberate
ignorance”—should be covered so that management
officials could not take refuge from the Act’s prohibitions
by their unwarranted obliviousness to any
action (or inaction), language or other “signaling device”
that should reasonably alert them of the “high
probability” of an FCPA violation. 140
Common red flags associated with third parties include:
• excessive commissions to third-party agents or
consultants;
• unreasonably large discounts to third-party
distributors;
• third-party “consulting agreements” that include
only vaguely described services;
• the third-party consultant is in a different line of
business than that for which it has been engaged;
• the third party is related to or closely associated
with the foreign official;
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