Anti-corruption quarterly - 3rd quarter 2015

ANTI-CORRUPTION Quarterly 3rd Quarter 2015 GLOBAL WATCH CROSS-BORDER COOPERATION IN HIGH PROFILE FIFA, PETROBRAS AND ALSTOM CASES In the global anti-corruption arena, U.S. regulators and foreign governments are increasing their coordination in investigating and prosecuting cases. As the U.S. DOJ and SEC push to extend the already long arm of the FCPA’s jurisdictional reach, U.S. authorities often find themselves “shoulderto-shoulder with law enforcement and regulatory authorities in other countries,” as Assistant Attorney General Leslie Caldwell noted in a 2014 speech. This increasingly close cooperation magnifies the potential risks facing businesses that operate across borders. Law enforcement agencies are integrating prosecution strategies, sharing evidence and coordinating arrests. Such cross-border collaboration not only increases the ability of U.S. prosecutors to pursue crimes committed abroad, but it also increases the chance that such charges will be duplicated by authorities in other countries. CONTINUED ON PAGE 7 CLARIFYING THE SCOPE OF THE ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT PROTECTION IN INTERNAL INVESTIGATIONS In In re: Kellogg Brown & Root, Inc., No. 14-5319 (D.C. Cir. Aug. 11, 2015), the Court of Appeals for the District of Columbia Circuit issued the “drastic and extraordinary remedy” of a writ of mandamus, vacating the District Court for the District of Columbia’s order compelling production of documents prepared during a company’s internal investigation. This is the latest decision in an ongoing debate surrounding the scope of the attorney-client privilege and work product protection in internal investigations. The D.C. Circuit’s decision, finding that the district court’s rulings would “generate substantial uncertainty about the scope of the attorney-client privilege in the business setting” and “erode the confidentiality of an internal investigation,” provides practical guidance for companies seeking to avoid disclosure of the contents of their internal investigations in subsequent litigation. CONTINUED ON PAGE 5 U.S. V. HOSKINS: INCREASED BURDEN TO CHARGE A NONRESIDENT, FOREIGN NATIONAL UNDER THE FCPA In August, a federal district court in Connecticut held that for an individual to be convicted of conspiring to violate the FCPA or aiding and abetting a violation of the FCPA, the individual must also fall within a category of persons directly liable under the FCPA. Thus, according to the court, individuals who are not among the classes of persons enumerated in the statute may not be swept up in an FCPA charge using theories of conspiracy or aiding and abetting. If this ruling is upheld and adopted by other courts, it will mean that DOJ may only charge a nonresident, foreign national under the FCPA by proving that the nonresident, CONTINUED ON PAGE 3 VISIT SIDLEY.COM FOR MORE INFORMATION ON SIDLEY’S FCPA/ANTI-CORRUPTION PRACTICE This Sidley update has been prepared by Sidley Austin LLP for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. Attorney Advertising—For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000. Sidley Austin refers to Sidley Austin LLP and affiliated partnerships as explained at sidley.com/disclaimer. Prior results described herein do not guarantee a similar outcome. IN THIS ISSUE: FEATURES U.S. V. HOSKINS: INCREASED BURDEN TO CHARGE A NONRESIDENT, FOREIGN NATIONAL UNDER THE FCPA.......... 1 CLARIFYING THE SCOPE OF THE ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT PROTECTION IN INTERNAL INVESTIGATIONS ........... 1 CROSS-BORDER COOPERATION IN HIGH PROFILE FIFA, PETROBRAS AND ALSTOM CASES ....................... 1 COLUMNS IN THE INTERIM................................. 2 COMPLIANCE CORNER: AFTER REGULARLY ADVISING COMPANIES TO DO THE SAME, DOJ HIRES ITS OWN ANTI-CORRUPTION COMPLIANCE EXPERT...................... 4 ANTI-CORRUPTION Quarterly * New criminal or civil cases (settled or contested) instituted by year ** Based upon public disclosures of investigations * Includes disgorgement; does not include non-U.S. fines ** Includes publicly disclosed reserves for future FCPA settlements 16 19 20 14 28 15 49 26 22 25 11 12 21 20 19 11 94 11 8 114 2007 2008 2009 2010 2011 2012 2013 2014 2015 Pending Investigations** FCPA-Related Cases* DOJ SEC 2007 2008 2009 2010 2011 2012 2013 2014 2015 Pending Settlement** 155.1 803.0 644.6 1885.12 502.7 260.3 731.1 1569.71 3.6 138.99 Corporate FCPA-Related Penalties* (in U.S. millions) 2 IN THE INTERIM 6/30/2015 – DOJ filed a complaint for the civil forfeiture of $34 million against Griffiths Energy International Inc., a Canadian oil company that was allegedly used to bribe Chad’s former ambassador to the United States and Canada. The bribe was alleged to have influenced the award of oil development rights. The complaint further alleges that Griffiths Energy paid a $2 million consulting fee to the ambassador’s wife. 7/8/2015 – A Norwegian court sentenced four former senior executives of Yara International, a Norwegian fertilizer manufacturer, to prison terms, ranging from two to three years, for paying approximately $8 million in bribes to Indian and Libyan officials for market access. The Norwegian penal code criminalizes active and passive bribery and applies to any company registered in Norway. All four defendants have appealed. 7/14/2015 – In its annual report for 2014–15, the U.K. Serious Fraud Office (SFO) reported a conviction rate of 78 percent, representing the successful prosecution of 18 defendants in nine cases, and also reported 16 new investigations. Additionally, the SFO recovered approximately $21.3 million in assets and issued approximately $41.3 million in confiscation orders in 2014—15. 7/20/2015 – Louis Berger International, Inc., a construction management company, entered into a deferred prosecution agreement (DPA) in which it admitted to violating the FCPA and agreed to pay a $17.1 million criminal penalty for paying $3.9 million in bribes to foreign officials in India, Indonesia, Vietnam and Kuwait to win construction management contracts. The company agreed to enhance internal controls and retain a compliance monitor for at least three years. Additionally, two former officials plead guilty to conspiracy and FCPA charges. 7/28/2015 – Mead Johnson Nutrition Co., the infant formula maker, agreed to pay $12.03 million to settle civil FCPA charges, without admitting or denying the allegations that led to the charges. A China unit of Mead Johnson allegedly paid $2 million in bribes to healthcare professionals at state-owned hospitals in China. The SEC stated that Mead Johnson had violated the FCPA’s books and records provisions by failing to properly record the illegal payments and that the company had an inadequate system of internal accounting controls. 8/6/2015 – NCR Corp., which makes ATMs, received a notice from the SEC that the SEC “does not intend to recommend an enforcement action” after a three-year investigation into FCPA compliance issues. In 2012, NCR Corp. received anonymous allegations about possibly illicit business practices in China, the Middle East and Africa. 8/17/2015 – DOJ asked authorities in European countries to freeze approximately $1 billion in assets tied to alleged bribes from VimpelCom and MTS of Russia and TeliaSonera of Sweden. The bribes were CONTINUED ON PAGE 3 ANTI-CORRUPTION Quarterly 3Q/2015 • 2 ANTI-CORRUPTION Quarterly U.S. V. HOSKINS: INCREASED BURDEN TO CHARGE A NONRESIDENT, FOREIGN NATIONAL UNDER THE FCPA CONTINUED FROM COVER PAGE foreign national is part of a class of persons directly subject to the FCPA. In U.S. V. Hoskins, the court ruled that because the defendant was not himself a “domestic concern” or an employee of an issuer or a domestic concern, the government must prove he was an agent of a domestic concern or acted within the United States for him to be convicted. Last December, DOJ reported its largest-ever foreign bribery resolution when Alstom S.A. (Alstom), a French power and transportation company, pleaded guilty to violations of the FCPA and agreed to pay over $770 million to settle the charges. Four executives also pleaded guilty, but Lawrence Hoskins, a British citizen and former senior vice president at Alstom’s headquarters in France, did not settle with DOJ. DOJ pursued Hoskins for his alleged involvement in a bribery scheme that spanned from 2002 through 2009, wherein Alstom Power, Inc. (Alstom Power), a U.S.-based subsidiary of Alstom, secured a $118 million contract (known as the Tarahan Project) to build power stations for Indonesia’s state-owned electricity company. Hoskins purportedly approved the selection of, and authorized payments to, consultants, knowing that a portion of the money was intended to influence Indonesian officials to award Alstom Power the Tarahan Project. The FCPA prohibits three categories of entities or individuals from offering bribes to foreign officials: (1) “issuers,” (2) “domestic concerns,” and (3) persons who act within the territory of the United States. “Issuers” are defined as companies registered on a U.S. stock exchange or with reporting obligations to the SEC. “Domestic concerns” include U.S. citizens, nationals, residents, and businesses with their principal place of business in the United States or businesses organized under the laws of the United States. The “issuers” and “domestic concerns” categories include employees and agents acting on behalf of such businesses. Otherwise, the FCPA applies only to a nonresident, foreign national when that person acts within the United States in furtherance of an improper payment. Originally, DOJ alleged that Hoskins was an agent of a domestic concern under the FCPA because he was involved in obtaining and retaining contracts in Asia for Alstom and its subsidiaries. However, in a superseding indictment, DOJ changed the language it used to charge Hoskins with conspiracy because it believed that it was not necessary for the jury to find that Hoskins was an “agent” of a domestic concern so long as prosecutors could prove Hoskins acted “together with” a domestic concern. The conspiracy charge in the superseding indictment is consistent with DOJ’s longstanding theory that, so long as it has FCPA jurisdiction CONTINUED ON PAGE 4 3 paid to the eldest daughter of the Uzbek president for access to the country’s telecom market. 8/18/2015 – SEC announced that BNY Mellon paid $14.8 million to settle allegations that it violated the FCPA by providing student internships in 2010 and 2011 to family members of foreign officials affiliated with a Middle Eastern sovereign wealth fund, without following standard hiring procedures for interns. 8/19/2015 – Avon Products asked a district court judge to approve a $62 million settlement in a securities fraud lawsuit stemming from allegations that the company and two former officers failed to disclose FCPA compliance issues in China. Avon paid $135 million to settle an FCPA enforcement action in December 2014. 8/29/2015 – China amended its criminal law, making significant changes in the anti-corruption area, including making it a crime to bribe close relatives of state functionaries; adding monetary penalties for corruption-related crimes; raising the bar for bribepayors to be exempt from punishment; and replacing specific monetary figures that triggered levels of punishment with more general standards. 8/31/2015 – A Russian official, director of the Pan American Department of JSC Techsnabexport (Tenex), pleaded guilty to conspiracy to commit money laundering “in connection with his role in arranging over $2 million in corrupt payments to influence the awarding of contracts” with the Russian State Atomic Energy Corporation’s subsidiary Tenex, according to a DOJ press release. IN THE INTERIM CONTINUED FROM PAGE 2 ANTI-CORRUPTION Quarterly 3Q/2015 • 3 ANTI-CORRUPTION Quarterly U.S. V. HOSKINS: INCREASED BURDEN TO CHARGE A NONRESIDENT, FOREIGN NATIONAL UNDER THE FCPA CONTINUED FROM PAGE 3 over one conspirator, it has jurisdiction over all co-conspirators. For example, in the November 2012 FCPA Resource Guide, DOJ stated that foreign nationals and companies “may…be liable for conspiring to violate the FCPA…even if they are not, or could not be, independently charged with a substantive FCPA violation.” Recently, a Connecticut federal district court rejected this theory and dismissed the FCPA conspiracy count against Hoskins. The court ruled that an individual who is not directly subject to the FCPA cannot be convicted of conspiring to violate it. Finding that Congress chose to assign guilt to only specific categories of persons under the FCPA, the court held that persons not included in those identified categories are not subject to conspiracy liability under the FCPA. DOJ filed a motion asking the court to reconsider its ruling, and if the court declines to do so or reaffirms its decision, DOJ could appeal the holding to the Second Circuit. If upheld, the decision would not have affected the case against Alstom, which was an issuer under the FCPA, but it may affect other counts in the indictment against Hoskins. Under the Pinkerton doctrine, a defendant is liable for any crimes committed by his co-conspirators when the activity is reasonably foreseeable, committed within the course of the conspiracy, and done in furtherance of the conspiracy. Thus, Hoskins, who may not have been personally involved in any of the transfers of money allegedly used to bribe foreign officials, is still charged with six counts of violating the FCPA for wire transfers caused by employees of Alstom Power to bank accounts owned by the consultants. Given the court’s ruling on conspiracy, these counts are on more tenuous ground. Ultimately, this decision may not prevent Hoskins from being found guilty for his involvement in improperly obtaining the Tarahan Project for Alstom Power. Prosecutors might still prove that Hoskins was acting as an agent for a domestic concern and be able to charge him with conspiracy to violate the FCPA. It remains to be seen whether the district court’s ruling will stand after a motion from DOJ to reconsider, which was appealed, and upheld and adopted by other courts. However, this decision has called into question DOJ’s expansive and aggressive views on the jurisdictional reach of the FCPA. It now requires prosecutors to demonstrate that an individual was clearly within the categories of persons articulated in the FCPA before pursuing charges. 4 COMPLIANCE CORNER: After Regularly Advising Companies To Do the Same, DOJ Hires Its Own Anti-Corruption Compliance Expert Recently, DOJ announced the hiring of an expert counsel on corporate anti-corruption compliance programs to assist the Fraud Section in its criminal investigations, including into alleged violations of the FCPA. The individual retained for the position is Hui Chen, the former global head of anti-bribery and corruption at Standard Chartered Bank. Chen left Standard Chartered in June of this year to become an independent consultant. According to the announcement, the duties of the compliance counsel include providing expert guidance on whether to prosecute business entities. This advice will involve examining the “effectiveness of any compliance program that the company had in place” at the time of the alleged wrongdoing and of any “meaningful remedial action” taken by the business to “detect and prevent future wrongdoing.” In addition, after a resolution is reached requiring ongoing DOJ assessment of the company, the expert will provide guidance to help prosecutors and monitors ensure “such measures [are] effective.” While all implications of this new hire are not clear, what is clear is that this hire will place more pressure on companies with DOJ investigations to put into place a rigorous and stateof-the-art compliance program. This change also has implications for companies that do not have active investigations with DOJ on FCPA issues. For years, federal prosecutors have counseled businesses on the importance of implementing effective CONTINUED ON PAGE 5 ANTI-CORRUPTION Quarterly 3Q/2015 • 4 ANTI-CORRUPTION Quarterly CLARIFYING THE SCOPE OF THE ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT PROTECTION IN INTERNAL INVESTIGATIONS CONTINUED FROM COVER PAGE Barko I. This is not the first time the D.C. Circuit has admonished and overturned the district court for its decisions related to privilege in this litigation. In an earlier ruling, the district court ordered documents prepared during Kellogg Brown & Root’s (KBR) internal investigation, conducted pursuant to its code of business conduct (COBC), to be produced as non-privileged business records. On a petition for mandamus, the D.C. Circuit vacated that order, ruling that, in the context of an organization’s internal investigation, the privilege applies as long as one of the significant purposes of the internal investigation was to obtain or provide legal advice. The D.C. Circuit did, however, permit the district court to consider other arguments for why the documents were not covered by either the attorney-client privilege or the work product protection. Rule 612 waiver. In a later ruling in the same litigation, the district court did just that, ordering disclosure of certain COBC documents on alternative bases. The district court first found disclosure of the investigation documents appropriate because KBR’s employee had reviewed them before testifying in a deposition. According to the court, disclosure was appropriate under Federal Rule of Evidence 612, which, in certain circumstances, allows an opposing party to inspect documents a witness used to refresh his memory. The D.C. Circuit disagreed, finding two reasons why the district court erred in ordering disclosure. First, there was no indication that the deponent “relied on” the documents in his testimony. Second, the district court’s conclusions ran counter to the Supreme Court’s decision in Upjohn Co. v. United States, 449 U.S. 383 (1981), which sought to remove uncertainties regarding privilege in the corporate context. Ordering disclosure of the materials based on the deponent’s review would erode the protections made clear in Upjohn and “allow the attorney-client privilege and work product protection covering internal investigations to be defeated routinely by a counter-party noticing a deposition on the topic of the privileged nature of the internal investigation.” “At issue” waiver. Alternatively, the district court found disclosure of the COBC documents appropriate because KBR had placed privileged materials “in controversy.” KBR had cited portions of the deposition relating to the investigation in its subsequent motion for summary judgment. The district court found that, in doing so, KBR impliedly waived the attorney-client privilege because it affirmatively used the COBC contents in its filing and “actively sought a positive inference in its favor based on what KBR claims the documents show.” Because KBR was relying on the materials in its defense, the plaintiff, in fairness, was entitled to see them. The D.C. Circuit disagreed. Although it presented a “difficult question,” the court ultimately found that, “[w]here KBR neither directly stated that the COBC investigation had revealed no wrongdoing nor sought any specific relief because of the results of the investigation, KBR ha[d] not based a claim or defense upon the attorney’s advice.” Therefore, KBR did not waive privilege. Substantial need. In a separate opinion and order, the district court compelled production of certain COBC documents on the alternative basis that they were discoverable fact work product. Federal Rule of Civil Procedure CONTINUED ON PAGE 6 5 COMPLIANCE CORNER CONTINUED FROM PAGE 4 anti-corruption compliance programs. Federal prosecutors recognize that no compliance program will be able to stop every bad actor. DOJ’s November 2012 FCPA Resource Guide notes that a company may avoid prosecution even when its compliance program fails to prevent a violation if its internal controls are well-designed and effective. And even when prosecutors decide to pursue charges, the existence of an effective compliance program is a factor that mitigates punishment. However, in a speech explaining the hiring, Assistant Attorney General Leslie Caldwell stated that “a surprising number of companies still lack rigorous compliance programs,” “even more” have “good structures on paper, but fail in practice to devote adequate resources and management attention to compliance,” and others “fail to consider obvious risks.” In announcing the new compliance counsel position, Caldwell noted that “we are prosecutors, not compliance professionals.” She described the expert as someone who may provide a “reality check” to prosecutors when evaluating compliance programs. However, Caldwell was quick to dispel any notion that DOJ would recognize or institute a “compliance defense.” Rather, she stated “[o]ur hiring of a compliance counsel should be an indication to companies about just how seriously we take compliance.” The hiring announcement indicated the compliance expert will work with “stakeholders” to help prosecutors “develop appropriate benchmarks for CONTINUED ON PAGE 6 ANTI-CORRUPTION Quarterly 3Q/2015 • 5 ANTI-CORRUPTION Quarterly 26(b)(3) permits discovery of fact work product if a party “shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.” The Rule exempts from disclosure opinion work product—the “mental impressions, conclusions, opinions, or legal theories of a party’s attorney.” In ordering disclosure, the district court reiterated that “the attorney-client privilege protects communications between employees and lawyers or their agents, but not communications only between lawyers, or their agents, alone.” Therefore, materials produced by non-attorney investigators were not attorney-client privileged unless they contained information obtained from the client. The investigators’ reports related to the investigation, however, were work product protected because they were prepared by agents of the legal department in anticipation of litigation. After conducting an independent assessment of the documents, the court found that excerpts of the documents were discoverable fact work product because they “scrupulously avoid[ed] stating conclusions about the allegations investigated.” The D.C. Circuit disagreed. First, portions of the COBC documents were, in fact, attorney-client privileged because they summarized statements of KBR employees. Second, those materials that were not privileged were nevertheless protected work product because they contained the mental impressions of the investigators, who were acting on behalf of the legal department. Guidance. This drawn-out discovery dispute highlights the need for attorneys to initiate and oversee internal investigations to ensure that privileged documents and attorney work product are protected from disclosure. Although both the circuit court and district court considered the non-attorney investigators to be agents of the attorneys, in-house or outside counsel should be used to gather and review evidence and conduct witness interviews, when possible. If non-attorneys are used, companies should ensure and document that these non-attorneys are acting at the direction, and under the supervision of, counsel to avoid any possibility of doubt. Attorneys and their agents also should clearly label all documents developed during the course of a privileged investigation as subject to the attorneyclient privilege and/or the work product doctrine. Moreover, attorneys and their agents should be mindful of the different levels of protection afforded opinion work product and fact work product when creating written materials concerning the investigation. The district court found that certain documents were fact work product because “the investigators did not judge credibility, demeanor, or evasiveness of witnesses; did not label reviewed documents as relevant or irrelevant; and did not conclude that particular statements or records were indicators of fraud.” Although the D.C. Circuit disagreed with this assessment, the inquiry is fact-specific. To avoid possible disclosure, investigation documents should include a clear disclaimer that they record factual information necessary to provide legal advice to the company and that their contents include “thoughts, impressions, conclusions, and opinions in connection with the pending matters.” CLARIFYING THE SCOPE OF THE ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT PROTECTION IN INTERNAL INVESTIGATIONS CONTINUED FROM PAGE 5 6 evaluating corporate compliance and remediation measures.” Caldwell offered several examples of the types of metrics the expert will considering including: (1) strong, explicit, and visible support for compliance from directors and senior managers; (2) stature of and resources provided to those responsible for compliance; (3) clarity of compliance policies, including whether they are translated into local languages; (4) communication to and training of employees on compliance; (5) mechanisms to enforce compliance policies; (6) whether third parties have been “sensitized” to how seriously the company takes compliance and not merely provided “boilerplate language in a contract; (7) whether third parties are terminated for “lack of respect for laws and policies”; (8) policies to identify and mitigate risks of unique customers; and (9) measures to ensure “potentially suspicious activity” in one branch or office is shared with other braches or offices. Given this announcement, it is important to note that any deference granted to companies is likely to be contingent on whether the business actively keeps up with potential risks and the best practices in their industry. Caldwell noted that “there are vast differences in the quality and effectiveness of programs, even among similar companies.” Thus, a company may risk being held liable if it does not stay ahead of the curve in fashioning and updating its compliance programs. COMPLIANCE CORNER CONTINUED FROM PAGE 5 CONTINUED ON PAGE 7 ANTI-CORRUPTION Quarterly 3Q/2015 • 6 ANTI-CORRUPTION Quarterly GLOBAL WATCH CROSS-BORDER COOPERATION IN HIGH PROFILE FIFA, PETROBRAS AND ALSTOM CASES CONTINUED FROM COVER PAGE Perhaps the most prominent example of international cooperation occurred in May 2015, when nine officials of the Fédération Internationale de Football Association (FIFA) and five corporate executives were indicted on charges of racketeering and corruption. Working in concert with DOJ, Swiss authorities arrested seven defendants a few hours before the indictments were announced. Several days later, Interpol agents raided the Buenos Aires offices of three Argentine businessmen the U.S. accused of paying tens of millions of dollars in bribes as part of the corruption scandal. This level of international law enforcement coordination suggests a well-planned cross-border strategy and demonstrates DOJ’s continued leadership in prosecuting corruption around the globe. Cross-border collaboration was also on display in DOJ’s prosecution of Alstom S.A. (Alstom) and its subsidiaries for alleged bribes to foreign officials in connection with power grid, and transportation projects in five countries to secure $4 billion in contracts. In announcing Alstom’s more than $770 million settlement with DOJ, federal prosecutors noted the “significant cooperation provided by…law enforcement colleagues” in nine other countries. DOJ’s investigation also appeared to spur other nations to prosecute related cases. Following DOJ’s settlement, the U.K.’s Serious Fraud Office (SFO) brought charges against a U.K. subsidiary of Alstom and a French national for bribing foreign officials in connection with a contract to supply trains to the Budapest Metro in 2006 and 2007. Similarly, Polish authorities subsequently filed charges against five employees of an Alstom subsidiary for suspected bribes in connection with contracts to deliver subway cars and tramways to the Polish capital. Indonesian authorities have also brought charges related to misconduct by Alstom and its employees. Foreign governments are also reaching out to U.S. authorities for assistance with home-grown anticorruption investigations. Last year, the task force of Brazilian prosecutors investigating the alleged Petrobras bribery scheme began sending information on Petrobras to U.S. authorities. Because Petrobras trades shares on a U.S. exchange, the company is an issuer under the FCPA. DOJ and SEC are now working with Brazil to review the matter, and news reports speculate that Petrobras may have to pay record penalties to settle U.S. criminal and civil probes. Finally, the U.S. is not the only country engaging in cross-border anti-corruption cooperation. In July, a Norwegian court convicted four former executives of Yara International (Yara) of offering around $8 million in bribes to officials in Libya and India. As part of its investigation into Yara, Norway requested assistance from 13 countries. Yara was charged with corruption and fined roughly $48 million. As these and other recent investigations illustrate, both U.S. and foreign governments are increasingly cooperating on the global anti-corruption front, a trend that increases risk for companies doing business abroad. Many jurisdictions, including the United States, do not recognize the concept of international double jeopardy, meaning a company may find itself being charged by multiple nations for the same violation. In addition, some jurisdictions have yet to develop processes to settle prosecutions that reward self-disclosure, cooperation, and remediation during the investigation. As part of this trend to increase global cooperation, several nations are already devoting more resources to fighting international corruption. In July, the FBI created three foreign bribery and anti-kleptocracy squads. In August, the SFO followed suit, setting up a specialized International Corruption Unit that has pledged to work closely with overseas partners. As more resources are devoted to cross-border cooperation and as more nations successfully prosecute the offering of bribes, companies may find themselves subject to greater liability in more jurisdictions for corrupt practices. 7 COMPLIANCE CORNER CONTINUED FROM PAGE 6 To reduce their exposure, companies should routinely reassess the specific risks facing their businesses; update their policies and procedures accordingly; train their employees on these risks; and update their tools for monitoring and auditing transactions. It is important for companies to document their efforts to keep their programs up to date and benchmark their policies and procedures against other companies in their industry. ANTI-CORRUPTION Quarterly 3Q/2015 • 7 ANTI-CORRUPTION Quarterly 8 THE FCPA/ANTI-CORRUPTION PRACTICE OF SIDLEY AUSTIN LLP Our FCPA/Anti-Corruption practice, which involves over 90 of our lawyers, includes creating and implementing compliance programs for clients, counseling clients on compliance issues that arise from international sales and marketing activities, conducting internal investigations in more than 90 countries and defending clients in the course of SEC and DOJ proceedings. Our clients in this area include Fortune 100 and 500 companies in the pharmaceutical, healthcare, defense, aerospace, energy, transportation, advertising, telecommunications, insurance, food products and manufacturing industries, leading investment banks and other financial institutions. For more information, please contact: WASHINGTON, D.C. Paul V. Gerlach +1 202 736 8582 [email protected] Karen A. Popp +1 202 736 8053 [email protected] Leslie A. Shubert +1 202 736 8596 [email protected] Joseph B. Tompkins Jr. +1 202 736 8213 [email protected] CHICAGO Scott R. Lassar +1 312 853 7668 [email protected] LOS ANGELES Douglas A. Axel +1 213 896 6035 [email protected] Kimberly A. Dunne +1 213 896 6659 [email protected] NEW YORK Timothy J. Treanor +1 212 839 8564 [email protected] SAN FRANCISCO David L. Anderson +1 415 772 1204 [email protected] LONDON Dorothy Cory-Wright +44 20 7360 2565 [email protected] BRUSSELS Maurits J.F. Lugard +32 2 504 6417 [email protected] Michele Tagliaferri +32 2 594 64 86 [email protected] GENEVA Marc S. Palay +41 22 308 0015 [email protected] BEIJING Chen Yang +86 10 6505 5359 [email protected] Henry H. Ding +86 10 6505 5359 [email protected] SHANGHAI Zhengyu Tang +86 21 2322 9318 [email protected] SINGAPORE Yuet Ming Tham +65 6230 3969 [email protected] HONG KONG Alan Linning +852 2509 7650 [email protected] Yuet Ming Tham +852 2509 7645 [email protected] TOKYO Takahiro Nonaka +81 3 3218 5006 [email protected] Sidley Austin Nishikawa Foreign Law Joint Enterprise Sidley Austin refers to Sidley Austin LLP and affiliated partnerships as explained at sidley.com/disclaimer. AMERICA • ASIA PACIFIC • EUROPE sidley.com