fcpa-resource-guide
fcpa-resource-guide
fcpa-resource-guide
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chapter 2<br />
The FCPA:<br />
Anti-Bribery Provisions<br />
years after the acquisition After another employee of Company A reports the long-running bribe scheme to a director at<br />
Foreign Government Agency, Company A stops the payments and DOJ and SEC investigate<br />
Based on these facts, would DOJ or SEC charge Company A?<br />
Yes DOJ and SEC have prosecuted companies like Company A in similar circumstances Any charges would not,<br />
however, be premised upon successor liability, but rather on Company A’s post-acquisition bribe payments, which<br />
themselves created criminal and civil liability for Company A<br />
Scenario 3:<br />
Under local law, Company A’s ability to conduct pre-acquisition due diligence on Foreign Company is limited In the<br />
due diligence it does conduct, Company A determines that Foreign Company is doing business in high-risk countries<br />
and in high-risk industries but finds no red flags specific to Foreign Company’s operations Post-acquisition, Company<br />
A conducts extensive due diligence and determines that Foreign Company had paid bribes to officials with Foreign<br />
Government Agency Company A takes prompt action to remediate the problem, including following the measures set<br />
forth in Opinion Procedure Release No 08-02 Among other actions, it voluntarily discloses the misconduct to DOJ and<br />
SEC, ensures all bribes are immediately stopped, takes remedial action against all parties involved in the corruption, and<br />
quickly incorporates Foreign Company into a robust compliance program and Company A’s other internal controls<br />
Based on these facts, would DOJ or SEC prosecute Company A?<br />
DOJ and SEC have declined to prosecute companies like Company A in similar circumstances Companies can follow<br />
the measures set forth in Opinion Procedure Release No 08-02, or seek their own opinions, where adequate pre-acquisition<br />
due diligence is not possible<br />
Hypothetical: Successor Liability Where Acquired Company Was Already Subject to<br />
the FCPA<br />
Both Company A and Company B are Delaware corporations with their principal offices in the United States Both<br />
companies’ shares are listed on a national U S exchange<br />
Scenario 1:<br />
Company A is considering acquiring several of Company B’s business lines Prior to the acquisition, Company A engages<br />
in extensive due diligence, including: (1) having its legal, accounting, and compliance departments review Company B’s<br />
sales and financial data, its customer contracts, and its third-party and distributor agreements; (2) performing a risk-based<br />
analysis of Company B’s customer base; (3) performing an audit of selected transactions engaged in by Company B; and<br />
(4) engaging in discussions with Company B’s general counsel, vice president of sales, and head of internal audit regarding<br />
all corruption risks, compliance efforts, and any other major corruption-related issues that have surfaced at Company B<br />
over the past ten years This due diligence aims to determine whether Company B has appropriate anti-corruption and<br />
compliance policies in place, whether Company B’s employees have been adequately trained regarding those policies,<br />
how Company B ensures that those policies are followed, and what remedial actions are taken if the policies are violated<br />
During the course of its due diligence, Company A learns that Company B has made several potentially improper<br />
payments in connection with a government contract with Foreign Country As a condition of the acquisition, Company A<br />
requires Company B to disclose the misconduct to the government Company A makes certain that the illegal payments<br />
(cont’d)<br />
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