The FCPA Report

The definitive source of actionable intelligence covering the Foreign Corrupt Practices Act

Articles By Topic

By Topic: Gifts, Travel and Entertainment

  • From Vol. 6 No.6 (Mar. 29, 2017)

    Insights From Walmart on Using a Gift Policy to Create a Corporate Culture of Integrity

    Gifts and hospitality are an accepted part of business culture, but they are also the source of many anti-corruption law violations. Because the practice is so entrenched, creating a gift policy that suits a company’s business needs is a significant challenge. In a guest article, Daniel Trujillo, the chief compliance and ethics officer for Walmart’s international operations, discusses how Walmart has implemented a strict no-gifts policy and used it as a tool to underscore the company’s corporate culture rooted in personal and professional integrity. See The FCPA Report’s three-part series on travel and entertainment corruption risks: “Five Hallmarks of an Acceptable Hospitality Expenditure” (Mar. 9, 2016); “Three Musts for a Strong T&E Policy and Five Ways a Company Can Customize Its Program” (Mar. 23, 2016); and “Internal Controls to Ensure the Program Is Working” (Apr. 6, 2016).

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  • From Vol. 5 No.18 (Sep. 14, 2016)

    Familiar Schemes Land AstraZeneca $4 Million of Disgorgement and Small Penalty

    Global pharmaceutical company AstraZeneca quietly settled FCPA-related books-and-records allegations with the SEC recently. According to the Commission’s bare-bones cease-and-desist order, the company failed to devise and maintain internal controls relating to interactions with health care practitioners in China and Russia. While details were sparse, familiar schemes such as fapiao fraud and sham speaker contracts played a role in China. To settle the charges, the company agreed to pay disgorgement of more than $4 million as well as a $375,000 penalty. See “Travel Agency Abuse, Falsified Expense Reports and Other Hospitality Blunders Lead to $25 Million Novartis Settlement” (Apr. 6, 2016).

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  • From Vol. 5 No.12 (Jun. 15, 2016)

    Addressing Five Major Compliance Issues Posed by Brazil’s 2016 Olympic Games

    Brazil’s president has been stripped of authority and faces impeachment proceedings. High-ranking politicians and major companies stand accused of far-reaching corruption as a result of Operation “Car Wash.” The country is experiencing an economic crisis that enlarges as fast as the political panorama shifts. It is in the midst of this turmoil that Brazil will host the Games of the XXXI Olympiad, the first ever hosted in South America. In a guest article, Giovanni Falcetta, Thaísa Toledo Longo, Shin Jae Kim and Renata Muzzi of Brazilian law firm TozziniFreire outline the five largest corruption risks facing companies that seek economic opportunities connected to the Games and detail the laws and regulations governing Olympic-related anti-corruption compliance. For more insight from TozziniFreire, see “Regional Risk Spotlight: Giovanni Falcetta of TozziniFreire Talks Anti-Corruption in Brazil Beyond the Petrobras Scandal” (Mar. 23, 2016). 

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  • From Vol. 5 No.7 (Apr. 6, 2016)

    Travel and Entertainment Corruption Risks: Internal Controls to Ensure the Program Is Working (Part Three of Three)

    A strong travel and entertainment policy that clearly delineates between an acceptable business expense and an impermissible bribe is critical to keeping a company out of FCPA trouble. But a policy alone is not enough – a company must also have sufficient internal controls in place to ensure that employees understand and follow company policies. In this final installment of The FCPA Report’s three-part series on travel and entertainment expenses, we explore the controls companies should have in place to keep their travel and entertainment programs working effectively. The first article in the series discussed the hallmarks of an appropriate T&E expense and the second looked at T&E policies. See also “Five Stages of Corruption and Myriad Internal Controls Failures: Compliance Takeaways From the VimpelCom Settlement” (Mar. 9, 2016).

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  • From Vol. 5 No.6 (Mar. 23, 2016)

    Travel and Entertainment Corruption Risks: Three Musts for a Strong T&E Policy and Five Ways a Company Can Customize Its Program (Part Two of Three)

    A strong travel and entertainment policy is the bedrock of a compliance program, but a policy that is overly complicated or doesn’t consider business realities may undermine a company’s compliance efforts. In this article, the second in a three-part series on travel and entertainment expenses, we explore three characteristics of a strong T&E compliance policy and five ways companies can customize their policy to their business. The first article in the series outlined five hallmarks of an acceptable T&E expense and the third article will investigate what internal controls a company needs to make sure that its program is functioning properly. See also “How to Build an Anti-Corruption Policy That Allows for Appropriate Business Gifts” (Sep. 19, 2012).

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  • From Vol. 5 No.5 (Mar. 9, 2016)

    Travel and Entertainment Corruption Risks: Five Hallmarks of an Acceptable Hospitality Expenditure (Part One of Three)

    Flying clients to visit factories, putting them up in hotels while they attend meetings and picking up the tab for their dinner can all be regular and acceptable business activities. But when those clients are officials of foreign governments, companies must tread carefully to ensure that genuine business expenses don’t become impermissible bribes. The abuse of travel and entertainment expenses was one of the first areas of focus for the government when it escalated FCPA enforcement over a decade ago and now many companies have established T&E compliance programs. However, as recent settlements involving T&E demonstrate, companies cannot afford to become complacent. This article, the first in a three-part series, sketches in the contours of the boundary between acceptable entertainment and corruption and identifies five hallmarks of appropriate travel and entertainment. Subsequent articles will address what a solid travel and entertainment policy should look like and how companies can actively monitor their T&E programs to prevent fraud and corruption. See also “A Guide to Detecting and Preventing Expense-Reimbursement Fraud (Part One of Three)” (Apr. 16, 2014); Part Two (Apr. 30, 2014); and Part Three (May 14, 2014).

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  • From Vol. 5 No.5 (Mar. 9, 2016)

    Qualcomm’s $7.5 Million Settlement for Princeling Hirings Enabled by Three Key Compliance Failures

    Qualcomm Inc., a major designer of wireless telecommunications products, has agreed to pay a civil monetary penalty of $7.5 million to the SEC to settle FCPA charges. According to the SEC, Qualcomm hired the relatives of Chinese government officials and also provided extensive gifts, travel and entertainment to the foreign officials and their families to influence those officials’ purchasing decisions. The case shows that hiring family members of foreign officials “clearly needs to be on companies’ risk assessment radar,” asserted Jeffrey Kaplan, a partner at Kaplan & Walker. The case is also a reminder that companies still need to be mindful of more traditional corruption risks such as gifts, travel and entertainment and a weak compliance program. See “Hiring Practices and FCPA Compliance in the Wake of the BNY Settlement (Part One of Two)” (Jan. 13, 2016); Part Two (Jan. 27, 2016).

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  • From Vol. 5 No.4 (Feb. 24, 2016)

    Excessive Power for Junior Employees and Lavish Trips for Foreign Officials Lead to $28 Million PTC Settlement

    PTC Inc., a Massachusetts-based software company, will pay more than $28 million to settle parallel civil and criminal FCPA charges. Like FLIR and SciClone, PTC’s corruption troubles stemmed from the provision of improper travel, gifts and entertainment to government officials. By inflating the fees paid to third parties for their services, junior employees of PTC’s China-based subsidiaries created pools of money that were then used to fund sightseeing adventures. Officials visited Honolulu, San Diego, New York and Las Vegas and enjoyed guided tours, golfing and other leisure activities. The SEC also announced its first DPA with an individual in an FCPA case, agreeing to defer prosecution against Yu Kai Yuan, a former employee of a PTC subsidiary, because of the significant cooperation he provided during the SEC investigation of the company. The voluntary disclosure calculus and how to handle relationships with lobbyists were among the key compliance concerns implicated in the PTC matter. See “CEO of LAN Airlines Settles FCPA Charges With SEC Over Union Dispute” (Feb. 10, 2016).

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  • From Vol. 4 No.16 (Aug. 5, 2015)

    Mitigating Corruption Risk in the Middle East (Part Two of Two)

    Business is booming in the Middle East, with many foreign investors seeking to take advantage of these rapidly expanding markets.  Doing so, while avoiding entanglement with anti-corruption regulators, requires careful risk assessment and planning.  The first article in this two-part series discussed the high incidence of corruption throughout the region, highlighting which countries and industries are the riskiest, and the legal and cultural diversity that can complicate a company’s assessment of corruption risk.  This, the second article of our two-part series, looks at three specific attributes of doing business in the Middle East that pose their own unique risks:  (1) the dominance over many economic sectors by state-owned entities and royal families; (2) the prevalence of third parties in business transactions in the region; and (3) the culture of gift-giving in Middle Eastern countries.  We draw from the knowledge of a panel of experts, organized by Strafford Publications and including Tom Best, a partner at Steptoe & Johnson in Washington, D.C.; Marc Alain Bohn, counsel at Miller & Chevalier in D.C.; John Vincent Lonsberg, a partner with Baker Botts based in Dubai, U.A.E.; and Daniel P. Chung, of counsel with Gibson Dunn in D.C.

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  • From Vol. 4 No.12 (Jun. 10, 2015)

    In-House and Outside Counsel Share Advice on Risk Assessments, Gift Policies and Third-Party Due Diligence

    Effective risk assessments, strong third-party practices and gifts and hospitality procedures that hold up under fire are at the heart of best-in-class anti-corruption compliance programs.  In a recent Practising Law Institute event, moderated by Gibson Dunn partner Richard W. Grime, outside and in-house counsel discussed how they tackle developing, implementing and monitoring those essential features of compliance programs.  The panel included Kathryn Cameron Atkinson, a member at Miller & Chevalier, Patricia M. Byrne, VP and Associate General Counsel for International Compliance at BAE Systems, Inc., and William B. Jacobson, a partner at Orrick.  See The FCPA Report’s Conducting Effective Anti-Corruption Due Diligence on Third Parties Interview Series: Gwen Romack, Director of Global Anti-Corruption at Hewlett-Packard, Vol. 2, No. 20 (Oct. 9, 2013); Principals at Nardello & Co., Vol. 2, No. 19 (Sep. 26, 2013); and Alice Fisher, Partner at Latham & Watkins, Vol. 2, No. 18 (Sep. 11, 2013).

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  • From Vol. 4 No.11 (May 27, 2015)

    Five Compliance Failures that Led to FCPA Charges for BHP Billiton’s 2008 Olympic Sponsorship Program

    BHP Billiton took its sponsorship of the 2008 Beijing Olympics a step too far, the SEC alleged in an administrative order resolving FCPA charges with the Australian mining giant.  The SEC announced on May 20, 2015 that BHP Billiton entities (BHPB) agreed to pay $25 million to settle charges that in 2008, despite a screening process for invitees to the Olympics designed to mitigate bribery risk, it provided luxury travel and hospitality for foreign government officials from whom it sought business.  The SEC cites five failures of BHPB’s program in its Order, demonstrating how the tension between the marketing and compliance departments can result in compliance programs that may look effective on paper but do not hold up on the ground.  See also Nine Steps to Reduce Corruption Risk When Entertaining Clients at the 2014 Winter Olympics and Beyond,” The FCPA Report, Vol. 3, No. 3 (Feb. 5, 2014).

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  • From Vol. 4 No.8 (Apr. 15, 2015)

    $9.5 Million SEC FLIR Settlement Emphasizes Benefits of Self-Reporting and Importance of Internal Controls

    Employees often ask compliance officers about what is acceptable when entertaining or providing gifts to foreign officials.  How much is too much?  The FLIR fact pattern provides a clear case of “too much.”  Months after two of its employees had been sanctioned for the same behavior, FLIR Systems, Inc., an Oregon-based company that develops infrared technology, has resolved SEC charges that it took key officials of the Saudi Arabia Ministry of Interior on an extensive “world tour” and bought them luxury gifts.  “FLIR’s deficient financial controls failed to identify and stop the activities of employees who served as de facto travel agents for influential foreign officials to travel around the world on the company’s dime,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit.  Despite the extravagant travel and gifts, FLIR did escape a DOJ enforcement action.  We discuss the details and takeaways from the case.  See also “A Guide to Preventing and Detecting Travel Agency Corruption (Part One of Three),” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014); Part Two of Three, Vol. 3, No. 2 (Jan. 22, 2014); Part Three of Three, Vol. 3, No. 3 (Feb. 5, 2014).

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  • From Vol. 3 No.23 (Nov. 19, 2014)

    SEC Sanctions Two FLIR Systems Employees for Bribing Saudi Officials

    Two former employees of FLIR Systems, Inc., an Oregon-based defense contractor, sent Saudi Arabian officials on a 20-day, self-described “world tour” and bought them luxury watches to retain business, the SEC says.  When the expenses were flagged by FLIR, the employees covered them up.  In its first administrative action sanctioning individuals for FCPA violations since 2012, the SEC fined one employee $50,000 and the other $20,000 for their actions.  The investigation is continuing.  William Michael, a partner at Mayer Brown, shared his views on the case with The FCPA Report.  See also “Four Hallmarks of Permissible Gifts and Entertainment: Insight from PepsiCo and Paul Hastings,” The FCPA Report, Vol. 3, No. 2 (Jan. 22, 2014). 

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  • From Vol. 3 No.15 (Jul. 23, 2014)

    Five Corruption Risks in the Financial Services Industry

    Given the increased attention from the government, how can principals and employees of private equity firms, hedge fund managers, broker-dealers and other financial services firms – as well as their principals and employees – protect themselves from FCPA violations?  What are the most vulnerable parts of their businesses?  At a recent PracticeEdge session hosted by the Regulatory Compliance Association, “FCPA Regulation and Enforcement for Asset Managers,” Ronald Wood, a partner at Proskauer Rose; Kara Brockmeyer, Chief of the SEC’s FCPA Unit; Andrew Levine, a partner at Debevoise & Plimpton; and Paula Anderson, a partner at Shearman & Sterling, identified five major risk areas for the financial services industry and explained how companies can mitigate those risks.  See also “Compliance Leaders from Citgroup and Morgan Stanley Examine FCPA Risks and Solutions for Financial Institutions,” The FCPA Report, Vol. 3, No. 10 (May 14, 2014).

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  • From Vol. 3 No.9 (Apr. 30, 2014)

    A Guide to Detecting and Preventing Expense-Reimbursement Fraud (Part Two of Three)

    The manipulation of expense reports is one way to cover up a bribe, and employees can be creative about evading internal controls.  To assist companies in designing, implementing and maintaining best-in-class expense-reimbursement programs, The FCPA Report is publishing a three-part article series on the topic.  This, the second article in the series, explores how different types of expense limits can protect companies from expense-report fraud and how to implement those limits effectively.  The first article in this series discussed risks associated with expense reports; provided advice on using travel and entertainment policies to limit expense-report fraud; and outlined how to use the training process to decrease expense-report fraud.  The third article in this series will provide strategies for reviewing expense reports and addressing problems discovered during the review process.  See also “A Guide to Preventing and Detecting Travel Agency Corruption (Part One of Three),” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014), Part Two of Three, Vol. 3, No. 2 (Jan. 22, 2014), Part Three of Three, Vol. 3, No. 3 (Feb. 5, 2014). 

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  • From Vol. 3 No.8 (Apr. 16, 2014)

    Three Regions, Four Settlement Tools and $108 Million: HP Entities Resolve Criminal and Civil FCPA Charges 

    Hewlett-Packard and three of its subsidiaries in Russia, Mexico and Poland have resolved FCPA charges, paying $108 million in penalties.  The schemes involved bribes to obtain contracts with various government sectors and encompass different risk areas, such as third-party payments and gifts.  The entities resolved the actions through a guilty plea (for HP Russia), a deferred prosecution agreement (for HP Poland), a non-prosecution agreement (for HP Mexico) and a cease and desist order (for HP, the California-based parent company).  The criminal fines represent discounts from the low end of the Sentencing Guidelines range, unlike the recent Marubeni case, and no compliance monitor was imposed.  For insights from HP on its current compliance program, see “Conducting Effective Anti-Corruption Due Diligence on Third Parties: An Interview with Gwen Romack, Director of Global Anti-Corruption at Hewlett-Packard Company,” Vol. 2, No. 20 (Oct. 9, 2013). 

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  • From Vol. 3 No.3 (Feb. 5, 2014)

    Nine Steps to Reduce Corruption Risk When Entertaining Clients at the 2014 Winter Olympics and Beyond

    In recent years, the SEC and DOJ have launched multiple anti-corruption investigations relating to corporate hospitality during major sporting events, such as the Olympics and the World Cup.  While anti-corruption laws do not generally prohibit travel, gifts or entertainment of customers for legitimate business purposes, the line between a bona fide business expense and one that might attract scrutiny from U.S. and other regulators can be grey.  In advance of this week’s Olympics in Sochi, Russia and the upcoming World Cup in Brazil, Kimberly A. Parker, Jay Holtmeier, Erin G.H. Sloane, Daniel F. Schubert, partners at WilmerHale, provide nine recommendations to help companies mitigate possible anti-corruption risk attendant to this type of corporate hospitality.  See also “Ten Strategies for Paying for Government Clients to Attend the Olympics or Other Sporting Events without Violating the Foreign Corrupt Practices Act,” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012).

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  • From Vol. 3 No.2 (Jan. 22, 2014)

    Four Hallmarks of Permissible Gifts and Entertainment: Insight from PepsiCo and Paul Hastings

    Providing gifts, travel and entertainment to business associates is a time-honored and legitimate means of promoting a company’s products and services and developing business relationships.  However, when foreign officials are involved, a company must be particularly vigilant to avoid crossing the line from appropriate business development to prohibited bribery and, as always, a company must accurately record gifts, travel and entertainment to avoid running afoul of the FCPA’s recordkeeping provisions.  A recent program hosted by the Ethisphere Institute and Thomson Reuters and featuring Nathaniel B. Edmonds, partner at Paul Hastings LLP and David Yawman, Senior Vice President and Chief Compliance & Ethics Officer of PepsiCo, Inc., addressed the appropriate parameters of gift-giving in the context of the FCPA, with a focus on four key “hallmarks” of permissible gifts.  See also “Gifts, Travel, Entertainment and Anti-Corruption Compliance: Sources of Authority, Best Practices and Benchmarking,” The FCPA Report, Vol. 2, No. 22 (Nov. 6, 2013).

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  • From Vol. 2 No.22 (Nov. 6, 2013)

    Gifts, Travel, Entertainment and Anti-Corruption Compliance: Sources of Authority, Best Practices and Benchmarking

    FCPA experts report that gifts, travel and entertainment expenses are one of the most asked-about areas in anti-corruption compliance and the answers can be surprisingly hard to come by.  A recent Strafford webinar provided experienced practitioners’ insights into navigating the potentially perilous shoals surrounding these expenses.  The program, “FCPA Gifts, Entertainment and Hospitality: Surviving Heightened Enforcement,” featured Margaret M. Cassidy, a principal at Cassidy Law in Washington, D.C., and John E. Davis, a member of law firm Miller & Chevalier.  Cassidy and Davis discussed available sources of guidance on gifts, travel and entertainment expenses, sources of guidance for benchmarking compliance controls and insights on implementing effective policies with regard to gifts, travel and entertainment.  This article summarizes the key takeaways from that presentation.  See “Ten Strategies for Paying for Government Clients to Attend the Olympics or Other Sporting Events without Violating the Foreign Corrupt Practices Act,” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012).

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    A Guide to Anti-Bribery Issue Spotting in China: Enforcement Trends, Third-Party Risks, Gift Giving, Travel Expenses, Foreign Officials and Due Diligence

    Recent news reports, such as the downfall of Bo Xilai, as well as reports of watchdog groups such as Transparency International, emphasize the heightened corruption risk that companies doing business in China face.  Not only does the Chinese culture value gift giving and relationship building, but, because of the government structure, a large proportion of employees there are foreign officials.  This increases the range of business activity that may give rise to FCPA liability.  Plus, China’s top leaders have been paying more attention to official corruption and have taken steps to strengthen their own laws against bribery and step up enforcement.  A recent webinar focused on the topic of Chinese corruption risk.  The panelists, partners at Gibson Dunn & Crutcher LLP and Herbert Smith Freehills LLP, discussed: the current state of anti-corruption law and enforcement in China; China-specific anti-corruption issues; FCPA enforcement actions stemming from bribery in China; and ways to mitigate the FCPA risks of doing business there.  This article summarizes the key takeaways from the webinar, focusing in particular on the lessons for companies that do business in China and lawyers that represent such companies.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    SEC’s FCPA Unit Chief and Top Practitioners Address the Role of Financial Controls in FCPA Compliance Policies, Internal Investigations, Self-Reporting and Related Topics

    In a recent panel discussion held at the New York City Bar, Kara Brockmeyer, Chief of the SEC’s FCPA Unit, and Mark Schonfeld, a partner at Gibson Dunn & Crutcher LLP, discussed the SEC’s role in civil FCPA enforcement from a private and public perspective.  The panel was moderated by Wayne Carlin, a partner at Wachtell, Lipton, Rosen & Katz.  The three experts shared useful insights regarding managing the costs of FCPA investigations, creating strong compliance programs, negotiating with the SEC and deciding whether to voluntarily disclose a violation to the government.

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  • From Vol. 2 No.1 (Jan. 9, 2013)

    How Private Fund Managers Can Manage FCPA Risks When Investing in Emerging Markets

    Anti-corruption enforcement efforts have dramatically increased over the last few years.  Every day it seems there is a new headline about an investigation involving alleged violations of the FCPA.  Federal authorities have indicated that their FCPA enforcement efforts are increasingly focused on the financial services industry and, in particular, private fund managers that invest in emerging markets.  Given this heightened level of government scrutiny, it is important that private equity firms, hedge fund managers and other investors that conduct business in foreign markets understand the associated FCPA risks.  Such risks can arise in the context of raising funds overseas, working with joint venture partners and third party agents, and investing in companies that operate in countries known for corruption.  A potential misstep in these areas can result in a fund manager and its employees facing significant civil penalties and possible criminal prosecution or, at a minimum, having to respond to government subpoenas or requests for information in connection with an investigation by federal authorities, thus resulting in the unnecessary expenditure of time and money and the attraction of unwanted attention.  In a guest article, Justin V. Shur and Joel M. Melendez, partner and associate, respectively, at Molo Lamken LLP, consider some of the important and recurring FCPA risks that arise for investors in emerging markets, and offer practical guidance to help private fund managers and their employees avoid or minimize liability in this area.

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  • From Vol. 2 No.1 (Jan. 9, 2013)

    Pharma Giant Eli Lilly Agrees to $29.4 Million Consent Judgment to Settle SEC Charges of FCPA Violations Arising Out of Its Operations in Russia, China, Brazil and Poland

    Eli Lilly and Company (Lilly), a major pharmaceutical company, has consented to the entry of a final judgment against it to settle SEC charges that Lilly subsidiaries violated the FCPA in connection with their operations in China, Brazil, Poland and Russia.  The consent judgment, which includes an injunction against future FCPA violations, calls for an independent review of Lilly’s internal controls and requires Lilly to pay disgorgement, interest and civil penalties of almost $29.4 million.  In its Complaint, the SEC provides insight into its expectations for internal controls.  The Lilly settlement resolves another case in what has been considered an “industry sweep” of pharmaceutical companies by the SEC.  See also “LeClairRyan Webinar Highlights Ten Anti-Corruption Risks for Pharmaceutical and Medical Device Companies and Outlines the Elements of an Effective FCPA Compliance Program,” The FCPA Report, Vol. 1, No. 9 (Oct. 3, 2012).

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  • From Vol. 1 No.8 (Sep. 19, 2012)

    How to Build an Anti-Corruption Policy that Allows for Appropriate Business Gifts

    What is a multinational company to do when there are government officials who are open to accepting bribes, or when multinational companies operate in countries where gift-giving, even to government officials, is culturally accepted and potentially could appear as a bribe?  In a guest article, Suzanne Rich Folsom and Victoria McKenney of ACADEMI LLC address these critical business questions and offer 14 gift-giving suggestions to consider incorporating in a corporate anti-corruption policy.

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  • From Vol. 1 No.1 (Jun. 6, 2012)

    Ten Strategies for Paying for Government Clients to Attend the Olympics or Other Sporting Events without Violating the Foreign Corrupt Practices Act

    Next month, corporate hospitality tents and suites will spring up all over London, and eager corporate hosts will escort willing clients, some of whom may well be government officials, to sporting events, dinners, and concerts associated with the London Olympics.  Are all of these corporations flirting with liability under the U.S. Foreign Corrupt Practices Act (FCPA)?  If the purpose of providing this travel, lodging and entertainment for the clients – which at today’s published prices in London almost certainly qualifies as “anything of value” – is not to “assist in obtaining or retaining business” then why do it?  And if it is to “assist in obtaining or retaining business,” how can it not be a violation of the FCPA?  The answer quite clearly is that the FCPA does not prohibit marketing to clients, and even lavish entertainment may qualify as legitimate marketing.  The trick, of course, is to ensure that marketing intended to build connections, make potential clients feel good about you and demonstrate that your company is a good business partner, both for quality and relationship, does not cross that sometimes imperceptible line between marketing and bribery.  As described in this article, navigating this boundary takes some thought, but it does not have to be difficult or over-lawyered.  Instead, some clear and transparent rules and procedures should be sufficient to protect the corporation and its employees – and its clients – from crossing the line.  In a guest article, Philip Urofsky, a Partner at Shearman & Sterling LLP, provides a comprehensive discussion of gifts and entertainment provisions under the FCPA, discusses relevant enforcement actions and DOJ opinions then describes ten specific strategies for paying for government clients to attend the upcoming London Olympics or other sporting events without violating the FCPA.

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