Chapter 1: An Overview and History of the FCPA

§ 1.01 Introduction

§ 1.02 Overview of the FCPA

[A]      The Antibribery Provisions

[B]      The Accounting Provisions

§ 1.03 History of the FCPA

[A]      The Origin of the FCPA

[1] Watergate and Its Aftermath

[2] Justifications for Anticorruption Legislation

[a]       The Ethical Imperative

[b]       The Pro-Business Argument

[c]       The Link Between Corporate Bribery and Foreign Policy

[B]      The Legislative History of the FCPA

[1] Fundamental Debates

[a]       Unilateral Action or Multilateral Accord

[b]       Disclosure or Criminalization

[2] The Succession of Legislative Proposals

[a]       S. 3379

[b]       S. 3741

[c]       S. 3418

[d]      S. 3133

[e]       S. 3664

[C]      Amendments to the FCPA

[1] 1988 Amendments

[a]       Incorporation of Domestic Bribery Standard

[b]       Antibribery Liability for the Acts of Third Parties

[c]       The Exception for Facilitating Payments

[d]      Affirmative Defenses for Payments That Are Lawful Under Local Laws and for Reasonable and Bona Fide Expenditures

[e]       Culpability Standard for Criminal Violations of the Accounting Provisions

[f]       Reasonable Detail in Books and Records and the Reasonable Assurance of Control of Corporate Assets

[g]       Responsibility for the Accounting Practices of Minority-Owned Subsidiaries

[h]       President’s Responsibility for Negotiating an International Antibribery Agreement

[i]        DOJ’s FCPA Opinion Procedure

[2] 1998 Amendments

[a]       Prohibition of Payments to Secure Any Improper Advantage

[b]       Inclusion of Employees of Public International Organizations in the Definition of Foreign Official

[c]       Expanding the Extraterritorial Reach of the FCPA: Acts of U.S. Persons Committed Outside of the United States

[d]      Expanding FCPA Jurisdiction: Acts of Non-U.S. Nationals Committed Within the United States

[D]      A History of FCPA Enforcement

[1] Phase One: 1978 to 1998

[a]       Lingering Confusion and Dissatisfaction with the FCPA

[b]       Concerns About International Trade and Foreign Policy

[c]       Lack of Financial and Strategic Resources

[2] Phase Two: Post-1999

[a]       Developing International Anticorruption Consensus

[b]       Wave of Corporate Corruption Scandals in the United States

[c]       Aggressive DOJ and SEC Strategies and Emphasis on Corporate Cooperation

[d]      Multilateral Enforcement

Chapter 2: The Antibribery Provisions of the FCPA

§ 2.01 Overview

§ 2.02 Who Is Covered?

[A]      Issuers

[B]      Domestic Concerns

[C]      Persons Other Than Issuers or Domestic Concerns

[D]      Persons Not Covered

§ 2.03 Jurisdiction

[A]     Use of the U.S. Mails or Any Means or Instrumentality of Interstate Commerce

[B]      Alternative Jurisdiction

[C]      Act in Furtherance “while in the Territory of the United States”

§ 2.04 Anything of Value

§ 2.05 Who Qualifies as a “Foreign Official” or Other Covered Recipient?

[A]      Foreign Officials

[1] Officers, Employees, and Persons Acting in an Official Capacity

[2] Government “Instrumentalities”

[3] Public International Organizations

[B]      Foreign Political Parties, Officials Thereof, and Candidates for Foreign Political Office

[C]      The FCPA’s “Knowledge” Element

§ 2.06 What Constitutes Corrupt Intent?

[A]      Knowing and Willful

[B]      Prohibited Purposes

§ 2.07 How is the “Business Nexus” Requirement Established?

§ 2.08 The FCPA’s Exception and Affirmative Defenses

[A]      Facilitating Payment Exception

[B]      Affirmative Defenses

[1] Local Law Defense

[2] Promotional or Contract-Related Expenditures

§ 2.09 Statute of Limitations

§ 2.10 Penalties and Enforcement

[A]      Enforcement

[B]      Criminal Penalties

[C]      Civil Penalties

[D]      Collateral Consequences

Chapter 3       The FCPA’s Accounting Provisions

§ 3.01 Introduction

§ 3.02 Who Is Covered?

[A]      Issuers

[1] In General

[2] Companies with Registrations Pending

[3] Issuers’ Responsibility for Subsidiaries

[4] Foreign Issuers

[B]      Subsidiaries of Issuers and Individuals

§ 3.03 Books and Records

[A]      Books, Records, and Accounts

[B]      Reasonable Detail

[C]      Accurately and Fairly Reflect Transactions and Dispositions of Assets

[1] In General

[2] No Materiality Requirement

[3] Exchange Act Rules

[a]       Exchange Act Rule 13b2-1

[b]       Exchange Act Rule 13b2-2

§ 3.04 Internal Controls

[A]      Introduction

[B]      General Obligation of Issuers

[1] The Statutory Requirements

[2] Implementing the Objectives

[3] Relationship of Internal Accounting Controls Provisions to the Sarbanes-Oxley Act

[C]      Obligations of Minority Shareholders

§ 3.05 Penalties and Enforcement

[A]      In General

[B]      Civil Enforcement

[C]      Criminal Enforcement

[D]      Aiding and Abetting

[E]      Control Person Liability

[F]      Statute of Limitations

Chapter 4: Issues Related to Non-U.S. Companies

§ 4.01 Introduction

§ 4.02 Direct Liability of Non-U.S. Companies

[A]      Antibribery Liability of Non-U.S. Issuers

[B]      Antibribery Liability of Non-U.S. Domestic Concerns

[C]      Antibribery Liability of Other Persons “While in the Territory of the United States”

[D]      Antibribery Liability of Non-U.S. Companies as Agents or Stockholders of Issuers or Domestic Concerns

[E]      Accounting Liability Under Section 13(b)(5), Exchange Act Rule 13b2-1, and Exchange Act Rule 13b2-2

§ 4.03 Liability of U.S. Companies for the Acts of Non-U.S. Subsidiaries

[A]      Liability of Companies for the Acts of Non-U.S. Companies Acting As Their Agents or Alter Egos

[1] Agency Theory of Liability

[2] Alter Ego Theory of Liability

[B]      Liability of Issuers Under the Books and Records and Internal Controls Provisions for the Acts of Non-U.S. Subsidiaries

§ 4.04 Liability of Non-U.S. Companies Under Secondary Liability Theories

[A]      Liability of Non-U.S. Companies for Aiding and Abetting

[B]      Conspiracy Liability

Chapter 5: Liability of Individuals

§ 5.01 Introduction

§ 5.02 Antibribery Liability

[A]      Liability of U.S. Citizens, Nationals, and Residents as “Domestic Concerns”

[B]      Liability of Officers, Directors, Employees, Agents, and Stockholders of Issuers and Domestic Concerns

[C]      Liability of Non-U.S. Individuals Acting Within the Territory of the United States

§ 5.03 Liability for Books and Records and Internal Controls Violations

[A]      Civil Liability Under Exchange Act Rules 13b2-1 and 13b2-2

[B]      Civil and Criminal Liability Under 15 U.S.C. § 78m(b)(5)

§ 5.04 Conspiracy and Aiding and Abetting Liability

§ 5.05 Liability of Foreign Officials Under the FCPA

Chapter 6: Complying with the FCPA: The Basics

§ 6.01 Introduction

§ 6.02 Guidance on Compliance Programs

[A]      U.S. Sentencing Guidelines and Other U.S. Guidance

[B]      OECD Good Practice Guidance

[C]      ”Adequate Procedures” Under the U.K. Bribery Act

§ 6.03 Elements of an Effective FCPA Compliance Program

[A]      Compliance Organization Structure

[1] Role of Directors and Audit Committee

[2] Role of Senior Management

[3] Day-to-Day Management

[B]      Tone at the Top

[C]      Code of Conduct

[D]      Policies and Procedures

[E]      Education and Training

[F]      Hotlines and Employee Reporting

[G]      Due Diligence

[H]      Contractual Safeguards

[I]       Audits and Assessments

[J]       Discipline, Incentives, and Enforcement

§ 6.04 Travel and Entertainment

§ 6.05 Per Diems

§ 6.06 Gifts

§ 6.07 Facilitating Payments

§ 6.08 Extortion

§ 6.09 Charitable Contributions

§ 6.10 Political Donations

§ 6.11 FCPA Compliance Audits

§ 6.12 The DOJ’s FCPA Opinion Procedure

[A]      Purpose and History

[B]      Requirements

[C]      Scope and Effect

[D]      Important Considerations

Chapter 7: Complying with the FCPA: Third-Party Relationships

§ 7.01 Introduction

§ 7.02 Overview of Third-Party Management

[A]      Liability Associated with Third-Party Relationships

[B]      Managing Third-Party Relationships

§ 7.03 Third-Party Relationships and Related FCPA Risks

[A]      Sales Representatives and Consultants

[B]      Distributors and Resellers

[C]      Professional Advisors

[D]      Joint Venture and Consortium Partners

[E]      Other Relationships

[1] Freight Forwarders and Customs Brokers

[2] Contractors and Subcontractors

§ 7.04 Due Diligence

[A]      Compiling Information and Making Initial Compliance Risk Assessments

[B]      Evaluating the Risks of Doing Business with Third Parties

§ 7.05 Contractual Safeguards

[A]      Third-Party Representatives and Consultants

[B]      Joint Venture Partners

§ 7.06 Training

§ 7.07 Monitoring

§ 7.08 Special Considerations When Using Government Officials or State-Owned Entities As Third Parties

Chapter 8: Complying with the FCPA: Mergers, Acquisitions and Investment Transactions

§ 8.01 Introduction

§ 8.02 FCPA Risks in Cross-Border Transactions

[A]      Pre-Transaction Conduct

[1] Successor Liability

[2] Ratification

[3] Acts “In Furtherance of” Corrupt Conduct

[4] Protect Investment

[B]      Post-Transaction Conduct

[1] Willful Blindness

[2] Violations of the Accounting Provisions

§ 8.03 Cross Border Mergers & Acquisitions

[A]      Due Diligence

[B]      Discovery of Compliance Issue

[C]      Contractual Safeguards

[D]      Post-Transaction Compliance Measures

§ 8.04 Non-U.S. Investments

[A]      Pre-Investment Due Diligence

[B]      Contractual Safeguards

[C]      Post-Investment Responsibilities

§ 8.05 Minority Interest Investments

[A]      Obligations of Minority Interest Holders

§ 8.06 Board Service

Chapter 9: Conducting Effective FCPA Internal Investigations

§ 9.01 Introduction

§ 9.02 Preliminary Considerations

[A]      Assessment of the Allegation

[B]      Scope of the Investigation and Development of a Work Plan

[C]      Oversight and Reporting

[1] Assembling an Investigation Team and Authorizing the Investigation

[2] Engaging Outside Counsel and Accountants

[D]      Attorney-Client Privilege and Work Product Considerations

[E]      Kicking off the Investigation

[1] Delegation Letter

[2] Document Preservation Notice

[a]       Purpose and Timing

[b]       Who Receives the Notice

[c]       Content of the Notice

[d]      Special Instructions for the Information Technology and Human Resources Departments

§ 9.03 Gathering and Reviewing Relevant Documents and Other Data

[A]      Document Requests and Gathering

[B]      Document Review

[1] Purpose of Document Review

[2] Managing the Volume of the Document Review

[3] Using Review Tags to Prioritize and Organize the Documents Reviewed

[4] Creating Different Levels of Review for High-Volume Projects

[5] Chronologies and Binders

[C]      Practical Considerations

[D]      Data Privacy

[1] Overview

[2] Types of Data that May Be Protected

[3] Measures that May Alleviate Data Privacy Restrictions

[4] Balancing the Need for a Thorough Investigation Against Potential Data Privacy Limitations

[E]      Blocking Statutes

§ 9.04 Employee and Third-Party Interviews

[A]      General Considerations

[1] Timing, Selection, and Order of Interviews

[2] Third-Party Interviews

[3] Who Participates in the Interviews

[B]      Preparing for the Interview

[C]      Conducting the Interview

[1] Introductory Remarks

[2] Counsel for the Witness

[3] Tone and Structure of the Questions

[4] Use of Documents

[5] Handling Difficult Questions from the Witness

[6] Concluding Remarks

[D]      Interview Summaries

[E]      Practical Considerations

[F]      Labor and Employment Law Considerations

§ 9.05 Reports of Investigation

[A]      Deciding Whether to Prepare a Report

[B]      Report Format and Medium

[C]      Content

§ 9.06 Interacting with External Auditors and Other Outside Constituents

[A]      External Auditors

[B]      Lenders and Other Financial Stakeholders

§ 9.07 Responding to Investigative Findings

[A]      Compliance Program Improvements

[B]      Disciplining Employees

[1] Purpose and Grounds for Discipline

[2] Forms of Discipline

[3] Timing of Discipline

[4] Legal and Fairness Considerations

[5] Documenting Discipline

§ 9.08 Disclosure to Enforcement Authorities

[A]      Deciding Whether to Disclose

[1] Requirements to Disclose

[a]       No Disclosure Requirement in the FCPA

[b]       Evaluating Materiality under Securities Laws

[i]  General Disclosure Requirement

[ii] Specific SEC Provisions and Stock Exchange Rules

[2] Voluntary Disclosure

[a]       Advantages of Voluntary Disclosure

[b]       Disadvantages of Voluntary Disclosure

[c]       Special Circumstances Affecting the Decision Whether to Disclose

[B]      To Whom, When, and How to Disclose

[C]      After Initial Disclosure

[1] Cooperating with an Investigation by the Government

[2] Providing Interim and Final Reports to the Government

Chapter 10: U.S. Government Enforcement of the FCPA

§ 10.01 Introduction

[A]      How the Government Learns of Allegations

[B]      Enforcement Agencies

[C]      Corporate Versus Individual Liability

§ 10.02 Criminal and Civil Enforcement by DOJ

[A]      Overview of DOJ Authority

[B]      Investigative Tools and Techniques

[1]       Grand Jury Subpoenas and Testimony

[a]       Subpoenas

[b]       Testimony

[2]       Other Affirmative Investigative Techniques

[a]       Search Warrants

[b]       Recorded Conversations

[c]       Document Requests

[C]      DOJ Enforcement Vehicles and Types of Settlements

[1]       Generally

[2]       Declination

[3]       NPAs and DPAs

[4]       Guilty Pleas and Trials

[D] DOJ Principles of Prosecution

[1] Business Organizations

[a] Factors Considered

[b]       Weighing the Factors

[c]       Holder, Thompson, McNulty, Filip, and Monaco Memoranda

[2]       Individuals

[E]      Fines, Penalties, and Other Sanctions

[1]       Criminal

[a]       Maximum penalties

[b]       United States Sentencing Guidelines

[2]       Civil

§ 10.03 Civil Enforcement by the SEC

[A]      Overview of SEC Authority

[B]      Investigative Tools and Techniques

[1]       SEC Subpoenas: Documents and Testimony

[a]       Subpoenas

[b]       Testimony

[2]       Document Requests

[C]      SEC Enforcement Vehicles and Types of Settlements

[1]       Generally

[2]       No-Action Letter

[3]       NPAs and DPAs

[4]       Injunctive Relief

[5]       Administrative and Civil Settlements and Proceedings

[D]      SEC Principles of Prosecution

[1]       The Seaboard Report

[2]       “Streamlined” Process and Cooperation Incentives

[3]       FCPA Enforcement

[E]      Monetary Sanctions

[1]       Generally

[2]       Civil Penalties

[3]       Disgorgement

[4]       Prejudgment Interest

§ 10.04 Corporate Compliance Monitors

[A]      Overview of Monitors

[B]      How to Avoid a Monitor

[C]      Selection of a Monitor

[D]      Scope and Authority of a Monitor

[E]      Term of a Monitor

[F]      Working with a Monitor

§ 10.05 Other Statutes in the DOJ’s Arsenal

[A]      Introduction

[B]      Conspiracy

[C]      Mail and Wire Fraud

[D]      RICO

[E]      Travel Act

[F]      False Claims Act

[G]      False Statements

[H]      Money Laundering

[I]       Tax Statutes

[J]       AECA and ITAR

§ 10.06 Preparing to Litigate against the Government

[A]      DOJ

[1]       Position Papers

[2]       Grand Jury Process

[3]       The Indictment

[B]      SEC

[1]       Wells Notice Process

[2]       The SEC Staff’s Action Memo

§ 10.07 Collateral Consequences of an FCPA Enforcement Action

[A]      Introduction

[B]      Government Debarment and Suspension

[1]       General Considerations

[2]       Debarment

[3]       Suspension

[4]       European Union

[C]      Loss of Status as Well-Known Seasoned Issuer

[D]      Commerce and State Department Sanctions

[1]       General Considerations

[2]       Export Licenses for Defense Articles

[3]       Export Licenses for Commercial Articles

[E]      Public International Organization Sanctions

[1]       General Considerations

[2]       World Bank and Other Multilateral Development Banks

[3]       United Nations

[F]      Shareholder Litigation

[G]      Other Third-Party Litigation

[1]       General Considerations

[2]       Claims Brought by a Customer

[3]       Claims Brought by a Competitor

[4]       Claims Brought by a Business Partner

[5]       Claims Brought by Employees

[H]      Other Potential Collateral Consequences

Chapter 11: Multi-Jurisdictional Investigations

§ 11.01 Cross-Border Evidence Sharing

[A]      Informal Evidence and Information Sharing

[B]      Formal Mechanisms for Evidence Sharing

[1] Mutual Legal Assistance Treaties

[a]       Crimes Covered by Mutual Legal Assistance Treaties

[b]       Mechanisms for Evidence Gathering in Mutual Legal Assistance Treaties

[c]       United States-European Union Mutual Legal Assistance Treaty

[d]      Bank Secrecy and Blocking Statutes Under Mutual Legal Assistance Treaties

[e]       Case Specific Agreements-“Lockheed Agreements”

[2] Letters Rogatory

[3] SEC MOUs and Cooperative Arrangements

[4] Timeframe for Formal Evidence Sharing

§ 11.02 Extraterritorial Evidence Taking

[A]      Compelling Testimony or Production from a United States National or Resident Living Abroad

[B]      Compelling Production of Business Records of a Foreign Company Through Grand Jury Subpoenas to Domestic Affiliates or Law Firms

[C]      Other Methods for Seeking Banking and Business Records

[D]      Border Searches

§ 11.03 Admissibility of Foreign Evidence

§ 11.04 Privilege Issues

§ 11.05 Coordinating Cooperation and Settlement over Multiple Jurisdictions

Chapter 12: Global Anticorruption Enforcement

§ 12.01 Introduction

§ 12.02 International Anticorruption Efforts

[A]      Intergovernmental Organizations

[1] Organization of Economic Co-operation and Development

[2] United Nations

[3] Organization of American States

[4] Council of Europe

[5] African Union

[6] World Bank

[B]      Non-Governmental Organizations

[1] Transparency International

[2] Extractive Industries Transparency Initiative

[3] Private Sector Organizations

§ 12.03 Selected National Enforcement Regimes

[A]      Germany

[B]      China

Chapter 13: The United Kingdom Bribery Act 2010

§ 13.01 Overview

§ 13.02 Jurisdiction Under the Bribery Act

[A]      Territorial Jurisdiction

[B]      Extraterritorial Jurisdiction

[C]      Jurisdiction Under the Offense of Failure of Commercial Organizations to Prevent Bribery

§ 13.03 Financial or Other Advantage

[A]      Charitable Donations

[B]      Travel, Accommodation, and Subsistence Expenses

§ 13.04 The Offense of Bribing Another Person

[A]      Case 1: Intending to Induce or Reward Improper Performance of a Relevant Function

[B]      Case 2: Knowing or Believing that Acceptance of the Advantage Will Constitute Improper Performance of a Relevant Function

[C]      Relevant Function or Activity

[D]      Hospitality Under the Offense of Bribing Another Person

[E]      Facilitation Payments Under Case 2

[F]      Liability for Conspiracy or Encouraging an Offense

§13.05 The Offense of Being Bribed

§ 13.06 Bribery of a Foreign Public Official

[A]      Definition of “Foreign Public Official”

[B]      Elements of the Offense of Bribing a Foreign Public Official

[C]      Effect of Law Applicable to the Foreign Public Official

[D]      Hospitality Provided to Foreign Public Officials

§ 13.07 Failure of Commercial Organizations to Prevent Bribery

[A]      Meaning of “Associated Person”

[B]      For the Benefit of the Commercial Organization

[C]      Defense of Adequate Procedures

§ 13.08 Facilitation Payments

§ 13.09 Liability of Senior Officers for Company Offenses

§ 13.10 Time Period to Bring Bribery Act Prosecutions

§ 13.11 Enforcement and Penalties

[A]      Prosecution

[B]      Deferred Prosecution Agreements

[C]      Financial Penalties

[D]      Compensation

[E]      Confiscation

Chapter 14: France’s Anticorruption Legal Framework

§ 14.01 A Brief Overview of the Recent History of French International Anticorruption Laws

§14.02 Jurisdictional Reach

[A]      Territorial Jurisdiction

[B] Extraterritorial Jurisdiction

[C]      Jurisdiction Based on Complicity

§ 14.03 The French Anticorruption Agency

§ 14.04 Corruption Offenses Under French Law

[A]      Corruption

[B]      Influence Peddling

[C]      Ancillary Sanctions

[D]      Court-Imposed Monitorship

[E]      Liability of the Company and/or Its Representatives

[F]      Absence of Exceptions or Specific Defenses

[G]      Existence of an Effective Anticorruption Program

§ 14.05 Enforcement

[A]      Statute of Limitations

[B]      Prosecution

[C]      Indemnification of Victims

[D]      Plea Bargaining

[E]      Deferred Prosecution Agreements

[F]      Distinctive Characteristics of the French Approach to Internal Investigations

§ 14.06 The Affirmative Obligation to Prevent Corruption Under French Law

[A]      Individuals and Legal Entities Subject to this Affirmative Obligation

[B]      The Eight Elements of the International Anticorruption Compliance Program

[C]      Supervision

[D]      Sanctions

[E]      Precedents

 § 14.07 The French Whistleblowing Framework

Chapter 15     Italy’s Anticorruption Legal Framework

§ 15.01 A Brief Overview of the Recent History of Italian International Anticorruption Laws

§ 15.02 Jurisdiction With Respect to Individuals

[A]      Territorial Jurisdiction

[B]      Extraterritorial Jurisdiction

§ 15.03 Italian Anticorruption Offenses Overview

[A]      Passive Bribery for the Performance of a Public Function

[B]      Passive Bribery for an Act Contrary to Public Duties or Proper Bribery

[C]     Passive Bribery in Judicial Proceedings

[D]     Unlawful Inducement to Give or Promise Anything of Value

[E]      Active Bribery

[F]      Instigation to Bribery

[G]      Bribery of Foreign Public Officials

[H]      Extortion Committed By a Public Official

[I]       Private-to-Private Corruption

[J]       Instigation to Private Corruption

[K]      Influence Peddling

§ 15.04 The Liability of Companies Under Decree 231

[A]      Conditions for Corporate Liability

[B]      Organizational Culpability

[C]     Sanctions

[D]      Confiscation

[E]      Precautionary Measures

[F]      Court-Appointed Administrator

[G]      Statute of Limitations

[H]      Jurisdiction

[I]       Liability of Groups of Companies

§ 15.05 The National Anticorruption Authority

§ 15.06 Enforcement

[A]      Investigation By the Public Prosecutor

[B]      Conclusion of the Investigation

[C]      Preliminary Hearing

[D]      Trial

[E]      Decision

[F]      Aggrieved Party and Decision on the Damages

[G]      The Fast-Track Proceedings (giudizio abbreviato)

[H]      Plea Bargaining (patteggiamento)

[I]      DPA in Italy

§ 15.07 Whistleblowing

[A]      The Public Sector

[B]      The Private Sector

[C]      The Protection of Whistleblowers