On October 22, 2010, the Fifth Circuit issued United States v. Jeong,1 which held that the jurisdictional provisions of the OECD Convention did not bar multi-national enforcement of the same bribery offense by OECD countries. The Fifth Circuit’s ruling makes it increasingly important for corporations to be cognizant of the cross-border challenges posed by violations of the Foreign Corrupt Practices Act (FCPA) and other anti-bribery statutes. The decision is available at http://caselaw. findlaw.com/us-5th-circuit/1542485.html.
Multiple jurisdiction investigations and prosecutions have been increasingly prevalent, such as in the high-profile FCPA cases of Siemens (prosecuted in Germany and the U.S.) and Statoil (prosecuted in Norway and the U.S.). While the penalties faced in the U.S. are often more daunting than those levied by other countries, this may be changing as foreign countries like the United Kingdom, Germany and Norway (among many others) have enhanced their anti-bribery laws and enforcement since becoming signatories to the OECD Convention. As a result, the risk of multiple jurisdiction prosecution and accompanying penalties only rises.
The Jeong case concerned whether a South Korean national could be prosecuted under U.S. criminal laws (bribery and wire fraud) for conduct for which he had already been prosecuted by Korean authorities under Korea’s equivalent of the FCPA.
Id. at *1-2. Between 2001 and 2006, the defendant bribed American officials in order for his company to obtain and retain a 10-year telecommunications contract for military installations throughout Korea. Id. at *1. In 2006, a former employee of the defendant’s company notified the U.S. Air Force Office of the misconduct. Id. The Korean National Police began a parallel investigation soon thereafter, and the two agencies agreed to share information. Id. In early 2008, a Korean district court convicted the defendant, imposing approximately $10,500 in fines against the defendant and $21,000 against his company. The defendant served 58 days of pretrial detention, but received no additional incarceration. An appeal upheld the conviction and sentence. Id.
The United States continued the investigation following the defendant’s Korean conviction and submitted a request to Korean officials for assistance under a mutual legal assistance treaty. Id. at *2. The United States represented that it was seeking evidentiary materials from the defendant’s trial for purposes of its investigation of the American officials who accepted the bribes. Id. Notably, it indicated that it was “not seeking to further prosecute [the defendant].” Id.
The defendant ultimately pleaded guilty in the U.S., but reserved the right to appeal the issue addressed by the Fifth Circuit.2 The district court had imposed a sentence of $50,000 in fines and a 60-month jail term (with no credit for the Korean sentence). On appeal, the defendant argued that the U.S. was barred from prosecuting him for two reasons. He first argued that a jurisdictional provision in the OECD’s Anti-Bribery Convention, to which the U.S. and Korea are both signatories, precluded a second prosecution by the U.S. Id. at *2-3. Article 4.3 of the OECD Convention provides for consultation as to the most appropriate jurisdiction for prosecution where more than one party to the Convention has jurisdiction over the matter. Id. at *3-4. The defendant alternatively argued that the U.S. had waived its jurisdiction when, in its request for mutual legal assistance to Korean officials, it stated that it was not seeking to further prosecute the defendant. Id. at *5. Notably, Korea joined in the Fifth Circuit suit as amici in support of the defendant. Id. at *2.
The Fifth Circuit rejected both arguments. The court found that the plain language of the OECD Convention “does not prohibit two signatory countries from prosecuting the same offense.” Id. at *4. The OECD only requires consultation, if requested, of countries with concurrent jurisdiction, but the OECD Convention contains no bar to prosecutions in multiple countries. The defendant cited Article 4.3, which requires that consultation be made “with a view to determining the most appropriate jurisdiction for prosecution” and argued that because the provision uses the singular, not plural, form of “jurisdiction,” prosecution of an offense may be had in only one jurisdiction. The court, however, held that the parties need only consult “‘with a view to determin[e]’ the jurisdictional question–they need not actually answer it.” (Emphasis in original.) Thus there was nothing in the OECD that changed the general rule in U.S. law that double jeopardy does not apply when separate sovereigns prosecute the same offense. Id. (“The Constitution of the United States has not adopted the doctrine of international double jeopardy.”) (internal citations omitted).
With respect to the waiver argument, the Fifth Circuit basically ducked the issue and found that there was nothing in the record from which the court could find that the U.S. had ceded jurisdiction to Korea in this case. Implicitly, the court concluded that there can be no waiver unless an applicable treaty provides for such a possibility or, in other words, that there can be no waiver based on mere estoppel. See id. at *5 & n.7. However, the court failed to address directly the argument that the U.S.’s statement in the MLAT itself served as a bar to prosecuting the defendant.