2019 Year in Review
January 21, 2020
FCPA/Anti-Corruption Developments: 2019 Year in Review
Lucinda A. Low and Brittany Prelogar (eds.)1
US Foreign Corrupt Practices Act (FCPA) enforcement authorities announced
a steady stream of individual and corporate enforcement matters throughout
2019, some with eye-popping fines. Overall, the Department of Justice (DOJ) and
Securities and Exchange Commission (SEC) reported 50 FCPA-related actions
(including 31 by the DOJ and 19 by the SEC) over the course of the year. The $2.9
billion in total fines, penalties, and disgorgement imposed in corporate FCPA
settlements in 2019 nearly matched the record-breaking $2.91 billion imposed in 2018
in such matters. The DOJ also announced a slew of new charges against individuals
and racked up a number of trial victories in existing cases.
Mega settlements reached by two companies made up nearly two-thirds of
the $2.9 billion total corporate penalties imposed in 2019. In the first quarter of
the year, Mobile TeleSystems PJSC (MTS) agreed to pay $850 million in penalties
and disgorgement to resolve charges against it, joining the ranks of fellow
companies Telia and VimpelCom among the top FCPA fines to date for conduct
relating to the Uzbek telecommunications sector. In a strong book-end to the year,
Telefonaktiebolaget LM Ericsson (Ericsson) and its subsidiary, Ericsson Egypt Ltd.
(Ericsson Egypt), agreed to pay more than $1 billion in penalties and disgorgement
to resolve DOJ and SEC investigations for conduct in multiple countries.
Enforcement against individuals, especially by the DOJ, was also particularly
robust in 2019. Overall, the DOJ and SEC brought actions against 27 individuals in
2019 (24 by the DOJ and six by the SEC, with three actions taken in parallel), up from
just 13 such actions in 2018. This increase follows through on US authorities’ repeated
pronouncements in recent years that they would prioritize individual prosecutions,
and this commitment is unlikely to diminish any time soon. As Assistant Attorney
General Brian Benczkowski reported at a prominent FCPA conference in December
2019, “This number of individual prosecutions in 2019 is not an outlier or a statistical
anomaly. Rather, it is part of the Department’s continued dedication to holding
1 Other contributors to Steptoe’s 2019 FCPA/Anti-Corruption Year in Review include Brigida Benitez, Wendy Wysong,
Zoe Osborne, Steve Barber, Alexandra Melia, Susan Munro, Richard Battaglia, Ali Burney, Fernando Merino, Rachel
Peck, Nicholas Turner, Hena Schommer, and Alexandra Baj (Eds.); Jessica Piquet Megaw, Elizabeth Arkell, and
Jefferson Klocke (Associate Eds.); and Yasmin Almeida (Law Clerk & International Advisor), Yas Froemel, Veronica
Ganzitti, Chris Han, Peter Ibrahim, Nicholas Kimbrell, Jessica Maneval, Lia Metreveli, Jillian Norton, Anthony Pan,
Marcia Pulcherio (International Trainee), Alexandrea Rahill, Ayushi Sharma, Troy Shephard, A. Cherie Tremaine, Stefan
Tsakanakis, Meihui (May) Xiao, Lin Yang, and Bo Yue.
individual wrongdoers accountable across the board.”2 In addition to these newly
filed charges, four individuals were convicted at trial.
US federal courts also issued a number of rulings in 2019 (including in non-
FCPA cases) which could affect future FCPA cases, or the investigation thereof. In
Connolly, for example, the court was critical of the government’s “outsourcing” of its
investigation to company counsel without conducting its own parallel investigation.
In Ng Lap Seng, the court distinguished the meaning of “official act” in the FCPA
context from earlier jurisprudence in McDonnell. In Hoskins, the court defined the
circumstances in which a non-US defendant can be held liable for corrupt acts taken
outside US territory on the theory he was acting as an “agent” of a US company.
And the Supreme Court has determined to resolve in Liu whether the SEC may seek
disgorgement from a court as “equitable relief” for a securities violation.
International anti-corruption efforts also accelerated, including through
new legislative developments across Europe and through a continued focus
on anti-corruption enforcement in Latin America. The United States continued
multijurisdictional enforcement with Brazilian authorities (in TechnipFMC plc (TFMC)
and Samsung Heavy Industries Company Limited (Samsung Heavy Industries)) and,
overall, international cooperation efforts were widespread. Notably, MTS featured
cooperation across a plethora of jurisdictions including Austria, Belgium, Cyprus,
France, Ireland, Isle of Man, Latvia, Luxembourg, the Netherlands, Norway, Sweden,
Switzerland, and the United Kingdom. Investigation and enforcement by international
financial institutions, particularly the World Bank, also remained active.
Whether 2020 will log any blockbuster FCPA settlements remains to be seen, but
we expect that robust anti-corruption enforcement will continue—including through
a continued focus on individual prosecutions. In addition, given the DOJ’s updated
Guidance on Evaluating Corporate Compliance Programs and related training
provided to DOJ prosecutors, companies should expect to see a more uniform
and sophisticated review of their corporate compliance programs. Furthermore,
companies engaged in projects financed by multilateral development banks
should remain alert to the continued risks of multijurisdictional investigations and
2 Transcript, Assistant Attorney General Brian A. Benczkowski Delivers Remarks at the American Conference Institute’s
36th International Conference on the Foreign Corrupt Practices Act, Oxon Hill, MD (Dec. 4, 2019), https://www.justice.
Table of Contents
I. Enforcement Statistics and Trends.................................................................................... 1
A. Number of Enforcement Actions.......................................................................................1
B. Monetary Sanctions...............................................................................................................3
C. Geography of Conduct.........................................................................................................5
D. Nature of Conduct..................................................................................................................6
II. FCPA Policy Developments................................................................................................ 9
A. DOJ Revised Corporate Compliance Guidance...........................................................9
B. DOJ FCPA Corporate Enforcement Policy..................................................................10
C. DOJ Inability to Pay Memorandum.................................................................................10
D. DOJ Cooperation with SEC............................................................................................... 12
E. SEC Whistleblower Award Program.............................................................................. 12
F. CFTC Leniency Program..................................................................................................... 13
III. Significant Judicial Decisions in FCPA Matters and Related Civil Collateral
A. Significant Judicial Decisions in FCPA Matters.......................................................... 15
1. United States v. Ng Lap Seng................................................................................. 15
2. United States v. Hoskins........................................................................................... 16
B. Significant Judicial Decisions Relevant to FCPA Investigations
and Enforcement................................................................................................................... 17
1. United States v. Connolly......................................................................................... 17
2. Liu v. SEC........................................................................................................................ 18
C. Significant Civil Collateral Litigation.............................................................................. 18
1. General Cable Corporation...................................................................................... 18
2. OZ Africa Management............................................................................................. 19
3. ZimmerBiomet Holdings.........................................................................................20
4. Bio-Rad Laboratories...............................................................................................20
5. Misonix........................................................................................................................... 22
IV. 2019 FCPA Corporate Settlements.................................................................................24
A. DOJ Corporate Enforcement Policy Declinations....................................................24
1. Cognizant Technology Solutions Corporation................................................24
2. Quad/Graphics Inc.....................................................................................................24
B. DOJ Corporate Enforcement Actions..........................................................................24
1. Samsung Heavy Industries Company Limited................................................24
C. SEC Enforcement Actions................................................................................................ 25
1. Telefônica Brasil S.A.................................................................................................. 25
2. Deutsche Bank AG.....................................................................................................26
3. Juniper Networks, Inc............................................................................................... 27
4. Westport Fuel Systems, Inc.................................................................................... 28
5. Barclays PLC................................................................................................................29
D. Parallel DOJ/SEC Enforcement Actions......................................................................30
1. Cognizant Technology Solutions Corporation................................................30
2. Mobile TeleSystems PJSC......................................................................................... 31
3. Fresenius Medical Care AG & Co. KGaA............................................................. 33
4. Walmart Inc..................................................................................................................34
5. Technip FMC................................................................................................................ 35
6. Microsoft Corporation.............................................................................................. 37
7. Quad/Graphics Inc.....................................................................................................39
8. Telefonaktiebolaget LM Ericsson and Ericsson Egypt Ltd.........................40
V. 2019 Individual Enforcement Actions............................................................................43
A. Lyon Associates: Frank James Lyon and Master Halbert......................................44
B. Cognizant: Sridhar Thiruvengadam, Gordon Coburn, and Steven Schwartz...44
C. PDVSA Individuals...............................................................................................................45
D. MTS: Gulnara Karimova and Bekhzod Akhmedov...................................................46
E. Ematum/MAM Individuals................................................................................................46
F. Haiti Port Development: Roger Richard Boncy and Joseph Baptiste.............. 47
G. Robin Longoria.....................................................................................................................48
H. Corpoelec: Luis Alberto Chacin Haddad, Jesus Ramon Veroes, Luis Alfredo
Motta Dominguez, and Eustiquio Jose Lugo Gomez.............................................48
I. TechnipFMC: Zwi Skornicki...............................................................................................49
J. PetroEcuador: Armengol Alfonso Cevallos Diaz, Jose Melquiades Cisneros
Alarcon, Frank Roberto Chatburn-Ripalda.................................................................50
K. Westport: Nancy Gougarty............................................................................................... 51
L. Unaoil: Cyrus Ahsani, Saman Ahsani, and Steven Hunter...................................... 51
M. Herbalife: Jerry Li and Mary Yang.................................................................................. 52
N. Braskem: Jose Carlos Grubisich..................................................................................... 52
O. 1MDB: Tim Leissner and Ng Chong Hwa (Roger Ng).............................................. 53
P. Transport Logistics International: Mark Lambert.....................................................54
Q. Donville Inniss, Ingrid Innes, and Alex Tasker............................................................54
R. Alex Nain Saab Moran and Alvaro Pulido Vargas..................................................... 55
S. Patrick Ho................................................................................................................................ 55
T. Keppel Offshore & Marine Ltd.: Jeffrey Shui Chow.................................................. 55
U. Ng Lap Seng.......................................................................................................................... 55
V. Alstom S.A.: Lawrence Hoskins.......................................................................................56
VI. New FCPA Investigations.................................................................................................. 57
A. Aviation.................................................................................................................................... 57
B. Energy and Extractives...................................................................................................... 57
D. Other Industries....................................................................................................................58
VII. World Bank and Other International
A. The World Bank....................................................................................................................59
B. Other International Financial Institutions...................................................................60
VIII. International Developments..............................................................................................61
A. United Kingdom.................................................................................................................... 61
B. Continental Europe ............................................................................................................65
2. Germany........................................................................................................................ 67
7. Sweden........................................................................................................................... 71
8. Switzerland.................................................................................................................... 71
C. Russia........................................................................................................................................ 72
D. Asia Pacific............................................................................................................................. 73
1. China............................................................................................................................... 73
a. The Powerful NSC...................................................................................................... 73
b. International Cooperation and Regulatory Compliance by
Chinese Companies................................................................................................... 75
2. South Korea.................................................................................................................. 77
3. India................................................................................................................................. 78
4. Japan.............................................................................................................................. 79
5. Hong Kong....................................................................................................................80
6. Indonesia........................................................................................................................ 81
7. Thailand......................................................................................................................... 82
8. Vietnam.......................................................................................................................... 82
10. The Philippines............................................................................................................84
E. Latin America........................................................................................................................86
5. Other Developments in Latin America...............................................................90
F. Africa......................................................................................................................................... 91
1. South Africa.................................................................................................................. 91
2. Other Developments in Africa...............................................................................92
I. Enforcement Statistics and Trends
A. Number of Enforcement Actions
With 50 reported FCPA-related actions against corporations and individuals,
2019 was the most active year for US FCPA enforcement since 2016, when the DOJ
and SEC set enforcement records.3 In 2019, the DOJ brought 31 enforcement actions
against individuals and companies, while in 2018, it brought only 15, and in 2017, it
brought 24. The SEC, on the other hand, brought 19 enforcement actions in 2019,
compared to 18 in 2018 and only nine in 2017.4 In contrast, 2016 saw 24 DOJ and 37
SEC FCPA enforcement actions.
Fourteen companies faced charges from the DOJ, the SEC, or both in 2019. This is
a slight decrease from 2018, in which 16 companies faced charges. These companies
were in the telecommunications, oil and gas, financial services, technology, retail,
medical goods and services providers, and engineering sectors (among others). The
DOJ and SEC brought six parallel corporate enforcement actions, compared to four
3 Steptoe’s methodology takes into account charges brought in 2019 or unreported prior to 2019. With respect to
charges brought against companies and individuals, the methodology counts charges involving violations of the
FCPA and for conspiracy to violate the FCPA. These statistics do not include non-FCPA foreign corruption-related
charges against individuals (such as money laundering charges against corrupt foreign officials), although we discuss
such cases herein in Section V, infra.
4 The DOJ and SEC brought a total of 20 corporate FCPA enforcement actions (counting actions against more than
one member of the same corporate family, such as those against Ericsson and MTS subsidiaries, as a single action).
The 20 corporate enforcement actions include six parallel enforcement actions by the DOJ and SEC against the
same companies (Ericsson, Fresenius Medical Care AG & Co. KGaA (FMC), Microsoft Corporation (Microsoft), MTS,
TFMC, Walmart Inc. (Walmart)) (excluding declinations under the DOJ FCPA Corporate Enforcement Policy), one
separate action by the DOJ (Samsung Heavy Industries), and another seven separate actions by the SEC (Barclays
PLC (Barclays), Cognizant Technology Solutions (Cognizant), Deutsche Bank AG (Deutsche Bank), Juniper Networks
(Juniper), Quad/Graphics (Quad), Telefônica Brasil S.A. (Telefônica), Westport Fuel Systems, Inc. (Westport)).
in 2018 and three in 2017. Six of the 14 companies facing charges in 2019 were USbased
corporations, while eight were foreign firms:5
In total, US enforcement authorities brought charges against 27 individuals in
30 actions in 2019. Of these, the DOJ brought 24 actions, while the SEC brought six
(three of which were brought in parallel against individuals who also were subject
to DOJ charges). The number of charges brought against individuals is a significant
increase (especially by the DOJ) from the 13 enforcement actions that were brought
in 2018 (during which nine actions were brought by the DOJ and four by the SEC).
This increase is in keeping with US authorities’ repeated pronouncements in recent
years that prosecuting individuals is a priority.6 As Assistant Attorney General Brian
Benczkowski reported at the 36th International Conference on the FCPA, this trend is
likely to continue.7
5 For purposes of Steptoe’s count, the US-based companies include Cognizant, Juniper, Microsoft, Quad, TFMC, and
Walmart. Although TFMC is a global company headquartered in London, Houston, and Paris, it is included as a USbased
corporation for the purpose of these statistics. One of TFMC’s predecessor companies, FMC Technologies Inc.,
was based in the United States, and was involved in the alleged misconduct. In addition, TFMC’s wholly-owned US
subsidiary, Technip USA, Inc., also settled charges with US authorities in 2019 for related conduct.
6 See, e.g., Memorandum from Sally Quillian Yates, Deputy Attorney General, US Dep’t of Justice (Sept. 9, 2015) (Yates
Memo), http://www.justice.gov/dag/file/769036/download (last accessed Jan. 5, 2020); Transcript, Attorney
General Jeff Sessions Delivers Remarks at the Ethics and Compliance Initiative Annual Conference, Washington, D.C.
(Apr. 24, 2017), https://www.justice.gov/opa/speech/attorney-general-jeff-sessions-delivers-remarks-ethics-andcompliance-
initiative-annual. This policy was reiterated in remarks made by Deputy Attorney General Rod Rosenstein
at American Conference Institute’s 35th International Conference on the Foreign Corrupt Practices Act (FCPA) in 2018
and associated revisions to the DOJ’s Justice Manual (formerly the US Attorney’s Manual). See Transcript, Deputy
Attorney General Rod J. Rosenstein Delivers Remarks at the American Conference Institute’s 35th International
Conference on the Foreign Corrupt Practices Act, Oxon Hill, MD (Nov. 29, 2018), https://www.justice.gov/opa/speech/
7 Transcript, Assistant Attorney General Brian A. Benczkowski Delivers Remarks at the American Conference Institute’s
36th International Conference on the Foreign Corrupt Practices Act, Oxon Hill, MD (Dec. 4, 2019), https://www.
(“This number of individual prosecutions in 2019 is not an outlier or a statistical anomaly. Rather, it is part of the
Department’s continued dedication to holding individual wrongdoers accountable across the board.”).
The DOJ also issued two formal declinations this year under the FCPA Corporate
Enforcement Policy, in addition to the corporate enforcement actions noted above.
Both declinations (Cognizant and Quad) were issued in parallel with related SEC
actions and credited disgorgement the companies agreed to pay to the SEC.8
B. Monetary Sanctions9
The aggregate dollar value of monetary sanctions imposed by the DOJ and the
SEC for FCPA-related offenses in 2019 was approximately $2.9 billion—$2.65 billion
of which was payable to the US Treasury.10 This aggregate amount of $2.9 billion is
just slightly lower than 2018’s record high of approximately $2.91 billion, of which
8 As noted above, for the purpose of these statistics we have considered these actions to be SEC enforcement actions
only (and not parallel actions). For a discussion of these cases, see Section IV, infra.
9 All values reported in US Dollars unless otherwise specified.
10 The totals include penalties, disgorgement and interest. The difference between fines imposed and paid to the US
Treasury reflects credits to payments to other authorities.
$1.95 billion was payable to the US Treasury. Mega settlements involving just two
companies, Ericsson and MTS, made up nearly two-thirds of this total.
The Ericsson settlement involved charges of conspiracy to violate the FCPA’s
anti-bribery, books and records, and internal control provisions. The underlying
conduct, which involved the company’s alleged use of third parties and provision
of travel and entertainment to officials and their families to win business and obtain
insider information, allegedly spanned five countries and more than seventeen
years. Ericsson paid approximately $1.06 billion in penalties, disgorgement, and
prejudgment interest, all of which was paid to the US Treasury.
The second highest settlement in 2019, MTS, followed on the heels of other
notable FCPA enforcement actions in the Uzbek telecom sector (including
VimpelCom in 2016 and Telia in 2017), all of which involved payments to the same
Uzbek official, Gulnara Karimova. MTS agreed to pay $850 million to resolve the
charges, also all payable to the US Treasury.
Even the smallest settlements from 2019 were still substantial—over $4 million
each. Those matters include, for example, Telefônica, which settled with the SEC
for violating the FCPA’s accounting provisions in connection with providing World
Cup and Confederation Cup tickets to government officials, and Westport, which
also settled with the SEC for anti-bribery, books and records, and internal control
violations in connection with a bribery scheme involving its shares in a Chinese joint
venture to secure business and a cash dividend payment.
Two enforcement actions from 2019 involved multijurisdictional enforcement,
both with Brazilian authorities. In TFMC, the company agreed to pay approximately
$214 million of its $301.2 million total penalty to Brazilian authorities. And in
Samsung Heavy Industries, the company agreed to pay half of its $75 million penalty
to Brazilian authorities. In addition to acknowledging assistance from Brazilian
authorities, the DOJ also acknowledged assistance from authorities in Monaco and
Switzerland in conducting its investigation of Samsung Heavy Industries.
There were several other notable examples of international cooperation in
2019. For example, with respect to MTS, US authorities acknowledged assistance
from authorities in Austria, Belgium, Cyprus, France, Ireland, Isle of Man, Latvia,
Luxembourg, the Netherlands, Norway, Sweden, Switzerland, and the United
Kingdom. The DOJ and SEC also credited Brazil, India, and Mexico with help in their
investigation of Walmart, and the SEC acknowledged Canadian assistance in its
investigation of Westport.
C. Geography of Conduct
Consistent with past years, FCPA corporate enforcement activity in 2019 was
based on misconduct that occurred in diverse jurisdictions. Asia (including China,
Indonesia, Thailand, Uzbekistan, and Vietnam) continued to be the most common
venue for misconduct. India also continued to be a common venue in 2019, as did
Brazil. Other misconduct in the Americas in 2019 took place in Mexico and Peru. In
Europe, other than in Russia, misconduct occurred in Bosnia, Hungary, Serbia, Spain,
and Turkey. Within the Middle East, misconduct occurred in Iraq, Kuwait, and Saudi
Arabia. And in Africa, countries in which misconduct occurred were Angola, Benin,
Burkina Faso, Cameroon, Chad, Djibouti, Gabon, the Ivory Coast, Morocco, Niger, and
11 Many enforcement actions are listed as occurring in more than one location due to the global nature of the
underlying conduct. For example, conduct alleged in Ericsson (Africa, Asia, Middle East, Southeast Asia); Walmart
(Brazil, Middle East); FMC (Africa, Americas, Asia, Europe, and Middle East); Microsoft (Europe, Middle East,
Southeast Asia); Deutsche Bank (Asia, Russia); Juniper (Asia, Russia); and Quad (Americas, Asia) all crossed regional
boundaries. Our methodology includes only one enforcement action counted per region where misconduct occurred
in more than one country per region. In FMC, for example, misconduct occurred in Angola, Turkey, Saudi Arabia,
Morocco, Benin, Burkina Faso, Cameroon, the Ivory Coast, Niger, Gabon, Chad and Senegal, Spain, Bosnia, China,
Serbia, and Mexico. Accordingly, our methodology treats this misconduct as occurring in five regions reflected in the
graph (Africa, Americas, Asia, Europe, and the Middle East).
D. Nature of Conduct
Enforcement actions brought in 2019 involved a variety of conduct. Alleged
payment schemes included: bid rigging and discounts (Microsoft), sham consulting
agreements (FMC and Ericsson), provision or purchase of shares in joint ventures
(FMC and MTS), gifts and travel (FMC and Ericsson), and payments through charities
and other third parties (FMC and Ericsson), among others. The Walmart matter
involved allegations of internal control deficiencies surrounding the engagement of
third-party intermediaries to obtain store permits and licenses.
Enforcement authorities also brought an enforcement action that raised the
interesting question of who constitutes a foreign official for purposes of the FCPA.
In MTS, authorities alleged that the telecommunications company paid bribes to a
former foreign official and daughter of the former president of Uzbekistan, Gulnara
Karimova, who had influence over the Uzbek governmental body that regulated
the telecom industry, to use her influence to enter the Uzbek market, gain valuable
telecom assets, and continue operating in Uzbekistan. However, Karimova did not
hold a formal role in the Uzbek telecom sector. Although she held government
positions (unrelated to the telecom sector), her influence appears to have stemmed
from her family connections.
Of the seven corporate enforcement actions the DOJ brought in 2019, six of which
were brought in parallel with the SEC, two (Samsung Heavy Industries and TFMC)
involved allegations with a familiar fact pattern—conspiring to bribe executives of
Brazil’s state-controlled oil company, Petróleo Brasileiro S.A.—Petrobras (Petrobras).
As discussed in the Steptoe’s 2018 FCPA/Anti-Corruption Year in Review, the DOJ
and SEC have brought numerous enforcement actions involving payments to
For its part, the SEC continued to rely on the FCPA accounting provisions when
bringing enforcement actions in 2019, as it did in 2018, but it also made more use of
the FCPA’s anti-bribery provisions than in 2018. All 13 of the corporate enforcement
actions brought by the SEC in 2019 alleged both books and records and internal
control violations. Seven of those (including three not brought in parallel with the
DOJ) also included anti-bribery violations—an increase from 2018, in which only three
of the SEC’s 14 corporate enforcement actions alleged anti-bribery violations.
Several of the 2019 SEC enforcement actions highlight emerging and continuing
trends that are worth watching. First, the SEC has continued to support alleged
accounting violations by citing payments to private customers (in addition to
government officials). For example, the SEC alleged that Microsoft’s subsidiaries
provided improper travel and gifts to employees of non-government customers, that
Barclays PLC (Barclays) hired relatives and friends of executives of non-government
clients to win investment banking business, and that a Quad subsidiary approved
sham invoices from third-party vendors to make improper “commission” payments
to private customers. This underscores that the FCPA’s books and records provisions
are not limited to payments to foreign officials and instead extend to all transactions
and expenditures of issuers.
Second, the Quad action serves as a reminder of the risks associated with mergers
and acquisitions. According to the SEC, Quad/Graphics was a small company with
a domestic focus before 2010, when, as a result of an acquisition, it became a large
international company. The SEC alleged that the company failed to implement
adequate anti-corruption policies, procedures, controls, training, resources, and
audits to address the increased risks presented by its expansion. This case and
others like it from past years reinforce the need for acquiring companies to conduct
appropriate due diligence and carry out prompt testing, training, and integration.
Third, the SEC has continued to bring enforcement actions against financial
institutions based on their hiring practices in the Asia-Pacific region, following
resolutions reached in recent years with JPMorgan, BNY Mellon, and Credit Suisse.
In 2019, Barclays and Deutsche Bank settled SEC accounting charges relating to the
hiring of friends and relatives of foreign officials.
Finally, the Quad action alleges accounting violations based in part on
concealment of sanctions and export violations related to commercial transactions
in Cuba. These allegations are reminiscent of an action brought by the SEC against
Weatherford International LTD. in 2013 alleging FCPA accounting violations based
in part on improper recording of commercial transactions with Cuba, Iran, Syria, and
Sudan in violation of economic sanctions and export control laws.
The DOJ and SEC imposed four compliance monitors in 2019. This is an increase
from only two in 2018 and matches the number imposed in 2017. Of the companies
that received the five highest penalty amounts in 2019, four received monitors—
Ericsson, MTS, Walmart, and FMC. US authorities cited to their assessment of the
current state of the companies’ compliance programs in supporting their decisions to
impose or not impose a monitor in these cases.
Ericsson and MTS each received a monitor for a period of three years. In
instituting that requirement, in both cases, the DOJ stated that the companies’
compliance programs had not yet been fully implemented or tested and that a
monitor was necessary to reduce the risk of misconduct.
With respect to Walmart, which received a monitor for two years, the DOJ
acknowledged that the company had engaged in significant remedial measures
but determined that a monitor was necessary to ensure its compliance program
was operating effectively and adequately. In imposing a two-year monitor on FMC,
the DOJ stated that misconduct had occurred at the company until 2016 and that a
compliance monitor was necessary to prevent a recurrence of the conduct at issue.
The company that paid the third highest penalty amount in 2019 ($301 million,
$87 million of which was payable to the US Treasury), TFMC, did not receive a
monitor, although it was required to self-report to DOJ for three years. The DOJ
cited the company’s compliance and remediation efforts in its determination that a
monitor was not necessary. TFMC’s avoidance of a monitor, despite the high penalties
and serious misconduct at issue in that case, is consistent with DOJ’s 2018 guidance
on the use of corporate monitors (addressed in our 2018 FCPA/Anti-Corruption Year
in Review) which evaluates, among other factors, a corporation’s investment in its
compliance program and internal control systems and whether the company has
implemented an effective compliance program at the time of resolution.
II. FCPA Policy Developments
A. DOJ Revised Corporate Compliance Guidance
On April 30, 2019, the DOJ Criminal Division announced the publication of an
updated Guidance on Evaluating Corporate Compliance Programs (2019 Guidance).
We examined the 2019 Guidance in detail in our May 9, 2019 International Law
Advisory, titled DOJ Revamps Corporate Compliance Program Guidance, Broadens
As analyzed in our Advisory, the 2019 Guidance reorganizes and expands on some
aspects of prior DOJ guidance in this area. For example, the 2019 Guidance has been
reorganized around three “fundamental” questions:
1. Is the compliance program well designed?
2. Is the program being applied earnestly and in good faith (a question the DOJ reframes
as whether the program is “being implemented effectively”)?
3. Does the program work in practice?
The 2019 Guidance then details relevant factors for assessing those questions.
In his remarks at the American Conference Institute’s 36th International
Conference on the Foreign Corrupt Practices Act in December 2019, Assistant
Attorney General Brian Benczkowski noted the importance of the guidance to
“convey to the bar and corporate community that [the DOJ] place[s] a significant
value on compliance program investment and improvement” and “will approach
compliance program evaluation in a thoughtful way that is guided by much more
than 20/20 hindsight.”12 He further noted that the DOJ has provided “enhanced
compliance training” to prosecutors, aimed at “giving them a more sophisticated
understanding of compliance program design and the challenges to effective
While the 2019 Guidance does not define groundbreaking expectations for
those actively engaged in the compliance profession (particularly those familiar
with FCPA compliance expectations), the 2019 Guidance is useful in consolidating
expectations set forth in various compliance-related guidance materials (including
the Justice Manual, United States Sentencing Guidelines (USSG), FCPA Resource
Guide, and Organization for Economic Co-operation and Development (OECD)
guidance, as well as more recent DOJ guidance on the selection of monitors) in
12 Transcript, Assistant Attorney General Brian A. Benczkowski Delivers Remarks at the American Conference Institute’s
36th International Conference on the Foreign Corrupt Practices Act, Oxon Hill, MD (Dec. 4, 2019), https://www.
accessed Dec. 22, 2019).
one document, which compliance professionals can reference in formulating and
evaluating corporate compliance programs.
B. DOJ FCPA Corporate Enforcement Policy
On November 20, 2019 the Fraud Section of the DOJ’s Criminal Division
announced changes to its FCPA Corporate Enforcement Policy (the Policy), which
was explored further in our 2017 FCPA/Anti-Corruption Year in Review & 2018 Q1
Preview and our International Law Advisory about the Policy. The Policy creates a
presumption that a company meeting all standards for “voluntary self-disclosure, full
cooperation, and timely and appropriate remediation” will have its matter resolved
through a public declination with disgorgement, absent certain aggravating factors.
The November 2019 update clarifies the standards regarding voluntary disclosure
To receive credit for voluntary disclosure previously, a company had to disclose
“all relevant facts known to it, including all relevant facts about all individuals
substantially involved in or responsible for the violation of law.”14 The November
2019 update now requires disclosure of “all relevant facts known to [the company]
at the time of the disclosure, including as to any individuals substantially involved in
or responsible for the misconduct at issue.”15 The DOJ recognizes in a new footnote
that “a company may not be in a position to know all relevant facts at the time of
a voluntary self-disclosure, especially where only preliminary investigative efforts
have been possible.”16 The Policy also states that a company should inform the DOJ
when disclosure is based on preliminary investigative efforts.17 These changes stress
the importance the DOJ places on prompt disclosure, even when a company has
not yet been able to conduct a thorough internal investigation into any suspected
Similarly, to receive full cooperation credit in the past, the requirement was that
a company that “is or should be aware of opportunities for the [DOJ] to obtain
relevant evidence not in the company’s possession and not otherwise known to
the [DOJ] . . . must identify those opportunities to the [DOJ].” Now a company
must simply identify to the DOJ any relevant evidence that it is aware of that is not
in its possession.18 This revision removes language about information in another’s
possession that the company “should be aware of,” thereby removing some
uncertainty when evaluating a company’s cooperation.
C. DOJ Inability to Pay Memorandum
On October 8, 2019, the DOJ published a memorandum regarding “Evaluating a
Business Organization’s Inability to Pay a Criminal Fine or Criminal Monetary Penalty”
14 The addition of the words “substantially” and “or responsible for” in the prior requirement for voluntary disclosure
credit occurred on March 12, 2019.
15 DOJ Justice Manual, 9-47.120 – FCPA Corporate Enforcement Policy § 3.a. (updated Nov. 2019), https://www.justice.
gov/jm/jm-9-47000-foreign-corrupt-practices-act-1977 (last accessed Jan. 6, 2020).
16 Id. at n.1.
18 Id. § 3.b.
(Inability-to-Pay Memorandum).19 The Inability-to-Pay Memorandum is intended as a
guide to help DOJ attorneys assess a business entity’s claim that it is unable to pay
an otherwise appropriate criminal fine or monetary penalty.20 Before the DOJ will
consider an assertion that an entity is unable to pay, the entity and the DOJ must
agree on the form of the corporate criminal resolution (e.g., deferred prosecution
agreement (DPA), plea agreement, etc.) and any applicable monetary penalty based
on the law and facts.21
The business entity asserting an inability to pay has the burden of establishing
that inability and must cooperate fully with prosecutors’ inquiries regarding the
entity’s ability to pay, including completing the Inability-to-Pay Questionnaire
attached as Attachment A to the Inability-to-Pay Memorandum.22
The Inability-to-Pay Memorandum lays out the legal considerations under 18 U.S.C.
§§ 3572(a) and 3572(b) and the federal Sentencing Guidelines that courts must
consider when analyzing an inability-to-pay position, including whether to impose a
criminal fine, the amount of the fine, the payment method, and the impact any fine
will have on the defendant’s ability to pay restitution to victims.23 The memorandum
then discusses the practical factors that should be considered when assessing an
entity’s ability to pay a criminal fine, starting with an analysis of the entity’s financial
situation to determine whether payment is feasible without creating concerns over
insolvency.24 The guidance notes that prosecutors generally will need to consult
an accounting expert as part of the process. Where “legitimate questions exist”
concerning the entity’s ability to pay, prosecutors will consider additional factors,
• How the entity ended up in its current financial condition25
• Whether the entity has access to alternative sources of capital to pay the fine26
• Whether paying the fine will have collateral consequences, like the entity’s ability
to fund pension obligations or satisfy other legal requirements, cause layoffs or
product shortages, or significantly disrupt marketplace competition27
• Whether the proposed monetary penalty will impair the entity’s ability to pay
restitution to its victims28
If DOJ attorneys believe an organization is unable to pay a penalty, then the
handling attorney must recommend an adjustment to the amount of the penalty or
an installment schedule to the extent needed to avoid (1) threatening the entity’s
19 DOJ Memorandum, Evaluating a Business Organization’s Inability to Pay a Criminal Fine or Criminal Monetary Penalty
(Oct. 8, 2019), https://www.justice.gov/opa/speech/file/1207576/download.
23 Id. at 2 (citing 18 U.S.C. §§ 3572(a), 3572(b); U.S.S.G. §§ 8C2.7, 8C2.9, 8C3.3).
24 Id. at 3.
viability as a going concern and (2) preventing the entity from making proper
restitution to its victims.29
D. DOJ Cooperation with SEC
On October 3, 2019, US Attorney General William P. Barr spoke at the SEC’s
Criminal Coordination Conference about cooperation between the DOJ and SEC
regarding financial crimes.30 Attorney General Barr highlighted three areas in which
“the deepening and increasingly productive relationship between the SEC and the
DOJ” are most apparent:
1. A successful record of joint enforcement, including in 2019 in relation to MTS (an
FCPA matter) and Power Traders Press (an investment fraud prosecution)
2. The agencies’ joint efforts to avoid creating “arbitrary and unnecessary barriers
to economic growth,” as reflected in the DOJ’s policy against piling-on and in
several matters in which the DOJ or SEC has credited amounts a defendant has
paid to the other authority in reaching a resolution31
3. The agencies’ efforts in promoting ethical business practices and strong
governance, as reflected in the agencies co-chairing the Financial Fraud Working
Group and joint publication of the 2012 Resource Guide to the FCPA, which we
examined in our 2012 FCPA Year in Review and “Guidance on the Guidance”
In relation to the final point, Attorney General Barr also noted the DOJ’s declination
of certain matters under the FCPA’s Corporate Enforcement Policy in part based on
parallel SEC resolutions (such as in the Cognizant and Dun & Bradstreet matters).
E. SEC Whistleblower Award Program
As noted in our 2018 FCPA/Anti-Corruption Year in Review the SEC proposed
on June 28, 2018 amendments to section 21F of the Exchange Act, which requires
the SEC to provide an award to whistleblowers who provide the SEC with original
information about a violation of the securities laws that leads to successful
enforcement by the SEC in a covered judicial, administrative, or related action.32
Under the proposed rule, the award amounts would consider deferred
prosecution and non-prosecution agreements entered into by the DOJ and state
attorneys general when calculating whistleblower awards, potentially expanding
29 Id. Criminal Division Attorneys also may make an adjustment to avoid “significant adverse collateral consequence”
that, “while severe, may not necessarily threaten the continued viability of the organization.” Id. at n.4.
30 William P. Barr, U.S. Attorney General, Remarks at the U.S. Securities and Exchange Commission’s Criminal
Coordination Conference (Oct. 3, 2019), https://www.justice.gov/opa/speech/us-attorney-general-william-p-barrdelivers-
31 Memorandum from Rod J. Rosenstein, Deputy Atty Gen. US DOJ., to Heads of Dep’t Components US Atty’s, Policy on
Coordination of Corporate Resolution (May 9, 2018), https://www.justice.gov/opa/speech/file/1061186/download; see
also Lucinda A. Low, et al., Sportsmanlike Conduct? DOJ Announces Policy to Avoid ‘Piling On’ Monetary Sanctions
in Corporate Resolutions, Steptoe & Johnson LLP Int’l L. Advisory (May 14, 2018), https://www.steptoe.com/en/newspublications/
32 SEC Press Release No. 2018-120, SEC Proposes Whistleblower Rule Amendments (June 28, 2018), https://www.sec.
award amounts significantly.33 The proposed rule also changes some of the
mechanisms for setting a whistleblower award by allowing the SEC to adjust award
amounts upward from $2 million (subject to a 30% statutory maximum) for low
penalty cases and downward (subject to a 10% statutory minimum) to no less than
$30 million for exceedingly high penalty cases.34
Although the public comment period for the proposed rule was scheduled to
end September 18, 2018, it has continued through 2019, as the SEC posted public
comments through at least January 8, 2020.35 Despite extending the time for public
comment, the SEC anticipates adopting the new rules in fiscal year 2020.36
F. CFTC Leniency Program
On March 6, 2019, the US Commodity Futures Trading Commission (CFTC) issued
an advisory on “Self Reporting and Cooperation for [Commodity Exchange Act] CEA
Violations Involving Foreign Corrupt Practices” (2019 Enforcement Advisory).37 The
2019 Enforcement Advisory is the most recent in a series of advisories by the CFTC
Division of Enforcement that address how the Division will evaluate individuals’ and
companies’ cooperation with its investigations.
The 2019 Enforcement Advisory applies to individuals and companies not
registered or required to be registered with CFTC that (1) voluntarily and timely
disclose Commodity Exchange Act violations involving foreign corrupt practices, (2)
fully cooperate with the CFTC’s Division of Enforcement after the disclosure, and (3)
appropriately remediate any violations.38 If those conditions are met, and no other
aggravating circumstances about the offense’s seriousness or offender exist, CFTC’s
Enforcement Division “will apply a presumption that it will recommend to the [CFTC]
a resolution with no civil monetary penalty.”39 Aggravating circumstances include (1)
the involvement of executive- or senior-level management, (2) the pervasiveness of
the misconduct within the company, or (3) whether the wrongdoer has engaged in
similar misconduct previously.40
Even if the CFTC’s Enforcement Division recommends a resolution with no civil
monetary penalty, payment of all disgorgement, forfeiture, and restitution resulting
from the misconduct still would be required in addition to any other available
remedies, including any civil monetary penalties owed by companies or individuals
implicated in the misconduct that did not submit a voluntary disclosure.41
33 See Whistleblower Program Rules, 83 Fed. Reg. 34,702 (proposed July 20, 2018), https://www.govinfo.gov/content/
34 17 C.F.R. §§ 240.21F-3; 240.21F-5 (2018).
35 See SEC Comments on Proposed Rule: Amendments to the Commission’s Whistleblower Program Rules, https://
www.sec.gov/comments/s7-16-18/s71618.htm (last accessed Jan. 16, 2020).
36 2019 Annual Report to Congress on the Dodd-Frank Whistleblower Program, SEC (Nov. 15, 2019), https://www.sec.
37 CFTC Press Release No. 7884-19, CFTC Division of Enforcement Issues Advisory on Violations of the
Commodity Exchange Act Involving Foreign Corrupt Practices (Mar. 6, 2019), https://www.cftc.gov/PressRoom/
38 CFTC Enforcement Advisory, Advisory on Self Reporting and Cooperation for CEA Violations Involving Foreign
Corrupt Practices (Mar. 6, 2019), https://www.cftc.gov/PressRoom/PressReleases/7884-19.
During a May 16, 2019 speech at the American Conference Institute’s New York
Conference on the FCPA, CFTC Director of Enforcement James McDonald clarified
that the Division is “not looking to bring actions under the FCPA” but rather is
focusing on foreign corrupt practices that violate US commodities laws.42
42 Nicole Di Schino, CFTC’s Director of Enforcement Explains Decision to Regulate Foreign Corruption, Anti-Corruption
Report (May 29, 2019), https://www.anti-corruption.com/2745406/cftcs-director-of-enforcement-explains-decisionto-
III. Significant Judicial Decisions in FCPA Matters and
Related Civil Collateral Litigation
US federal courts issued a number of significant rulings in 2019, including in
individual FCPA cases, as well as in non-FCPA prosecutions and collateral litigation
that could affect future FCPA cases or the investigation thereof.
A. Significant Judicial Decisions in FCPA Matters
1. United States v. Ng Lap Seng
In August 2019, the Second Circuit upheld Ng Lap Seng’s conviction on various
bribery, conspiracy, and money laundering charges.43 Central to the court’s decision
was the conclusion that for acts of bribery under 18 U.S.C. § 66644 and the FCPA,
the term “official act”—in the context of a quid pro quo—was not limited to the 18
U.S.C. § 201(a)(3) definition of an official act as construed by the Supreme Court in
McDonnell v. United States.45
Ng, a Chinese national and Macau businessman, paid two senior United Nations
diplomats, including John Ashe who served as President of the General Assembly,
to help procure a contract with the UN to hold an annual conference at one of
his properties.46 The scheme essentially involved payment to the diplomats for
their efforts, including public support, internal advocacy, and other activities, to
help secure the contract. Ng was convicted in July 2017, sentenced to 48 months
imprisonment and ordered to pay fines, forfeiture, and restitution.47 Ng challenged
the conviction on a number of grounds, including the definition of “organization”
with respect to § 666, the scope of an “official act” quid pro quo, and various jury
In affirming Ng’s conviction, the Second Circuit distinguished McDonnell, in
which the Supreme Court vacated and remanded the conviction of former Virginia
Governor Bob McDonnell on the basis that the “official act” standard in 18 USC §
201(a)(3) was not met. In doing so, the Second Circuit clarified that bribery in the
context of the FCPA is broader than the “official act” definition in § 201(a)(3).49 The
FCPA, for example, includes language proscribing not only influencing or inducing
an official’s decisions or actions, but also “securing any improper advantage” or an
official using influence with a foreign government.50 Because the FCPA defines a
43 United States v. Ng Lap Seng, 934 F.3d 110 (2d Cir. 2019).
44 This statute targets theft or bribery concerning programs receiving federal funds.
45 McDonnell v. United States, 136 S. Ct. 2355 (2016). McDonnell’s application to the FCPA in this case was previously
discussed in our 2017 Year-in-Review.
46 Ng Lap Seng, 934 F.3d at 117-21.
47 Id. at 121. Ng’s conviction and sentencing were discussed in our 2018 Year-in-Review.
48 Id. at 116.
49 McDonnell v. United States, 136 S. Ct. 2355 (2016). For the Second Circuit’s interpretation of McDonnell, see Ng Lap
Seng, 934 F.3d at 130-31.
50 See 15 U.S.C. §§ 78dd-2(a)(1), 15 U.S.C. §§ 78dd-3(a)(1).
broader list of “quos” than the “official act” standard at issue in McDonnell under §
201(a)(3), the Second Circuit upheld Ng’s conviction.
2. United States v. Hoskins
On November 8, 2019, a jury found Lawrence Hoskins, a former senior executive
at Alstom S.A. (Alstom), guilty for his role in a multi-year, multimillion-dollar foreign
bribery scheme and a related money laundering scheme.51 Hoskins was convicted on
six counts of violating the FCPA, three counts of money laundering, and two counts
of conspiracy for allegedly hiring two consultants to bribe Indonesian officials to
obtain an $18 million contract with Indonesia’s state-owned electricity company.
Last year, the US Court of Appeals for the Second Circuit ruled that Hoskins—a
UK citizen who was employed by a UK subsidiary and acted entirely outside the
United States—could not be found liable for conspiring to violate or aiding and
abetting a violation of the FCPA’s anti-bribery provisions unless he came within the
jurisdictional scope of the statute.52 This meant that Hoskins had to have acted as an
agent, employee, officer, director, or shareholder of the US subsidiary or committed
a crime within the territory of the United States.53 For additional background
concerning the 2018 ruling, please see the 2018 FCPA/Anti-Corruption Year in
Review, 2017 FCPA/Anti-Corruption Year in Review & 2018 Q1 Preview and Steptoe’s
International Law Advisory.
As a result, the DOJ’s case against Hoskins turned primarily on whether he
acted as an “agent” of Alstom’s US-based subsidiary (Alstom US). Specifically, the
DOJ alleged that Hoskins violated the FCPA by directing and authorizing corrupt
payments by Alstom US to Indonesian officials. The DOJ’s theory was that, even
though Hoskins was employed by a non-US entity, he nevertheless acted as an agent
of the US subsidiary.
During pre-trial motions, the parties sharply disagreed about the jury instruction
defining the term “agent,” as the FCPA does not define the term. Although the
parties agreed that the definition “should be drawn from traditional agency
law principles, and include[ ] an element of ‘control,’” they disputed the precise
instructions that should be provided to the jury.54 In response to an August 2019
defense motion, the court declined to decide on the precise contours of the jury
instruction but determined that it would follow the Second Circuit’s clear statement
and “the understanding of the parties that the principal is to be in control of the
undertaking.”55 In doing so, the court rejected the defendant’s proposed instruction
that the principal must control the agent, which according to the court would
wrongly suggest to the jury that a higher level of generalized control over the
51 United States v. Hoskins, No. 3:12cr238 (JBA), 2019 WL 7207280 (D. Conn. Nov. 8, 2019).
52 United States v. Hoskins, 902 F.3d 69 (2d Cir. 2018). But see United States v. Firtash, 392 F.Supp.3d 872, 891-92 (N.D.
Ill. 2019) (district court in Seventh Circuit declining to follow Second Circuit’s decision in Hoskins in denying foreign
defendants’ motion to dismiss FCPA charges). So far, the Court of Appeals for the Seventh Circuit has not weighed
in on this issue, nor have other appellate courts outside the Second Circuit. It remains an unsettled question in most
federal jurisdictions whether the DOJ can use conspiracy charges to reach foreign, non-issuer defendants who do not
otherwise fall within the FCPA’s jurisdiction (i.e., as directors, officers, shareholders, employees, or agents of an issuer
or domestic concern or based on alleged corrupt acts taken while in US territory).
53 Id. at 96.
54 United States v. Hoskins, No. 3:12cr238 (JBA), 2019 WL 3996634, at *1 (D. Conn. Aug. 23, 2019).
55 Id. at *2.
agent was required.56 Rather, the court found that “the control need only be over
‘the agent’s actions taken on the principal’s behalf.’” As such, the court’s final jury
instruction at trial stated that “[t]o create an agency relationship, there must be,
one, a manifestation by the principal that the agent will act for it; two, acceptance
by the agent of the undertaking; and, three, an understanding between the agent
and the principal that the principal will be in control of the undertaking.”57 Further,
the agency relationship does not require a formal agreement and can be “inferred
circumstantially from the words and actions of the parties.”58
Ultimately, the DOJ persuaded the jury that Hoskins had acted as an agent of
the US subsidiary. This jury verdict is a significant victory for the government in
light of the Second Circuit’s ruling last year limiting the DOJ’s use of conspiracy
and complicity theories against non-US defendants who acted entirely outside US
territory. The DOJ is left with considerable room to continue prosecuting non-US
persons as officers, directors, shareholders, employees, or agents of a US domestic
concern or issuer, even when the defendant took no corrupt acts within US territory.
B. Significant Judicial Decisions Relevant to FCPA Investigations
1. United States v. Connolly
A ruling in May from the Southern District of New York carries potentially
important implications for large-scale internal investigations conducted in
coordination with the US government. In United States v. Connolly, the court held
that employee statements given during an internal investigation may be inadmissible
at later trial, if the conduct of the investigation is attributable to the government.59
The factual history of the case originates in a US government investigation into
alleged manipulation of the London Inter-Bank Offered Rate (LIBOR). As part of
that investigation, several US agencies informed Deustche Bank (DB) that its LIBORrelated
practices were being investigated.60 At the government’s demand, DB
appointed outside counsel to conduct an internal investigation into the matter. In
addition to counsel’s robust cooperation with the government in an effort to secure
cooperation credit, the investigation also involved “considerable direction by” the
US government.61 For example, the government directed that DB’s counsel interview
specific personnel (including instructing a DB lawyer to approach one interview “as if
he were a prosecutor”), produce certain documents before interviewing a particular
employee, and share its findings . . . on a regular basis.”62 One of those employees,
Gavin Campbell Black (who was ultimately terminated and indicted) sought
relief on the grounds that his interview statements were “fairly attributable to the
government” and “compelled,” in violation of his right against self-incrimination.63
57 See United States v. Hoskins, No. 3:12-cr-238 (JBA), 2019 WL 7207278, at *5 (D. Conn. Nov. 29, 2019).
58 Here’s the ‘agent’ instruction from US v. Hoskins, FCPA BLOG (Dec. 20, 2019), https://fcpablog.com/2019/12/20/
heres-the-agent-instruction-from-us-v-hoskins/ (last accessed Jan. 13. 2019) (quoting the jury instructions).
59 United States v. Connolly, No. 16 Cr. 0370 (CM), 2019 WL 2120523 (S.D.N.Y. May 2, 2019), appeal filed, No. 19-3944 (2d
Cir. Nov. 22, 2019).
60 Id. at *2.
62 Id. *3-9, *14.
63 Id. *9-12.
In Connolly, Chief Judge McMahon ruled that Black had in fact been compelled to
participate in interviews that were fairly attributable to the government.64 In reaching
this conclusion, the court found it “critically important” that the government did
not conduct its own parallel investigation, but instead “outsourced” and relied on
DB’s investigation and downloads as a foundation for its own investigation.65 And
even though the judge did not vacate Black’s conviction or dismiss the indictment—
because independently sourced evidence against Black was sufficient to support his
conviction—the potential implications for internal investigations are clear. When the
government effectively outsources its investigative responsibility to a company or
directs the company’s investigation,66 the investigation may be deemed “attributable
to the government” and evidence derived from interviews may well be inadmissible.
In a session on the “FCPA Year in Review” at the 36th International Conference
on the Foreign Corrupt Practices Act, Charles Cain, Chief of the SEC FCPA Unit, and
Christopher Cestaro, Acting Chief of the DOJ FCPA Unit, both suggested that, while
Connolly serves as a good reminder for properly conducting investigations, the
agencies would continue to seek to obtain the benefits of cooperation while ensuring
they are not directing internal investigations.67
2. Liu v. SEC
On November 1, 2019, the US Supreme Court granted a writ of certiorari to review
the Ninth Circuit case, Liu v. SEC.68 The case will resolve a key question that could
have a significant impact on how the SEC seeks remedies in future FCPA cases:
whether the SEC may seek disgorgement from a court as “equitable relief” for a
securities law violation.
As we explained in our 2017 FCPA/Anti-Corruption Mid-Year Review and Steptoe’s
International Law Advisory on Kokesh,69 the Supreme Court explicitly left open
the question of “whether courts possess authority to order disgorgement in SEC
enforcement proceedings” in footnote 3 to that decision.
The case is currently set for argument on March 3, 2020.
C. Significant Civil Collateral Litigation
FCPA investigations again resulted in significant collateral civil litigation last year.
These suits included shareholder class actions, claims of defamation and retaliation,
restitution, civil RICO, breach of contract, and other civil matters. A brief survey of
certain of these cases follows.
1. General Cable Corporation
General Cable Corporation (GC) reached a settlement with the DOJ and SEC in
December 2016 related to FCPA violations allegedly committed through certain of its
64 Id. at 14.
65 Id. at 9-12.
66 The court noted that outside counsel “did everything that the Government could, should, and would have done had
the Government been doing its own work.” Connolly, 2019 WL 2120523, at *12.
67 There is no transcript available for these particular remarks, but Steptoe lawyers in attendance confirm them.
68 Liu v. Sec. & Exch. Comm’n, No. 18-1501, 2019 WL 5659111 (Mem.) (U.S. Nov. 1, 2019).
69 Kokesh v. Sec. & Exch. Comm’n, 137 S. Ct. 1635, 1640-41, 1644-45 (2017).
foreign entities.70 The settlement required GC to establish an FCPA monitoring and
compliance program.71 From 2012 through 2016, GC regularly submitted SEC filings,
informing investors of its financial performance, compliance program, and risks
associated with its overall business.
In 2017, a class of shareholders filed suit against GC, alleging that GC and its
executives made false and misleading statements about the company’s compliance
program, the risks that the company faced in overseas markets, and the effectiveness
of its internal accounting controls.72 In an order dated April 30, 2019, Judge William
O. Bertelsman granted GC’s motion to dismiss, holding that GC’s representations
regarding its compliance program were not actionable because they contained
no assurances that the system was effective.73 The court disagreed with the
shareholders’ allegation that GC should have disclosed that its overseas operations
would fail if it could not rely on corrupt business practices, finding that the
shareholders alleged no facts that GC knew this was the case and, thus, did not have
a duty to disclose this as a risk. Finally, the court ruled that the shareholders failed to
adequately plead that GC knew that its statements about the efficacy of its internal
accounting controls were false.
2. OZ Africa Management
On August 29, 2019, Judge Garaufis, of the US District Court for the Eastern
District of New York, issued a significant FCPA-related ruling arising from restitution
claims under the Mandatory Victims Restitution Act (the MVRA).74 The suit relates
to a $412 million settlement in 2016 among the DOJ, SEC and Och-Ziff Capital
Management Group LLC, the parent company of OZ Africa Management GP, LLC, in
which OZ Africa pled guilty to various FCPA violations.75 The settlement papers detail
a two-year scheme in which Och-Ziff agents bribed Congolese officials in exchange
for beneficial court rulings. The scheme caused another entity to cede control over a
Congolese mine to OZ Africa.76 The former investors of this entity allege that with the
loss of the mine, they lost a promising opportunity and any potential value therefrom.
The former investors sought restitution to “make them whole” and claimed that their
stakes in the Congolese mine would have been worth $1.8 billion had development
proceeded without Och-Ziff’s corrupt practices.77 However, Judge Garaufis stated
that restitution should be calculated based “on the value of these mining rights, as
of either 2006-2008 or the present day,” rather than on their “full projected value.”78
70 Press Release, General Cable Corporation Agrees to Pay $20 Million Penalty for Foreign Bribery Schemes in Asia
and Africa, U.S. Dep’t of Justice, Office of Pub. Affairs (Dec. 29, 2016), https://www.justice.gov/opa/pr/general-cablecorporation-
72 Doshi v. Gen. Cable Corp., 386 F. Supp. 3d 815, 820 (E.D. Ky. 2019).
74 Mem. & Order, United States v. OZ Africa Mgmt. Grp., LLC, 16-515 (NGG) (E.D.N.Y. Aug. 29, 2019), ECF No. 51.
75 DOJ Press Release, Och-Ziff Capital Management Admits to Role in Africa Bribery Conspiracies and Agrees to Pay
$213 Million Criminal Fine (Sept. 29, 2016), U.S. Dep’t of Justice, https://www.justice.gov/opa/pr/och-ziff-capitalmanagement-
admits-role-africa-bribery-conspiracies-and-agrees-pay-213; Press Release, Och-Ziff Hedge Fund
Settles FCPA Charges (Sept. 29, 2016), https://www.sec.gov/news/pressrelease/2016-203.html.
76 Deferred Prosecution Agreement, United States v. Och-Ziff Capital Mgmt. Grp., LLC, Cr. No. 16-516 (NGG), A-8
(E.D.N.Y. Sept. 29, 2016), https://www.justice.gov/criminal-fraud/file/900261/download.
77 Mem. & Order, United States v. OZ Africa Mgmt. Grp., LLC, 16-515 (E.D.N.Y. Aug. 29, 2019), ECF No. 51.
78 Id. at 9.
Och-Ziff is seeking additional details on individual claimants that the company claims
is vital to calculating restitution payments.79
The September 29, 2016 plea agreement entered by OZ Africa provided that it
would pay “any fine or restitution imposed by the [c]ourt.”80 On February 20, 2018,
two weeks before OZ Africa was scheduled to be sentenced, the former investors
filed a motion “requesting confirmation of victim status” and an award of restitution
pursuant to the MVRA.81 The court held that the former investors qualify as victims
under the MVRA because they incurred significant losses as a result of the bribes
paid by OZ Africa to Congolese officials to secure control of a Congolese mine82 and
that these allegations were sufficient to support OZ Africa’s restitution claim.
3. ZimmerBiomet Holdings
On October 8, 2019, the US Court of Appeals for the Seventh Circuit affirmed
a lower court ruling granting Biomet’s motion for summary judgment against
an employee alleging defamation after his name was implicated in an FCPA
investigation.83 In 2012 and 2017, the DOJ investigated Biomet for FCPA violations
relating to a Latin American subsidiary that had bribed doctors.84 Biomet entered
into deferred prosecution agreements with the DOJ in 2012 and 2017.85 As part of
the 2012 agreement, Biomet distributed a Restricted Parties List (RPL) of individuals
who posed a risk to its compliance with anti-corruption and anti-bribery laws.86
The list included former employee Alejandro Yeatts and a notation regarding
his suspension in connection with the corruption investigation of Biomet’s Latin
American subsidiary.87 After Biomet terminated Yeatts, he sued for defamation based
on his inclusion on the RPL.88 The Seventh Circuit held that Biomet’s statement that
Yeatts was suspended from his job was true and could not support a defamation
claim.89 The Court also held that Biomet’s assessment that Yeatts posed a risk to
its compliance program was an opinion and could also not support a defamation
4. Bio-Rad Laboratories
On February 26, 2019, the US Court of Appeals for the Ninth Circuit considered
an appeal of an approximately $11 million jury verdict in favor of a former general
counsel in a whistleblower retaliation law suit under the Sarbanes-Oxley Act (SOX),
the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act),
and California common law.91 In May of 2015, Sanford Wadler, the former general
79 Reenat Sinay, Och-Ziff Wants Details on Investors’ Restitution Claim, LAW360 (Dec. 10, 2019), https://www.law360.
com/articles/1226996/och-ziff-wants-details-on-investors-restitution-claim (last accessed Jan. 15, 2020).
80 Id. at 2.
81 Id. at 3.
83 Yeatts v. Zimmer Biomet Holdings, Inc., 940 F.3d 354, 360 (7th Cir. 2019).
84 Id. at 357.
87 Id. at 358.
89 Id. at 360.
91 See Wadler v. Bio-Rad Labs., Inc., 916 F.3d 1176 (9th Cir. 2019).
counsel of Bio-Rad Laboratories, Inc., filed suit in the US District Court for the
Northern District of California following termination of his employment at Bio-Rad
Laboratories. Wadler asserted, and the jury found, that Bio-Rad Laboratories and
its CEO Norman Schwartz (the Defendants) had violated SOX, the Dodd-Frank Act,
and California public policy by terminating Wadler’s employment in retaliation for his
internal report that he believed the company had engaged in violations of the FCPA.
On appeal, the Defendants argued that the district court had erred in instructing
the jury that the statutory provisions of the FCPA constituted “rules and regulations”
of the SEC for purposes of whether Wadler engaged in “protected activity” under
SOX.92 This instruction stated that “under ‘the rules and regulations of the [SEC]
applicable to Bio-Rad,’ it is unlawful to (1) bribe a foreign official; (2) fail to keep
accurate and reasonably detailed books and records; (3) knowingly falsify books and
records; and (4) knowingly circumvent a system of internal accounting controls.”93
On appeal, Bio-Rad argued that this instruction was in error because the FCPA is
not a rule or regulation of the SEC and is instead a statute. The panel, reviewing de
novo, agreed, concluding that “§ 806’s text is clear: an FCPA provision is not a ‘rule
or regulation of the [SEC].’”94 In reaching this finding, the Court explained that the
plain meaning of “rule or regulation” in the context of SOX is that these words refer
only to administrative rules or regulations.95 Accordingly, the panel determined that
the jury instruction was given in error and remanded the case to the district court
to determine whether a new trial was warranted.96 The Ninth’s Circuit’s reading of
what constitutes an SEC “rule or regulation” may make it more difficult for plaintiffs
to show they engaged in protected activity under SOX when reporting FCPA-related
The panel did not directly review the issue of privilege raised at trial. Specifically,
Bio-Rad moved to exclude evidence it claimed was shielded by California’s stringent
protections of attorney-client privilege.98 Bio-Rad argued that Wadler’s claims were
“inextricabl[y] intertwined” with Bio-Rad’s privileged and confidential information99
and that it was Wadler’s burden to show that a fair trial was possible without the
disclosure of such information. In response, the SEC filed an amicus brief arguing
that SEC regulations implementing SOX’s up-the-ladder reporting requirements for
issuers’ counsel preempt conflicting state ethical rules regarding the disclosure of
attorney-client communications.100 Based on Bio-Rad’s express and implied waivers
of certain privileged communications, as well as a finding of federal pre-emption, the
district court denied Bio-Rad’s motion and permitted Wadler to rely on privileged
92 Id. at 1181.
93 Id. at 1184.
94 Id. at 1186.
96 Because the Ninth Circuit found that the jury, if properly instructed, could permissibly find in favor of Wadler based
on the falsification of books and records theory, since it is also an SEC regulation (17 C.F.R. § 240.13b2-1), the Ninth
Circuit declined to direct a verdict in favor of Wadler.
97 This may ultimately be an artful pleading issue, as the FCPA’s accounting provisions have associated SEC rules and
98 See Wadler v. Bio-Rad Labs., Inc., 212 F. Supp. 3d 829, 833 (N.D. Cal. 2016).
99 Id. at 837.
100 Id. at 843.
communications throughout the trial.101 The Ninth Circuit did not address this issue
directly on appeal.102
In April 2019, a judge in the Eastern District of New York issued a significant Order
in the ongoing litigation between Cicel (Beijing) Science & Technology Co., Ltd.
(Cicel) and Misonix, Inc. (Misonix).103 The court held that documents related to, and
prepared by, outside counsel during an internal investigation would, for the most
part, be protected by privilege in subsequent litigation. As noted in our 2017 FCPA/
Anti-Corruption Year in Review & 2018 Q1 Preview, the Cicel case commenced in 2017
when Cicel, a Chinese medical device distributor and marketer, sued Misonix, a US
medical device manufacturer, for breach of contract springing from the termination
of a multi-year distribution agreement.104 Cicel alleged that Misonix had wrongfully
terminated the agreement. Misonix contended that the agreement was terminated
following an investigation that raised concerns about Cicel’s business practices vis-àvis
the FCPA and that resulted in Misonix’s disclosure of its investigation to the DOJ
and SEC and in an SEC filing.105
During discovery, Cicel moved to compel the production of documents from the
Misonix internal investigation.106 Misonix argued that materials from the investigation
conducted by outside counsel were protected by both attorney-client privilege and
the work-product doctrine. Although Cicel countered that Misonix had hired outside
counsel to conduct an internal investigation and not for legal advice,107 the court
dismissed Cicel’s argument in reliance on the Supreme Court’s decision in Upjohn
Co. v. United States and a case from the Southern District of New York with parallel
facts (In re General Motors Ignition Switch Litig.). It concluded that communications
with counsel conducting the investigation were protected, as they stemmed from
the provision of legal advice.108 Similarly, the court held that documents prepared
attendant to the investigation, given its nature, were done in anticipation of the
litigation, and therefore protected by the attorney work product doctrine.109
The court also ordered Misonix to produce for the court’s in camera review certain
third-party communications, however—namely emails listed on its privilege log
exclusively between non-lawyers.110 It also ordered Misonix to amend its privilege log
to list materials counsel prepared during the investigation.111 The court also ordered
101 Id. at 849.
102 The Ninth Circuit noted in its opinion that “[i]n a memorandum disposition filed this date, we conclude that the
instructional error was not harmless as to the SOX claim” and “also reject Bio-Rad’s challenges to the district court’s
evidentiary rulings and the sufficiency of the evidence.” Wadler, 916 F.3d at 1182. However, this contemporaneously
filed memorandum also does not address the issue of privileged communications.
103 Order, Cicel (Beijing) Science & Technology Co., Ltd. v. Misonix, Inc., 17-cv-1642-ADS-SIL (E.D.N.Y. Apr. 11, 2019).
104 Order, Cicel (Beijing) Science & Technology Co., Ltd. v. Misonix, Inc. et. al., No. 2:17-cv-01642-ADS-SIL (E.D.N.Y. Oct. 7,
105 Id. The SEC has ended its investigation and taken no further action. See Mengqi Sun, Misonix Says SEC Ends Probe
With No Plans for Enforcement Action, Wall Street J. (June 24, 2019), https://www.wsj.com/articles/misonix-sayssec-
106 Order, Cicel (Beijing) Science & Technology Co., Ltd. v. Misonix, Inc., 17-cv-1642-ADS-SIL, at 8 (E.D.N.Y. Apr. 11, 2019).
107 Id. at 13-15.
109 Id. at 15,16.
110 Id. at 17.
111 Id. at 18.
that any documents provided to the SEC must also be produced.112 The case is
ongoing, but the implications of the April order and memorandum are instructive.
Although communications with outside investigative counsel for the purpose of
rendering or receiving legal advice and investigative work product produced in
anticipation of litigation remain protected, the case is a reminder of the waiver
limitations on privilege, including where investigations by enforcement authorities
112 Id. at 19.
IV. 2019 FCPA Corporate Settlements
A. DOJ Corporate Enforcement Policy Declinations
1. Cognizant Technology Solutions Corporation
On February 13, 2019, the DOJ issued a declination to Cognizant Technology
Solutions Corporation (Cognizant) for payments made to Indian government officials
in connection with the construction and operation of its Indian commercial facilities.113
For a discussion of the underlying facts of this matter, see Section IV.D.1, infra.
2. Quad/Graphics Inc.
On September 19, 2019, the DOJ issued a declination to Quad/Graphics Inc.
(Quad) under the FCPA Corporate Enforcement Policy for violations of the antibribery
provisions by Quad’s Peruvian and Chinese subsidiaries.114 For a discussion of
the underlying facts of this matter, see Section IV.D.7, infra.
B. DOJ Corporate Enforcement Actions
1. Samsung Heavy Industries Company Limited
On November 22, 2019, the DOJ announced that it had entered into a deferred
prosecution agreement with Samsung Heavy Industries Company Limited (Samsung
Heavy Industries), a South Korea-based engineering company, based on charges that
the company conspired to violate the anti-bribery provisions of the FCPA.115
According to the agreement, from 2007 through approximately 2013, Samsung
Heavy Industries, through employees based in its office in Houston as well as in
South Korea,116 conspired with a Houston-based offshore oil drilling company
to bribe executives of Brazil’s state-controlled oil company, Petrobras, in order
to ensure that the offshore oil drilling company obtained a lucrative Petrobras
contract (which would result in its procurement of an offshore oil drillship from
Samsung Heavy Industries). As part of the scheme (similar to many other Lava Jato
(Car Wash) schemes that have been prosecuted in recent years by the US and/or
Brazil), Samsung Heavy Industries agreed to pay $20 million in commission fees to
intermediary companies owned by its Brazilian agents, intending that the fees be
113 See DOJ Declination Letter, Cognizant Technology Solutions Corp. (Feb. 13, 2019), https://www.justice.gov/criminalfraud/
114 See DOJ Declination Letter, Quad/Graphics Inc. (Sept. 19, 2019), https://www.justice.gov/criminal-fraud/file/1205341/
115 See DOJ Deferred Prosecution Agreement, United States v. Samsung Heavy Indus. Co. Ltd. (Nov. 22, 2019), https://
116 The case was brought under 15 U.S.C. 78 dd-3, which requires acts in furtherance of a bribe “while in the territory”
of the United States. The DPA points to numerous actions that were taken by company personnel based in Houston
involving the third parties, including acts relating to their hiring and payment, to satisfy this requirement.
passed on as bribes to two senior Petrobras executives. The agents then made the
payments through a series of transactions involving sham agreements with shell
Samsung Heavy Industries agreed to pay approximately $75 million in criminal
penalties, half of which was paid to the United States and half of which was paid to
Brazilian authorities. The penalty was reduced based on Samsung Heavy Industries’
remediation and cooperation—although full cooperation credit was not provided
based on the company’s failure to meet certain DOJ deadlines. The company is also
required to report to the DOJ on enhancements to its compliance program for a
period of three years. Enforcement authorities in Brazil, Monaco, and Switzerland
were credited with providing investigation assistance.
C. SEC Enforcement Actions
1. Telefônica Brasil S.A.
On May 9, 2019, Telefônica Brasil S.A. (Telefônica), a Brazilian telecommunications
company with American Depositary Receipts traded on the NYSE, resolved SEC
allegations related to violations of the FCPA’s accounting provisions associated with
a hospitality program during the 2014 World Cup and the 2013 Confederations Cup in
The SEC’s order alleged that Telefônica provided tickets and hospitality to
government officials who were directly involved with, or in a position to influence,
legislative actions, regulatory approvals, and business dealings involving the
company.117 In total, Telefônica allegedly provided World Cup tickets and related
hospitality to 93 government officials,118 and Confederations Cup tickets and related
hospitality to approximately 34 government officials.119 The tickets and hospitality
had an average cost of more than $3,000 per guest. In some cases, more than
one ticket was provided to a given official so that the official could invite relatives
or friends.120 Recipients included federal congressmen and senators, mayors,
ambassadors, and other government officials.121 The misconduct allegedly occurred
between 2012 and 2014.
According to the Order, Telefônica violated the FCPA’s internal control provisions
by failing to devise and maintain sufficient internal controls over the hospitality
program. Telefônica violated the FCPA’s books and records provisions by recording
the tickets and hospitality as “general advertising and publicity expenses” when “in
fact…[they] were given to government officials.122 Without admitting to or denying
the allegations, Telefônica agreed to a cease-and-desist order and to pay a $4.125
million civil money penalty to resolve the charges.
117 Order Instituting Cease-and-Desist Proceedings, In the Matter of Telefônica Brasil, SEC Exch. Act Release No. 85819,
Accounting and Auditing Enforcement 2 (May 9, 2019) https://www.sec.gov/litigation/admin/2019/34-85819.pdf.
118 Id. ¶ 8.
119 Id. ¶ 12.
120 Id. ¶ 8.
121 Id. ¶ 9.
122 Id. ¶ 18.
The SEC considered the remedial acts promptly undertaken by Telefônica and its
cooperation throughout the investigation, including enhancing its internal accounting
controls and compliance functions and adopting a new anti-corruption policy and
2. Deutsche Bank AG
On August 22, 2019, continuing the trend of FCPA cases involving hiring by
financial institutions (such as JPMorgan and BNY Mellon) Deutsche Bank AG
(Deutsche Bank) agreed to an SEC cease-and-desist order to resolve alleged
violations of the FCPA’s books and records and internal control provisions related
to certain hiring practices in the Asia-Pacific region and Russia between 2006 and
2014.124 Deutsche Bank is a multinational financial services company incorporated
and domiciled in Germany and listed on the New York Stock Exchange.125
According to the SEC order, Deutsche Bank allegedly hired relatives at the request
of foreign officials employed by entities from which Deutsche Bank sought business
in China and Russia. The order alleged that certain Deutsche Bank Asia-Pacific
employees circumvented Deutsche Bank’s hiring policies and procedures, including
by arranging for Deutsche Bank’s joint venture to hire various referral candidates who
failed to satisfy Deutsche Bank’s hiring standards.
Deutsche Bank employees in Russia allegedly hired candidates that had been
referred to it by senior Russian government officials and executives of Russian stateowned
enterprise (SOEs), despite concerns expressed by Deutsche Bank hiring
personnel about the qualifications of the candidates. The SEC further alleged that
Deutsche Bank personnel in Russia took one referral hire and her father, a Russian
SOE executive, on a hunting and fishing trip that should not have been recorded as
a legitimate business expense. The order alleged that the referral hires in China and
Russia resulted in Deutsche Bank winning contracts with Chinese and Russian SOEs
and the Russian government.
Deutsche Bank did not admit or deny the allegations in the SEC order.126 To
resolve the SEC’s investigation, it agreed to pay $16,178,850 in disgorgement ($10.76
million), prejudgment interest ($2.39 million), and a civil penalty ($3 million).127 The
SEC considered Deutsche Bank’s cooperation and remedial efforts in the cease-anddesist
order.128 Remedial efforts included, among others, enhancing Deutsche Bank’s
internal accounting controls, anti-corruption compliance program, and training;
improving its global procedures for vetting and monitoring candidates referred by
clients, potential clients, and government officials; and making personnel and staffing
123 Id ¶ 20.
124 See Order Instituting Cease-and-Desist Proceedings, In re Deutsche Bank AG, SEC Exch. Act Release No. 86,740
(Aug. 22, 2019), https://www.sec.gov/litigation/admin/2019/34-86740.pdf.
125 See id. ¶ 4.
126 See id. § II.
127 See id. § IV.B.
128 See id. ¶ 43.
129 See id. ¶ 45.
3. Juniper Networks, Inc.
On August 29, 2019, the SEC issued a cease-and-desist order against Juniper
Networks, Inc. (Juniper) alleging books and records and internal control violations
related to conduct by Juniper’s subsidiaries operating in Russia, JNN Development
Corp. (JNN), as well as in Hong Kong, Juniper Networks R&D Ltd., and China, Juniper
Networks Shanghai Ltd. (together, Juniper China), between 2008 and 2013.130
Juniper is a California-based networking equipment products and services provider
that is listed on the New York Stock Exchange.131
According to the SEC order, sales employees in JNN’s Russian representative
office secretly agreed with third party channel partners to increase discounts on
sales made through the channel partners.132 But instead of passing those discounts
on to the end customers, the sales employees and channel partners allegedly
agreed to divert the increased discounts to “common funds” held by the channel
partners for travel and marketing expenses.133 The JNN employees involved falsely
told senior management that the increased discounts were needed for competitive
reasons.134 According to the SEC, the transactions were structured as additional
discounts to keep the funds off Juniper’s books so that the JNN employees and the
channel partners could use the funds without obtaining proper internal approvals.135
The diverted money allegedly was used to fund trips for end customer employees,
including foreign officials, that were inconsistent with Juniper’s policies, had little
to no legitimate business purpose, and were predominantly leisure in nature.136 For
example, the order states that, although Juniper had no facilities there, trips included
visits to Italy, Portugal, and various US cities and involved sightseeing tours, visits
to amusement parks, and meals and entertainment for customers and, in some
cases, their family members. Internal communications allegedly suggested that the
purpose of certain trips was to “speed up” bookings and to avoid the loss of sales.
In late 2009, a senior manager at the time discovered the off-book accounts funded
by improper discounts and instructed the employees involved to discontinue their
actions. The SEC considered this remediation ineffective, as the employees continued
the conduct until 2013.137
From 2009 to 2013, Juniper China employees allegedly falsified trip agendas
to obtain approval and pay for excessive travel and entertainment of customers,
including foreign officials, in violation of Juniper’s policies.138 Further, Juniper’s legal
staff responsible for approving the hospitality allegedly approved the expenses after
they had been incurred despite Juniper’s policy that hospitality must receive preapproval.
130 See Order Instituting Cease-and-Desist Proceedings, In re Juniper Networks, Inc., SEC Exch. Act Release No. 86,812
(Aug. 29, 2019), https://www.sec.gov/litigation/admin/2019/34-86812.pdf.
131 See id. ¶ 5.
132 See id. ¶¶ 2, 9.
133 See id.
134 See id. ¶ 9.
135 See id. ¶ 10.
136 See id. ¶ 11.
137 See id. ¶ 12.
138 See id. ¶¶ 14-15.
139 See id. ¶ 15.
Juniper did not admit or deny the allegations in the SEC order,140 but it agreed to
pay $11.75 million in disgorgement ($4 million), prejudgment interest ($1.25 million),
and a civil penalty ($6.5 million) to resolve the charges.141 The SEC considered
Juniper’s cooperation, including the timely disclosure of facts discovered during
an internal investigation initiated after learning of the SEC’s investigation and its
remedial efforts in the cease and desist order.142 Juniper’s remedial efforts included,
among others, enhancing the company’s policies, procedures, and internal controls;
requiring compliance pre-approval of non-standard discounts and of certain higherrisk
third-party expenditures; improving the company’s compliance function by
centralizing the department through an empowered chief compliance officer;
establishing an independent and expert investigations function; requiring escalation
of serious issues to Juniper’s board of directors; and conducting additional anticorruption
4. Westport Fuel Systems, Inc.
On September 27, 2019, the SEC issued a cease and desist order against Westport
Fuel Systems, Inc. (Westport) and its former chief executive officer, Nancy Gougarty,
alleging anti-bribery, books and records, and internal control violations related to
conduct by Westport, acting through Gougarty and others, in China between 2013
and 2016.144 Westport is a Vancouver-based Canadian clean fuel technology company
that is listed on the NASDAQ and the Toronto Stock Exchange.145 Further, Westport
wholly owns a subsidiary in Hong Kong, which in turn held a stake in a Chinese
joint venture (JV) with a Chinese state-owned entity (SOE-1) and a Hong Kong
According to the SEC order, Westport engaged in a bribery scheme involving
transferring its shares in a Chinese JV to secure business and a cash dividend
payment. Specifically, in March 2013, SOE-1 proposed taking the JV public in China at
the direction of the Chinese government official.147 The JV’s manager misrepresented
to Westport that the JV would need to be restructured so that SOE-1 held a
majority interest in the JV to file for an initial public offering under Chinese law.148 To
accomplish that, Westport and the Hong Kong conglomerate would transfer some
of their shares to SOE-1 and a Chinese private equity fund (in which the government
official held a financial interest).149
Early in the negotiations regarding the JV’s restructuring, Westport allegedly
learned that the government official had a significant financial interest in the
Chinese private equity fund set to receive the transferred shares.150 On Gougarty’s
140 See id. § II.
141 See id. § IV.B.
142 See id. ¶ 20.
143 See id. ¶ 21.
144 See Order Instituting Cease-and-Desist Proceedings, In re Westport Fuel Systems, Inc. and Nancy Gougarty, SEC
Exch. Act Release No. 87,138 (Sept. 27, 2019), https://www.sec.gov/litigation/admin/2019/34-87138.pdf.
145 See id. ¶ 4.
146 See id.
147 See id. ¶ 6.
148 See id.
149 See id.
150 See id. ¶ 10.
recommendation, Westport allegedly conditioned the share transfer on Westport
securing a long-term sales agreement with the JV.151 As the negotiations progressed,
Westport faced growing financial pressure as its performance dipped due to falling
oil prices, which made Westport willing to accept a lower price for the transferred
shares despite knowing that the government official sought a low valuation to “‘make
quick and big money’ outside the scrutiny of [the] Chinese regulators.”152 After the
transaction closed (which included the share transfer, execution of a long-term
supply agreement with the JV, and a cash dividend of 20% above what was provided
for in the JV agreement), Westport and Gougarty allegedly falsified internal books
and records and public filings to hide the private equity fund’s involvement in the
transaction, contrary to Westport’s internal controls and procedures.153 In addition,
Gougarty allegedly executed a false certification to Westport’s outside auditors
concerning Westport’s internal controls (charges against Gougarty are described in
more detail at Section V.K, infra).
The SEC noted that, while Westport’s policies required due diligence to be
conducted when engaging third-party vendors and required anti-corruption clauses
to be included in vendor contracts, the company’s policies failed to require due
diligence to be conducted when engaging in a business transaction with an entity in
which a government official may hold an interest and failed to require the use of anticorruption
clauses when engaging in such transactions.154
Westport did not admit or deny the allegations in the SEC order.155 To resolve the
SEC’s investigation, it agreed to pay $4.05 million in disgorgement ($2.35 million),
prejudgment interest ($196,000), and a civil penalty ($1.5 million) to resolve the
charges.156 Gougarty also agreed to pay a $120,000 civil money penalty.157 The SEC
considered Westport’s cooperation and remedial efforts in the cease-and-desist
order.158 Remedial efforts included, among others, enhancing Westport’s anti-bribery
and anti-corruption and compliance policies, procedures, and training programs;
establishing specific internal controls for transactions involving foreign entities
or government officials; and mandating due diligence for those transactions.159
Westport also agreed to self-report to the SEC on its compliance and remedial
measures for a two-year period.
5. Barclays PLC
On September 27, 2019, Barclays PLC (Barclays), a bank holding company
headquartered in London, settled charges with the SEC related to books and records
and internal control violations of the FCPA associated with hiring the relatives and
friends of foreign government officials (so called “relationship hires”) in order to
151 See id. ¶ 11.
152 See id. ¶ 12.
153 See id. ¶¶ 18-21.
154 See id. ¶ 16.
155 See id. § II.
156 See id. § IV.D.
157 See id. § IV ¶ E.
158 See id. ¶ 28.
159 See id. ¶ 29.
obtain or retain investment banking business.160 Barclays agreed to a cease-anddesist
order and to pay more than $6 million to resolve the charges.161
The SEC order alleged that between 2009 and 2013, Barclays Asia Pacific
Region (APAC) provided “valuable employment” to more than 100 “relatives and
friends of government officials and executives of non-government clients” to win
investment banking business.162 These relationship hires allegedly were made through
an unofficial internship program, a formal internship program, and a “graduate
program,” as well as into permanent positions.163
Although Barclays’ anti-corruption policy prohibited providing employment in
exchange for business, the SEC found that Barclays failed to implement training,
monitoring, and other internal accounting controls around its hiring practices
sufficient to provide reasonable assurances that its employees did not engage in
transactions in violation of corporate policy.164 For example, Barclays APAC bankers
and compliance personnel allegedly lacked familiarity with and understanding of
Barclays’ anti-bribery and corruption policies, particularly as those policies related to
hiring.165 In addition, Barclays APAC employees allegedly falsified corporate records
to conceal the true source of certain candidates and the reason for hiring them
from the compliance department.166 In some instances, relationship hires were made
without consulting the compliance department. In others, compliance allegedly
approved hires even when it knew business was pending or being sought, including
in circumstances where employees identified that the justification for the hire was the
potential for future business.167 The SEC noted that in some cases candidates were
hired despite performing poorly in interviews or otherwise falling below the bank’s
Barclays voluntarily disclosed these relationship hires to the SEC. In addition,
the SEC considered the company’s cooperation and remedial acts, including
strengthening its compliance program and firing senior executives and other
employees involved in the misconduct, when determining whether to accept
Barclay’s offer of settlement.169 Barclays did not admit or deny the allegations, but
agreed to pay $3.82 million in disgorgement, $984,040 in prejudgment interest, and
a $1.5 million civil penalty—totaling more than $6.3 million.
D. Parallel DOJ/SEC Enforcement Actions
1. Cognizant Technology Solutions Corporation
On February 15, 2019, the SEC settled charges that a New Jersey-based
corporation, Cognizant Technology Solutions Corporation (Cognizant), violated the
160 See SEC Press Release, SEC Charges Barclays with FCPA Violations Related to Its Hiring Practices (Sept. 27, 2019),
162 Order Instituting Cease-and-Desist Proceedings, In the Matter of Barclays PLC, SEC Exch. Act Release No. 87132 2
Accounting and Auditing Enforcement (Sept. 27, 2019), https://www.sec.gov/litigation/admin/2019/34-87132.pd.
163 Id. ¶ 3.
164 Id. ¶¶ 4 and 41-42.
165 Id. ¶ 8.
166 Id. ¶ 14.
168 Id. ¶ 29, 35.
169 Id. ¶ 43.
FCPA’s anti-bribery, books and records, and internal accounting control provisions
when it authorized a contractor and other third parties to make payments to Indian
government officials in connection with the planning, construction, and operation of
Cognizant’s commercial facilities in India.170 Just two days earlier, on February 13, the
DOJ issued a declination to Cognizant in a related matter.171
According to the SEC’s cease-and-desist order, Cognizant paid approximately
$3.6 million in bribes to Indian officials between 2012 and 2016 in order to obtain
permits and operating licenses for its Indian commercial facilities. The majority
of payments were made through Cognizant’s contractor and approved by senior
executives within Cognizant’s US headquarters and/or by Cognizant’s Indian
subsidiary. The payments were not accurately reflected in Cognizant’s consolidated
books and records (the contractor was reimbursed through a series of “sham
change order requests,” while payments for operating licenses were disguised as
generic payments to third parties such as “liaison,” “consulting,” or “miscellaneous”
charges).172 Nor were sufficient accounting controls in place to prevent the
misconduct—according to the SEC, “[the] conduct took place in an environment in
which Cognizant failed to adequately enforce its corporate anti-bribery and anticorruption
Cognizant did not admit or deny the allegations contained in the SEC Order
but agreed to pay approximately $19 million in disgorgement and prejudgment
interest (including disgorgement to the DOJ relating to its declination), in addition
to a $6 million penalty, to settle the charges. Cognizant was also subject to a twoyear
reporting term on the status of its remediation and compliance measures.
The SEC considered Cognizant’s voluntary disclosure of the conduct, cooperation,
and remedial actions (including terminating officers and employees, appointing
new senior executives, enhancing its compliance function and related controls) in
accepting Cognizant’s settlement offer. Meanwhile, the DOJ declined to prosecute
Cognizant based on the company’s voluntary self-disclosure, investigation,
cooperation, the nature and seriousness of the offense, lack of prior criminal history,
the existence of a pre-existing compliance program (and steps taken to enhance that
program), full remediation, adequacy of civil remedies, and assistance in identifying
Three former Cognizant executives, Gordon Coburn (former President), Steven
E. Schwartz (former Chief Legal Officer), and Sridhar Thiruvengadam (former
Chief Operating Officer) were also charged in connection with the misconduct, as
discussed in more detail at Section V.B, infra.
2. Mobile TeleSystems PJSC
On March 6 and 7, 2019, following on the heels of other notable FCPA enforcement
actions in the Uzbek telecom sector, including VimpelCom in 2016 and Telia in 2017
170 See Order Instituting Cease-and-Desist Proceedings, In re Cognizant Technology Solutions Corporation, SEC Exch.
Act Release No. 85,149 (Feb. 15, 2019), https://www.sec.gov/litigation/admin/2019/34-85149.pdf.
171 See DOJ Declination Letter, Cognizant Technology Solutions Corp. (Feb. 13, 2019), https://www.justice.gov/criminalfraud/
172 Id. at ¶¶12-17.
173 Id. at ¶3.
(involving payments to the same Uzbek official, Gulnara Karimova), the DOJ and SEC
announced that Mobile TeleSystems PJSC (MTS), a Russian corporation, had entered
into resolutions relating to charges that the company conspired to violate the antibribery
and books and records provisions of the FCPA and violated the FCPA’s
internal control provisions.174 In a related matter, MTS’ Uzbek subsidiary, Kolorit
Dizayn Ink LLC (Kolorit), entered into a plea agreement with the DOJ based on a
charge that it conspired to violate the FCPA’s anti-bribery and books and records
According to these agreements, from 2004 to 2012, MTS and its related entities
paid more than $420 million in bribes to the benefit of the Uzbek official, Karimova,
in order to enter and operate in the Uzbek telecommunications market. Bribes were
paid through the purchase of stakes in, or acquisition of, shell companies which
Karimova beneficially owned (this included MTS paying an inflated price to acquire
Kolorit, an advertising company with no connection to the telecommunications
sector), and through donations to charities or sponsorships affiliated with Karimova
(including payments which were made in violation of internal procedures requiring
pre-approval). When MTS declined to make additional payments, Karimova retaliated
by working to expropriate MTS’ Uzbek subsidiary, JZ Uzdunrobita (Uzdunrobita).
Throughout this period, MTS also worked under a “lax internal control environment
[which] included a failure to require approval for certain transactions and a failure
to comply with the established management approval requirements with respect
to other transactions” (including failing to perform adequate due diligence on third
parties and lacking adequate payment controls and an internal audit function).176
Furthermore, MTS failed to follow corporate procedures with respect to public
statements made during the relevant period and improperly recorded the payments
in its books and records.
The case raises an important issue as to how US enforcement authorities apply
the requirement for there to be a “foreign official” for the FCPA’s anti-bribery
provisions to be implicated. Karimova, who was also involved in the VimpelCom and
Telia matters, is a former Uzbek official and the daughter of the former president
of Uzbekistan. Although Karimova served as the Deputy Minister of Foreign Affairs
for Cultural Issues and as an Ambassador to the United Nations, the SEC and DOJ
have not alleged that she held a formal role in the Uzbek telecom sector (rather,
she “had influence over decisions made by [the Uzbek Agency for Communications
and Information (UzACI)].”).177 That influence, however, did not appear to derive
from her official positions but from her status as a family member. Nevertheless, US
prosecutors treated it as satisfying that element of the FCPA. In contrast, a Swedish
district court examining charges against Telia executives for similar payments
determined that Swedish prosecutors had not established that Karimova was a public
174 See DOJ Deferred Prosecution Agreement, United States v. Mobile TeleSystems PJSC (Feb. 22, 2019), https://www.
justice.gov/opa/press-release/file/1141631/download; Order Instituting Cease-and-Desist Proceedings, In re Mobile
TeleSystems PJSC, SEC Exch. Act Release No. 85,261 (Mar. 6, 2019), https://www.sec.gov/litigation/admin/2019/34-
175 See DOJ Plea Agreement, United States v. Kolorit Dizayn Ink Ltd. Liab. Co. (S.D.N.Y. Feb. 22, 2019), https://www.
176 DOJ Deferred Prosecution Agreement, United States v. Mobile TeleSystems PJSC (Feb. 22, 2019), ¶ 75, https://www.
177 Id. ¶ 7.
official under Sweden’s Bribery Act and Penal Code.178 In the United States, charges
have been unsealed against Karimova and Bekhzod Akhmedov, a former Uzdunrobita
executive, for their role in the misconduct—Akhmedov was charged with conspiracy
to violate the FCPA as well as with FCPA violations, while both defendants were
charged with conspiracy to commit money laundering for transferring funds with an
intent to promote the bribery scheme and knowing and attempting to conceal the
fact that funds were the proceeds of illegal activity (for a discussion of these charges,
see Section V.D, infra).
MTS agreed to pay a total of $850 million, including a $100 million civil penalty to
the SEC and approximately $750 million to the DOJ (including approximately $40.5
million in criminal fines and forfeiture on behalf of Kolorit). In resolving the charges,
the DOJ considered, among other things, that MTS did not voluntarily disclose the
conduct (but did ultimately provide authorities with all facts known to it) and did
not receive credit for cooperation or remediation (based on its delays in producing
materials, refusing to support interviews with current employees and for failing
to take adequate disciplinary measures for responsible employees). MTS was also
credited with taking steps to implement adequate anti-corruption controls. Under
the terms of the agreements, MTS will be subject to the oversight of an independent
compliance monitor for three years.
3. Fresenius Medical Care AG & Co. KGaA
On March 29, 2019, the SEC and DOJ announced that Fresenius Medical Care AG
& Co. KGaA (FMC), a German medical product and services provider, agreed to pay
over $231 million to resolve parallel investigations spanning 17 countries and involving
allegations that the company violated the FCPA’s anti-bribery, books and records,
and internal accounting controls provisions.179
The settled charges arose from various payment schemes to publicly-employed
health or other government officials resulting in nearly $30 million in improper
payments from 2007÷2016. Allegations involved a remarkably diverse array of
payment schemes that varied from country to country, including, for example: the
provision of shares in joint ventures (in Angola and Turkey); sham contracts or
commission agreements (in Angola, Saudi Arabia, Morocco, and West Africa); sham
consulting agreements (in Angola, Saudi Arabia, Spain, West Africa, and Bosnia);
improper “bonus” payments (in China); improper payments through distributors
and agents (in Saudi Arabia, Serbia, and Mexico); payments through third-party
freight and logistics companies (in Saudi Arabia); payments through charities run
by doctors (in Saudi Arabia and Spain); gifts (in Saudi Arabia and Spain); and travel
sponsorships (including luxurious travel with no business or educational justification
and travel to medical conferences in Saudi Arabia, Spain, and Serbia).
178 See James Thomas, Telia pays US$208.5 million in disgorgement to the Netherlands, Global Investigations Rev., Just
Anti-Corruption (Mar. 19, 2019), https://globalinvestigationsreview.com/article/1189010/telia-pays-ususd2085-millionin-
179 See Order Instituting Cease-and-Desist Proceedings, In re Fresenius Medical Care AG & Co. KGaA, SEC Exch. Act
Release No. 85,468 (Mar. 29, 2019), https://www.sec.gov/litigation/admin/2019/34-85468.pdf; DOJ Non-Prosecution
Agreement, Fresenius Medical Care AG & Co. KGaA (Feb. 25, 2019), https://www.justice.gov/criminal-fraud/
Notably, anti-bribery charges were based only on FMC’s conduct in Angola,
Saudi Arabia, and West Africa (in the latter case, for the SEC only)180 while books
and records and internal control violations served as the basis for allegations
for the remaining countries. Improper payments, including improper payments
made by distributors (which were then consolidated into FMC’s records), were not
accurately recorded. Nor were sufficient accounting controls in place to prevent the
misconduct—according to the SEC, FMC “failed to properly assess and manage its
worldwide risks and devoted insufficient resources to compliance” and “[i]n many
instances, senior management actively thwarted compliance efforts, personally
engaging in corruption schemes and directing employees to destroy records of the
FMC agreed to pay a criminal penalty of just under $85 million to the DOJ as
well as to disgorge $147 million to the SEC. FMC will also be required to engage
an independent compliance monitor for two years, followed by a period of selfmonitoring.
Although FMC received a reduction in criminal penalties for voluntarily
disclosing the conduct, providing the DOJ with all information known, and engaging
in remedial measures (including enhancing its compliance program), it received only
partial credit for its cooperation because it “did not timely respond to requests by
the Department and, at times, did not provide fulsome responses to requests for
information.”182 In calculating criminal penalties, the DOJ also considered the nature
and seriousness of the misconduct, including the amount of payments, number of
jurisdictions in which misconduct occurred, and pervasiveness of the misconduct
(including the involvement of high-level executives). German authorities are
reportedly investigating several FMC employees for related conduct.183
4. Walmart Inc.
On June 20, 2019, Walmart Inc. (Walmart) entered into a non-prosecution
agreement with the DOJ and agreed to a cease-and-desist order with the SEC to
resolve allegations of internal control and recordkeeping deficiencies related to the
engagement by Walmart subsidiaries of third-party intermediaries in Mexico, Brazil,
India, and China to obtain permits and licenses to open new stores.184 A Brazilian
subsidiary also pleaded guilty to one count of knowingly and willfully causing
Walmart to maintain false books, records, and accounts.185
180 Jurisdiction for these charges was based on the fact that “FMC employees and agents utilized the means and
instrumentalities of U.S. interstate commerce, including the use of internet-based email accounts hosted by
numerous service providers located in the United States.” Order Instituting Cease-and-Desist Proceedings, In re
Fresenius Medical Care AG & Co. KGaA, SEC Exch. Act Release No. 85,468 at ¶1 (Mar. 29, 2019), https://www.sec.gov/
181 Order Instituting Cease-and-Desist Proceedings, In re Fresenius Medical Care AG & Co. KGaA, SEC Exch. Act Release
No. 85,468 at ¶5 (Mar. 29, 2019), https://www.sec.gov/litigation/admin/2019/34-85468.pdf.
182 DOJ Non-Prosecution Agreement, Fresenius Medical Care AG & Co. KGaA, at 1-2 (Feb. 25, 2019), https://www.justice.
183 Ian Johnson, German prosecutors probe dialysis firm Fresenius, Deutsche Welle (Oct. 21, 2019), https://www.dw.com/
184 DOJ Non-Prosecution Agreement, Walmart Inc. (June 20, 2010), https://www.justice.gov/opa/press-release/
file/1175791/download; Order Instituting Cease-and-Desist Proceedings, In Matter of Walmart, Inc., Sec. Exch. Act of
1934 Release, No 86159 (June 20, 2019), https://www.sec.gov/litigation/admin/2019/34-86159.pdf.
185 See DOJ Plea Agreement, United States v. WMT Brasilia S.a.r.l. (June 20, 2019), https://www.justice.gov/opa/pressrelease/
As part of the DOJ non-prosecution agreement, Walmart agreed to pay
a monetary penalty of $137.9 million. In light of the company’s cooperation and
remediation, the penalty reflects a discount of 25% off of the US Sentencing
Guidelines fine range for alleged conduct in Brazil, China, and India, and 20% off
of the fine range for alleged conduct in Mexico.186 A portion of the amount paid to
the DOJ, $724,898, was paid by Walmart Brazil.187 Walmart also agreed to retain
an independent corporate compliance monitor for two years.188 To settle the SEC’s
charges, Walmart agreed to pay $144.6 million in disgorgement and pre-judgment
5. Technip FMC
On June 25, 2019, TechnipFMC plc (TFMC), an issuer and global provider of oil
and gas technology and services, and its wholly-owned US subsidiary, Technip USA,
Inc. (Technip USA) agreed to settle charges with US and Brazilian enforcement
authorities in connection with two alleged multi-year foreign bribery schemes
involving TFMC’s predecessor companies, Technip S.A. (Technip) and FMC
Technologies, Inc. (FMC), which merged in 2017.190
To resolve the DOJ’s investigation, TFMC and Technip USA agreed to pay a
combined total criminal fine of $296.1 million as part of TFMC’s DPA191 and Technip
USA’s plea agreement.192 TFMC admitted to two counts of conspiring to violate the
FCPA’s anti-bribery provisions in connection with conduct in Brazil and Iraq, and
Technip USA admitted to one count of conspiring to violate the FCPA’s anti-bribery
provisions in connection with conduct in Brazil.
In addition, TFMC agreed to an SEC cease-and-desist order on September 19,
2019 relating to conduct of its predecessor company FMC in Iraq that allegedly
violated the FCPA’s anti-bribery, books and records, and internal accounting controls
provisions. As part of the settlement, TFMC agreed to pay disgorgement of $4.3
million and prejudgment interest of $734,712. No civil penalty was imposed based on
the $296.184 million criminal fine imposed as part of the DOJ resolution.193
186 See DOJ Non-Prosecution Agreement, Walmart Inc. 6 (June 20, 2010), https://www.justice.gov/opa/press-release/
187 See DOJ Press Release, Walmart Inc. and Brazil-Based Subsidiary Agree to Pay $137 Million to Resolve Foreign
Corrupt Practices Act Case (June 20, 2019), https://www.justice.gov/opa/pr/walmart-inc-and-brazil-basedsubsidiary-
188 See DOJ Non-Prosecution Agreement, Walmart Inc. 3 (June 20, 2010), https://www.justice.gov/opa/press-release/
189 Order Instituting Cease-and-Desist Proceedings, In Matter of Walmart, Inc., Sec. Exch. Act of 1934 Release, No 86159
14 (June 20, 2019), https://www.sec.gov/litigation/admin/2019/34-86159.pdf.
190 See DOJ Press Release, TechnipFMC Plc and U.S.-Based Subsidiary Agree to Pay Over $296 Million in Global Penalties
to Resolve Foreign Bribery Case, Office of Pub. Affairs (June 25, 2019), https://www.justice.gov/opa/pr/technipfmcplc-
191 Deferred Prosecution Agreement, United States v. TechnipFMC plc, Case No. 19-cr-278-KAM (June 25, 2019), https://
192 Plea Agreement, United States v. Technip USA, Inc., Case No. 19-cr-279-KAM (June 25, 2019), https://www.justice.
193 See SEC Press Release, SEC Charges Global Oil and Gas Services Company with Violations of the FCPA (Sept. 19,
2019), https://www.sec.gov/enforce/34-87055-s; Order Instituting Cease-and-Desist Proceedings, In re TechnipFMC
plc., Sec. Exch. Act of 1934 Release No. 87,055 (Sept. 23, 2019), https://www.sec.gov/litigation/admin/2019/34-
Technip USA was a shareholder in a JV with Keppel Offshore & Marine Ltd.
(KOM) in Brazil, established in or about 2003 for the purpose of bidding on oil and
gas projects, notably with Brazilian government-controlled oil company Petróleo
Brasileiro S.A. – Petrobras (Petrobras). TFMC and Technip USA admitted that,
between approximately 2003 and 2014, they caused Technip, its subsidiaries and coconspirators,
including KOM, to make more than $69 million in corrupt payments to
a consultant, with knowledge that a portion of these payments would be used to pay
bribes to Petrobras officials, the Workers’ Party, and Workers’ Party candidates for
the purpose of securing offshore oil and gas projects.194 Technip and its subsidiaries
earned approximately $135.7 million in profits from the resulting contracts.195 KOM
and its US subsidiary, Keppel Offshore & Marine USA, Inc., had previously agreed to
pay a penalty of more than $422 million to settle related charges with enforcement
authorities in the United States, Brazil, and Singapore in December 2017, as noted in
Steptoe’s 2017 FCPA/Anti-Corruption Year in Review & 2018 Q1 Preview.
As part of TFMC’s three-year DPA, TFMC also admitted to conduct by its other
predecessor company, FMC, between 2008 and 2013, involving a conspiracy
to pay and payment of bribes to Iraqi officials during a period that FMC was a
US-headquartered issuer. FMC funneled payments through a Monaco-based
intermediary, which provided oil and gas sales and marketing services, and various
sub-agents to obtain seven contracts for FMC and related entities to provide
metering technologies for oil and gas production measurements to the Iraqi
government. FMC earned profits of approximately $5.3 million from the resulting
contracts.196 While the Monaco-based intermediary was not named in the DOJ or SEC
settlement papers, FMC’s Form 10-Q filed with the SEC in April 2016 suggests that
the intermediary may be Unaoil S.A.M.197
Technip had previously resolved FCPA charges with the DOJ in 2010 in connection
with bribes paid to Nigerian government officials.198 As a result of Technip’s
recidivism, the fine was assessed near the midpoint of the applicable US Sentencing
Guidelines fine range. However, while TFMC and Technip USA did not receive
voluntary disclosure credit, the companies received full cooperation and remediation
credit, resulting in a 25% reduction of the fine. In addition, based on the companies’
remediation efforts and the state of their compliance program, the DOJ decided
194 Deferred Prosecution Agreement, United States v. TechnipFMC plc, Case No.19-cr-278-KAM, ¶ 2, (June 25, 2019),
https://www.justice.gov/opa/press-release/file/1177316/download; Information, United States v. TechnipFMC plc,
Case No. 19-cr-278-KAM, ¶ 37, https://www.justice.gov/opa/press-release/file/1177321/download; Plea Agreement,
United States v. Technip USA, Inc., Case No. 19-cr-279-KAM, ¶ 1, (June 25, 2019), https://www.justice.gov/opa/pressrelease/
Information, United States v. Technip USA, Inc., Case No. 19-cr-279-KAM, ¶ 15, (June 25, 2019), https://www.justice.
195 Information, United States v. TechnipFMC plc, Case No. 19-cr-278-KAM, ¶ 38, https://www.justice.gov/opa/pressrelease/
file/1177321/download; Information, United States. v. Technip USA, Inc., Case No. 19-cr-279-KAM, ¶ 16, https://
196 Information, United States v. TechnipFMC plc, Case No. 19-cr-278-KAM, ¶¶ 57-58, https://www.justice.gov/opa/pressrelease/
197 FMC reported in its Form 10-Q that it received an inquiry from the DOJ in connection with an FCPA investigation into
whether certain services Unaoil S.A.M. provided its clients, including FMC. See FMC Technologies, Inc., Form 10-Q
(Apr. 28, 2016), https://www.sec.gov/Archives/edgar/data/1135152/000113515216000043/fmc20160331-10q.htm.
198 See DOJ Press Release, Technip S.A. Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay $240
Million Criminal Penalty, Office of Pub. Affairs (June 28, 2010), https://www.justice.gov/opa/pr/technip-sa-resolvesforeign-
that an independent compliance monitor was unnecessary, although the companies
are required to self-report to the DOJ for three years on their compliance and
remediation efforts. Of the $296.18 million total criminal fine imposed on the TFMC
and Technip USA, $81.85 million was payable to the US Treasury. Up to $214.33 million
paid by TFMC to the Brazilian authorities as part of their resolution will be credited
by the DOJ towards satisfaction of the total criminal fine.199
According to a statement published by TFMC on June 25, 2019, the company
continues to cooperate with an ongoing investigation by the French Parquet National
Financier (PNF) in connection with projects and Equatorial Guinea and Ghana.200
6. Microsoft Corporation
On July 22, 2019, the SEC issued a cease-and-desist order against Microsoft
Corporation (Microsoft) related to allegations that Microsoft violated the FCPA’s
books and records and internal control provisions in connection with four different
foreign-based subsidiaries’ operations in Hungary, Saudi Arabia, Thailand, and
Turkey.201 Without admitting or denying the allegations, Microsoft agreed to pay more
than $16 million to settle the SEC’s charges.202 In addition, Microsoft Magyarország
Számítástechnikai Szolgáltató és Kereskedelmi Kft. (Microsoft Hungary), a whollyowned
subsidiary of Microsoft, entered into a non-prosecution agreement with the
DOJ to resolve potential FCPA violations arising out of a bid rigging and bribery
scheme in connection with the sale of Microsoft software licenses to Hungarian
government agencies.203 Microsoft Hungary agreed to pay a criminal fine of $8.75
million in connection with the non-prosecution agreement.204
According to the SEC Order and the DOJ’s NPA,205 from at least 2013 through
2015, Microsoft Hungary provided discounts on software licenses to its resellers,
distributors, and other third parties that went beyond the standard approved
discounts.206 The discounts were used to fund improper payments intended for
foreign government officials to secure software license sales for Microsoft.207 The
SEC noted that senior executives in Hungary approved the “excessive discounts”
based on “vague justifications without ensuring [the discounts] were passed on to
199 Deferred Prosecution Agreement, United States v. TechnipFMC plc, Case No. 19-cr-278-KAM, ¶¶ 4 and 7, (June
25, 2019), https://www.justice.gov/opa/press-release/file/1177316/download; Plea Agreement, United States v.
Technip USA, Inc., Case No. 19-cr-279-KAM, ¶¶ 6 and 16, (June 25, 2019), https://www.justice.gov/opa/press-release/
200 See TFMC Press Release, TechnipFMC Reaches Global Resolution of U.S. and Brazilian Legacy Investigations (June
25, 2019), https://www.technipfmc.com/en/media/press-releases/2019/06/technipfmc-reaches-global-resolution-ofus-
201 SEC Press Release, SEC Charges Microsoft Corporation with FCPA Violations (July 22, 2019), https://www.sec.gov/
203 DOJ Press Release, Hungary Subsidiary of Microsoft Corporation Agrees to Pay $8.7 Million in Criminal Penalties
to Resolve Foreign Bribery Case (July 22, 2019), https://www.justice.gov/opa/pr/hungary-subsidiary-microsoftcorporation-
205 See DOJ Non-Prosecution Agreement, Microsoft Magyarorszag Szamitastechnikai Szolgaltat6 es Kereskedelmi Kft ¶¶
12-43 (July 22, 2019), https://www.justice.gov/opa/press-release/file/1185686/download.
206 See Order Instituting Cease-and-Desist Proceedings, In Matter of Microsoft Corporation, Sec. Exch. Act of 1934
Release, No 86421 ¶¶ 2, 16-23 (July 22, 2020) https://www.sec.gov/litigation/admin/2019/34-86421.pdf.
the end government customers.”208 In addition, Microsoft Hungary made payments
to certain subcontractors in connection with the company’s service agreements
with government end customers, in some cases without performing due diligence,
without evidence of services provided by the subcontractors, or based on false
descriptions of services performed.209
The SEC also found that from 2012 through 2015, Microsoft’s subsidiaries in Saudi
Arabia and Thailand provided improper travel and gifts to foreign government
officials and employees of non-government customers funded through slush
funds maintained by Microsoft’s vendors and resellers.210 And it found that in 2014,
Microsoft’s subsidiary in Turkey provided an excessive discount to an unauthorized
third party in a licensing transaction for which Microsoft’s records did not reflect any
services provided and without evidence that the additional discount was passed on
to the Turkish government end user.211
The SEC found that Microsoft failed to make and keep adequate documentation
related to third-party vendors, consultants, distributors, and resellers and failed to
devise and maintain a sufficient system of internal accounting controls throughout
the relevant period.212 The DOJ found that Microsoft Hungary knowingly and willfully
caused Microsoft to record improper payments as legitimate discounts in its books,
records, and accounts.213
Microsoft agreed to pay $16.56 million in disgorgement and pre-judgment interest
to the SEC,214 and Microsoft Hungary agreed to pay a $8.75 million penalty to the
DOJ.215 Although Microsoft Hungary did not receive voluntary disclosure credit, it
received credit for its cooperation and remedial efforts, resulting in a DPA and a
25% discount off the bottom of the US Sentencing Guidelines fine range. The SEC
and the DOJ considered Microsoft’s remedial measures when resolving the charges,
including that it enhanced its internal accounting controls and compliance program,
took disciplinary action against four MS Hungary employees, terminated four
Hungarian licensing partners, enacted new discount transparency and pass-through
requirements, created an expanded transaction monitoring initiative at the regional
level, and developed and used data analytics to help identify high-risk transactions.216
As a result of these efforts and the companies’ agreement to self-report for
three years to the DOJ on their compliance program and remediation efforts, no
independent compliance monitor was required.
208 Id. ¶ 2.
209 Id. ¶ 16-23.
210 See Order Instituting Cease-and-Desist Proceedings, In Matter of Microsoft Corporation, Sec. Exch. Act of 1934
Release, No 86421 ¶¶ 3, 24-26 (July 22, 2019), https://www.sec.gov/litigation/admin/2019/34-86421.pdf.
211 Id. ¶¶ 3, 27.
212 Id. ¶ 4.
213 DOJ Non-Prosecution Agreement, Microsoft Magyarorszag Szamitastechnikai Szolgaltat6 es Kereskedelmi Kft ¶ 21
(July 22, 2019), https://www.justice.gov/opa/press-release/file/1185686/download.
214 See Order Instituting Cease-and-Desist Proceedings, In Matter of Microsoft Corporation, Sec. Exch. Act of 1934
Release, No 86421 9 (July 22, 2019) https://www.sec.gov/litigation/admin/2019/34-86421.pdf.
215 DOJ Non-Prosecution Agreement, Microsoft Magyarorszag Szamitastechnikai Szolgaltat6 es Kereskedelmi Kft 5 (July
22, 2019), https://www.justice.gov/opa/press-release/file/1185686/download. The SEC did not impose a civil penalty
based upon the DOJ’s imposition of a criminal penalty.
216 See Order Instituting Cease-and-Desist Proceedings, In Matter of Microsoft Corporation, Sec. Exch. Act of 1934
Release, No 86421 ¶¶ 33 (July 22, 2019) https://www.sec.gov/litigation/admin/2019/34-86421.pdf; DOJ Non-
Prosecution Agreement, Microsoft Magyarorszag Szamitastechnikai Szolgaltat6 es Kereskedelmi Kft 2 (July 22, 2019)
7. Quad/Graphics Inc.
On September 26, 2019, the SEC issued a cease-and-desist order against Quad/
Graphics Inc. (Quad) alleging anti-bribery, books and records, and internal control
violations related to conduct by Quad’s subsidiary in Peru, Quad/Graphics Peru S.A.
(Quad Peru), between 2011 and 2016 and its subsidiary in China, Quad/Tech Shanghai
Trading Company, Ltd. (Quad China), between 2010 and 2015.217 A week earlier, the
DOJ issued a declination in a related matter.218 Quad is a Wisconsin-based marketing
solutions and printing services provider that has been listed on the New York Stock
Exchange since 2010.219
According to the SEC order, as a result of a July 2010 acquisition, Quad grew from
a small, private company with a domestic focus into a large, publicly traded company
with a major international presence. Despite this, Quad allegedly failed to implement
adequate anti-corruption policies, procedures, controls, training, resources, or
auditing to address these increased risks.220
Following the acquisition, Quad allegedly engaged in multiple bribery schemes
through its subsidiaries in Peru and China to secure business by paying or promising
more than a million dollars in bribes.221 Specifically, the order alleged that Quad Peru
approved sham invoices from third-party vendors to make improper “commission”
payments to government officials and private customers to secure contracts
with those recipients and avoid defaults under existing contracts.222 Quad failed
to conduct due diligence on the sham vendors, several of which shared the same
business address and had no real operations. The order alleged that Quad paid the
vendors despite the presence of various red flags, like the invoices having the same
date or dollar totals and no supporting documentation and falsely reported the
expenses in its books and records as “pre-press,” packaging, or other services that
were not performed by the vendors.223 Payments allegedly continued for years after a
finance manager reported concerns to a US finance executive.224
Similarly, the order alleged that Quad Peru engaged in a judicial bribery scheme
with the help of a local law firm in connection with Quad Peru’s challenge to a valueadded
tax assessment and related fines totaling $12 million.225 Quad Peru allegedly
used sham invoices from vendors, as well as an invoice for “extraordinary fees” issued
by its law firm, to fund the judicial bribes.226
Separately, the order alleged that, following the acquisition of Quad Peru’s
predecessor entity by Quad in 2010, Quad Peru continued to do business with Cuba
217 See Order Instituting Cease-and-Desist Proceedings, In re Quad/Graphics, Inc., SEC Exch. Act Release No. 87,128
(Sept. 26, 2019), https://www.sec.gov/litigation/admin/2019/34-87128.pdf.
218 DOJ Declination Letter, Quad/Graphics Inc. (Sept. 19, 2019), https://www.justice.gov/criminal-fraud/file/1205341/
219 See Order Instituting Cease-and-Desist Proceedings, In re Quad/Graphics, Inc., SEC Exch. Act Release No. 87,128 ¶ 3
(Sept. 26, 2019), https://www.sec.gov/litigation/admin/2019/34-87128.pdf.
220 See id. ¶ 6.
221 See id. ¶ 1.
222 See id. ¶¶ 8-11, 18.
223 See id. ¶¶ 16, 19
224 See id. ¶¶ 13, 16.
225 See id. ¶¶ 21, 23.
226 See id. ¶¶ 29-32.
in violation of US economic sanctions and export control laws. In particular, Quad
Peru made sales to a purported customer that allegedly was used as a pass-through
entity for sales to Cuba. The SEC alleged that Quad Peru concealed the transactions
in Quad’s emails, contracts, shipping documents, invoices, and journal entries,
causing such books and records to be inaccurate. Even after learning of certain
prohibited sales to Cuba, US executives allegedly failed to implement adequate
internal accounting controls and trade compliance measures to prevent further
prohibited transactions with sanctioned countries and persons.227
In addition, from 2010 to 2015 Quad China allegedly used sham sales agents to
pay bribes to employees of state-owned entities and private customers in China to
win business.228 In particular, Quad China allegedly paid phony commissions, which
were described as “technical service fees,” to sales agents that amounted to 2% of
the sales order value, which the sales agents would use to make illicit payments.229
The “commissions” were falsely recorded in Quad’s books and records.230 The SEC
found that Quad failed to maintain sufficient internal controls to detect or prevent
the improper payments: Quad China did not conduct due diligence on the sham sales
agents or require proof that any services were actually performed, and Quad failed to
oversee and audit Quad China’s activities.231
Quad did not admit or deny the allegations in the SEC order,232 but it agreed to
pay $9.89 million in disgorgement ($6.93 million), prejudgment interest ($959,160),
and a civil penalty ($2 million) to resolve the charges.233 The SEC premised the
anti-bribery charges on the theory that the Quad subsidiaries acted as “agents” of
Quad when engaging in the misconduct. The SEC considered Quad’s self-disclosure,
cooperation, and remedial efforts in the cease-and-desist order.234 Remedial efforts
included, among others, terminating the employees involved in the misconduct;
enhancing the resources and role of Quad’s compliance function; and improving
Quad’s internal policies, procedures, and controls based on a root-cause analysis.235
Quad also agreed to self-report to the SEC for a one-year period on the status of its
compliance and remediation efforts. The DOJ’s decision to decline prosecution was
based on Quad’s identification, self-disclosure, and investigation of the misconduct;
full cooperation; and remediation (including enhancing its compliance program,
terminating the employees involved in the misconduct, and ending its relationships
with the third parties involved). Quad agreed to disgorge nearly $7 million in profits
to the SEC.
8. Telefonaktiebolaget LM Ericsson and Ericsson Egypt Ltd.
On December 6, 2019, the DOJ and SEC announced the long-awaited resolution
of the case against the telecommunications firm Telefonaktiebolaget LM Ericsson
(Ericsson), assessing penalties that vaulted the company into the top ten
227 See id. ¶¶ 37-50.
228 See id. ¶ 51.
229 See id. ¶ 55.
230 See id. ¶ 58.
231 See id. ¶ 58.
232 See id. § II.
233 See id. § IV.C.
234 See id. ¶ 63.
235 See id. ¶ 64.
enforcement cases historically.236 Ericsson’s Deferred Prosecution Agreement with
the DOJ was based on charges of conspiracy to violate the anti-bribery provisions
(for conduct in Djibouti), as well as the FCPA’s books and records and internal control
provisions (for conduct in Djibouti, China, Indonesia, Vietnam, and Kuwait). The DOJ
settlement included a related action against Ericsson’s subsidiary, Ericsson Egypt
Ltd. (Ericsson Egypt) which pleaded guilty to charges that it conspired to violate
the FCPA’s anti-bribery provisions for conduct in Djibouti.237 Meanwhile, the SEC
charged Ericsson with violations of the FCPA’s anti-bribery provisions (for conduct
in Djibouti, China, and Saudi Arabia) in addition to books and records and internal
control violations (for conduct in Djibouti, China, Saudi Arabia, Vietnam, Indonesia,
Ericsson’s conduct, which spanned five countries over 17 years, involved the use
of sham arrangements with third parties as well as luxurious travel and entertainment
for officials and their families in an effort to win business and obtain insider
information. According to the DOJ and SEC, sham consultants were hired in Djibouti,
Saudi Arabia,238 China, Vietnam, and Indonesia. In many cases, high level executives
circumvented controls and ignored red flags in engaging these third parties, which
were then used to create a slush fund. In Djibouti, for example, due diligence failed
to disclose that a consultant was an official’s wife. Fake invoices were subsequently
used to further bribe payments to the official. In Saudi Arabia, the company ignored
significant red flags with respect to two consultants, who were paid approximately
$40 million in “corporate marketing fees.” In China, policies restricting the use
of agents were circumvented (allowing the company to hire third parties with
connections to officials). Similar arrangements existed in Vietnam, Indonesia, and
In Saudi Arabia and China, Ericsson sponsored trips for officials that were “purely
for sightseeing and had no legitimate business purpose.”239 This included, for
example, a 16-day trip for a delegation of Chinese government officials and highlevel
employees of a state-owned telecom company to visit Canada, the United
States, and the Caribbean. The delegation spent only two hours meeting at Ericsson’s
Canadian offices before departing for the remainder of the trip, which included a
luxury cruise to Barbados, St. Lucia, Antigua, and St. Martin. Other examples of these
lavish expenses included a month-long trip for a Saudi Arabian official and seven
family members, trips to Paris, and spa and shopping trips.
Payments to third parties were falsely or misleadingly characterized in Ericsson’s
books and records, and Ericsson was charged with having knowingly and willfully
failed to implement adequate controls surrounding its use of third parties. This
included Ericsson’s failure to implement controls: (1) requiring employees to properly
document and account for payments to third parties; (2) requiring adequate due
236 DOJ Deferred Prosecution Agreement, United States v. Telefonaktiebolaget LM Ericsson (Nov. 26, 2019), https://
www.justice.gov/criminal-fraud/file/1226521/download; Complaint, SEC v. Telefonaktiebolaget LM Ericsson, Case No.
1:19-cv-11214, ¶ 53 (S.D.N.Y. Dec. 6, 2019), https://www.sec.gov/litigation/complaints/2019/comp-pr2019-254.pdf.
237 See DOJ Plea Agreement, United States v. Ericsson Egypt Ltd. (Nov. 26, 2019), https://www.justice.gov/criminalfraud/
238 The DOJ’s DPA did not address conduct in Saudi Arabia.
239 Complaint, SEC v. Telefonaktiebolaget LM Ericsson, Case No. 1:19-cv-11214 (S.D.N.Y. Dec. 6, 2019), https://www.sec.
diligence when retaining third parties; (3) requiring that due diligence be completed
prior to allowing a third party to begin services; (4) requiring that payments to
third parties be commensurate with services performed; (5) prohibiting certain
payment structures with third parties, including advance payments; and (6) requiring
oversight over retaining and paying third parties.
Ericsson paid record fines relating to the conduct described above, totaling
approximately $1.06 billion. This included a $520 million criminal penalty to the
DOJ (including a $9.8 million criminal penalty for Ericsson Egypt) and $539 million
in disgorgement and prejudgment interest to the SEC. Although Ericsson received
partial credit for its cooperation, the company failed to voluntarily disclose the
conduct, delayed producing certain materials, and did not fully remediate. In addition
to the payments described above, Ericsson is subject to a three-year monitorship.
Sweden is reportedly investigating the company.240
240 Simon Johnson, Sweden opens Ericsson bribery probe after U.S. settlement: paper, Reuters (Dec. 12, 2019), https://
V. 2019 Individual Enforcement Actions
This section covers both new FCPA charges that were filed against individuals in
2019 by the DOJ and SEC as well as significant updates in cases we have covered
in prior years. As in past years, FCPA charges against alleged bribe payers—which
included company owners and executives, investment bankers, intermediaries
and consultants, and others—were often accompanied by related charges, such as
conspiracy to violate the FCPA, money laundering, wire fraud, securities fraud, and
federal program fraud. Following its trend from recent years, the DOJ continues to
bring money laundering charges against foreign officials who allegedly received
bribes and laundered this money using the US financial system. These cases are also
covered in this section.
Both the DOJ and the SEC have continued to focus efforts on foreign individuals.
Some of these charges were connected to significant, ongoing DOJ investigations of
alleged bribery schemes involving PDVSA and PetroEcuador officials, both of which
included a number of new indictments this year. In fact, the majority of the DOJ’s
FCPA and related cases this past year have been against foreign executives and highlevel
foreign officials spanning the globe.
The DOJ continues to prosecute individuals associated with companies that
already have been subject to FCPA enforcement, such as executives of Cognizant,
MTS, Westport, Braskem, Transport Logistics International (TLI), Keppel Offshore &
Marine Ltd. (KOM), Alstom S.A. (Alstom), and Insurance Corporation of Barbados
Limited (ICBL) (the latter a formal declination with disgorgement). The DOJ also
is prosecuting a number of individuals independent (at least to date) of corporate
enforcement (such as in the PDVSA and Petroecuador matters, as well as a number
of others described below). In some cases, public reports suggest that investigations
against the associated companies are ongoing, indicating that additional corporate
enforcement may still follow.
This has been a particularly busy year for individual prosecutions, and the DOJ has
touted the fact that its FCPA Unit has announced more charges this year than any
other year in history and beat out records it previously set in 2017 and 2018.241 The
DOJ has affirmed its willingness to dedicate the significant resources required to try
cases in challenging matters, and has highlighted that the FCPA Unit’s trial record in
2019 matched its prior “high water mark for trials ending in conviction.”242
In total there were five FCPA trials in 2019 and the beginning of 2020 (Ematum/
MAM, Hoskins, Haiti Port Development, Lambert, and Inniss). The DOJ obtained
convictions in four of these cases, with Boustani in the Ematum/MAM matter being
acquitted. In contrast with the DOJ’s important victory in the Hoskins trial, in which a
241 Transcript, Assistant Attorney General Brian A. Benczkowski Delivers Remarks at the American Conference Institute’s
36th International Conference on the Foreign Corrupt Practices Act, Oxon Hill, MD (Dec. 4, 2019), https://www.justice.
non-US defendant was convicted for entirely ex-US conduct on the basis he acted as
an “agent” of a domestic concern (as described at Section III.A.2, supra) the Boustani
case is noteworthy because it highlights some of the challenges the DOJ still faces
in prosecuting foreign individuals operating abroad and proving the extraterritorial
application of US law. As one juror commented after trial, “We couldn’t find any
evidence of a tie to the Eastern District of New York. That’s why we acquitted.” 243
With two FCPA trials of individuals already scheduled for this coming year related
to the Cognizant and Unaoil matters, 2020 is likely to be another active year for
individual FCPA enforcement.
A. Lyon Associates: Frank James Lyon and Master Halbert
On January 22, 2019 in the District of Hawaii, Frank James Lyon, the owner of Lyon
Associates, Inc., an engineering and consulting company, entered into a cooperation
agreement and pleaded guilty to conspiracy to violate the anti-bribery provisions of
the FCPA and to committing federal program fraud.244 Lyon admitted that between
2006 and 2016, he and his co-conspirators paid bribes to foreign officials in the
Federated States of Micronesia and to Hawaii state officials.245
As part of his cooperation agreement, Lyon agreed to provide information that he
conspired to bribe Master Halbert, a Micronesian public official, and others, in order
to obtain and retain contracts for his company. These contracts were valued at more
than $10 million.246 In May 2019, Lyon was sentenced to 30 months in prison, three
years supervised release, and a $100 special assessment.247
In a related matter, a criminal complaint was filed on January 24, 2019 against
Halbert.248 He was charged with one count of conspiracy to commit money
laundering.249 On April 2, 2019, he pleaded guilty to the money laundering charge and
in his admissions stated he had helped Lyon’s company secure contracts in return for
bribes.250 On September 27, 2019, he was sentenced to 18 months in prison and three
years of supervised release.251
B. Cognizant: Sridhar Thiruvengadam, Gordon Coburn, and Steven
In Sections IV.A.1 and IV.D.1, supra, we reported on allegations that Cognizant,
through its largest subsidiary, Cognizant India, violated the FCPA’s anti-bribery,
books and records, and internal control provisions by authorizing and reimbursing
contractors for bribes to Indian government officials.
243 Stewart Bishop, Boustani Acquitted In $2B Mozambique Loan Fraud Case, Law 360 (Dec. 2, 2019), https://www.
244 DOJ Press Release, U.S. Executive Sentenced to Prison for Role in Conspiracy to Violate Foreign Corrupt Practices
Act, Office of Pub. Affairs (May 14, 2019), https://www.justice.gov/opa/pr/us-executive-sentenced-prison-roleconspiracy-
247 Docket, United States v. Lyon, No. 1:19-cr-00008 (D. Haw.)
248 Criminal Complaint, United States v. Halbert, No. 1:19-cr-00031-SOM (D. Haw. Jan. 24, 2019).
250 Memorandum of Plea Agreement, United States v. Halbert, No. 1:19-cr-00031-SOM (D. Haw. Apr. 2, 2019), https://
251 Judgment, United States v. Halbert, No. 1:19-cr-00031-SOM (D. Haw. Sept. 27, 2019).
On September 13, 2019 the SEC settled charges with Sridhar Thiruvengadam,
the former Chief Operating Officer of Cognizant, for violating the FCPA’s internal
accounting controls and record-keeping provisions.252 Without admitting or denying
the findings, Thiruvengadam agreed to pay a civil penalty of $50,000.
The SEC filed a civil complaint in federal court against Gordon J. Coburn, the
former president of Cognizant, and Steven E. Schwartz, the former Chief Legal
Officer of Cognizant, alleging violations of the FCPA anti-bribery and accounting
provisions.253 The DOJ filed a 12-count criminal indictment against Coburn and
Schwartz in the District of New Jersey for criminal violations of the anti-bribery and
accounting provisions of the FCPA.254 In the civil matter, the District of New Jersey
granted the United States’ Motion to Intervene and for a Stay on November 14,
2019, pending the conclusion of criminal proceedings.255 Both Coburn and Schwartz
continue to deny any wrongdoing and most recently filed motions to dismiss the
criminal indictment on November 15, 2019.256 The trial in this matter is currently
scheduled for September 2020.
C. PDVSA Individuals
In our 2016 FCPA/Anti-Corruption Year in Review, 2017 FCPA/Anti-corruption
Year in Review & 2018 Q1 Preview, and 2018 FCPA/Anti-Corruption Year in Review, we
reported on ongoing developments in the investigation of an alleged bribery scheme
to obtain and extend contracts from Venezuelan state-owned oil company Petróleos
de Venezuela S.A. (PDVSA).
Several guilty pleas were entered in 2019 and the defendants are pending
sentencing. On February 26, 2019, charges were filed in Florida against Rafael
Enrique Pinto-Franceschi (Pinto) and Franz Herman Muller-Huber (Muller).257 The
case was transferred to the Southern District of Texas on February 28, 2019 due to
related cases.258 On July 31, 2019, Pinto pleaded guilty to one count of conspiracy to
violate the FCPA and one count of conspiracy to commit wire fraud.259 On August 21,
2019 Muller also pleaded guilty to one count of conspiracy to violate the FCPA and
one count of conspiracy to commit wire fraud. Sentencing for both Muller and Pinto
is scheduled for February 20, 2020.260
On May 29, 2019, Jose Manuel Gonzalez Testino pleaded guilty in the Southern
District of Texas to one count of conspiracy to violate the FCPA, one count of
violating the FCPA, and one count of failing to report foreign bank accounts.261
252 SEC Press Release, SEC Settles FCPA Charges Against Former Chief Operating Officer of Cognizant (Sept. 13, 2019),
253 Complaint, SEC v. Coburn, Case No. 19-cv-5820 (D.N.J. Feb. 15, 2019), https://www.sec.gov/litigation/
254 Indictment, United States v. Coburn, No. 19-cr-120, (D.N.J. Feb. 14, 2019), https://www.justice.gov/criminal-fraud/
255 Docket, SEC v. Coburn, Case No. 19-cv-5820 (D.N.J.) (Gordon J. Coburn & Steven E. Schwartz).
256 Docket, United States v. Coburn, Case No. 2:19-cr-00120 (D.N.J.) (Gordon J. Coburn & Steven E. Schwartz).
257 Indictment, United States v. Pinto-Francheschi and Muller-Huber, Case No. 1:19-mj-02252-JG (S.D. Fla. Feb. 26, 2019).
258 United States v. Pinto-Francheschi and Muller-Huber, Case No. 4:19-CR-00135 (S.D. Tex. Feb. 21, 2019).
261 DOJ Press Release, Business Executive Pleads Guilty to Foreign Bribery Charges in Connection with Venezuela
Bribery Scheme, Office of Pub. Affairs (May 29, 2019), https://www.justice.gov/opa/pr/business-executive-pleadsguilty-
According to admissions made in connection with his guilty plea, beginning in or
around 2012 and continuing through at least 2018, Gonzalez and a co-conspirator
paid at least $629,000 in bribes to a former PDVSA official in exchange for favorable
business treatment.262 Sentencing is scheduled for February 19, 2020.263
In addition to ongoing sentencing, new indictments have also been issued in this
matter. On April 24, 2019, the government filed a superseding indictment against
Nervis Gerardo Villalobos-Cardenas, Alejandro Isturiz-Chiesa, Rafael Ernesto Reiter-
Munoz, and three new defendants: Javier Alvarado-Ochoa, Daisy T. Rafoi-Bleuler,
and Paulo J.D.C. Casqueiro-Murta.264 On September 4, 2019 the court ordered that
the superseding indictment in this matter be unsealed; however, much of the docket
currently remains under seal.265
D. MTS: Gulnara Karimova and Bekhzod Akhmedov
As described in Section IV.D.2, supra, the DOJ and SEC have concluded their
investigation of conduct by MTS in the Uzbek telecommunications sector. The
investigation of MTS, as with several telecommunication companies, arises out of
a wider investigation into a company linked to Gulnara Karimova, the daughter of
former Uzbek President Islam Karimov. MTS entered into a deferred prosecution
agreement in the Southern District of New York and entered resolutions with the DOJ
and SEC to pay a combined total penalty of $850 million for its misconduct.266
On March 7, 2019, Karimova and Bekhzod Akhmedov, a former Uzbek executive
at Uzdunrobita, an Uzbekistan telecommunications company that worked with
Mobile Telesystems, were indicted in the Southern District of New York.267 Karimova is
charged with one count of conspiracy to commit money laundering and Akhmedov
is charged with one count of conspiracy to violate the FCPA, two counts of violating
the FCPA, and one count of conspiracy to commit money laundering.268 The
indictment alleges that Akhmedov conspired with telecom companies and others to
pay Karimova more than $865 million in bribes, and that both conspired with others
to launder and conceal those funds.269
E. Ematum/MAM Individuals
On December 19, 2018, three former London-based investment bankers from
Credit Suisse (Andrew Pearse, Surjan Singh, and Detelina Subeva), three former
senior Mozambican government officials (Manuel Chang, Antonio do Rosario,
and Teofilo Nhangumele), and two executives of United Arab Emirates-based
shipbuilding company Privinvest Group (Jean Boustani and Najib Allam) were
263 Docket, United States v. Gonzalez-Testino, Case No. 4:19-CR-00341 (S.D. Tex. May 14, 2019) (Jose Manuel Gonzalez-
Testino). See also Docket, United States v. Gonzalez-Testino, Case No. 1:18-MJ-03171 (S.D. Fla.) (Jose Manuel
264 Docket, United States v. De Leon-Perez et al., Case No. 4:17-cr-00514 (S.D. Tex. Aug. 23, 2017) (Daisy T. Rafoi-Bleuler,
Nervis Gerardo Villalobos-Cardenas, Alejandro Isturiz-Chiesa, Rafael Ernesto Reiter-Munoz, Paulo J.D.C. Casqueiro-
Murta & Javier Alvarado-Ochoa).
266 See Section IV.D.2, supra.
indicted in the Eastern District of New York for their roles in an alleged $2 billion
fraud and money laundering scheme.270 The indictment alleged that these individuals
had arranged for $2 billion in loans to be made to three companies owned by the
Mozambican government (Proindicus S.A., Empresa Moçambicana de Atum, S.A.
(EMATUM) and Mozambique Asset Management (MAM), that they had defrauded
investors in these Mozambican companies through their misrepresentations, and
that they had diverted at least $200 million from the loans for use in bribes and
In the indictment, the three investment bankers at Credit Suisse, Andrew
Pearse, Surjan Singh, and Detelina Subeva, were each charged with one count of
conspiracy to violate the anti-bribery and internal control provisions of the FCPA for
allegedly facilitating bribe payments to the Mozambican government officials and
circumventing the internal accounting controls of the investment bank.272 In addition,
Pearse, Singh, and Subeva were charged with one count of conspiracy to commit
wire fraud and one count of conspiracy to commit money laundering.273 All three
were arrested in the United Kingdom on January 3, 2019, pursuant to provisional
arrest warrants issued at the request of the United States.274 Subeva pleaded guilty
to one count of money laundering on May 20, 2019. Pearse pleaded guilty on July
21, 2019 to one count of wire fraud conspiracy. Singh pleaded guilty to one count of
conspiracy to commit money laundering on September 6, 2019. The US continues
to seek the arrest or extradition of the Mozambican government officials and
shipbuilding executive Allam for related money-laundering charges.275
Shipbuilding executive Jean Boustani—who was charged with conspiracy to
commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit
money laundering—went forward with a jury trial.276 On December 2, 2019, he was
found not guilty on all counts.277
F. Haiti Port Development: Roger Richard Boncy and Joseph Baptiste
As reported in our 2017 FCPA/Anti-Corruption Year in Review & 2018 Q1 Preview,
retired US Army Colonel Joseph Baptiste was indicted for conspiracy to violate the
FCPA and the Travel Act, violating the Travel Act, and conspiracy to commit money
270 Indictment, United States v. Boustani et al., Case No. 18-cr-00681 (E.D.N.Y. Dec. 19, 2018), https://www.justice.gov/
272 DOJ Press Release, Mozambique’s Former Finance Minister Indicted Alongside Other Former Mozambican Officials,
Business Executives, and Investment Bankers in Alleged $2 Billion Fraud and Money Laundering Scheme that
Victimized U.S. Investors (Mar. 7, 2019), https://www.justice.gov/opa/pr/mozambique-s-former-finance-ministerindicted-
275 DOJ Press Release No. 19-201, Mozambique’s Former Finance Minister Indicted Alongside Other Former Mozambican
Officials, Business Executives, and Investment Bankers in Alleged $2 Billion Fraud and Money Laundering Scheme
that Victimized U.S. Investors, https://www.justice.gov/opa/pr/mozambique-s-former-finance-minister-indictedalongside-
other-former-mozambican-officials (Mar. 7, 2019); Mogomotsi Magome, Shipbuilding Executive Found
Not Guilty in Mozambique Debt Fraud Trial, Wall St. J. (Dec. 2, 2019) (Manuel Chang), https://www.wsj.com/articles/
shipbuilding-executive-found-not-guilty-in-mozambique-debt-fraud-trial-11575310415 (last accessed Dec. 13, 2019).
276 Id.; Superseding Indictment, United States v. Boustani, No. 1:18-cr-00681-WFK (E.D.N.Y. Aug. 16, 2019).
laundering.278 As reported in our 2018 FCPA/Anti-Corruption Year in Review, the DOJ
filed a superseding indictment charging Roger Richard Boncy with the same crimes
and adding him as a co-conspirator to the case on October 30, 2018.279 According
to the DOJ, Baptiste and Boncy solicited bribes from undercover FBI agents in
connection with a proposed project to develop a port in Haiti.280
On June 20, 2019, after a two-week trial, Baptiste and Boncy were both convicted
of one count of conspiracy to violate the FCPA and the Travel Act.281 Baptiste was
also convicted of one count of violating the Travel Act and one count of conspiracy
to commit money laundering.282 Boncy was acquitted on these two charges.283 Both
Boncy and Baptiste have filed motions for new trials.284 The motions are pending.
G. Robin Longoria
On August 29, 2019, Robin Longoria of Mansfield, Texas, a manager of an
international program at an Ohio-based adoption agency, pleaded guilty to one
count of conspiracy to violate the FCPA, to commit wire fraud, and to commit visa
fraud.285 Longoria admitted to playing a part in a conspiracy in which judges and
other court officials in Africa were paid bribes to corrupt the adoption process.286
Longoria admitted that she caused bribes to be paid to court registrars and Ugandan
High court judges to corruptly influence the court registrars to assign particular
cases to “adoption-friendly” judges and to corruptly influence the judges to grant
the US. clients of the adoption agency guardianship rights over Ugandan children.287
Longoria also admitted to creating false documents for submission to the United
States State Department to mislead it in its adjudication of visa applications for the
Ugandan children being considered for adoption.288 Sentencing is currently set for
March 2, 2020.
H. Corpoelec: Luis Alberto Chacin Haddad, Jesus Ramon Veroes, Luis
Alfredo Motta Dominguez, and Eustiquio Jose Lugo Gomez
On March 15, 2019, a criminal complaint was filed against Jesus Ramon Veroes
of Venezuela and Luis Alberto Chacin Haddad of Miami, Florida for their roles in
laundering the proceeds of violations of the FCPA in connection with bribes to award
business to US-based companies from Venezuela’s state-owned and state-controlled
electricity company, Corporación Eléctrica Nacional, S.A. (Corpoelec).289 Chacin owns
278 Indictment, United States v. Baptiste, No.17-cr-10305-ADB (D. Mass. Oct. 4, 2017).
279 DOJ Press Release, Businessman Indicted for Conspiring to Bribe Senior Government Officials of the Republic of
Haiti (Oct. 30, 2018), https://www.justice.gov/opa/pr/businessman-indicted-conspiring-bribe-senior-governmentofficialsrepublic-
haiti (last accessed Jan. 16, 2019).
280 DOJ Press Release, Two Businessmen Convicted of International Bribery Offenses (June 20, 2019), https://www.
justice.gov/opa/pr/two-businessmen-convicted-international-bribery-offenses-0 (last accessed Dec. 15, 2019).
283 Motion for Acquittal, United States v. Boncy, No. 17-cr-10305-ADB (D. Mass. Aug. 26, 2019).
285 DOJ Press Release, Texas Woman Pleads Guilty to Conspiracy to Facilitate Adoptions From Uganda Through Bribery
and Fraud (Aug. 29, 2019), https://www.justice.gov/opa/pr/texas-woman-pleads-guilty-conspiracy-facilitateadoptions-
uganda-through-bribery-and-fraud (last accessed Dec. 15, 2019).
287 Information, United States v. Longoria, No. 1:19-cr-00482 (N.D. Ohio Aug. 29, 2019).
289 Complaint, United States v. Jesus Ramon Veroes, No. 19-MJ-02352-JJO (S.D. Fla. Mar. 15, 2019).
and manages several business in Miami, including two companies that were awarded
business under the scheme.290 Veroes is a relative of the president of a third company
involved in the scheme.291
Veroes and Chacin each pleaded guilty to one count of conspiracy to commit
felony violations of the FCPA on June 24, 2019.292 As part of the plea agreement,
Veroes and Chacin admitted that they agreed with each other and with other coconspirators
to bribe foreign officials at Corpoelec to award nearly $60 million in
procurement contracts to Florida-based companies.293 Veroes and Chacin will each
be required to forfeit $5.5 million in profits from the corruptly obtained contracts, as
well as real property in Florida.294
On September 25, 2019, Chacin was sentenced to just over four years in prison
for his role in the scheme. Chacin’s cooperation with the United States government
led to charges being filed against Venezuela’s minister of electrical energy, who led
the utility, and its procurement director.295 Veroes was also sentenced to four years in
prison on October 29, 2019.296 Veroes faces two years of supervised release following
his time in prison.297
In related proceedings, on June 27, 2019, Luis Alfredo Motta Dominguez (Motta),
the former head of Corpoelec, Venezuela’s state-owned electricity company, and
Eustiquio Jose Lugo Gomez (Lugo), another Corpoelec executive were charged
by DOJ with seven counts of money laundering and one count of conspiracy to
commit money laundering.298 The indictment alleges that from January 2016 through
December 2018, Motta and Lugo conspired to launder proceeds of a bribery scheme
to and from bank accounts located in the United States.299
I. TechnipFMC: Zwi Skornicki
As described in Section IV.D.5, supra, in June 2019, TFMC, a global oil and gas
services company, agreed to pay a combined total criminal fine of more than
$296 million to resolve foreign bribery charges in the United States and Brazil.300
According to the DOJ, the charges stem from two bribery schemes orchestrated by
the company: the first, a scheme to bribe Brazilian officials, and the second, a scheme
to bribe Iraqi officials. TFMC’s former consultant and Brazilian national, Zwi Skornicki,
pleaded guilty to a one-count criminal information charging him with conspiracy to
292 Plea Agreement, United States v. Jesus Ramon Veroes, No. 19-MJ-02352-JJO (S.D. Fla. June 24, 2019).
293 DOJ Press Release, Two Former Venezuelan Officials Charged and Two Businessmen Plead Guilty in Connection
with Venezuela Bribery Scheme (June 27, 2019), https://www.justice.gov/opa/pr/two-former-venezuelan-officialscharged-
and-two-businessmen-plead-guilty-connection-venezuela (last accessed Dec. 15, 2019).
295 Nathan Hale, Miami Man Gets 4 Years for Bribing Venezuelan Officials, law 360 (Sept. 25, 2019), https://www.law360.
com/articles/1202576 (last accessed Dec. 15, 2019).
296 Nathan Hale, Venezuelan National Gets 4 Years for Bribery Scheme, law 360 (Oct. 29, 2019), https://www.law360.
com/articles/1214463/venezuelan-national-gets-4-years-for-bribery-scheme (last accessed Dec. 15, 2019).
298 See Indictment, United States v. Motta Domiguez et al., No. 1:19-cr-20388 (S.D. Fla. June 27, 2019).
300 DOJ Press Release, Technipfmc PLC and U.S.-Based Subsidiary Agree to Pay Over $296 Million in Global Criminal
Fines to Resolve Foreign Bribery Case (June 25, 2019), https://www.justice.gov/usao-edny/pr/technipfmc-plc-andus-
based-subsidiary-agree-pay-over-296-million-global-criminal-fines (last accessed Dec. 16, 2019).
violate the FCPA’s anti-bribery provisions.301 Skornicki admitted that between 2001
and 2014 he conspired to pay more than $55 million in illegal bribes to officials at
Petrobras, a Brazilian state-controlled oil company, and the Brazilian Workers’ Party
to win contracts related to oil and gas projects.302 In an effort to facilitate the illegal
payments and to conceal the scheme, TFMC and Technip USA created and executed
false agreements with consulting companies controlled by Skornicki.303 Skornicki
subsequently used portions of the purported consulting payments to pay bribes.304
At the time of this report, Skornicki awaits a 2020 sentencing date.
According to media reports, Skornicki was convicted on corruption charges in
Brazil in 2016.305 Skornicki was required to pay a penalty upwards of $24 million to
Brazilian authorities and was originally sentenced to more than 15 years in prison on
those charges.306 According to local reports, however, his sentence was later reduced
to six months’ home confinement pursuant to a cooperation agreement.307 Although
this is a rare occurrence, Skornicki’s consecutive prosecutions in Brazil and the United
States is part of a recent trend of successive prosecutions in multiple countries.308
J. PetroEcuador: Armengol Alfonso Cevallos Diaz, Jose Melquiades
Cisneros Alarcon, Frank Roberto Chatburn-Ripalda
As reported in Steptoe’s 2018 FCPA/Anti-Corruption Year in Review, six individuals
were charged in 2018 in connection with the DOJ’s investigation of a scheme to
bribe officials of PetroEcuador, Ecuador’s state-owned oil company, in exchange for
contracts.309 On May 9, 2019, two additional Ecuadorian citizens, Armengol Alfonso
Cevallos Diaz and Jose Melquiades Cisneros Alarcon, were indicted for conspiracy to
violate the FCPA, conspiracy to commit money laundering, and nine counts of money
laundering in connection with the DOJ’s expanding prosecution involving bribery at
PetroEcuador.310 Diaz and Alcaron allegedly assisted with laundering and paying $4
million in bribes to PetroEcuador officials.311
To date, the DOJ’s investigation has yielded four guilty pleas, including Frank
Roberto Chatburn-Ripalda (Chatburn). As discussed in the 2018 FCPA/Anti-
Corruption Year in Review, Chatburn was set to go to trial in September 2019 for his
role in an alleged scheme to bribe officials of PetroEcuador, Ecuador’s state-owned
oil company, in exchange for government contracts. On October 11, 2019, however,
302 See Criminal Information, CR. No. 19-277 (KAM), United States v. Zwi Skornicki.
305 Jody Godoy, FCPA Policy Benefits Open to Repeat Bribery Offenders, Law 360 (July 9, 2019), https://www.law360.
com/articles/1173737/fcpa-policy-benefits-open-to-repeat-bribery-offenders (last accessed Jan. 17, 2020).
308 Kathleen Hamann and Timothy Malley, Double jeopardy ruling sends “alarming” message, GLOBAL INVESTIGATIONS
REV., Just Anti-Corruption (July 19, 2019) https://globalinvestigationsreview.com/article/jac/1195268/doublejeopardy-
309 See also DOJ Press Release, Financial Advisor Pleads Guilty to Money Laundering Charge in Connection With Bribery
Scheme Involving Ecuadorian Official (Sept. 11, 2018), https://www.justice.gov/opa/pr/financial-advisor-pleads-guiltymoneylaundering-
charge-connection-bribery-scheme-involving (last accessed Dec. 15, 2019).
310 Indictment, United States v. Diaz, 1:19-cr-20284-RS (S.D. Fla. May 9, 2019); Richard L. Cassin, Two more charged with
FCPA conspiracy in PetroEcuador bribe case, FCPABlog (July 2, 2019), https://fcpablog.com/2019/07/02/two-morecharged-
with-fcpa-conspiracy-in-petroecuador-bribe/ (last accessed Dec. 15, 2019).
Chatburn pleaded guilty to one count of conspiracy to commit money laundering.
As part of his plea agreement with federal prosecutors, Chatburn agreed to forfeit
over $870,000.312 Prosecutors, in turn, agreed to seek a three-point reduction in
the sentencing guidelines on the basis of his acceptance of responsibility.313 On
December 18, 2019, Chatburn was sentenced to three and a half years in prison
followed by three years of supervised release. He was also fined an additional
K. Westport: Nancy Gougarty
On September 27, 2019, the SEC announced that Westport, a Canadian clean
fuel technology company, and its former CEO, Nancy Gougarty, agreed to pay
more than $4.1 million to resolve charges that the company paid bribes to a Chinese
government official.315 According to the SEC, in 2016, Gougarty engaged in a scheme
to bribe a Chinese government official to obtain business and a cash dividend by
transferring shares of stock in Westport’s Chinese joint venture to a private equity
fund in which the government official held a financial interest.316
Without admitting or denying the SEC’s findings, Gougarty, as well as Westport,
consented to a cease-and-desist order.317 The SEC Order regarding Westport
is discussed in Section IV.C.4, supra. According to the SEC’s order, Gougarty
circumvented Wesport’s internal accounting controls and signed a false certification
regarding the sufficiency of the company’s controls, according to the order.318
Gougarty agreed to pay a civil penalty of $120,000.319
L. Unaoil: Cyrus Ahsani, Saman Ahsani, and Steven Hunter
On October 30, 2019, the DOJ announced that Cyrus Ahsani and Saman Ahsani,
the former CEO and COO of Monaco-based Unaoil, each pleaded guilty in March
2019 to one count of conspiracy to violate the FCPA.320 According to the DOJ, from
1999 to 2016, the former Unaoil officers schemed to facilitate millions of dollars in
bribe payments to officials in multiple countries to secure oil and gas contracts.321
Further, the Ahsanis allegedly laundered the proceeds of their bribery schemes in
an effort to promote and conceal the schemes and to obstruct the government’s
investigations.322 In addition, on August 2, 2018, Steven Hunter, Unaoil’s former
business development director, also pleaded guilty to one count of conspiracy to
violate the FCPA in connection with the bribery scheme.323 According to the DOJ,
312 See Plea Agreement, United States v. Chatburn Ripalda et al., No. 1:18-cr-20312 (S.D. Fla. Oct. 11, 2019).
314 See Judgment, United States v. Chatburn Ripalda et al., No. 1:18-cr-20312 (S.D. Fla. Dec. 18, 2019).
315 SEC Press Release, SEC Charges Canadian Clean Fuel Technology Company and Former CEO with FCPA Violations
(Sept. 27, 2019), https://www.sec.gov/news/press-release/2019-197 (last accessed Dec. 15, 2019).
317 Order Instituting Cease-and-Desist Proceedings, In re Westport Fuel Systems, Inc. and Nancy Gougarty, SEC Exch.
Act Release No. 87138 (Sept. 27, 2019), https://www.sec.gov/litigation/admin/2019/34-87138.pdf.
320 DOJ Press Release, Oil Executives Plead Guilty for Roles in Bribery Scheme Involving Foreign Officials (Oct. 30,
(last accessed Dec. 16, 2019).
from 2009 to 2015, Hunter facilitated bribe payments to Libyan officials.324 Cyrus
and Saman Ahsani are currently scheduled to be sentenced on April 20, 2020, and
Hunter’s sentencing is scheduled for March 13, 2020.325 The UK’s investigation of
Unaoil executives has also progressed in 2019, as described in Section VIII.A, infra.
On July 15, 2019, Unaoil’s former partner in Iraq pleaded guilty to five offences of
conspiracy to give corrupt payment as part of the SFO’s ongoing investigation326
and the criminal trial of three other individuals associated with Unaoil is scheduled to
begin on January 20, 2020 at Southwark Crown Court.
M. Herbalife: Jerry Li and Mary Yang
As reported in our 2017 FCPA/Anti-Corruption Year in Review & 2018 Q1 Preview,
on January 20, 2018, Herbalife Ltd. disclosed that the SEC had requested documents
and other information related to the company’s anti-corruption compliance in
China.327 On November 14, 2019, the SEC filed a civil complaint against Yanliang
(Jerry) Li, the former managing director of Herbalife’s Chinese subsidiary, charging
him with FCPA violations in connection with the bribery of Chinese government
officials.328 The complaint alleged that Jerry Li, from 2006 to 2016, directed a
scheme to bribe Chinese officials in order to obtain direct selling licenses and limit
government investigation of Herbalife’s Chinese subsidiary.329
In a related proceeding, on October 22, 2019, the DOJ filed an indictment against
Jerry Li as well as Hongwei (Mary) Yang, the former head of the external affairs
department, charging them with conspiring to violate the FCPA by bribing Chinese
government officials.330 Jerry Li was also charged with one count of perjury in
connection with the SEC’s investigation, and one count of destruction of records in
federal investigations in connection with the SEC and DOJ’s investigation.331
N. Braskem: Jose Carlos Grubisich
On February 27, 2019, Jose Carlos Grubisich—the former CEO of Brazil-based
petrochemical company Braskem S.A. (Braskem)332—was charged with violations
of the FCPA and with money laundering arising from the alleged diversion of about
$250 million to a secret slush fund used, in part, to bribe Brazilian government
326 SFO, Former Unaoil executive pleads guilty to conspiracy to give corrupt payments (July 19, 2019) https://www.sfo.
gov.uk/2019/07/19/former-unaoil-executive-pleads-guilty-to-conspiracy-to-give-corrupt-payments/ (last accessed
December 16, 2019).
327 Austen Hufford, SEC Questions Herbalife Over China Anti-Corruption Efforts, WALL STREET JOURNAL (Jan. 20,
2017), https://www.wsj.com/articles/sec-questions-herbalife-over-china-anti-corruption-efforts-1484924135 (last
accessed Apr. 4, 2018).
328 Indictment, SEC v. Li, No. 19-cv-10562 (S.D.N.Y. Nov. 14, 2019); see also SEC Litigation Release No. 24666, SEC
Charges Former Executive with FCPA Violations (Nov. 15 2019), https://www.sec.gov/litigation/litreleases/2019/
lr24666.htm (last accessed Dec. 12, 2019).
329 Indictment, SEC v. Li, No. 19-cv-10562 (S.D.N.Y. Nov. 14, 2019). Direct sales licenses were also a central issue in the
Avon case, as discussed in our 2014 FCPA Year in Review.
330 Indictment, United States v. Li, No. 1:19-CR-00760 (S.D.N.Y. Oct. 22, 2019); see also DOJ Press Release No. 19-1,249,
Two Former Executives of the China Subsidiary of a Multi-Level Marketing Company Charged for Scheme to Pay
Foreign Bribes and Circumvent Internal Accounting Controls (Nov. 14, 2019), https://www.justice.gov/opa/pr/twoformer-
executives-china-subsidiary-multi-level-marketing-company-charged-scheme-pay (last accessed Dec. 12,
331 Indictment, United States v. Li, No. 1:19-CR-00760 (S.D.N.Y. Oct. 22, 2019).
332 Charges against Odebrecht and Braskem are discuss in more detail in our 2016 FCPA Year in Review.
officials for business.333 Grubisich was arrested on November 20, 2019.334 The
indictment, which was unsealed the same day, alleged that Braskem together with
Odebrecht—a Brazilian holding company with a controlling interest in Braskem—had
set up a secret financial structure that “effectively functioned as a stand-alone bribe
department within Odebrecht” responsible for laundering and paying out bribes
to Brazilian government officials and political parties.335 As part of this scheme, for
which Odebrecht and Braskem were both prosecuted in 2016, Grubisich and multiple
unnamed co-conspirators allegedly created a slush fund that was used to pay bribes
and agreed to falsify books and records, and Grubisich allegedly approved bribe
negotiations and bribe payments.336 On December 12, 2019, Grubisich was granted
bail in return for $30 million—that is, about half his wealth.337
O. 1MDB: Tim Leissner and Ng Chong Hwa (Roger Ng)
As reported in our 2018 FCPA/Anti-Corruption Year in Review, Tim Leissner, a
former executive at Goldman Sachs Group Inc., pleaded guilty in 2018 to a two-count
criminal information charging him with conspiring to launder money and conspiring
to violate the FCPA by bribing various Malaysian and Abu Dhabi officials and
circumventing Goldman Sachs’ internal accounting controls in connection with the
1MDB scandal.338 Sentencing has been set for June 11, 2020.
On December 16, 2019, the SEC announced charges against Leissner for violating
the anti-bribery, internal accounting controls, and books and records provisions of
the FCPA in connection with his participation in the corrupt scheme.339 A settlement
order was issued the same day.340
According to the SEC’s order, Leissner obtained millions of dollars by paying
unlawful bribes to high-ranking government officials in Abu Dhabi and Malaysia
to obtain business from 1Malaysia Development Berhard (1MDB), a Malaysian
government-owned investment fund, which included underwriting $6.5 billion
in bond offerings. The settlement includes a permanent ban from the securities
industry.341 Leissner has also agreed to disgorgement of $43.7 million, which will be
offset by amounts paid as part of the resolution of the DOJ’s criminal action.342
333 Indictment, United States v. Grubisich, No. 19-CR-102 (RJD) (E.D.N.Y. Feb. 27, 2019), https://www.justice.gov/usaoedny/
334 DOJ Press Release No. 19-1278, Former Chief Executive Officer of a Brazilian Petrochemical Company Charged for
His Role in a Scheme to Pay Bribes to Brazilian Officials and to Falsify Company Books and Records (Nov. 20, 2019),
pay (last accessed Dec. 12, 2019).
335 Indictment ¶ 18, United States v. Grubisich, No. 19-CR-102 (RJD) (E.D.N.Y. Feb. 27, 2019).
336 Id. ¶¶ 20-21.
337 Jody Godoy, Ex-Braskem Exec Granted $30M Bail In Bribery Case, Law 360 (Dec. 12, 2019), https://www.law360.com/
8a532192cccc&utm_source=newsletter&utm_medium=email&utm_campaign=whitecollar (last accessed Dec. 13,
2019); cf. Criminal Minute Entry, United States v. Grubisich, No. 19-CR-102 (RJD) (E.D.N.Y. Dec. 12, 2019).
338 Information, United States v. Leissner, No. 18-cr-00439 (MKB) (E.D.N.Y. Aug. 28, 2018), https://www.justice.gov/opa/
339 SEC Press Release, SEC Charges Former Goldman Sachs Executive with FCPA Violations, (Dec. 16, 2019), https://
Order, In the Matter of Tim Leissner, File No. 3-19619 (Dec. 16, 2019), https://www.sec.gov/litigation/admin/2019/34-
340 Order, In the Matter of Tim Leissner, File No. 3-19619 (Dec. 16, 2019).
As reported in our 2018 FCPA/Anti-Corruption Year in Review, in October 2018,
Roger Ng was indicted for conspiring to violate the FCPA by bribing multiple
Malaysian and Abu Dhabi officials, as well as conspiring to launder billions of dollars
embezzled from 1MDB.343 In May 2019, Ng was extradited from Malaysia to the United
P. Transport Logistics International: Mark Lambert
As reported in our 2018 FCPA/Anti-Corruption Year in Review, Mark Lambert,
the former co-president of Transport Logistics International (TLI), was indicted on
11 counts, including one count of conspiracy to violate the FCPA and to commit
wire fraud, seven counts of violating the FCPA, two counts of wire fraud, and one
count of international promotion of money laundering, related to a scheme involving
the alleged bribery of an official at a subsidiary of Russia’s State Atomic Energy
Corporation (RUSATOM).344 In October 2018, the DOJ offered Lambert a plea deal,
which he rejected.345
According to evidence presented at trial, Lambert conspired with others at TLI
to make corrupt payments to Vadim Mikerin, a Russian official at the RUSATOM
subsidiary, to secure transportation contracts for nuclear fuel. To conceal the
payments, fake invoices were prepared that described services that were never
provided by TLI.346 After a three-week trial, on November 22, 2019, Lambert was
found guilty of four counts of violating the FCPA, two counts of wire fraud, and one
count of conspiracy to violate the FCPA and commit wire fraud.347 Sentencing has
been scheduled for March 9, 2020.348
Q. Donville Inniss, Ingrid Innes, and Alex Tasker
As discussed in the 2018 FCPA/Anti-Corruption Year in Review, the trial of
Donville Inniss was originally scheduled for October of 2019. Inniss was charged
with conspiracy to commit money laundering and money laundering for allegedly
accepting $36,000 in bribes in exchange for facilitating contracts between the
Barbados Investment and Development Corporation, a government agency, and the
Insurance Corporation of Barbados Limited (ICBL). After a two-day trial Inniss was
found guilty on all counts on January 16, 2020.349 Trial dates have not yet been set for
former ICBL executives Ingrid Innes and Alex Tasker, who are facing charges for the
343 Indictment, United States v. Low Taek Jho and Ng Chong Hwa, No. 18-cr-00538 (MKB) (E.D.N.Y. Oct. 3, 2018), https://
344 Indictment, United States v. Lambert, No. 8:18-CR-00012 (D. Md. Jan. 10, 2018), https://www.justice.gov/criminalfraud/
345 Joint Status Report, United States v. Lambert, No. 8:18-CR-00012 (D. Md. Nov. 7, 2018), https://www.courtlistener.
346 DOJ Press Release, Former President of Transportation Company Found Guilty of Violating the Foreign Corrupt
Practices Act and Other Crimes, (Nov. 22, 2019), https://www.justice.gov/opa/pr/former-president-transportationcompany-
349 DOJ Press Release, Former Member of Barbados Parliament and Minister of Industry Found Guilty of Receiving and
Laundering Bribes from Barbadian Insurance Company (Jan. 16, 2020), https://www.justice.gov/opa/pr/formermember-
R. Alex Nain Saab Moran and Alvaro Pulido Vargas
On July 25, 2019, Colombian businessmen Alex Nain Saab Moran (Saab) and
Alvaro Pulido Vargas (Pulido) were each indicted in the Southern District of Florida
on one count of conspiracy to commit money laundering and seven counts of
money laundering.350 The indictment alleges that between 2011 and 2015, Saab and
Pulido bribed Venezuelan officials with payments for shipments of construction
materials that were never actually sent to the country to secure a contract with the
government to build low-income housing.351 The indictment seeks forfeiture of over
$350 million in funds alleged to have been transferred out of Venezuela and through
the United States pursuant to the scheme.352
On the same day as Saab and Pulido were indicted, the US Department of
Treasury, Office of Foreign Assets Control (OFAC) announced sanctions against
Saab, Pulido and associated parties.353 The sanctions designated all US-based
property and interests in property in which Saab, Pulido, and any other named party
has at least a fifty percent interest as blocked and reportable to OFAC. The sanctions
prohibit dealings with US persons or within (or transiting) the US that involve any
blocked property or named party.
S. Patrick Ho
As reported in our 2018 FCPA/Anti-Corruption Year in Review, former Hong Kong
Secretary for Home Affairs Chi Ping Patrick Ho was convicted in December 2018
on charges of violating the FCPA, money laundering and conspiracy for his role in
bribing officials in Chad and Uganda in exchange for contracts with a Chinese energy
company. On March 25, 2019, US District Judge Loretta A. Preska sentenced Patrick
Ho to three years in prison.354
T. Keppel Offshore & Marine Ltd.: Jeffrey Shui Chow
Jeffrey Shui Chow, who, as discussed in our 2017 FCPA/Anti-Corruption Year in
Review & 2018 Q1 Preview, pleaded guilty to one count of conspiracy for his role in
the Keppel Offshore & Marine Ltd. (KOM) bribery scheme, was sentenced to time
served and probation on November 18, 2019.355
U. Ng Lap Seng
As discussed in detail at Section III.A.1, supra, the Second Circuit made a
significant ruling in 2019, affirming Ng Lap Seng’s conviction on various bribery,
350 See Indictment, United States v. Saab Moran et al., No. 1:19-cr-20450-RNS-1 (S.D. Fla. July 25, 2019); DOJ Press
Release, Two Columbia Businessman Charged with Money Laundering in Connection with Venezuela Bribery
Scheme (July 25, 2019), https://www.justice.gov/opa/pr/two-colombian-businessmen-charged-money-launderingconnection-
353 See OFAC Press Release, Treasury Disrupts Corruption Network Stealing From Venezuela’s Food Distribution
Program, CLAP (July 25, 2019), https://home.treasury.gov/news/press-releases/sm741.
354 DOJ Press Release, Patrick Ho, Former Head Of Organization Backed By Chinese Energy Conglomerate, Sentenced
To 3 Years In Prison For International Bribery And Money Laundering Offenses (Mar. 25, 2019), https://www.justice.
355 Judgement, United States v. Jeffery Chow, No. 17-cr-00466 (KAM) (E.D.N.Y. Nov. 18, 2019) (ECF No. 29).
conspiracy, and money laundering charges and distinguishing the term “official act”
in the FCPA context from prior jurisprudence in McDonnell v. United States.
V. Alstom S.A.: Lawrence Hoskins
As discussed in detail at Section III.A.2, supra, a jury found Lawrence Hoskins, a
former senior executive at Alstom, guilty for his role in a foreign bribery scheme. The
DOJ’s case against Hoskins turned primarily on whether he acted as an “agent” of
Alstom’s US-based subsidiary.
VI. New FCPA Investigations
A total of eight new FCPA investigations were disclosed in 2019, which is down
from 20 in 2017, and ten in 2018. These new, publicly announced investigations cover
a number of industries, including aviation, energy and extractives, among other
The aviation industry historically has not been as much of an FCPA hotspot as
some others, but that does not mean market players in this industry are flying under
the radar. On July 10, 2019, AAR Corp. filed a Form 8-K disclosing that the company
had informed the DOJ, SEC, and the UK Serious Fraud Office (SFO) of an internal
investigation of possible FCPA violations relating to the company’s activities in Nepal
and South Africa.356 On Aug. 15, 2019, the Colombian airline, Avianca Holdings S.A.,
also disclosed that it had informed the DOJ and SEC of an internal investigation to
determine whether the company’s business practices whereby company employees
(possibly including members of senior management and the board of directors) gave
free and discounted airline tickets and upgrades to government employees in certain
countries, had violated the FCPA and other anti-corruption laws.357
B. Energy and Extractives
Several investigations were disclosed by energy and extractive companies relating
to Monaco-based intermediary Unaoil S.A.M. (Unaoil). Among others, on April
30, 2019, Baker Hughes, LLC, disclosed that it received a document request from
the DOJ in March 2019 related to certain of its operations in Iraq and its dealings
with Unaoil Limited and its affiliates.358 ABB Ltd., which previously disclosed that
it had informed the DOJ, SEC, and the SFO of its internal investigation regarding
past dealings with Unaoil and its subsidiaries (as reported in our 2017 FCPA/Anti-
Corruption Year in Review & 2018 Q1 Preview), filed a Form 20-F on March 28, 2019,
stating that based on findings during an internal investigation, the company had
informed the DOJ, SEC, various authorities in South Africa and other countries, and
certain multilateral financial institutions of potential suspect payments and other
compliance concerns in connection with the company’s dealings with Eskom, a South
African utility company.359
356 AAR Corp., Form 8-K (July 10, 2019), https://www.sec.gov/Archives/edgar/data/1750/000110465919039824/a19-
12637_18k.htm (last accessed Jan. 7, 2019).
357 Avianca Holdings S.A., Form 6-K (Aug. 15, 2019), https://www.sec.gov/Archives/edgar/
data/1575969/000119312519221753/d792613dex991.htm (last accessed Jan. 7, 2019) (noting that the company has
also disclosed the investigation to the Colombian Financial Superintendence).
358 Baker Hughes, a GE company LLC, Form 10-Q (Apr. 30, 2019), https://www.sec.gov/ix?doc=/Archives/edgar/
data/808362/000080836219000011/bhgellc-2019033110xq.htm (last accessed Jan. 7, 2019).
359 ABB Ltd., Form 20-F (Mar. 28, 2019), https://www.sec.gov/Archives/edgar/data/1091587/000141057819000158/
maindocument001.htm (last accessed Jan. 7, 2019) (noting that many of the authorities “have expressed an interest
in, or commenced an investigation into, these matters;” it is not clear at this moment if the DOJ and SEC are also
investigating the company’s Eskom-related dealings).
The technology industry continued to be a focus of FCPA-related activity,
with two new investigations disclosed in 2019. Gartner, Inc. (Gartner), a Stamford,
Connecticut-based research and advisory firm, disclosed in its Form 10-K filed
on February 22, 2019, that a South African government commission had been
established to review a wide range of issues related to the country’s revenue service,
including the procurement and fulfillment of consulting agreements that Gartner
entered into with the revenue service through a sales agent, and that the commission
had recommended that the revenue service explore lawful options to invalidate the
agreements. Gartner stated that it had initiated an internal investigation regarding
this matter and also disclosed its investigation to DOJ and SEC.360
In addition, Internet Gold Golden Lines Ltd. (Internet Gold), a communication
service group based in Israel, disclosed in its Form 20-F filed on May 15, 2019 that
the SEC had issued a Formal Order of Private Investigation with respect to the
company in March 2019, regarding possible violations of the FCPA with respect to
facts uncovered in criminal investigations in Israel regarding whether the company’s
subsidiaries and parent company violated Israeli securities laws.361
D. Other Industries
On July 26, 2019, the Minnesota-based multinational manufacturer, 3M Company,
filed a Form 10-Q disclosing that the company had informed the DOJ and SEC of
an internal investigation relating to certain travel activities and related funding and
record keeping issues arising from marketing efforts by certain business groups
based in China.362
360 Gartner, Inc., Form 10-K (Feb. 22, 2019), https://www.sec.gov/Archives/edgar/data/749251/000074925119000005/
it-12312018x10k.htm (last accessed Jan. 8, 2019).
361 Internet Gold Golden Lines Ltd., Form 20-F (May 15, 2019), https://www.sec.gov/Archives/edgar/
data/1090159/000121390019008849/f20f2018_internetgold.htm (last accessed Jan. 8, 2019).
362 3M Company, Form 10-Q (July 26, 2019), https://www.sec.gov/ix?doc=/Archives/edgar/
VII. World Bank and Other International
A. The World Bank
The Integrity Vice Presidency (INT) of the World Bank continued to actively
investigate fraud and corruption in World Bank-financed projects. During fiscal year
2019 (FY2019), the World Bank received 2,461 complaints, leading to 346 preliminary
investigations, and ultimately resulting in 49 investigations.363 Of the 47 completed
investigations, 37 cases were referred for sanctions to the Office of Suspension and
OSD temporarily debarred 24 firms and 10 individuals, of which 19 did not
appeal and were subsequently sanctioned by OSD.365 In an unusual move, the OSD
dismissed four of the cases that INT submitted, as there was insufficient evidence to
corroborate any of the allegations. Consistent with the previous years, allegations of
fraud were the most common sanctionable practice: 77% of the cases reviewed by
OSD included at least one claim of fraud.
The numbers of settlements submitted by INT to OSD dropped from 23 in FY2018
to 16 in FY2019.366 Noteworthy cases of FY2019 included a successful settlement
with an affiliate of Odebrecht, the Brazilian large multinational construction and
engineering company which settled a major FCPA case in 2018,367 under a Latin
American water project.368 The five contracts under investigation amounted to a total
of USD 520 million. The company failed to disclose fees paid to its agents during the
tender prequalification and bidding process. The settlement agreement included a
three-year period of debarment for the company and its affiliates. In connection with
the same project, the World Bank also debarred two subsidiaries of Veolia, for two
years in the case of its French subsidiary, and for one year in the case of its Brazilian
subsidiary369 for fraudulent and collusive practices during the bidding process.
363 World Bank Group Sanctions System Annual Report FY19 8, http://documents.worldbank.org/curated/
en/782941570732184391/pdf/World-Bank-Group-Sanctions-System-Annual-Report-FY19.pdf (last accessed Jan. 2,
365 Id. at 37.
366 Id. at 61.
367 For a discussion of the FCPA charges against Odebrecht, see our 2018 FCPA Year in Review.
368 Press Release, World Bank Group Announces Settlement with Brazilian Subsidiary of Odebrecht (Jan. 29, 2019),
subsidiary-of-odebrecht (last accessed Jan. 2, 2020).
369 Press Release, World Bank Group Announces Debarment of French and Brazilian Subsidiaries of Veolia Water
Technologies (May 29, 2019), https://www.worldbank.org/en/news/press-release/2019/05/29/world-bank-groupannounces-
debarment-of-french-and-brazilian-subsidiaries-of-veolia-water-technologies (last accessed Jan. 2,
The Sanctions Board sanctioned 14 firms and individuals in FY2019.370 In six of
those cases, the respondents were charged with fraudulent misconduct, whereas the
number of cases including corruption allegations dropped from six in FY2018 to only
one case in FY2019. On the other hand, in an increase from prior years, the Sanctions
Board resolved four cases involving alleged collusion.
In the post-sanctions phase, the Integrity Compliance Officer engaged with over
90 sanctioned firms and individuals and released 23 firms and/or individuals from
B. Other International Financial Institutions
In September 2019, the Inter-American Development Bank (IDB) announced a sixyear
debarment of CNO S.A., a subsidiary of Odebrecht involved in corrupt practices
in Venezuela and Brazil. Sanctions extended to 60 subsidiaries of Odebrecht: 19 are
subject to debarment and 41 to conditional non-debarment. From 2007 until 2015,
Odebrecht companies allegedly paid a total of USD 118 million in bribes to public
officials related to two IDB-funded projects. As part of the settlement, Odebrecht
agreed to make a total contribution of USD 50 million to NGOs and charities starting
Another settlement involved the European Investment Bank (EIB) and
Volkswagen AG (Volkswagen) on December 19, 2019 and related to gas emissions
levels allegedly reported to the EIB in or around 2009 in connection with obtaining
loans.373 As part of the settlement, Volkswagen agreed to pay EUR 10 million to
environment and/or sustainability projects in Europe.374
370 World Bank Group Sanctions System Annual Report FY19 8, http://documents.worldbank.org/curated/
en/782941570732184391/pdf/World-Bank-Group-Sanctions-System-Annual-Report-FY19.pdf (last accessed Jan. 2,
372 Inter-American Development Bank News Release, Odebrecht Reaches Settlement Agreement with IDB Group
Resulting in Sanctions (Sept. 4, 2019), https://www.iadb.org/en/news/odebrecht-reaches-settlement-agreement-idbgroup-
resulting-sanctions-0 (last accessed Jan. 2, 2020).
373 European Investment Bank Press Release, Agreement reached between the European Investment Bank and
Volkswagen AG in relation to EIB loan “Antrieb RDI” (Dec. 19, 2018), https://www.eib.org/en/press/news/agreementreached-
accessed Jan. 2, 2020).
VIII. International Developments
The recent trend of increasing anti-corruption legislative and enforcement
activity outside the United States has continued in 2019. Below, we discuss notable
worldwide anti-corruption developments.
A. United Kingdom
Having experienced mixed fortunes during 2018, the SFO had little in the way of
high-profile success during 2019. The SFO’s year was defined mostly by acquittals,
the closure of investigations, a lack of visible progress in other long-running
investigations, and the publication of several external reports into SFO staffing and
case progression that highlighted room for improvement.
As noted in our 2018 FCPA/Anti-Corruption Year in Review, a number of highprofile
and long-running SFO investigations appear to have stalled, particularly the
investigations into Kazakh mining group Eurasian Natural Resources Corporation
(ENRC) and the Airbus subsidiary GPT. At the end of 2019 it is not clear that either
case is closer to resolution.
The ENRC investigation instead has spawned myriad separate proceedings. In
March 2019 ENRC brought a claim against the SFO for £70 million in respect of legal
costs resulting from the original SFO investigation. ENRC’s claim accuses the SFO
of misfeasance in public office, arguing that the SFO induced the law firm Dechert
(which previously represented ENRC) and a partner at Dechert into acting in breach
of contract and/or fiduciary duties owed to ENRC.375
Three months after the issuance of ENRC’s claim, in July 2019, the SFO halted its
independent inquiry into its handling of the investigation following allegations that it
had improperly gathered evidence concerning ENRC.
In August 2019, ENRC applied to the High Court for a judicial review, alleging that
the SFO’s decision to suspend its independent inquiry was “unlawful, unreasonable,
disproportionate and unfair.”376 A month earlier ENRC also commenced a High
Court claim against the former prime minister of Kazakhstan, Akezhan Kazhegeldin,
accusing him of leaking confidential and privileged information to both the SFO and
The investigation into GPT, initiated in 2012 amid accusations of £14 million in
bribes being paid to secure a £2 billion contract with the Saudi Arabian National
Guard, also appears to have advanced little during 2019. In June 2019 GPT’s annual
375 Max Walters, ENRC targets SFO in £70m ‘privilege breach’ claim, Law Gazette (Mar. 27, 2019), https://www.
lawgazette.co.uk/law/enrc-targets-sfo-in-70m-privilege-breach-claim-/5069769.article (last accessed Nov. 21, 2019).
376 Jemma Slingo, ENRC mounts more legal action against SFO, Law Gazette (Aug. 14, 2019), https://www.lawgazette.
co.uk/news/enrc-mounts-more-legal-action-against-sfo/5101148.article (last accessed November 21, 2019).
377 Dean Seal, ENRC Sues Ex-PM Of Kazakhstan In Widening War With SFO, Law 360 (July 25, 2019), https://www.
law360.com/articles/1181746/enrc-sues-ex-pm-of-kazakhstan-in-widening-war-with-sfo (last accessed Nov. 22, 2019).
report announced that the company would go out of business on December 31,
2019—likely a result of the UK Ministry of Defence awarding GPT’s sole contract to a
different military contractor.378
On October 14, 2019, Transparency International UK wrote to Attorney General
Geoffrey Cox expressing concern over the timeliness of the investigation into GPT.379
Transparency International UK called on the Attorney General to update Parliament,
as a matter of urgency, as to the reasons for the delay. On November 4, 2019, Cox
noted that “This case is being investigated by the Serious Fraud Office which
investigates and prosecutes allegations of the most serious or complex fraud, bribery
and corruption.” Cox stated that the allegations were challenging to investigate, that
the case was particularly complex, that the investigation was ongoing, and that it
would take time. As a result, he declined to comment further on it.380
A number of ongoing investigations were ended by the SFO during 2019. On
October 18, 2019, the SFO concluded its investigation into the manipulation of the
LIBOR with no further charges being brought.381 Charges of conspiracy to defraud
had been brought against a total of 13 individuals, with the most recent trial
concluding on April 6, 2017, with the acquittal of two individuals. Elements of an SFO
investigation into manipulation of the Euro Interbank Offered Rate (EURIBOR) do,
however, remain active. In April 2019, two former Barclays traders were convicted of
conspiring to rig EURIBOR, with one trader being acquitted.382
As we discussed in our 2018 FCPA/Anti-Corruption Year in Review, on
February 22, 2019, the SFO announced the closure of both the Rolls-Royce and
GlaxoSmithKline (GSK) investigations, citing “insufficient evidence to provide
realistic prospect of conviction” and the “public interest” as the reasons behind its
decisions. The SFO noted that its investigation into Rolls-Royce had resulted in a DPA
but confirmed that no individuals at Rolls-Royce would face prosecution.
Following on from the high-profile failure of the SFO’s case against three former
Tesco executives, discussed in our 2018 FCPA/Anti-Corruption Year in Review, on
July 16, 2019, the SFO suffered a further setback when three employees of metals
company Sarclad were acquitted of bribery charges by a jury at Southwark Crown
Court.383 The SFO then confirmed that Sarclad was the name of the company
previously known only as XYZ Ltd, which had entered into a DPA with the SFO in
2016. Continued difficulty securing convictions ultimately may lead more companies
to challenge the SFO and scrutinize the case against them before engaging in
378 Rob Evans and David Pegg, Airbus shuts down subsidiary at center of bribery investigation, Gua rdian (June 23,
(last accessed Nov. 21, 2019)
379 Transparency International UK, Serious concerns over delay to corruption prove [sic] into Airbus subsidiary (Oct.
14, 2019) https://www.transparency.org.uk/press-releases/airbus-gpt-corruption-investigation-delay-serious-fraudoffice/
(last accessed November 21, 2019)
380 UK Parliament, GPT Special Project Management: Written question – 7186, https://www.parliament.uk/business/
publications/written-questions-answers-statements/written-question/Commons/2019-10-29/7186 (last accessed
Jan. 3, 2020)
381 SFO, SFO concludes investigation into LIBOR manipulation (Oct. 18, 2019), https://www.sfo.gov.uk/2019/10/18/sfoconcludes-
investigation-into-libor-manipulation/ (last accessed Nov. 22, 2019).
382 Andy Verity, Former Barclays traders jailed over Euribor rate-rigging, BBC (Apr. 1, 2019), https://www.bbc.co.uk/
news/business-47779993 (last accessed Jan. 3, 2020).
383 SFO, Sarclad Ltd (Sept. 3, 2019), https://www.sfo.gov.uk/cases/sarclad-ltd/ (last accessed Nov. 22, 2019).
settlement discussions with the SFO. Indeed, while the UK subsidiary of Alstom,
the French rail and power company, was found guilty in November 2019 of paying
a €2.4 million bribe to secure a Tunisian tram contract and fined £15 million, ending
a decade-long SFO investigation, three other charges in respect of other transport
projects did not result in convictions.
The SFO did find some success with regards to individual convictions during
2019. On February 6, 2019, the former global head of sales for Petrofac International
Limited pleaded guilty to eleven counts of bribery, with sentencing to occur at a later
date.384 Additionally, on July 15, 2019, Unaoil’s former partner in Iraq pleaded guilty
to five offences of conspiracy to give corrupt payment as part of the SFO’s ongoing
investigation into Unaoil.385 The criminal trial of three other individuals associated
with Unaoil is scheduled to begin on January 20, 2020 at Southwark Crown Court.
While various investigations were brought to a close during 2019, there has
been relatively little cheer with regards to the opening of any new, high profile
investigations besides the opening of investigations into the De La Rue group, the
world’s biggest printer of banknotes, over suspected corruption in South Sudan386
and the Glencore group of companies into suspected bribery, respectively.387
Indeed, a November 2019 article in Bloomberg Businessweek, entitled “Activists
Worry Britain’s Financial Watchdog Is Losing Its Zeal” focused on this particular
issue, quoting Susan Hawley, the executive director of Spotlight on Corruption,
as saying “[the SFO is] focusing on small cases, and you’re left asking, ‘where is
the ambition?’”388 Anti-corruption campaigner Bill Browder also stated that “[w]
hite-collar crime enforcement in the UK is a total disaster.” With regards the UK
Bribery Act 2010 (the Act) itself, however, on March 14, 2019, a House of Lords
Select Committee found the Act to be a model piece of legislation. It made certain
recommendations for clarifying the accompanying guidance, including the provision
of further examples as to what would constitute a good defense to the corporate
offence of failing to prevent bribery. The Committee also recommended that the
UK government delay no further in reaching a decision as to whether to extend the
failure to prevent offence to other economic crimes.389
On July 12, 2019, the UK government’s Economic Crime Strategic Board
published an Economic Crime Plan for 2019 to 2022. The plan sets out seven
priority areas that include improving systems for transparency of ownership of
legal entities and legal arrangements, pursuing better sharing of information across
384 SFO, Former senior executive convicted in Petrofac investigation (Feb. 7, 2019), https://www.sfo.gov.uk/2019/02/07/
former-senior-executive-convicted-in-petrofac-investigation/ (last accessed December 12, 2019).
385 SFO, Former Unaoil executive pleads guilty to conspiracy to give corrupt payments (July 19, 2019), https://www.sfo.
gov.uk/2019/07/19/former-unaoil-executive-pleads-guilty-to-conspiracy-to-give-corrupt-payments/ (last accessed
Dec. 16, 2019).
386 SFO, De La Rue plc (July 23, 2019), https://www.sfo.gov.uk/2019/07/23/de-la-rue-plc/ (last accessed Dec. 12, 2019).
387 SFO, SFO confirms investigation into suspected bribery at Glencore group of companies (Dec. 5, 2019), https://www.
accessed Dec. 20, 2019)
388 Franz Wild, Activists Worry Britain’s Financial Watchdog Is Losin.g Its Zeal, Bloomberg Businessw eek (Nov. 14, 2019),
(last accessed Nov. 22, 2019)
389 House of Lords, The Bribery Act 2010: post-legislative scrutiny (Mar. 14, 2019), https://publications.parliament.uk/pa/
ld201719/ldselect/ldbribact/303/303.pdf (last accessed Dec. 12, 2019)
the public and private sectors and developing a better understanding of the threat
posed by economic crime.390
During 2019 two external reports were published that painted the SFO in a
somewhat mixed light. Following a request by SFO Director Lisa Osofsky for an
independent assessment of staff engagement, on July 22, 2019, the HM Crown
Prosecution Service Inspectorate (HMCPSI) published a report entitled “Serious
Fraud Office Leadership Review” that highlighted a number of organizational
On October 8, 2019, HMCPSI published a second report on the SFO focusing on
case progression systems and processes between case acceptance and charging.392
As part of the report, HMCPSI selected six cases at random, spoke to staff and case
managers and reviewed key documents and processes. The report found that cases
are accepted by the SFO for investigation in a timely manner but then subject to
delays thereafter—often due to either a delay in allocation of a case controller and
suitable team or a delay in the SFO digital forensic unit processing the relevant digital
material. The report also found inconsistencies in treatment of unused material and
application of internal casework processes. It noted, however, the recent adoption by
the SFO of a new case management system that hopefully will address some of the
concerns identified. The report stated that it should not be read negatively or lead to
a conclusion that the SFO is ineffective when it is not, notwithstanding the ways in
which the organization might improve.
Among the more positive developments for the SFO in the last 12 months was
the completion of two further deferred prosecution agreements (DPA). On July 4,
2019, the SFO received court approval for a DPA with Serco Geografix Ltd (Serco),
ending an investigation that commenced in November 2013.393 Serco had committed
three offenses of fraud and two of false accounting in connection with a scheme to
dishonestly mislead the Ministry of Justice (MOJ) as to the extent of profits made
by its parent company, Serco Limited, for the provision of electronic monitoring
services. According to the SFO, this deception prevented the MOJ from seeking to
limit future profits or seek more favorable terms during contract renegotiations. The
DPA required Serco to pay a financial penalty of £19.2 million and also £3.7 million
in costs incurred by the SFO. These payments were in addition to compensation of
£12.8 million previously paid to the MOJ by Serco in 2013 as part of a civil settlement.
Additionally, under the terms of the DPA for the next three years Serco must
cooperate fully with the SFO and other foreign and domestic regulatory authorities,
reporting any evidence of fraud and both enhancing and reporting annually on the
effectiveness of its ethics and compliance program. On December 16, 2019, the SFO
announced that it has charged two individuals with fraud and false accounting in
relation to this investigation.
390 GOV.UK, Economic Crime Plan 2019 to 2022 (Sept. 13, 2019), https://www.gov.uk/government/publications/
economic-crime-plan-2019-to-2022 (last accessed Dec. 12, 2019).
391 HM Crown Prosecution Service Inspectorate, Serious Fraud Office Leadership Review (July 22, 2019), https://www.
justiceinspectorates.gov.uk/hmcpsi/inspections/serious-fraud-office-leadership-review/ (last accessed Nov. 22,
392 HM Crown Prosecution Service Inspectorate, Case Progression in the Serious Fraud Office (Oct. 8, 2019), https://
www.justiceinspectorates.gov.uk/hmcpsi/inspections/case-progression-sfo-oct-19/ (last accessed Nov. 22, 2019).
393 SFO, SFO completes DPA with Serco Geografix Ltd (July 4, 2019), https://www.sfo.gov.uk/2019/07/04/sfocompletes-
dpa-with-serco-geografix-ltd/ (last accessed Nov. 21, 2019).
On December 20, 2019, the SFO also announced that it had reached a DPA with
Güralp Systems Ltd (Güralp) in relation to conspiracy to make corrupt payments
to a South Korean public official and a failure to prevent bribery by its employees
in relation to payments made between 2002 and 2015. As a result of this DPA,
Güralp agreed to pay a total of £2,069,861 in disgorgement of gross profits. Three
individuals were, however, acquitted of conspiracy to make corrupt payments in
relation to payments made to a South Korean public official between 2002 and
One area of uncertainty over the last few years has been the extent of cooperation
the SFO requires of corporate entities in order to consider eligibility for cooperation
credit when making decisions to charge or enter into a DPA. In trying to meet the
level of cooperation expected by the SFO, the only guidance available to corporate
entities to assist them in understanding what was required was the (limited) DPAs
agreed to date, speeches, and guidance such as the DPA Code of Practice. The SFO
brought some clarity to this area on August 6, 2019 when it released its “Corporate
Cooperation Guidance.”395 Much of the guidance is as expected and foreshadowed by
prior speeches. Cooperation must exceed mere compliance with law and may include
actions such as providing material promptly and in a useful structured manner,
identifying material in the possession of third parties, creating and maintaining
an audit trail of the acquisition and handling of hard copy and physical material,
providing records that show relevant money flows and consulting with the SFO prior
to interviewing potential witnesses or suspects or taking personnel/HR actions.
While this additional written clarification should be useful to corporate entities,
certain elements of the guidance do not accord with expectations in the United
States and might therefore pose issues in cross-border investigations. For instance,
approval from US regulatory bodies is not required before interviewing witnesses or
suspects, although US authorities do expect “de-confliction” where requested by the
DOJ to receive credit for full cooperation. Additionally, larger strategic issues such
as the timing of any self-reporting to the SFO and the impact from a cross-border
perspective of any waiver of privilege will, of course, still need to be considered.
B. Continental Europe
Since the adoption of a new anti-corruption law, nicknamed Sapin II, in December
2016, which entered into force in June 2017,396 France has continued to implement
its provisions, notably to secure a Convention Judiciaire d’Intérêt Public (CJIP) or
French DPA. While 2018 saw four corruption-related CJIPs, including a coordinated
settlement with US authorities, in 2019, the French PNF secured only one corruptionrelated
CJIP in addition to two CJIPs for fiscal fraud.
394 SFO, Three individuals acquitted as SFO confirms DPA with Güralp Systems Ltd (Dec. 20, 2019), https://www.sfo.gov.
uk/2019/12/20/three-individuals-acquitted-as-sfo-confirms-dpa-with-guralp-systems-ltd/ (last accessed Dec. 20,
395 SFO, Corporate Co-operation Guidance (Aug. 16, 2019), https://www.sfo.gov.uk/download/corporate-co-operationguidance/
(last accessed Nov. 22, 2019).
396 See our 2016 FCPA Year in Review, 2017 FCPA/Anti-Corruption Year in Review & 2018 Q1 Preview, and the FCPA/Anti-
Corruption Developments: 2018 FCPA/Anti-Corruption Year in Review for a discussion of France’s anti-corruption
efforts in recent years.
On November 28, 2019, the PNF and French engineering firm SAS Egis Avia (Egis
Avia) entered into a CJIP to settle charges of corruption of a foreign public agent
between 2009 and 2011 in connection with a contract for the modernization of the
Oran airport in Algeria. The alleged conduct involved a €390,640 fictitious contract
Egis Avia entered into with consulting firm Amphora Consultants, incorporated in
the British Virgin Islands, which was allegedly used as a conduit to pass on funds
to Algerian intermediaries, including the son of the Algerian Interior Minister at the
time, to help Egis Avia obtain the Oran airport contract. As part of the CJIP, approved
by the Paris High Court on December 10, 2019, Egis Avia agreed to pay a penalty of
€2,600,000. The penalty was mitigated by the company’s current management’s
active cooperation in the negotiation phase and the age of the conduct at issue.397
The two CJIPs entered into in 2019 for fiscal fraud included the larger CJIP with
SARL Google France and Google Ireland Limited, signed on September 3 and
approved by the Paris High Court on September 12,398 in which the companies agreed
to pay a total penalty of €500 million for allegedly evading €189,528,428 of taxes
between 2011 and 2018; and the CJIP with Carmignac Gestion SA, signed on June 20,
2019 and approved by the Paris High Court on June 28, 2019,399 pursuant to which
the company agreed to pay a penalty of €30 million for allegedly evading €11,143,832
of taxes between 2010 and 2014.
2019 also saw the first decision by the Sanctions Commission set up within the
French Anti-Corruption Agency (Agence Française Anticorruption, AFA) to issue
sanctions under Article 17 of Sapin II for failure to comply with the law’s requirements
regarding anti-corruption compliance programs. Under Article 17, which requires
certain companies with at least 500 employees and a turnover of more than €100
million to take measures to prevent and detect corruption, the AFA is charged with
monitoring compliance and may refer its findings to the Sanctions Commission. As
of the end of 2018, the AFA had conducted a total of 53 inspections according to its
latest annual report of activity.400
On July 4, 2019, the Sanctions Commission issued its first decision in response
to the AFA’s referral of “Company S” made in March 13, 2019 based on its initial
inspection from late 2017 and updated following its assessment of Company S’s
responses provided in September 2018. The Sanctions Commission found that
the shortcomings identified by the AFA had been remediated by the company in
2018 and in the first half of 2019, as a result of which no injunction or sanction was
397 CJIP PNF 14 153 000 230 (Nov. 28, 2019), https://www.agence-francaise-anticorruption.gouv.fr/files/files/cjipEGIS.
PDF (last accessed Dec. 24, 2019); ordinance of validation of the CJIP, Cour d’appel de Paris,P 14 153 000 230 (Dec.
10, 2019), https://www.agence-francaise-anticorruption.gouv.fr/files/files/Ordonnance_de_validationCJIPEGIS.pdf
(last accessed Dec. 24, 2019).
398 CJIP PNF 15 162 000 335 (Sept. 3, 2019), https://www.agence-francaise-anticorruption.gouv.fr/files/files/190903_
CJIP.pdf (last accessed Dec. 24, 2019); ordinance of validation of the CJIP, Cour d’appel de Paris, P 15 162 000
335 (Sept. 12, 2019), https://www.agence-francaise-anticorruption.gouv.fr/files/files/190912_Ordo_validation_
sign%C3%A9e%20(2).pdf (last accessed Dec. 24, 2019).
399 CJIP PNF 17 044 000 327 (June 20, 2019), https://www.agence-francaise-anticorruption.gouv.fr/files/files/
carmignac%20gestion_CJIP.pdf (last accessed Dec. 24, 2019); ordinance of validation of the CJIP, Cour d’appel
de Paris, P 17 044 000 327 (June 28, 2019), https://www.agence-francaise-anticorruption.gouv.fr/files/files/
carmingnac%20gestion%20Ordonnance_%20validation_CJIP.pdf (last accessed Dec. 24, 2019).
400 Rapport Annuel D’Activité, AFA (2018), https://www.agence-francaise-anticorruption.gouv.fr/files/files/RA%20
Annuel%20AFA_WEB_0.pdf (last accessed Dec. 24, 2019). The Annual Report for 2019 is not yet available.
imposed.401 While the decision was anonymized, referring simply to “Company
S,” French company Sonepar, involved in the distribution of electronic products,
identified itself following the publication of the decision on July 10, 2019 by means of
a press release.402
Overall, the decision suggests the Sanctions Commission’s willingness to consider
remediation efforts by the company under inspection up to the date of its decision,
considering the company’s compliance program as it then stands, thus giving
companies the opportunity to address swiftly shortcomings identified in an AFA
inspection in order to avoid a sanction.
French prosecutors continue to target current and former high-level politicians
in France in connection with their anti-corruption efforts. While the preliminary
inquiry opened in 2018 into allegations that the French President’s chief of staff,
Alexis Kohler, violated conflict of interest rules while serving at the Ministry of the
Economy and Finance, was closed in August 2019,403 the proceedings against former
French President Nicolas Sarkozy for corruption, illegal campaign financing, and
misappropriation of Libyan public funds are ongoing.404
In August 2019, the German Ministry of Justice and Consumer Protection
presented a draft legislation for the Corporate Sanctions Act establishing criminal
liability for corporations in Germany. So far, Germany has not enacted a corporate
criminal law and companies cannot be held criminally liable, although they have
equivalent liability on a civil and administrative basis.405 If enacted, the new law would
apply to all legal persons based or doing business in Germany. Among other things,
the draft legislation includes an increase in the potential fines to 10% of the annual
revenues of companies whose revenues exceed €100 million. The German parliament
is expected to adopt the draft legislation in the coming year.
Meanwhile, German prosecuting authorities are currently investigating Fresenius
Medical Care AG & Co. KGaA (FMC) after it entered into settlements totalling USD
231.7 million with the SEC and DOJ to resolve bribery allegations.406 The bribery
allegations being investigated by the German authorities relate to several employees
of FMC and are mainly derived from the findings of the SEC and DOJ, including that,
401 Commission de Sanctions Décision No. 19-01, AFA (July 4, 2019), https://www.agence-francaise-anticorruption.gouv.
fr/files/files/DECISION%2019-01%20COMMISSION%20DES%20SANCTIONS%20ANONYMISEE.pdf (last accessed
Dec. 24, 2019).
402 Sonepar becomes first French company officially ruled Sapin II compliant, Sonepar (July 10, 2019), https://www.
html (last accessed Dec. 24, 2019).
403 L’enquête du Parquet national financier sur Alexis Kohler classée sans suite, Le Monde (Aug. 22, 2019), https://www.
suite_5501635_1653578.html (last accessed Dec. 24, 2019).
404 Soupçons de financement libyen : le camp Sarkozy tente d’invalider l’enquête judiciaire, Le Monde (Oct.17, 2019),
l-enquete-judiciaire_6015830_823448.html (last accessed Dec. 24, 2019).
405 Emily Casswell, New German law expected to transform corporate investigations, Global Investigations Rev. (Aug. 30,
(last accessed Jan. 2, 2020)
406 FMC paid USD 84.7 million under a non-prosecution agreement with the DOJ and USD 147 million after an
administrative order by the SEC.
between 2007 and 2016, doctors and clinic personnel systematically bribed public
officials in 17 countries. FMC itself voluntarily informed the German authorities and
has since fully co-operated with the authorities.
In December 2019 the German authorities closed their investigation against two
employees of Deutsche Bank related to money laundering and tax evasion on the
basis of a lack of corroborating evidence.407
On January 31, 2019, Italy’s anti-corruption law No 3/2019 on “Measures to fight
crimes against the public administration as well as on the matter of statute of
limitations and transparency of political parties and movements” entered into force.
This new law introduces important measures affecting Italian criminal law (such as a
life-long prohibition on dealing with public administrations, a life-long disqualification
from holding public office for individuals sentenced for a corruption-related crime
to longer than two years, and increased penalties for certain crimes against the
public administration) and significantly amends Legislative Decree No 231/2001
with respect to corporate liability (including by increasing the duration of restraining
measures applicable to certain crimes against the public administration).
Meanwhile, the Milan trial concerning Eni and Royal Dutch Shell’s business
activities in Nigeria is still ongoing. Eni and Shell, as well as senior executives from
both companies currently on trial, deny wrongdoing. Shell announced in October,
2019 that US prosecutors had dropped a related investigation “based on the facts
available… including the ongoing legal proceedings in Europe.”408
Also in relation to Eni, Italian prosecutors have been conducting an investigation
into allegations of corruption involving the oil and gas major in the Republic of
Congo and some company executives (including the CEO, Claudio Descalzi) between
2013 to 2015. The case reportedly concerns agreements between Eni’s subsidiary
in the Congo and the local Ministry of hydrocarbons for exploration and production
permits as well as separate allegations that Descalzi failed to declare conflicts of
interest. Eni and the individuals under investigation have denied any wrongdoing.
Prosecutors have recently added Descalzi’s wife to the list of suspects and issued
search warrants for their homes in Italy.409
In the long-running case involving allegations that Saipem paid intermediaries
about 198 million euros to secure energy contracts with Algeria’s state-owned
Sonatrach, prosecutors appealed the court of first instance’s September 2018 ruling
(which fined Saipem 400,000 euros, sentenced its former CEO Pietro Tali to prison,
and ordered that 198 million euros be seized from Saipem, while acquitting Eni and
407 Deutsche Bank Media Release, Criminal investigations into Deutsche Bank employees in connection with “Regula”
closed (Dec. 6, 2019), https://www.db.com/newsroom_news/2019/criminal-investigations-into-deutsche-bankemployees-
in-connection-with-regula-closed-en-11655.htm (last accessed Jan. 2, 2020)
408 Michael Griffiths, Shell announces end to DOJ bribery probe, Global Investigations Rev., Just Anti-Corruption (Oct. 3,
409 Joe Bavier, Emilio Parodi and Stephen Jewkes, Congo Republic president’s adviser awarded oil licenses at heart
of Eni probe, Reuters (Oct. 10, 2019), https://uk.reuters.com/article/us-eni-congorepublic-insight/congo-republicpresidents-
adviser-awarded-oil-licenses-at-heart-of-eni-probe-idUKKBN1WP1Q1, and Milan prosecutors investigate
Eni CEO’s wife, Global Investigations Rev. (Sept. 30, 2019), https://globalinvestigationsreview.com/short-cut/2019/
its former CEO Paolo Scaroni). Prosecutors sought a prison sentence for Scaroni,
a fine of 900,000 euros for Eni, and the seizure of assets worth 197 million euros.
In a January 15, 2020 ruling, an Italian appeals court acquitted Eni and its former
subsidiary Saipem of corruption and lifted the asset seizure order against Saipem.410
Finally, the Italian National Anti-Corruption Authority (ANAC) has imposed a
penalty for retaliation against a whistleblower for the first time since the country’s
whistleblower protection legislation took force in 2018. The legislation aims to
strengthen the existing protection available in the public sector and to introduce
protection in the private sector, in line with the adoption by the EU Council of the
EU-wide Whistleblower Protection Directive on October 7, 2019 (the Directive).
The Directive sets out certain standards across Europe for the protection of
whistleblowers and provides whistleblowers (and their colleagues or family
members) with legal protection against all forms of retaliation (such as dismissal,
demotion, or intimidation). EU Member States are due to transpose the Directive into
national legislation by May 15, 2021.411
On July 1, 2019, the new Greek Criminal Code412 and the new Greek Code of
Criminal Procedure413 entered into force and created a unified framework for the
prosecution of corruption offences. As a result, the main active bribery offence was
converted from a felony to a misdemeanor. The OECD Working Group on Bribery
expressed concerns that the new rules could be in breach of the OECD’s Anti-
Bribery Convention and that they may have unintended far-reaching consequences,
such as the closure of ongoing corruption-related investigations and prosecutions,
the possible hindrance of international cooperation in future cases and/or the
implementation of shorter limitation periods.414 The new legislation also introduced
the possibility of plea bargaining. While the plea bargaining is designed for the pretrial
procedure, it may also take place at the trial stage.
In July 2019, the Court of Appeal in Athens convicted former Johnson & Johnson
executives in connection with a long-running investigation into allegations that the
company bribed medical professionals to secure contracts in Greece. Prosecutors
alleged that employees of Johnson & Johnson and other medical device companies
made corrupt payments to Greek healthcare professionals to secure contracts for the
sale of orthopedic products between 2000 and 2006.415
410 Italian appeals court acquits Saipem, Eni in Algerian graft case, Reuters (January 15, 2020) https://www.reuters.
411 Vera Cherepanova, Italy (finally) protects a whistleblower, issues first penalty for retaliation, FCP A Blog (Oct. 17,
412 Law No. 4619/2019 of June 11, 2019, https://www.kodiko.gr/nomologia/document_navigation/529099 (last accessed
Dec. 12, 2019).
413 Law No. 4620/2019 of June 11, 2019, https://www.kodiko.gr/nomologia/document_navigation/530491 (last accessed
Dec. 12, 2019).
414 OECD, OECD very concerned that active bribery is no longer a felony in Greece (July 10, 2019), https://www.oecd.
org/greece/oecd-very-concerned-that-active-bribery-is-no-longer-a-felony-in-greece.htm (last accessed Dec. 12,
415 James Thomas and Marieke Breijer, Greece convicts three UK nationals in Johnson & Johnson bribery case, Global
Investigations Rev. (July 29, 2019), https://globalinvestigationsreview.com/article/1195671/greece-convicts-three-uknationals-
in-johnson-johnson-bribery-case (last accessed Dec. 23, 2019)
Finally, an Athens court found 22 former employees of German engineering
company, Siemens, and Greek telecommunications company, OTE, guilty of bribery.
Several individuals, including Siemens’ CEO Heinrich von Pierer were sentenced to
terms of imprisonment of up to 15 years. The case relates to bribes estimated at 70
million euros paid by Siemens in 1997 to secure a contract with the then state-owned
telecoms provider, OTE.416
On August 23, 2019, the Office of the Prosecutor General of Hungary announced
that it was considering acting against Microsoft Hungary following a report received
from the US DOJ that Microsoft Hungary used third-party agents to negotiate
contracts with government agencies for software and services, which were heavily
discounted by Microsoft’s parent company. These savings, however, were not passed
on to the purchaser, and were instead “used to make improper payments.” As part of
an NPA with the US DOJ, Microsoft Hungary admitted to violating the FCPA.
Ten days after the announcement by the Office of the Prosecutor General of
Hungary, the Organization for Economic Co-operation and Development (OECD)
highlighted in a report that the Hungarian prosecutor’s office had failed to convict a
single company on foreign bribery offences since the organization’s first report into
the country’s justice system in 2003.417
In 2018, the Romanian parliament approved changes to the criminal code. The
changes are intended to decriminalize low-level corruption including that cases
involving less than $475 would be exempt from prosecution, people older than 60
would only serve one-third of their sentence, and the maximum jail time would be
reduced from seven to five years. The changes were also intended to shorten the
statutes of limitations resulting in the closure of several ongoing cases. In a nonbinding
referendum, the Romanian people expressed their disapproval with the
changes to the anti-corruption laws by an emergency decree.418 Shortly after the
referendum, in July 2019, the Romanian Constitutional Court declared the changes
made to the criminal code as unconstitutional.
On May 26, 2019, the Supreme Court of Romania upheld an earlier conviction of
Liviu Dragnea, the Chief of Romania’s Ruling Party, in relation to corruption charges.
He was previously sentenced to three years and six months in jail for having procured
jobs at a child protection agency for two women working in his party.
416 Ioanna Mandrou, Court finds 22 guilty in Siemens bribery trial, ekathimerini.com (Nov. 19, 2019), http://www.
ekathimerini.com/246614/article/ekathimerini/news/court-finds-22-guilty-in-siemens-bribery-trial (last accessed
Dec. 12, 2019).
417 Sam Fry, Microsoft unlikely to face bribery enforcement action in Hungary, Global Investigations Rev. (Sept. 10, 2019),
(last accessed Dec. 23, 2019).
418 European Commission, Report from the Commission to the European Parliament and the Council on Progress in
Romania under the Cooperation and Verification Mechanism, 4 (Oct. 22, 2019), https://ec.europa.eu/info/sites/info/
In November 2019, Sweden’s criminal code was amended to significantly increase
the potential penalties for committing foreign bribery. From January 1, 2020, Swedish
courts will be able to hand down a maximum fine of 500 million krona (USD 53
million) against large companies: an increase from the previous cap of 10 million
krona (USD 1 million). Large companies are defined as those which are publicly
listed or fulfil two out of three criteria, including having 50 or more employees, a
balance sheet in excess of 40 million krona, or a net turnover in excess of 80 million
krona. Under the amended criminal code, prosecutors will also be able to levy fines
of up to three million krona (USD 318,000) on a company without initiating legal
proceedings if they can prove an individual acting for the company has committed a
criminal offence. The law also removes a prerequisite that prosecutors must secure
the conviction of a company employee who took part in the scheme before pursuing
the corporate. It also states that fines against companies will not constitute a criminal
In February, a Swedish district court examining charges against Telia executives
for payments to Gulnara Karimova, a former Uzbek official and daughter of the
former president of Uzbekistan, determined that Swedish prosecutors had not
established that Karimova was a public official under Sweden’s Bribery Act and Penal
Code.420 This ruling is contrast with the position taken by US enforcement authorities
in an enforcement action against MTS (see Section IV.D.2, supra), which also involved
payments to Karimova.
As noted in Section IV.D.8, supra, Sweden is also reportedly investigation Ericsson
following the company’s settlement with US enforcement authorities.421
Switzerland continues to be considered as one of the least corrupt countries
according to Transparency International’s Corruption Perception Index.422
The investigation by the Swiss Office of the Attorney General (OAG) into Fifa’s
decision to award the 2018 and 2022 World Cups to Russia and Qatar, respectively,
continues. In June, 2019, a court in Bellinzona ordered that the Swiss attorney
general, Michael Lauber, a prosecutor, and a former chief prosecutor be recused
from the FIFA investigation for reasons including that Lauber and the chief
419 Will Barbieri, Swedish companies to face larger penalties for foreign bribery, Global Investigations Rev. (Dec. 19, 2019),
(last accessed Dec. 23, 2019).
420 See James Thomas, Telia pays US$208.5 million in disgorgement to the Netherlands, Global Investigations Rev., Just
Anti-Corruption (Mar. 19, 2019), https://globalinvestigationsreview.com/article/1189010/telia-pays-ususd2085-millionin-
421 Simon Johnson, Sweden opens Ericsson bribery probe after U.S. settlement: paper, Reuters (Dec. 12, 2019), https://
422 Switzerland ranks sixth in Transparency International’s Corruption Perception Index 2018 slightly lower than in 2017
(third), https://www.transparency.org/news/feature/cpi_2018_global_analysis (last accessed Jan. 2, 2020); How
Corruption Weakens Democracy, Transparency Int’l (Jan. 29, 2019), https://www.transparency.org/news/feature/
prosecutor breached procedural rules by attending and failing to report meetings
with FIFA president Gianni Infantino.423
In August 2019, Beny Steinmetz, an Israeli billionaire, was indicted for allegedly
paying bribes to foreign officials and forgery in Guinea between 2005 and 2010
to win mining licenses.424 Steinmetz allegedly paid bribes totalling USD 10 million,
partially through Swiss bank accounts, to one of the wives of the former President
of Guinea, Lansana Conte, in order to oust one of his competitors. According to the
indictment he further used forged documents and false invoices to hide the bribes.425
His company, the Beny-Steinmetz Group Resources (BSGR), was largely operating
from Geneva. After a six-year investigation by Swiss prosecutors, Steinmetz and
his two associates face charges of corruption and forgery in Geneva and could be
sentenced to prison terms of between two to 10 years if convicted. In 2016 Israeli
authorities detained Steinmetz; however, they released him shortly after. Steinmetz
denies the charges made by Swiss prosecutors.
In 2019, Russia’s Ministry of Labor and Social Protection issued three publications
with guidance for businesses and other organizations on anti-corruption issues.426 The
longest document, entitled “Measures to prevent corruption in organizations,” guides
organizations through the process of establishing and implementing anti-corruption
policies.427 The document states that implementing measures to prevent corruption
“significantly” reduces the risk that liability for bribing officials, including foreign
officials, would apply to the organization.428 Additionally, it recommends that anticorruption
standards within an organization focus not on preventing the receipt of any
and all gifts, but on certain categories of gift-givers, as well as the cost of the gift.429
The second publication, entitled “Recommendations on the procedure for assessing
corruption risks in organizations,” helps organizations identify business processes that
carry the greatest risk of corruption.430 It recommends beginning the assessment with
activities involving the distribution of benefits, governmental cooperation, or access
to restricted information, or where corruption has occurred in the past.431 The third
and shortest publication, “Memorandum: Establishing the duties of an organization’s
employees related to the prevention of corruption, liability, and incentives,” briefly
423 James Thomas, Swiss AG barred from Fifa investigation, Global Investigations Rev. (June 19, 2019), https://
globalinvestigationsreview.com/article/1194199/swiss-ag-barred-from-fifa-investigation (last accessed Dec. 23, 2019).
424 Sam Fry, Steinmetz to fight Swiss corruption charges, Global Investigations Rev. (Aug. 13, 2019), https://
globalinvestigationsreview.com/article/1196282/steinmetz-to-fight-swiss-corruption-charges (last accessed Jan. 2,
425 Richard L. Cassin, Beny Steinmetz indicted in Switzerland for bribery, FCP A Blog (Aug. 14, 2019), https://fcpablog.
com/2019/08/14/beny-steinmetz-indicted-in-switzerland-for-bribery/ (last accessed Jan. 2, 2020).
426 While all three documents are only dated “2019,” the Ministry’s webpage on which they are posted says it was last
updated in Sept. 2019 (https://rosmintrud.ru/ministry/programms/anticorruption/015), and news articles covering
the publications were first issued in Sept. 2019 (see, e.g., https://www.audit-it.ru/news/personnel/996487.html,
http://www.consultant.ru/law/review/207397354.html) (last accessed Dec. 26, 2019).
427 Меры по предупреждению коррупции в организациях (2019), https://rosmintrud.ru/uploads/magic/ru-RU/Ministry-0-106-
src-1568817692.8748.pdf (last accessed Dec. 26, 2019).
428 Id. at 3.
429 Id. at 24.
430 Рекомендации по порядку проведения оценки коррупционных рисков в организации (2019), https://rosmintrud.ru/uploads/magic/
ru-RU/Ministry-0-106-src-1568817604.7941.pdf (last accessed Dec. 26, 2019).
431 Id. at 3.
covers a range of topics from the inclusion of anti-corruption provisions in employment
contracts to the role of incentives in anti-corruption policies.432
D. Asia Pacific
During 2019, rule-making activities in the anti-corruption area were less frequent
and primarily related to the Supervision Law promulgated in 2018. In spite of the
declared “overwhelming victory” of the anti-corruption campaign,433 President
Xi emphasized that the campaign would continue to “strengthen and further”
the progress made so far.434 In connection with developments in the Belt & Road
Initiative, the Chinese government continues to promote international cooperation
on anti-corruption enforcement and there has been an increase in repatriation
of fugitive Chinese government officials. Also of note is that Chinese companies,
striving to expand in overseas markets, have been active in adopting internal
compliance programs, policies and procedures.
The new Foreign Investment Law, effective January 1, 2020, provides that China
may take reciprocal measures if a country or region adopts prohibitive or restrictive
measures against Chinese investments.435 While likely driven by considerations
other than corruption (e.g., US foreign investment review legislation CFIUS and
FIRMMA), this authorization’s likely anti-corruption impact rests on whether the
“China Initiative” led by the US DOJ, which specifically targets Chinese companies for
FCPA investigation and prosecution, will be considered as prohibitive or restrictive
measures, against which the Chinese government can respond with anti-corruption
enforcement against US companies. It remains to be seen how this will affect foreign
businesses operating in China.
a. The Powerful NSC
As previously reported, a new National Supervision Commission (NSC) was
created to lead anti-corruption efforts and the Supervision Law sets out the powers
of the NSC and outlines certain procedures that are required to be followed in
supervision work to ensure due process. The NSC has a broad range of powers
to supervise, investigate, and discipline personnel with public duties, including
civil servants, personnel engaged in public affairs and other officials. Also, the
NSC is designated to be the authority to coordinate anti-corruption international
cooperation. The NSC, and its local branches, share offices and work together with
the China Communist Party Commission for Discipline Inspection (CCDI), which is
charged with investigating and dealing with violations of laws, regulations, and Party
rules by CCP officials.
432 Памятка: Закрепление обязанностей работников организации, связанных с предупреждением коррупции, ответственность и
стимулирование (2019), https://rosmintrud.ru/uploads/magic/ru-RU/Ministry-0-106-src-1568817742.8173.pdf (last
accessed Dec. 26, 2019).
433 Anti-corruption Campaign Has Achieved Overwhelming Victory-What is the Take on This and What are the Next
Steps, Nat’l Supervision Comm’n (Jan. 14, 2019), http://www.ccdi.gov.cn/yaowen/201901/t20190114_187048.html (last
accessed Jan. 3, 2020).
435 Art. 40, PRC Foreign Investment Law, National People’s Congress (promulgated on Mar. 15, 2019 and effective on Jan.
1, 2020), translated version is available at http://www.fdi.gov.cn/1800000121_39_4872_0_7.html.
During 2019, the NSC issued jointly with the CCDI non-public rules and
regulations. For example, in the summer of 2019, the CCDI and the NSC jointly
issued two regulations: Regulation on the Supervision and Enforcement Work by
the Supervisory Authorities, an implementing measure for the Supervision Law; and
Provisions on the Handling of Fugitives Pursuit and Criminal Proceeds Recovery
and other Foreign-Related Anticorruption Matters by the Disciplinary Inspection
and Supervisory Authorities (Trial), the first guidance document on cross-border
pursuit of fugitives and recovery of corruption proceeds. The contents of both
documents have not yet been made available to the public. However, the limited
publicly available information indicates that both documents address and provide
clarifications regarding NSC’s authority, and lay out requirements or procedures for
NSC’s enforcement actions.436 In October 2019, the Standing Committee of National
People’s Congress granted the NSC power to issue administrative regulations in
connection with the Supervision Law.437 As such, more rule-making activities in this
regard are expected in 2020.
Anti-corruption enforcement, led by the geared-up NSC, maintained strong
momentum in 2019, albeit with certain shifts in the focus of enforcement. A targeted
crackdown took place in the financial sector in 2019. As of November 21, 2019,
more than 47 key officials in a wide array of financial sectors, including banking,
insurance, trust, and asset management companies, as well as financial regulators,
were reported to have been subject to investigations.438 Also, there are signs of
enhanced enforcement against bribe-givers. Up to now, enforcement against bribegivers
has been less stringent than on bribe-takers.439 Recently, however, the Chinese
government has paid more attention to bribe-givers and called for the “punishment
of both those who take bribes and those who offer them.”440 Aided by Article 22
of the Supervision Law, which arms supervisory commissions with the power to
detain bribe-giver suspects associated with investigations of bribe-takers, recent
cases reported by the NSC and the official media outlets in 2019 show strengthened
enforcement actions against bribe-givers.441
436 Issuance of the Regulation on the Supervision and Enforcement Work by the Supervisory Authorities, CC DI and NSC
(July 15, 2019), http://www.ccdi.gov.cn/toutiao/201907/t20190715_197112.html; Issuance of the “Provisions on the
Handling of Fugitives Pursuit and Criminal Proceeds Recovery and other Foreign-related Anticorruption Matters by
the Disciplinary Inspection and Supervisory Authorities (Trial),” CC DI and NSC (Aug. 20, 2019), http://www.ccdi.gov.
437 Decision of the Standing Committee of the National People’s Congress on Developing Supervisory Regulations by
the National Supervisory Commission, Standing Committee of the National People’s Congress (Oct. 26, 2019), http://
438 Senior Financial Officials Caught This Year, Paper (Nov. 21, 2019), https://finance.sina.com.cn/money/bank/bank_
hydt/2019-11-21/doc-iihnzhfz0686858.shtml (last accessed Jan. 3, 2020).
439 See, e.g., Yang Wenming, Comprehensive Anti-corruption; Bribe-giving Shall Also Be Investigated, People’s Daily
(Dec. 22, 2017), http://legal.people.com.cn/n1/2017/1222/c42510-29722309.html (last accessed Jan. 3, 2020).
440 Xi Jinping, Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the
Great Success of Socialism with Chinese Characteristics for a New Era, Speech at the 19th National Congress of the
Communist Party of China (Oct. 18, 2017), http://www.xinhuanet.com/english/download/Xi_Jinping%27s_report_
at_19th_CPC_National_Congress.pdf (last accessed Jan. 3, 2020).
441 See, e.g., Escalated Processing, Detention of both Bribe-taker and Bribe-giver, First Cracking Down “Protection
Umbrella” Case of Sanming Municipal Supervision Commission (Jan. 20, 2019) http://www.ccdi.gov.cn/
yaowen/201901/t20190116_187207.html (last accessed Jan. 3, 2020); Order Sustained in Appeal in Guangdong’s First
Severe Penalty Case on Bribe-giving, China Central Radio and Television report (Sept. 4, 2019), http://www.sohu.
com/a/338677992_362042 (last accessed Jan. 3, 2020).
b. International Cooperation and Regulatory Compliance by
China’s continued support for the Belt and Road Initiative has led to the
promotion of increased international cooperation on anti-corruption. President Xi
Jinping again urged international cooperation in anti-corruption enforcement at the
2019 Belt and Road Forum.442
On October 17, 2019, the United Nations and China signed an Anti-Corruption
Cooperation Agreement.443 This memorandum of understanding allows the United
Nations Office on Drugs and Crime (UNODC) and the National Commission of
Supervision of the People’s Republic of China to strengthen their cooperation in the
fight against corruption and in the implementation of the UN Convention Against
Corruption. Prevention, criminal justice responses to corruption offenses, law
enforcement cooperation, and stolen asset recovery will be among the key factors of
the cooperation. The signed agreement is intended to further facilitate the dialogue
and cooperation among all member countries of the UN Convention Against
To better facilitate its efforts in repatriating fugitives, China signed new
extradition or criminal judicial assistance treaties with four countries in 2019, all of
which are participating countries in the Belt and Road Initiative. China has such
treaties with 77 countries.444 The campaign for repatriation of fugitive officials,
known as the “Sky Net” Campaign, continued in 2019. According to reports, the “Sky
Net 2019” Campaign has led to the capture of 1,634 fugitive government officials,
and successful retrieval of illegal gains in a total amount of RMB 2.954 billion
(approximately USD 424 million).445
China also reinforced its anti-corruption commitments in relation to the
overseas operations of Chinese companies, including state-owned enterprises.
The “Beijing Initiative for the Clean Silk Road” was launched during the 2019 Belt &
Road Forum.446 In October 2019, the NSC hosted a 15-day anti-corruption training
program for African government officials,447 during which it was stated that the
Chinese government requires Chinese companies operating in Africa to refrain from
bribery.448 It will be interesting to monitor the enforcement during 2020 of Article 164
of the PRC Criminal Law, which criminalizes bribery of foreign government officials.
442 Xi Jinping, Together to create a bright future for the Belt and Road Initiative, Keynote Speech at the Opening
Ceremony of the Second Belt and Road Forum for International Cooperation (Apr. 26, 2019), http://www.xinhuanet.
443 United Nations Office on Drugs and Crime Press Release, The United Nations and China sign agreement on
combating corruption (Oct. 17, 2019), https://www.unodc.org/unodc/en/frontpage/2019/October/the-unitednations-
and-china-sign-agreement-on-combating-corruption.html (last accessed Jan. 2, 2020)
444 What’s the Take on The Signing of Anti-Corruption Document with the United Nation by the NSC for the First Time,
Cent. Comm’n for Discipline Inspection (Oct. 22, 2019), http://www.ccdi.gov.cn/special/bwzp/201910/t20191022_202855.
html (last accessed Jan. 3, 2020).
445 “Sky Net 2019” Campaign has Fruitful Results: Repatriation of 1,634 Fugitive Officials between January and October
2019, with Retrieval of Illegal Gains in amount of RMB 2.954 Billion, Cent. Comm’n for Discipline Inspection (Dec. 9, 2019),
http://www.ccdi.gov.cn/toutiao/201912/t20191209_205744.html (last accessed Jan. 3, 2020).
446 Beijing Initiative for the Clean Silk Road, Central Commission for Discipline Inspection (Apr. 26, 2019), http://www.
ccdi.gov.cn/yaowen/201904/t20190426_192942.html (last accessed Jan. 3, 2020).
447 CCDI/NSC Report on Anti-corruption Training Program for African Countries, Cent. Comm’n for Discipline Inspection
(Oct. 31, 2019), http://www.ccdi.gov.cn/yaowen/201910/t20191031_203344.html (last accessed Jan. 3, 2020).
As regulatory compliance by Chinese companies becomes increasingly an
international topic, the Chinese government has promoted and encouraged
corporate compliance by issuing two key guidelines that drove internal company
compliance activities in 2019. As a result of these guidelines which are set forth
in more detail below, a key agenda for many state-owned enterprises in 2019 has
been to adopt a comprehensive compliance program, and many have adopted new
compliance policies and procedures as a result of the guidelines.449
The Guidelines on the Compliance Management for Central State-owned
Enterprises (For Trial Implementation) (Central SOEs Guidelines), require Central
SOEs to speed up the establishment and improvement of compliance management
systems, and make compliance a component of both management and employee
performance reviews.450 The Central SOEs Guidelines emphasize “key fields, key
processes and key personnel,” set forth compliance management responsibilities
for various positions, and require the establishment of Compliance Committees.451
The other guidelines, the Guidelines for the Compliance Management of Enterprises’
Overseas Operations (Overseas Operations Guidelines) apply to “enterprises
domiciled in China, their overseas subsidiaries, branches, representative offices and
other overseas establishments that engage in foreign trade, overseas investment,
overseas project contracting and other relevant overseas business.”452
Coincident with these guidelines’ publication, another noteworthy development
for Chinese companies is the self-inspection and self-reporting by China’s internet
and high-tech sectors, which hit a peak in 2019. According to local media, in the first
seven months of 2019, over 110 bribery cases were uncovered concerning eight major
internet companies, far exceeding the levels of previous years, and more than 220
employees were terminated or handed over to the police authorities as a result.453
It also remains to be seen how the Chinese government will use the Foreign
Investment Law to react to any enforcement action taken by the US Government
under the “China Initiative” announced in November 2018. The Foreign Investment
Law, which governs foreign investment in China, provides the Chinese government
with the authority to take reciprocal measures against prohibitive, restrictive or
other similar measures adopted by a country or region that discriminate against
investments from China. The US DOJ’s “China Initiative” includes a mandate to
“identify FCPA cases involving Chinese companies that compete with American
businesses.”454 Following its announcement, US Attorney General William Barr
declared in June 2019 that the DOJ must “continue to pursue, and indeed step up,
449 See, e.g., the China National Nuclear Corporation (Notice available at http://www.cnnc.com.cn/
cnnc/300555/300557/528129/index.html); the China State Shipbuilding Corporation (Notice available at http://mini.
eastday.com/mobile/190925073258535.html); the State Grid Company (Notice available at http://www.md.sgcc.com.
450 Arts 4, 23, Guidelines on the Compliance Management for Central State-owned Enterprises (For Trial
Implementation), Guo Zi Fa Rule  No. 106 (Nov. 2, 2018).
451 Id. Arts. 5 to 10.
452 Art. 2, Guidelines for the Compliance Management of Enterprises’ Overseas Operation, Fa Gai Wai Zi  No. 1916,
Dec. 26, 2018.
453 90% of the Risks Come from Third Parties, Sohu (Aug. 29, 2019), http://www.sohu.com/a/337360863_161795 (last
accessed Jan. 3, 2020).
454 See DOJ Press Release, Attorney General Jeff Session’s China Initiative Fact Sheet, U.S. DOJ (Nov. 1, 2018), https://
our China initiative.”455 Companies conducting internal investigations in cooperation
with the DOJ face challenges posed by the PRC International Criminal Judicial
Assistance Law and other laws such as the PRC Guarding State Secrets Law, which
further complicate the process by limiting information collection and transfer.456
Without a defined scope or any explanation on what may constitute “prohibitive,
restrictive or other similar measures against investments from China,” whether any
FCPA enforcement action targeting Chinese companies under the “China Initiative”
may trigger tit-for-tat anti-corruption enforcement by the Chinese government
remains uncharted waters. If the DOJ increases FCPA enforcement actions against
Chinese companies, it cannot be ruled out that the Chinese government may take
countermeasures, such as an enhanced or expanded use of mechanisms in its state
secrets and cybersecurity laws, to block the production and cross-border transfer
of relevant documents hosted in China. The Chinese government may also bring
anti-corruption enforcement actions against US companies with operations in China.
In any event, recent amendments to the PRC Criminal Procedure Law suggest that
Chinese authorities are ramping up anti-bribery enforcement efforts.
2. South Korea
In 2019, South Korea continued to act against high profile individuals allegedly
guilty of bribery offences, adding to its list of former South Korean government
officials indicted in 2017 and 2018.
In August 2019, a South Korea Supreme Court ruling ordered retrials of South
Korea’s former President Park Geun-hye and Samsung’s vice president, Lee Jaeyong,
following their sentencing in 2018 and 2017, respectively, for bribery.457 The
Supreme Court ruled that the Seoul High Court narrowly construed what constituted
a bribe and omitted to consider certain gifts provided as bribes, and ordered a retrial
at the lower court. As we detailed in our 2018 FCPA/Anti-Corruption Year in Review,
Park was sentenced to 24 years in prison and was ordered to pay $16.9 million for
receiving more than $20 million in bribes. Park could face a longer jail sentence
following retrial. As noted in Steptoe’s 2017 FCPA/Anti-Corruption Year in Review &
2018 Q1 Preview, Lee was sentenced in 2017 for five years imprisonment on bribery
and embezzlement charges but was released from jail in February 2018 after his
sentence was suspended by the appeals court. Lee risks returning to prison if the
lower court reconsiders the value of bribes paid to be higher.
In May 2019, the former Vice Justice Minister of South Korea, Kim Hak-ui, who
also held office in the Justice Ministry during Park’s administration, was arrested for
alleged bribery offences. Kim allegedly received kickbacks totaling over KRW 130
million (approx. USD 110,000) between 2006 and 2008, sexual entertainment on
455 See William P. Barr, Att’y Gen., Opening Remarks at the U.S. Attorney’s Conference, U.S. DOJ (June 26, 2019), https://
456 Article 4, PRC Law on International Criminal Judicial Assistance, the Standing Committee of National People’s
Congress, promulgated by and effective on Oct. 26, 2018; see also, PRC Law on Guarding State Secrets, the Standing
Committee of National People’s Congress, promulgated on Apr. 29, 2010 and effective on Oct. 1, 2010.
457 S Korea ex-leader Park and Samsung heir Lee face bribery retrials, BBC News (Aug. 29, 2019), https://www.bbc.co.uk/
news/world-asia-49507401 (last accessed Dec. 16, 2019).
over 100 occasions paid for by business associates, and a further KRW 40 million
(approx. USD 35,000) from a businessman. Kim was previously cleared of the
bribery and sexual allegations against him, first made in March 2013, due to a lack of
evidence following two police investigations conducted in 2013 and 2014.458 Kim is
due to face trial.
As part of its continuing efforts to sanction high-ranking government officials
involved in corrupt practices, in December 2019, the South Korean parliament passed
a bill to establish an independent anti-corruption agency dedicated to investigating
corruption allegations made against senior public officials.459 The agency will be
granted power to investigate allegations of corruption made against the president,
lawmakers, top court justices and prosecutors, and indict police, prosecutors, and
judges. President Moon Jae-in’s controversial bill, which formed an integral part of
his election campaign, was the subject of large-scale protests by supporters of the
opposition party. Despite the opposition party’s attempts to block passage of the
bill, the new anti-corruption agency is expected to be established in July 2020.460
Following India’s efforts over recent years to combat corruption, including an
overhaul of its anti-corruption laws through the introduction of the Prevention of
Corruption (Amendment) Act of 2018, the country has seen improvements in its
corruption rankings on international indices461 and continues to implement anticorruption
On March 19, 2019, India appointed former Indian Supreme Court Justice, Shri
Pinaki Chandra Ghose, as its first anti-corruption ombudsman462 (i.e., Chairman of
the Lokpal, India’s anti-corruption agency, which is formed of a chairperson and
eight judicial and non-judicial members). The Lokpal Act, which was passed in
2013, grants the Lokpal power to investigate corruption allegations made against
any public entities and officials, including the Prime Minister. The Lokpal has power
of superintendence over all other central investigation agencies in India, including
the Central Bureau of Investigation. This is a welcome development given that the
Lokpal Act was passed six years ago and little action had been taken by the Indian
government to form a committee to appoint the first Lokpal until it was ordered to
do so by the Indian Supreme Court in January 2019.
458 Bahk Eun-ji, Ex-vice justice minister arrested for alleged bribery, Korea Times (May 17, 2019), https://www.koreatimes.
co.kr/www/nation/2019/05/251_269055.html (last accessed Dec. 16, 2019).
459 Song Jung-a, South Korea passes bill to set up anti-corruption agency, Financial Times (Dec. 30, 2019), https://www.
ft.com/content/11b3f736-2aec-11ea-bc77-65e4aa615551 (last accessed Jan. 3, 2020).
460 (4th LD) Parliament passes corruption probe unit bill amid opposition lawmakers’ protest, Yonhap News Agency (Dec.
30, 2019), https://en.yna.co.kr/view/AEN20191230004454315 (last accessed Jan. 3, 2020).
461 For example, India ranked 78 out of 180 on the Transparency International Corruption Perceptions Index 2018 as
compared to 94 out of 177 on the Transparency International Corruption Perceptions Index 2013 (see Transparency
International Corruption Perceptions Index 2018, https://www.transparency.org/cpi2018 (last accessed Dec. 16, 2019),
and Transparency International Corruption Perceptions Index 2013, https://www.transparency.org/cpi2013/results
(last accessed Dec. 16, 2019)).
462 Prabhjote Gill, India’s gets its first anti-corruption ombudsman, Business Insider (Mar. 20, 2019), https://www.
businessinsider.in/what-is-lokpal-chaired-by-panaki-chandra-ghose/articleshow/68491453.cms (last accessed Dec.
The Indian government also passed the Finance Act 2019 (the FA 2019)463, which
aims to tighten the existing anti-money laundering provisions under the Prevention
of Money Laundering Act 2002 (the PMLA 2002). The FA 2019 amends eight
provisions of the PMLA 2002, which were widely considered to be ambiguous and
confusing. Most notably, the new legislation widens the meaning of “proceeds of
crime” to include not only property derived or obtained as a result of the scheduled
offence under the PMLA 2002 but also any property derived or obtained as a result
of criminal activity relatable to the scheduled offence464. The amendments also will
allow the Directorate of Enforcement to more easily investigate and enforce money
laundering and terrorist financing offences, including by levying stricter due diligence
screening and reporting obligations on certain reporting entities.
Japan finds itself under the anti-bribery microscope in the lead-up to the 2020
Olympics. In June 2019, the OECD Working Group on Bribery issued a report
criticizing Japan’s efforts to combat bribery of foreign public officials.465 The OECD
was concerned about Japan’s “alarmingly low” number of corporate prosecutions,
which was not commensurate with its size, export-oriented economy, and highrisk
regions and sectors. The OECD further identified a “major loophole” in Japan’s
anti-corruption legislation, the Unfair Competition Prevention Law (UCPL), which
requires the involvement of a Japanese national for jurisdiction to attach over
bribery of a foreign public official abroad. The OECD encouraged “urgent review” to
broaden the legislative framework for establishing jurisdiction, as well as providing
for extension of the statute of limitations and increasing the penalties for offences.
The OECD also called for more proactive detection, investigation, and prosecution of
foreign bribery, through the use of Japan’s AML system, recommending mandatory
reporting for suspected money laundering predicated on foreign bribery. It labeled
as “incompatible” Japan’s recognition of “economic harm to a company” as a
justification for bribery, as set forth in the Guidelines for the Prevention of Bribery of
Foreign Public Officials by the Ministry of Economy, Trade and Industry (METI).
The OECD did praise the progress Japan made since its 2013 evaluation,
specifically Japan’s 2017 criminalization of the laundering of proceeds of foreign
bribery and the 2018 sentencing mitigation credit allowed for cooperating in
other individual prosecutions. It is expected that Japan will try to implement
the OECD recommendations in light of the scrutiny it is anticipating from other
intergovernmental organizations, including the Financial Action Task Force and
the Asia/Pacific Group on Money Laundering, particularly as the 2020 Olympics
approach. Notably, in March 2019, the president of the Japanese Olympic Committee,
Tsunekazu Takeda, announced his retirement following allegations of bribery in
463 See The Finance (No. 2) Act, 2019, Part XIII at 70, Gazette of India (Aug. 1, 2019), http://egazette.nic.in/
WriteReadData/2019/209695.pdf (last accessed Dec. 16, 2019).
464 See id. § 192 at 70.
465 OECD Working Group on Bribery, Japan: Implementing the OECD Anti Bribery (7 Mar. 2019), http://www.oecd.org/
connection with Tokyo’s successful bid for the 2020 Games, which resulted in the
launching of an investigation into Takeda’s actions by French authorities.466
5. Hong Kong
Hong Kong has conducted its own “princeling” investigations, leading the
Independent Commission Against Corruption (ICAC), now in its 45th year, to charge
JPMorgan’s former Asia investment banking vice chair, Catherine Leung Kar-cheung,
with two counts of bribery for allegedly trying to hire the son of the chairman of a
logistics company to reward the chairman for “showing favor” to JPMorgan for his
company’s IPO.467 The “client referral” program, in place since 2007, allegedly allowed
senior staff at or above the rank of executive director or managing director to refer
candidates to JPMorgan for the junior post of analyst or associate. Ms. Kar-cheung is
due to stand trial in February 2020.468
The Hong Kong Court of Final Appeal quashed the 2017 conviction of former
Hong Kong Chief Executive, Donald Tsang, for failing to disclose a property deal he
had with a business tycoon, who was applying for a digital radio license at the time.469
Tsang appealed his conviction twice, resulting first in a reduced sentence from 20
to 12 months in jail, but had been released due to his ill health. The Court found the
jury instructions inadequate in instructing the jurors to decide whether Tsang had a
motive for not disclosing the deal. In another high-profile ICAC prosecution, thirteen
employees of a construction consulting firm were sentenced for falsifying results of
concrete tests for the Hong Kong-Zhuhai-Macao Bridge, a mega-project connecting
cities across the Pearl River Delta region. Six of the employees were sentenced to
prison terms of up to two years.470
The 2019 Hong Kong protests have as their root the introduction of an extradition
bill, the Fugitive Offenders and Mutual Legal Assistance in Criminal Legislation
(Amendment) Bill, introduced by the Hong Kong government.471 The now-withdrawn
bill472 would have allowed case-by-case extradition of individuals wanted by
territories with which Hong Kong does not have extradition agreements, including
Taiwan and mainland China, upon the order of Hong Kong’s Chief Executive. It is
thought by some commentators that the Bill arose in connection with China’s antigraft
campaign, when the lack of a formal extradition mechanism contributed to the
466 Alastair Gale, Japan’s Olympic Chief, Focus of Bribery Probe, to Step Down, Wall Street J. (Mar. 19, 2019), https://
www.wsj.com/articles/japans-olympic-chief-focus-of-bribery-probe-to-step-down-11552990248 (last accessed Jan.
467 ICAC Press Release, Ex-managing director of investment bank charged with bribery over IPO of logistics company,
Hong Kong Independent Commission Against Corruption (May 16, 2019), https://www.icac.org.hk/en/press/index_
468 For a discussion of US enforcement charges against JPMorgan, see our 2016 FCPA/Anti-Corruption Year in Review.
469 HKSAR vs. Donald Tsang Yam-kuen, In the Court of Final Appeal of the Hong Kong Special Administrative Region
Final Appeal No. 29 of 2018 (CRIMINAL) (2019), https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=122716.
470 Cannix Yau, Mainland Chinese contractor cited in graft case linked to Hong Kong-Zhuhai-Macau bridge, S. China
Morning Post (May 26, 2017), https://www.scmp.com/news/hong-kong/politics/article/2095805/construction-andcertification-
471 Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill (2019), https://
472 Justin Solomon, Hong Kong Extradition Bill officially withdrawn, ABC News (Oct. 23, 2019), https://abcnews.go.com/
alleged, extrajudicial removal from Hong Kong of individuals who were wanted in
In July 2019, the Corruption Eradication Commission (KPK) lost its first case
since its establishment in 2003. Two of three judges of the Supreme Court voted to
acquit the former chair of the Indonesian Bank Restructuring Agency, Syafruddin
Arsyad Temenggung, who had been convicted and sentenced to 15 years in
prison for approving the discharge of a debt owed by a businessman, costing the
Indonesian government over USD 300 million.474 The first-ever loss is significant
because the case involved more than twice the amount of funds involved in any of
the more than 500 prior cases the KPK had brought to conviction in the special anticorruption
court system, all of which had been upheld by the Supreme Court. It also
focused concerns regarding Indonesia’s anti-corruption law, which does not require
prosecutors to prove the defendant’s intent to enrich, just a loss to the state through
an illegal act.
There is some concern that the loss signals a further weakening of the KPK,
following the passage of legislative amendments in September 2019.475 These
amendments curtailed the KPK’s wiretap authority, allowed cases to be dropped if
an investigation is not complete within two years, imposed an ethics code on KPK
employees and commissioners written and enforced by a Supervisory Board aligned
with the current president, and reclassified those KPK employees as civil servants,
and thus, less independent from government. The KPK’s commissioners are due to
be replaced in 2020, and questions have arisen regarding the announced appointees
which included a police officer who had been dismissed by the KPK for misconduct.
Passage of the amendments triggered widespread protests,476 but to date, they have
not been repealed.
In contrast to the impression of apparent weakening of the KPK was its pursuit of
corporate criminal liability477 in February 2019, against PT Nusa Konstruksi Enjiniring,
Tbk, a publicly traded construction company, which was declared guilty of corruption
in a number of government construction projects.478 Additionally, the KPK arrested
two police officers in December 2019 who were suspected in a 2017 acid attack
against an investigator leading a probe involving 80 individuals, including officials,
legislators, and private companies, who had pocketed more than a third of the funds
473 David Lague, James Pomfret and Greg Torode, How murder, kidnappings and miscalculation set off Hong Kong’s
revolt, Reuters (Dec. 20, 2019), https://www.reuters.com/investigates/special-report/hongkong-protests-extraditionnarrative/.
474 Decision No. 1555 K/PID SUS/2019; see also Matthew Stephenson, Guest Post: Indonesian Anticorruption Institutions
at Risk, Part 1: The Significance of the KPK’s First Acquittal, Global Anticorruption Blog (Oct. 2, 2019), https://
475 Transparency International Secretariat, AN OPINION POLL ON CORRUPTION IN THE MIDDLE EAST AND NORTH
AFRICA WILL BE RELEASED ON DECEMBER 11, Transparency Int’l (Dec. 4, 2019), https://www.transparency.org/
476 Kafil Yamin, Two die in student protests sparked by corruption law, Univ. World News (Oct. 2, 2019), https://www.
477 Indonesia does not generally apply corporate criminal liability but only for certain types of criminal offenses, which
include corruption. Article 1 paragraph (3) of the Law No. 31 of 1999 on Eradication of Corruption Criminal Offenses
as amended by Law No. 20 of 2001, articles 2, 3, and 20.
478 NKE was fined approximately USD 48,631 and ordered to pay approximately USD 6 million in restitution to the state.
paid for an electronic identity card system.479 Those convicted included the former
Speaker of the Indonesian Parliament, Setya Novanto, who was sentenced to 15 years
for his involvement in that theft of public money in 2018.
Thailand is ranked 99 of 180 countries in Transparency International’s most
recent Corruption Perceptions Index,480 and corruption is regarded as “pervasive”
even though the country has laws and enforcement mechanisms in place to combat
corruption.481 Indicative of Thailand’s exercise of its anti-corruption enforcement was
the response by Thailand’s National Anti-Corruption Commission (NACC) that it was
“unaware of the case” involving Microsoft’s July 2019 guilty plea and settlement of
FCPA charges, accepting and acknowledging illegal payments made on its behalf to
Thai banking officials.482 The Secretary-General of the Anti-Corruption Organization
of Thailand, a private sector anti-corruption watchdog group, has urged the NACC
to investigate the charges and not to turn a blind eye now that the issues are public
knowledge, but there have been no further reports.
Thailand followed on from Japan’s prosecution of Mitsubishi Hitachi Power
Systems and three of its senior executives in 2018 and 2019,483 when the NACC
announced in November 2019 that it had sufficient evidence to conclude that four
top officials of state-owned Sino-Thai Construction and Engineering demanded
payment of approximately USD 659,000 from the Japanese construction company
to allow the use of a dock to transport equipment for construction of a power
plant.484 The Sino-Thai officials could be relieved of their duty or face disciplinary
action, NACC said, adding that it would submit its report to the attorney general to
adjudicate the case.
Effective August 15, 2019, Vietnam issued new regulations485 to implement its 2018
Anti-Corruption Law,486 which took effect in July 2019. The new regulations impose
requirements on the public sector, but also extend to publicly-held companies, credit
institutions, and fund-raising charities. The new regulations require these entities
479 The Associated Press, Indonesia Arrests 2 Policemen Suspected in Acid Attack, N.Y. Times (Dec. 27, 2019), https://
480 Corruption Perceptions Index 2018, Transparency Int’l https://www.transparency.org/country/THA.
481 Thailand Corruption Report. GAN Integrity (Updated Sept. 2017), https://www.ganintegrity.com/portal/countryprofiles/
482 Joseph O’Connor and Son Nguyen. Microsoft accepts charges of corrupt payments in Thailand as it makes a deal
with US investigators, Thai Examiner (July 25, 2019), https://www.thaiexaminer.com/thai-news-foreigners/2019/07/25/
thailand-corruption-microsoft-firm-corrupt-payments-thai-government/; Office of Public Affairs. Hungary Subsidiary
of Microsoft Corporation Agrees to Pay $8.7 Million in Criminal Penalties to Resolve Foreign Bribery Case, U.S. Dep’t
of Justice (July 22, 2019), https://www.justice.gov/opa/pr/hungary-subsidiary-microsoft-corporation-agrees-pay-87-
483 Kyodo News and Online Reporters. Japanese exec sentenced for bribing Thai official. Bangkok Post (Sept. 13, 2019),
484 Reuters, Shares in Sino-Thai plunge after anti-graft body corruption allegation, CNBC (Nov. 13, 2019), https://www.
485 Decree No. 59/2019/ND-CP dated July 1, 2019, https://www.vietnam-briefing.com/news/vietnam-new-lawseffect-
486 Decree No. 36/2018/QH14 dated November 20, 2018, https://thuvienphapluat.vn/van-ban/EN/Tai-chinh-nha-nuoc/
to establish and implement anti-corruption compliance programs, with specific
terms, and provide for periodic inspection by the government with remediation for
shortcomings. While administrative penalties can be imposed, there is no corporate
criminal liability under Vietnamese law. Nor do the regulations specify the criminal
fines or penalties for individuals who allow corruption to occur. Public officials are
now subject to reporting requirements for giving or receiving gifts, regardless of
value, for an improper purpose (i.e., bribery and corruption) and new limits are
imposed on their joining commercial entities following resignation or retirement from
In keeping with Vietnam’s antigraft effort,487 in the largest anti-corruption case
in Vietnamese history, a former communications minister, Nguyen Bac Son, was
sentenced to life in prison on December 28, 2019 upon his conviction at trial for
receiving USD3.2 million in bribes to approve a deal by Mobifone, the state-owned
telecommunications company.488 Prosecutors had asked for the death penalty but
Son returned the money upon announcement of the verdict. His then-deputy, Truong
Minh Tuan, was sentenced to 14 years, and 11 other officials involved in the scheme
received sentences of between two and 23 years. The bribe-payor, the brother of the
richest man in Vietnam, was also convicted and sentenced to three years.
The prosecutions of two public officials were among the more notable
enforcement actions against corruption in Taiwan in 2019. The first of the two matters
involved the expansion project of the Taoyuan airport. The director of construction
and an engineer allegedly requested kickbacks relating to maintenance of airport
terminals and construction of a new terminal from the general contractor. Both were
prosecuted for corruption, and legal proceedings of matter are ongoing.489 In another
matter, the secretary was indicted for corruption. The legal proceedings in this
matter are currently ongoing.490 Aside from the two referenced matters, enforcement
by local authorities involved several matters relating to other local and regional
permit- and license-related bribery and attempted bribery.
Taiwan ranked 31 out of 180 countries in the latest Transparency International
CPI.491 While legislatively there was not much to update in 2019, the Economic
Crimes Prevention Office of the Taiwanese Ministry of Justice Investigation Bureau
emphasized its prioritization of corporate corruption matters in December,
specifically relating to four areas: securities-related violations (including
manipulation of share prices, insider trading, false reporting, etc.), financial
487 Despite its efforts to combat corruption since 2016, Vietnam dropped two points in the Corruption Perception Index,
ranked 117 of 180 countries, with a score of 33; Corruption Perceptions Index 2018: Corruption in Vietnam’s public
sector is still perceived as highly serious, Transparency Int’l (Jan. 29, 2019), https://towardstransparency.vn/en/cpi_
488 Hanoi Newsroom. Vietnam court sentences ex-minister to life in MobiFone corruption scandal, Reuters (Dec. 28,
489 Ceng Jian You. Taoji Second Terminal Expansion Case Explodes Corruption, Chief Taoji Receives 2.54 Million Rebate,
UDN (Dec. 12, 2019), https://udn.com/news/story/7321/4221507.
490 Former Taoyuan County Mayor’s accompanying secretary involved in BMW and 10 million bribes sued for corruption,
Apple Daily (Mar. 3, 2019), https://tw.appledaily.com/new/realtime/20190313/1532319/.
491 Corruption Perceptions Index 2018 – Taiwan Profile, Transparency Int’l, https://www.transparency.org/country/TWN
(last accessed Dec. 16, 2019).
corruption crimes (individual liability of those in charge of financial institutions,
etc.), disgorgement of assets (including embezzlement and other illegal violation of
duties), and business secrets-related matters (industrial espionage, etc.).492
10. The Philippines
Under the direction of President Rodrigo Duterte, a drastic and severe campaign
against corruption continued in the Philippines in 2019, and the country improved
from 111 to 99 out of 180 countries ranked in Transparency International’s Corruption
Perception Index.493 However, it is unclear whether the tactics used by the Duterte
administration can bring long-lasting or structural changes to the country, as
corruption remains pervasive in the Philippines.494
In September, President Duterte turned his focus to corruption of customs
brokers by firing 64 customs employees, as part of his administration’s efforts to
stop the flow of methamphetamine from entering the country. Further, Duterte’s
administration also has plans to transition from a “net taxation system where
production is taxed to a “gross taxation” system that taxes income as well as funds in
estates and trusts to further assist the country’s efforts against corruption.495
Malaysia ranked 61 out of 180 countries in the 2018 Transparency International
Corruption Perception Index.496 While its CPI ranking remained relatively unchanged
from the previous year, the country saw improvements in other rankings including
the World Bank’s Doing Business Rankings497 and the Democracy Index.498 The
Director-General of the National Governance, Integrity and Anti-Corruption Centre
(GIACC), Tan Sri Abu Kassim Mohamed, attributed this change to the country’s
sustained efforts to fight corruption.499 Further, the government rolled out a National
Anti-Corruption Plan in January 2019, requiring government agencies to each set a
practical goal based on initiatives to be taken to address corruption, integrity, and
IMDB (One Malaysia Development Bank) remained on the front pages in 2019,
with the US DOJ’s USD 700 million settlement with Jho Low and others, including
492 North American IP News. The Bureau of Investigation and Bribery of the Public Sector Not only Locks Four Types of
Corporate Corruption, UDN (Dec. 27, 2019), https://udn.com/news/story/6871/4252075.
493 Corruption Perceptions Index 2018 – Philippines Profile, Transparency Int’l, https://www.transparency.org/country/
494 Panos Mourdoukoutas. Duterte’s Philippines Is Getting Less Corrupt, The Wrong Waym Forbes (Feb. 2, 2019), https://
495 Jennings, Ralphm Will Philippines New Plan to Fight Some of Asia’s Worst Corruption Work?, Voice of Am. (Sept. 18,
496 Corruption Perceptions Index 2018 – Malaysia Profile, Transparency Int’l, https://www.transparency.org/country/MYS.
497 Ease of Doing Business rankings, World Bank Group, https://www.doingbusiness.org/en/rankings.
498 Democracy Index, The Economist, https://www.eiu.com/topic/democracy-index.
499 Hana Naz Harun. Malaysia’s war against corruption paying dividends. New Straits Times (Sept. 17, 2019), https://www.
500 National Anti-Corruption plan 2019-2023, Malaysian Anti-Corruption Comm’n (Jan. 29, 2019), https://www.sprm.gov.
his family.501 The GIACC also acted on several lower-profile corruption matters
domestically, including the prosecution of six officials from Roads Transport
Department for allegedly accepting bribes,502 and the indictment of a businessman
who allegedly bribed various government officials relating to a construction
project.503 In early 2020, reports have also surfaced of alleged retaliation against
former Malaysian Anti-Corruption Commission (MACC) chief Abu Kassim Mohamed
for investigating the Prime Minister for money-laundering and misconduct.504
On July 22 2019, the Securities Commission Malaysia (the Securities Commission)
announced that it would implement an action plan to strengthen standards of
corporate governance to prevent corruption, misconduct and fraud in Malaysia.505
The Securities Commission’s recommendations build on new corporate liability
provisions of the amended Malaysian Anti‑Corruption Commission Act (the
MACC Act) which come into effect in June 2020, and include a requirement that
companies listed in Malaysia put in place anti‑corruption measures. The Malaysian
Anti‑Corruption Commission is expected to begin enforcing the new corporate
liability provisions from June 2020.
Political developments slowed Australia’s efforts to amend its anti-corruption
laws in the last year. As detailed in our 2018 FCPA/Anti-Corruption Year in Review,
the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 (the
2017 Bill) was put before the Australian Parliament in November 2017 and aimed to
align Australia’s foreign bribery laws more closely with the US and UK anti-corruption
frameworks. However, the 2017 Bill did not fully progress through the Australian
Parliament during an 18-month period and was subsequently taken off the table due
to the Australian general elections.506
In November 2019, the draft law was reintroduced to the country’s Senate as
the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 (the
2019 Bill) and is currently going through parliament. Although the final wording
of the legislation will not be available until the 2019 bill has been passed, the 2019
bill is expected to closely mirror the 2017 Bill. As discussed in our 2018 FCPA/Anti-
Corruption Year in Review, the new anti-corruption legislation will introduce a new
corporate offence of failing to prevent bribery, including an associated “adequate
procedures” defense, and will introduce a DPA scheme that closely reflects UK-
501 Office of Public Affairs. United States Reaches Settlement to Recover More Than $700 Million in Assets Allegedly
Traceable to Corruption Involving Malaysian Sovereign Wealth Fund, U.S. Dep’t of Justice (Oct. 30, 2019), https://www.
502 N.Trisha, Six more JPJ officers charged, Star Malaysia (July 26, 2019), https://www.sprm.gov.my/images/
503 Kuala Lumpur. Gnanaraja Slapped with 68 Chargers, New Straits Times (Apr. 9, 2019), https://www.sprm.gov.my/
504 Abu Kassim tried to pass 1MDB probe papers to US Attorney’s Office in 2015: Fairfax CEO, Malas iaKini (Jan. 10, 2020),
505 SC to Implement Anti‑Corruption Action Plan, Media Releases and Announcements of Securities Commission
Malaysia (July 22, 2019), https://www.sc.com.my/resources/media-releases-and-announcements/sc-to-implementanti-
506 Sam Fry, Australia presents long-awaited corruption bill, Global Investigations Rev. (Nov. 28, 2019), https://
globalinvestigationsreview.com/article/1211440/australia-presents-long-awaited-corruption-bill (last accessed Dec.
and US-style DPAs. The bill also does not appear to remove Australia’s facilitating
To assist companies to comply with the new anti-corruption law, the Australian
Attorney General has published accompanying draft guidance on the steps
companies can take to prevent bribery of foreign public officials507. This guidance,
like the UK Ministry of Justice’s guidance on the UK Bribery Act 2010, sets out six
broad principles that aim to guide companies of all sizes and in all sectors in their
implementation of effective and proportionate procedures to prevent bribery in a
flexible and tailored manner.
On December 2, 2019, the Australian government introduced a bill to Senate that,
if approved, would eliminate an admission of guilt as a pre-requisite for authorities
being able to offer deferred prosecution agreements to companies accused of
serious wrongdoing. Other amendments include introducing the new corporate
offence of failure to prevent foreign bribery and broadening the existing definition of
a foreign official to include those running for office.508
As we detailed in our 2018 FCPA/Anti-Corruption Year in Review, the Australian
Senate approved new Commonwealth whistleblower laws that aim to strengthen
the protections afforded to whistleblowers, including the ability for whistleblowers
to pursue a claim for compensation when a company fails to prevent a third party
from victimizing the whistleblower. The Treasury Laws Amendment (Enhanced
Whistleblower Protections) Act 2019 came into effect on July 1, 2019 and requires
public and certain large private companies to implement compliant whistleblower
policies by January 1, 2020. Whistleblower reforms in the public sector are also
anticipated following judicial criticism of the currently limited protections afforded to
public servant whistleblowers.
E. Latin America
During the first year of Jair Bolsonaro’s presidency, the fight against corruption
continued to take the center stage of Brazilian politics, now reinforced by attempts at
legislative reforms and structural changes that also target money laundering.
With President Bolsonaro’s support, Justice Minister Sergio Moro - known for
his leading role in the Car Wash Operation—prepared a combination of legal and
regulatory provisions that became known as the “Anticrime Package” (Package),
aimed at increasing pressure to combat crime in general by amending several
different penal statutes. Minister Moro campaigned before Congress and in media
outlets to have the Package approved. The proposed bill included heightened
sanctions in the case of organized crime, violent crimes and corruption. It also tried
to regulate the use of plea bargain agreements in Brazil and to grant protection to
507 See Attorney-General’s Department Consultation Draft, Draft guidance on the steps a body corporate can take
to prevent an associate from bribing foreign public officials (Nov. 2019), https://www.ag.gov.au/Consultations/
on-adequate-procedures-to-prevent-the-commission-of-foreign-bribery.pdf (last accessed Dec. 16, 2019).
508 Will Neal, Australia rejigs proposed DPA structure, Global Investigations Rev. (Dec. 5, 2019), https://
globalinvestigationsreview.com/article/1211766/australia-rejigs-proposed-dpa-structure (last accessed Dec. 23, 2019).
whistleblowers. Congress approved a new version of the bill, rejecting, however,
among other measures, the terms proposed for plea bargains under Brazilian law.
The topic remains a priority for the Brazilian administration and may be included
in future bills to be proposed before Congress. On the other hand, President
Bolsonaro sanctioned Decree 10, 153 on December 3, 2019 to grant protection for
whistleblowers within the scope of federal public administration.
The Package also tried—without success—to resolve the uncertainty around
imprisonment after a second-level judicial decision (segunda instancia). This
controversial topic was the subject of heated debates in Brazil earlier in the year,
when the Supreme Court (STF) decided on the constitutionality of imprisonment
while there are still further appeals possible. A narrow majority (6 vs. 5) of justices
concluded that defendants can only be imprisoned after all appeals have been
exhausted. The decision had a direct impact over politics in the country, and an
indirect impact over Operation Car Wash efforts. On the grounds that his conviction
was not final, former president Luis Inacio Lula da Silva was released from jail on
November 8, 2019 the day after the STF’s decision. Other individuals convicted as
part of Car Wash investigations also benefited from the court’s decision, including
former politicians and businessmen. The Brazilian Congress is now considering
introducing new legislation that would allow the possibility of imprisonment after the
Despite the STF’s decision, Operation Car Wash moved forward during its fifth
year. In March 2019, under the scope of Operation Car Wash in Rio de Janeiro, former
president Michel Temer was provisionally arrested based on alleged wrongdoing in
connection with Eletronuclear contracts, along with former Minister and the former
governor of Rio de Janeiro, Moreira Franco. Another four governors of Rio de Janeiro
have also been arrested on corruption charges.
Notwithstanding its national and local investigation efforts, Operation Car
Wash itself is also subject to criticism. In early June, Intercept published a series of
reports with alleged extracts of leaked conversations between public prosecutors
investigating corruption cases and then-Judge Moro, who was overseeing the cases;
these reports indicated to many that Judge Moro had crossed a line in his dealings
with the prosecutors and compromised his judicial independence.
The judicial branch in Brazil is also under heightened scrutiny due to allegations
of excessive judicial activism and corruption of high-court justices. In Congress,
representatives have tried to create a parliamentary investigation commission (CPI)
dubbed Lava Toga (Judge robe wash, in reference to operation Car Wash). Critics
of the CPI claim investigations against the judiciary may have a chilling effect over
judges’ efforts to fight corruption.
In terms of anti-money laundering policies, in November, the STF allowed the
sharing of confidential information between entities dedicated to financial oversight,
such as the Brazilian revenue service (Receita Federal) and the Council for the
Control of Financial Activities (COAF). In December, Congress approved a Provisional
Measure issued by the President, subordinating COAF to the Central Bank.
The STF decision entitling the Federal Police—in addition to the Brazilian
Federal Prosecutors—to negotiate plea bargain agreements, opened a new route
for defendants and cooperating individuals to reach agreements. The combination
of the political and popular opinion environment and the legal and regulatory
developments indicated above, lead us to believe that the Operation Lava Jato
investigations will continue to increase.
Finally, on November 12, 2019, the STF voted unanimously to stop the case
of a Brazilian defendant who was previously convicted of money laundering in
Switzerland. This case supports the proposition that the STF is committed to the
principle of double jeopardy.509
During the presidency of Mauricio Macri, Argentina’s government released a
decree for a five-year National Anti-Corruption Plan on April 10, 2019.510 The plan
that was promoted by the Argentinian Anti-Corruption Office and the Secretariat for
Institutional Strengthening includes 250 initiatives and is based on three fundamental
pillars: the promotion of integrity and transparency; the control and punishment
of corruption in the administrative authorities; and the promotion of sectoral anticorruption
policies by all ministries and decentralized agencies of the national
Executive Power.511 The decree also established an Advisory Council responsible for
overseeing and ensuring the implementation of the Anti-Corruption Plan.
On May 21, 2019, the first of 11 cases against Cristina Fernandez Kirchner, former
president and current vice-president of Argentina, went to trial. While in office
(2007-2015), Ms. Kirchner allegedly received bribes from construction companies
in exchange for 51 government contracts worth USD 1 billion.512 These investigations
were part of the “notebook” scandal, a publication of written notes taken by the
chauffeur of Ms. Kirchner’s former planning minister who allegedly picked up and
delivered cash payments to various government officials including Ms. Kirchner.513 As
a former congresswoman and current vice-president Ms. Kirchner enjoys immunity
from imprisonment but not from prosecution. Even though the charges against her
could lead to a ten-year prison sentence, it remains unlikely that two-thirds of the
Argentinean Senate would vote to lift her immunity.
509 Sam Fry, Brazil rules in favour of double jeopardy principle, Global Investigations Rev. (Nov. 14, 2019), https://
510 National Anti-Corruption Plan, Decree 258/2019, Official Bulletin of the Republic of Argentina (Apr. 10, 2019), https://
511 Hartmann, Carlos. Laura Alonso: Este es el inicio del “Nunca más” de la corrupción en la Argentina, La Prensa (Apr.
22, 2019), http://www.laprensa.com.ar/475642-Laura-Alonso-Este-es-el-inicio-del-Nunca-mas-de-la-corrupcion-enla-
Argentina.note.aspx; Fernando Goldaracena, Vanina Caniza, and Luis Dates, Argentina: National Anti-Corruption
Plan, Global Compliance News (Apr.26, 2019), https://globalcompliancenews.com/argentina-national-anti-corruptionplan-
512 Fernández de Kirchner angrily denies graft claims as she testifies in court, Buenos Aires Times (Dec. 2, 2019), https://
513 Argentina: ex-president Cristina Fernández charged in bribery scandal, Gua rdian (Sept. 17, 2018), https://www.
During Mr. Macri’s presidency, Argentina moved up 20 places in Transparency
International’s Corruption Perception Index.514 It remains to be seen whether the
new administration strengthens the fight against corruption and the promotion of
Peru has continued its efforts to investigate and prosecute corruption. Three
former Peruvian presidents are currently under investigation for taking bribes from
the Brazilian construction company Odebrecht.
Former president, Alejandro Toledo (2001-2006) was arrested in the United
States following an extradition request from Peru for allegedly receiving USD
20 million from Brazilian companies Camargo Correa and Odebrecht for the
construction of the Interoceanic Highway. Following a US District Judge order, Mr.
Toledo was released on bail on October 22, 2019. He is currently under house arrest
facing an extradition case.
On April 17, 2019, former president Alan Garcia (1985-1990 and 2006-2011) took
his own life before police came to arrest him for allegations of bribery. Shortly
thereafter, another former president, Pedro Pablo Kuczynski, was placed under pretrial
detention for having allegedly received bribes from Odebrecht. Similarly, former
president Ollanta Humala Tasso (2011-2016) spent nine months in pre-trial detention
before he was released on appeal.515 Odebrecht allegedly paid USD three million to
support Mr. Humala’s presidential campaign. In July 2019, the homes of Peru’s former
first lady and Mr. Humala’s wife, Nadine Heredia (2011-2016), and two former energy
ministers were raided in relation to the construction of the Gasoducto Sur pipeline.
In November 2019, the daughter of former president Alberto Fujimori, Keiko
Fujimori, was released from prison after a decision by Peru’s Constitutional Court.516
Ms. Fujimori spent 13 months in prison after a pre-trial sentence in October 2018. She
was also accused of having received illegal campaign contributions from Odebrecht.
Mexico’s new president, Andrés Manuel López Obrador, known as AMLO, who
took office on December 1, 2018, campaigned on an anti-corruption platform, and
identified the fight against corruption as a key priority of his government.517 While
legal reforms adopted in 2015 and 2016, creating the National Anti-Corruption
System (Sistema Nacional Anticorrupción, or SNA), strengthened Mexico’s anti-
514 In the latest Corruption Perception Index, Argentina holds rank 85 out of 180; while in 2014, before Macri took office,
Argentina only ranked 107 out of 174; Corruption Perceptions Index 2018 – Argentina Profile, Transparency Int’l,
https://www.transparency.org/cpi2018; Corruption Perceptions Index 2014 – Argentina Profile, Transparency Int’l,
515 Peruvian judge orders ex-President Kuczynski to pre-trial jail for three years, Reuters (Apr. 19, 2019), https://www.
516 Paul Mackessey. Keiko Fujimori Ordered Freed from Jail, Anti-Corruption Digest (Dec. 3, 2019), https://
517 See Mexican Government’s Press Release ; see also Discurso de Andrés Manuel López Obrador, Presidente de los
Estados Unidos Mexicano, (Dec. 1, 2018), https://www.gob.mx/presidencia/articulos/discurso-de-andres-manuellopez-
corruption framework, implementation and enforcement have been slow. However,
since the beginning of AMLO’s term as president, the country appointed its first
specialized chief anti-corruption prosecutor, Luz Mijangos Borja, and charges were
brought against former high-ranking officials of Mexico’s state-run oil company
Petróleos Mexicanos (Pemex) in connection with the Odebrecht investigation,
marking the country’s first major anti-corruption prosecution.
Mexican authorities had been investigating Odebrecht, a Brazilian construction
firm with operations across Latin America and implicated in Brazil’s large-scale
Operation Car Wash, at least since 2017,518 although the previous administration
had failed to bring charges in connection with the probe.519 However, since May
2019, Mexico’s prosecution authority (Fiscalía General de la República, or FGR) and
financial intelligence unit (Unidad de Inteligencia Financiera, or UIF) have taken
actions against former Pemex CEO, Emilio Lozoya, and current CEO of Mexican
steel manufacturer Altos Hornos de Mexico (AHMSA), Alonso Ancira, in connection
with bribery charges, including by freezing assets520 and issuing arrest warrants.521 In
particular, Lozoya, a long-time ally of former president Enrique Peña Nieto, is alleged
to have received bribes from Odebrecht during his tenure as Pemex CEO from 2012
to 2016,522 and from AHMSA through an Odebrecht subsidiary in connection with
Pemex’s acquisition of a fertilizer plant from AHMSA for an over-inflated price.523
While these actions are broadly seen as an important step towards greater
enforcement of anti-corruption legislation in Mexico, the significance and long-term
implications of this first major prosecution will largely depend on the judiciary’s
ability to bring those accountable to justice. As of November 10, 2019, Lozoya has
evaded his arrest warrant, as is the case with Pemex’s former head of security,
General Eduardo León Trauwitz, who is accused of coordinating and benefiting from
oil theft and whose whereabouts are unknown.524
5. Other Developments in Latin America
On May 13, 2019, Ecuador’s president Lenin Moreno created the Commission of
International Experts to Fight Corruption in Ecuador (CEICCE). The CEICCE is made
518 See our FCPA/Anti-Corruption Developments: 2018 FCPA/Anti-Corruption Year in Review for a discussion of Mexico’s
investigation of Odebrecht in 2018.
519 Azam Ahmed, Mexico Could Press Bribery Charges. It Just Hasn’t, New York Times (June 11, 2018), https://www.
520 UIF Press Release, Congela UIF cuentas que presuntamente son derivadas de actos de corrupción, Sec’y Finance &
Public Credit (May 27, 2019), https://www.uif.gob.mx/work/models/uif/comunicados/UIF_009.pdf.
521 Press Release, Comunicado FGR 258/19. La Fiscalía General de la República Informa de la detención de Alonso “N”
en España, FGR (May 28, 2019), https://www.gob.mx/fgr/prensa/comunicado-fgr-258-19-la-fiscalia-general-de-larepublica-
informa-de-la-detencion-de-alonso-n-en-espana; Press Release, Comunicado FGR 323/19. La Fiscalía
General de la República informa, FGR (July 5, 2019), https://www.gob.mx/fgr/prensa/comunicado-fgr-323-19-lafiscalia-
522 Emilio Lozoya: Former Mexican oil chief accused of corruption, BBC (July 6, 2019), https://www.bbc.com/news/
523 Kirk Semple and Azam Ahmed. Mexico Charges Former Oil Official With Bribery in Anticorruption Drive, New York
Times (May 28, 2019), https://www.nytimes.com/2019/05/28/world/americas/mexico-corruption-prosecution-oilcompany.
524 Kevin Sieff. A general was the leading suspect in the biggest anti-corruption case in Mexico. Then he disappeared,
Was hington Post (Nov. 10, 2019), https://www.washingtonpost.com/world/the_americas/a-general-was-the-leadingsuspect-
up of five international experts and its purpose is to strengthen public institutions
and avoid corrupt practices.
Earlier this year, Luis Gustavo Moreno Rivera, former National Director of Anti-
Corruption in Colombia was sentenced to four years in prison in the United States
for accepting a cash bribe while at a Miami shopping mall.525 Mr. Moreno, who
pleaded guilty, solicited USD 132,000 in return for confidential information regarding
an investigation against former governor of the Cordoba region, Alejandro Lyons
1. South Africa
Following a steady decline in the country’s Transparency International corruption
perception ranking in recent years,526 the election by South African parliament of
new president Cyril Ramaphosa on February 15, 2018 marks the country’s renewed
commitment to fighting corruption. In his state of the nation address on February
16, 2018, Ramaphosa vowed to turn the tide of corruption in the country’s public
institutions, emphasizing the role of the Commission of Inquiry into State Capture,
and committed to equally fighting corruption, fraud and collusion in the private
The Commission of Inquiry into State Capture was set up by presidential
proclamation on January 23, 2018 to inquire into allegations of state capture,
corruption and fraud in the public sector, including allegations of undue influence
exercised by the Gupta family, an Indian family with significant business ties in
South Africa, over the administration of former president Jacob Zuma. While the
commission, headed by Deputy Chief Justice Raymond Zondo, does not have
prosecutorial powers, it can refer matters for prosecution or further investigation.528
The commission, which started hearing testimony in August 2018 and whose work is
ongoing, so far has heard from a variety of sources, including high-ranking politicians
and government officials, notably former president Zuma, former government
ministers and former officials of state-owned enterprises (SOEs).
While the commission’s work has yet to result in prosecutions, on October 10,
2019, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC)
designated members of the Gupta family and a close business associate under
the Global Magnitsky Human Rights Accountability Act for their involvement in a
525 Colombia’s Luis Gustavo Moreno Rivera Gets Four Years in U.S. Prison, Anti-Corruption Digest (Jan. 8, 2019),
526 South Africa’s global ranking in Transparency International’s Corruption Perception Index has consistently declined
since 2015, going from 61 in 2015 to 73 in 2018, and its score remained below 50 throughout this period, varying from
43 to 45. Transparency International’s Corruption Perception Index ranks countries and territories by their perceived
levels of public sector corruption, using a scale of 0 to 100 to score countries, where 0 is highly corrupt and 100 is
very clean, and ranking them by highest to lowest score. Source: Corruption Perceptions Index 2018 – South Africa
Profile, Transparency Int’l, https://www.transparency.org/cpi2018.
527 President Ramaphosa Transcript, President Cyril Ramaphosa: 2018 State of the Nation Address, S. African Gov’t (Feb.
16, 2018), https://www.gov.za/speeches/president-cyril-ramaphosa-2018-state-nation-address-16-feb-2018-0000.
528 Proclamation No. 3 of 2018 by the President of the Republic of South Africa, Gov’t Gazette (Jan. 25, 2018), https://
significant corruption network in South Africa. The individuals designated were
implicated in several corrupt schemes, allegedly leveraging their political connections
to obtain government contracts and misappropriate state assets estimated at
hundreds of millions of dollars.529 According to a statement released by South
Africa’s Department of Justice and Constitutional Development on the same day,
the OFAC designations were part of a collaborative effort between authorities of the
two countries.530 Notably missing from the OFAC designations were public officials,
state-owned enterprises (SOEs) and multinational companies implicated in corrupt
schemes involving the Gupta family and subject to ongoing investigations in South
Meanwhile, the criminal proceeding against former President Zuma for alleged
corruption related to South Africa’s arms deal with French arms company Thales
remains ongoing. The charges of corruption, racketeering, fraud and tax evasion,
initially brought against Zuma and Thales over a decade ago and reinstated in March
2018, have been mired in procedural wrangling. The trial is currently scheduled for
April 2020, although both Zuma and Thales expressed an intention to appeal the
decision of the Pietermaritzburg High Court dismissing application to drop the
2. Other Developments in Africa
2019 has also seen other countries in Africa stepping-up anti-corruption
enforcement efforts. In particular, Namibia has recently charged high-ranking public
officials in connection with a corruption scandal in its fishing industry. The scandal
first came to light through a whistleblower leak that became public in November
2019, and involves Icelandic fisheries company, Samherji, which allegedly paid bribes
of around USD 6.8 million to public officials in Namibia in exchange for fishing rights.
In response to the leaks, Namibian authorities brought charges of fraud, money
laundering and tax evasion against six individuals, including two former ministers,
implicated in the scheme.532 Repercussions of this scandal can already be seen across
different jurisdictions, as Norwegian authorities investigate the alleged role played by
the country’s largest bank, DNB, in processing payments from Samherji to Namibia,533
and Angolan authorities investigate the alleged involvement of a former fishing
minister in the scheme.534
In addition, since Angola’s former president, José Eduardo dos Santos, stepped
down in 2017 after 38 years in power, his successor, João Lourenço, has publicly
529 Press Release, Treasury Sanctions Members of a Significant Corruption Network in South Africa. U.S. Dep’t of Treasu ry
(Oct. 10, 2019), https://home.treasury.gov/news/press-releases/sm789.
530 Media Statements, Interests of Justice have no Borders, S. Africa Dep’t of Justice & Constitutional Dev. (Oct. 10, 2019),
531 Rebeca Davis. Zuma launches latest appeal to can corruption trial, Daily Maverick (Nov. 5, 2019), https://www.
532 Nyasha Nyaungwa, Namibian ex-ministers enmeshed in fish scandal in jail for New Year, Reuters (Dec. 27, 2019),
533 Richard Milne, Norway probes DNB bank over Icelandic fisheries scandal, Financial Times (Nov. 29, 2019), https://www.
534 Tim Cocks, Angola opens case against ex-minister over Namibia fishing bribe scandal, Reuters (Dec. 11, 2019), https://
vowed to combat corruption in the country.535 Angolan authorities have stepped-up
anti-corruption enforcement in 2019, notably by bringing corruption charges against
José Filomeno dos Santos, son of former president and former head of the country’s
sovereign wealth fund, and against the former governor of the National Bank of
Angola,536 and by freezing an estimated USD 1 billion worth of assets belonging
to Isabel dos Santos, daughter of former president and former head of Sonangol,
the state-owned oil company.537 However, it remains to be seen whether the anticorruption
drive will reach beyond the dos Santos clan.
On January 11, 2019, a court in Ontario convicted two individuals in connection
with a failed scheme to bribe Air India officials, namely Shailesh Govindia, a UK
national and an agent for Cryptometrics, and Robert Barra, a US national and former
chief executive of Cryptometrics.538 Govindia and Barra were each sentenced to twoand-
a-half years in prison for agreeing to pay bribes.539 Although there reportedly
was no evidence to show a bribe was paid and no contract was awarded to
Cryptometrics by Air India, the judge found that there was enough evidence to show
that the defendants had knowledge that a potential recipient of the bribes, the Indian
Minister of Civil Aviation, was a “foreign public official” under Canada’s Corruption of
Foreign Public Officials Act (CFPOA).540 In arriving at his judgment, the judge found
a conversation about the bribery scheme recorded by a co-defendant was reliable
to prove the allegation beyond a reasonable doubt.541 The judge also explicitly
discounted Govindia’s assertion that he simply was trying to secure a $500,000
consulting fee in a dishonest way and was not really serious about agreeing to bribe
the minister.542 Govindia and Barra’s convictions resulted from the second ever trial
under the CFPOA.543
On February 1, 2019 and with a week before his trial commenced, former SNCLavalin
CEO Pierre Duhaime pleaded guilty to helping a public servant commit a
breach of trust.544 In exchange for his plea, 14 other charges facing Duhaime were
dropped.545 Duhaime was sentenced to 20 months’ house arrest and 240 hours
535 Henrique Almeida, Angola Vows to Fight ‘Cancer’ of Corruption as Economy Recovers, Bloomberg (Nov. 22, 2018),
536 Noah Browning, Angolan ex-president’s son on trial in rare corruption case, Reuters (Dec. 10, 2019), https://
537 Andrew Meldrum, Isabel dos Santos slams Angolan court for seizing $1 billion, Ass ociated Press (Jan. 1, 2020), https://
538 Marieke Breijer, Two convicted in Cryptometrics foreign bribery case, Global Investigations Rev. (Feb. 5, 2019), https://
globalinvestigationsreview.com/article/1179949/two-convicted-in-cryptometrics-foreign-bribery-case (last accessed
Nov. 26, 2019).
539 Waithera Junghae, Pair in Cryptometrics foreign bribery cas e sentenced, Global Investigations Rev. (Mar. 25, 2019), https://
globalinvestigationsreview.com/article/1189209/pair-in-cryptometrics-foreign-bribery-case-sentenced (last accessed
Nov. 26, 2019).
540 Norm Keith, Canada convicts American and Brit for CFPOA offenses, FCP A Blog (Mar. 21, 2019), https://fcpablog.
com/2019/03/21/canada-convicts-american-and-brit-for-cfpoa-offenses/ (last accessed Nov. 26, 2019).
544 Former SNC-Lavalin CEO pleads guilty in superhospital fraud case, CBC News (Feb. 1, 2019), https://www.cbc.ca/
news/canada/montreal/snc-lavalin-ceo-guilty-fraud-pierre-duhaime-1.5001839 (last accessed Feb. 27, 2019).
of community service, and ordered to make a $200,000 donation to a fund that
compensates victims of crime. In mid-December 2019, another former SNC-Lavalin
executive, Sami Bebawi, was found guilty by a Quebec jury of five charges, including
fraud, corruption of foreign officials, and money laundering, for his role in the Libyan
bribery scheme.546 On January 10, 2020, Bebawi was sentenced to eight and a half
years in prison after prosecutors recommended Bebawi be sentenced to nine years
in prison, while Bebawi argued that he be sentenced to only six years.547 Prosecutors
also reportedly plan to seek a fine as part of Bebawi’s sentence, but the exact amount
and arguments in support of a fine have not yet been heard by the sentencing
And to see 2019 out, on December 18, 2019, a division of SNC-Lavalin Group
Inc. pleaded guilty to fraud in relation to the company’s activities in Libya, ending
the criminal case into the company. According to an agreed statement of facts,
SNC-Lavalin Construction paid $127 million to two shell companies between 2001
and 2011. Those two companies then paid bribes to win SNC-Lavalin contracts in
Libya, including $47 million of that money being paid to reward Saadi Gadhafi, son
of the late dictator Moammar Gadhafi, for helping SNC-Lavalin secure lucrative
construction projects.549 This case had, earlier in the year, attracted significant
political attention and comment when it was revealed in a report published by
Canada’s Conflict of Interest and Ethics Commissioner on August 14, 2019 that Prime
Minister Justin Trudeau had repeatedly lobbied for a settlement in the ongoing SNCLavalin
bribery case. The report found that Prime Minister Trudeau made repeated
attempts to persuade former justice minister to offer the company a deferred
546 Ian Austen, Corruption Case That Tarnished Trudeau Ends With SNC-Lavalin’s Guilty Plea, New York Times (Dec. 18,
2019), https://www.nytimes.com/2019/12/18/world/canada/snc-lavalin-guilty-trudeau.html (last accessed Jan. 3,
547 Jesse Feith, SNC-Lavalin: Sami Bebawi sentenced to 8½ years for fraud, corruption, Montreal Gazette (Jan. 10, 2020),
corruption (last accessed Jan. 13, 2020); Jesse Feith, SNC-Lavalin: Crown seeks nine-year prison term for Sami
Bebawi, Montreal Gazette (Dec. 19, 2019), https://montrealgazette.com/news/local-news/snc-lavalin-crown-seeksnine-
year-prison-term-for-sami-bebawi (last accessed Jan. 3, 2020).
549 SNC-Lavalin pleads guilty to fraud for past work in Libya, will pay $280M fine, Ethix Bas e (Dec. 19, 2019), https://
accessed Dec. 20, 2019).
550 Sam Fry, Ethics watchdog finds Trudeau interfered in SNC-Lavalin bribery case, Global Investigations Rev. (Aug. 15,
bribery-case (last accessed Dec. 23, 2019).
In 2019, we saw some of the largest corporate fines in the history of FCPA
enforcement, continued extensive cooperation from non-US authorities, and two
significant multi-jurisdictional resolutions. We also saw active DOJ prosecutions of
individuals—both in the form of new filed charges and trials in ongoing matters—and
judicial confirmation of the law’s wide jurisdictional reach. The DOJ also continued
to refine its enforcement policies and heighten its compliance program expectations.
At the same time, the trend of increasing non-US enforcement in anti-corruption
matters, as well as active enforcement by the World Bank and other international
financial institutions, continued in 2019. As these trends are unlikely to diminish in the
near term, continued attention to anti-corruption compliance enhancements, as well
as appropriate investigations of potential violations and remediation, should remain
high on the list of corporate compliance priorities for 2020.