The FCPA Report

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

Articles By Topic

By Topic: Charitable Donations

  • From Vol. 5 No.19 (Sep. 28, 2016)

    A Charitable Donation to Avoid a Fine in China Nets Nu Skin an SEC Fine Instead

    Efforts to evade a Chinese sanction have resulted in an SEC penalty for a health and beauty company based in Provo, Utah. Nu Skin Enterprises, Inc., a manufacturer and direct marketer of cosmetics and nutritional products, has agreed to settle allegations that its subsidiary donated approximately $154,000 to a charity in order to influence a regulatory decision. The company will pay disgorgement in the amount of the fine it avoided paying – $431,088 – plus a $300,000 penalty, according to the SEC’s cease-and-desist order. See “Ten Strategies for Avoiding FCPA Violations When Making Charitable Donations” (Jul. 11, 2012).

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  • From Vol. 5 No.19 (Sep. 28, 2016)

    Experts from PwC Discuss Compliance Audits and Common Missteps

    Compliance auditing is a critical component of an effective anti-corruption compliance program, recognized both by the U.S. Sentencing Guidelines and the government’s FCPA Resource Guide. A recent Strafford program, “FCPA Compliance Audits: Lessons From Recent Investigations,” discussed regulators’ expectations regarding compliance auditing, the process for scoping and conducting a compliance audit and common audit pitfalls. David A. Wilson, a partner at Thompson Hine, led the discussion, which featured Sulaksh Shah, a partner at PwC, and James Gargas, a director at that firm. This article discusses some of the key takeaways from the program. See also our interview series, “Best Practices for Performing Compliance Program Assessments: Pamela Passman of CREATe.org” (Apr. 6, 2016); “Susan Markel of AlixPartners” (Feb. 24, 2016); and “Jeffrey Kaplan of Kaplan & Walker” (Nov. 4, 2015).

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  • From Vol. 4 No.19 (Sep. 23, 2015)

    Regional Risk Spotlight:  Jay Holtmeier of WilmerHale Explains How to Navigate Bureaucratic Corruption Risks in India

    As the world’s second-most populous country, India presents myriad opportunities for foreign companies to sell and manufacture their products.  As an English-speaking nation with a highly educated populace, it has also become a hub for outsourcing services such as customer relations and technical support.  On the other hand, as a legacy of its colonial past, India is highly bureaucratic and companies doing business there face an intricate web of government regulations and licensing requirements, creating corruption risk.  In this installment of The FCPA Report’s Regional Risk Spotlight series, we talk to Jay Holtmeier, a partner at WilmerHale, about how companies can best navigate corruption risks in India and build strong compliance programs while doing business there.  See also “Regional Risk Spotlight:  Thomas Firestone of Baker & McKenzie Explains How to Navigate Corruption Risks in Russia,” The FCPA Report, Vol. 4, No. 16 (Aug. 5, 2015).

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  • From Vol. 4 No.9 (Apr. 29, 2015)

    Checklist of FCPA Issues to Consider Before and After Making a Charitable Donation

    Charitable donations can be effective guises for bribes, but can also be perfectly legitimate and benefit whole communities – in a sense, countering the corrosive impact of corruption.  Separating the altruistic payments from the problematic payments that improperly influence a foreign official can be challenging, especially when a foreign official has some connection to the charity.  The FCPA Report has compiled a non-exhaustive list of considerations to help companies formulate policies for smart charitable giving and to encourage good corporate citizenship while avoiding FCPA violations.  See also “Defining the Corruption Risks of Foreign Political Contributions,” The FCPA Report, Vol. 3, No. 18 (Sep. 10, 2014).

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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.3 (Jul. 11, 2012)

    Ten Strategies for Avoiding FCPA Violations When Making Charitable Donations

    Charitable donations by companies and their employees present at least two FCPA-related risks.  First, charitable donations may be – or may appear to be – intended to improperly influence foreign government officials associated with a charity.  Second, even bona fide donations may violate the books and records provisions of the FCPA if inadequately accounted for.  Accordingly, companies and employees contemplating charitable donations must contend with potential FCPA consequences.  Unfortunately, in the case of charitable donations – as with many other recurring business questions with potential FCPA implications – there is little authoritative guidance.  Business decision-making in this area is typically guided by experience and best practices.  The purpose of this article is to distill best practices with respect to avoiding FCPA violations when making charitable donations.  In particular, this article: discusses in greater detail the intersection of the FCPA and charitable giving; summarizes the modest volume of relevant precedent (including an ongoing investigation of a big name in the gaming industry); then details ten strategies for approaching charitable donations in a manner intended to mitigate FCPA risk.  In the background of this discussion is a macro trend.  It is becoming increasingly apparent that good corporate citizenship is good business.  As communication channels proliferate, both in terms of technology and access, the number of global customers is increasing and the average customer is becoming better informed.  Customer choices are being swayed by factors beyond product and service quality – factors including corporate reputation.  Reputation, in turn, is powerfully affected by a corporation’s charitable undertakings in the areas where it operates.  A well-orchestrated, well-positioned and judiciously publicized charitable campaign can boost the social profile of a company, which can impact revenue more quickly and directly than ever before.  But a bungled charitable campaign – for example, one that trips up the FCPA – can conjure up the uncharitable old adage: “No good deed goes unpunished.”  Companies should engage in smart charity, and doing so entails staying on the right side of the FCPA.  This article provides a roadmap for doing so.

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