Travel Agencies, Fapiao and Hospitality: $12.8 Million SciClone Settlement Highlights Diversity of Risk in China

The allegations in the recent SciClone Pharmaceuticals’ FCPA settlement read like a “how to” manual for bribing foreign officials in China. SciClone employees paid for foreign officials to attend a beer festival, gave officials language classes as gifts, used travel agencies to disguise entertainment as legitimate conferences, submitted fake fapiao to falsify expense reports and more. To resolve these widespread bribery schemes at SciClone’s Chinese subsidiaries, the company, a U.S.-based, China-focused, specialty pharmaceutical company, agreed to pay $12.8 million and self-report to the SEC for a period of three years. We analyze the key compliance takeaways from the settlement. See also “The Emperor Is Far Away: The Evolving Nature of Third-Party Risk in China” (Sep. 9, 2015).

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