Insight 8 | FCPA, International Cooperation, Global Settlements and Latin America
Summary: The Foreign Corrupt Practices Act of 1977 (“FCPA”) was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.
Thanks to Stanford Law School and Sullivan & Cromwell's Foreign Corrupt Practices Act Clearinghouse, a public database that aggregates and curates source documents and provides analytic tools related to enforcement of the FCPA, we know the following FCPA-related facts:
There have been 325 FCPA-related enforcement actions brought by the DOJ (76.60% resolved via settlement) and 208 enforcement actions brought by the SEC (92.58% resolved via settlement).
There have been 371 FCPA-related corporate defendants, and 361 individual defendants.
There are approximately 120 individuals who have served some time (prison, probation/supervised release, or house arrest) for FCPA violations. The highest sanction was 15 years in prison, and the average is ~4 years.
Total monetary sanctions (U.S.): US$11,010,692,317
The legal costs incurred by corporations during FCPA investigations and subsequent corporate and compliance enhancements can be a multiple of the monetary sanctions imposed by enforcement agencies. For example, Siemens AG reported incurring costs of more than $1 billion for a global inquiry into payment of bribes to foreign officials to win business. The company agreed to pay penalties of $1.6 billion to the DOJ, SEC and German authorities in 2008. Walmart has reported spending over US$880 million in legal costs and compliance enhancements in response to its alleged FCPA violations in Mexico and other countries. The investigations are still ongoing after 6 years.
New Era of International Cooperation and Coordination
International cooperation is not a new phenomenon in FCPA matters, but in recent years, it has grown exponentially. There have been an increasing number of successful multinational efforts to identify, investigate and prosecute corruption schemes.
There are at least three factors that have contributed to create this new era of international collaboration and cooperation: 1) Stronger institutional commitment for international cooperation; 2) Reciprocal information sharing; and 3) New anti-bribery regulations and enforcement activity by foreign authorities.
One of the new trends in the fight against corruption involves multi-jurisdictional, coordinated investigative and joint enforcement efforts between U.S. and foreign agencies.
Since 2016, there are at least seven large global multi-jurisdictional resolutions between enforcement agencies from the U.S., Brazil, Sweden, Netherlands, U.K. and Singapore:
Those cases included total penalties of approximately US$7,56 billion, from which US$1,83 billion correspond to sanctions paid to the U.S.
FCPA Cases in Latin America
Over the past decade, there has been an increased focus on FCPA enforcement in Latin America by the U.S. enforcement agencies.
Since 2008, there have been a total of 73 FCPA cases in Latin America. Two thirds of these cases (48) have taken place in just 4 countries: Mexico (16), Brazil (12), Argentina (11) and Venezuela (9). These cases have included a total of 152 enforcement actions against corporate and individual defendants
In total, these cases have taken place in 15 different Latin American countries. Since 1977, there have been 96 FCPA cases and 196 enforcement actions in Latin America.
You can can find full article at the following link: FCPA, International Cooperation, Global Settlements and Latin America Focus.
Author: Evan M. Epstein
Founder & Managing Partner
Pacifica Global Corporate Governance
Keywords: Foreign Corrupt Practices Act, FCPA, Compliance, Latin America, Anti-Bribery, International Cooperation, Global Settlements, Corporate Governance
Pacifica Global was founded in San Francisco to serve as a leading corporate governance advisory firm. The mission of Pacifica Global is to help public and private companies solve some of their most complex corporate governance conflicts and challenges.