The FCPA Report

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

Articles By Topic

By Topic: Middle East

  • From Vol. 5 No.24 (Dec. 7, 2016)

    Embraer Global Settlement Presages a New Paradigm in International Enforcement and Next-Level Compliance

    Embraer, the world’s largest manufacturer of mid-size jets, recently settled FCPA allegations. The settlement is a striking example of how the SEC and DOJ are working with foreign governments all over the world to investigate and prosecute corruption in a coordinated manner. The case also illustrates how companies need a next level of compliance beyond basic policies and procedures to prevent individuals from finding ways around internal controls. In this, our second article analyzing Embraer’s historic settlement, we discuss the enforcement implications as well as the compliance takeaways of the case. For details on the facts underlying the case and the terms of the settlement see our companion article “Embraer Uses Sleight-of-Hand Payments to Third-Party Agents to Sell Planes Around the World, Landing It More Than $200M in U.S. Fines” (Nov. 9, 2016).

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  • From Vol. 5 No.22 (Nov. 9, 2016)

    Embraer Uses Sleight-of-Hand Payments to Third-Party Agents to Sell Planes Around the World, Landing It More Than $200M in U.S. Fines

    Embraer, one of Brazil’s leading exporters and the world’s largest manufacturer of mid-size jets, has settled bribery allegations with both the SEC and DOJ related to its use of third-party agents in transactions spanning the globe. According to Karlis Novickis, a regional compliance officer at Whirlpool LatAm based in São Paolo, the fines in this case show that compliance “is one of the best investments” a company can make. In this article, we synthesize the SEC and DOJ’s divergent papers to provide a coherent narrative of how Embraer employees skirted the company’s internal controls. In a companion article in a future issue, we will look at the compliance and enforcement implications of the settlement. 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.21 (Oct. 26, 2016)

    Regional Risk Spotlight: Riyadh-Based Attorney Robert Thoms Talks Formal and Informal Anti-Corruption Control in Saudi Arabia

    With the price of oil down precipitously, Saudi Arabia finds itself in a time of economic change. While the country has recently enacted a significant number of laws and regulations targeting corruption, secrecy around enforcement leaves many companies unsure of what is expected of them. Such confusion is particularly concerning for multinationals doing business with the country’s three largest companies, all of which are at least partially state-owned. The FCPA Report recently spoke with Riyadh-based attorney Robert Thoms, a senior attorney at The Law Firm of Salah Al-Hejailan, to discuss Saudi Arabia’s anti-corruption climate and the many ways the country controls corruption both inside and outside of the legal system. See previously “Regional Risk Spotlight: John Vincent Lonsberg of Baker Botts Helps Untangle the U.A.E.’s Web of Anti-Corruption Laws” (Oct. 21, 2015).

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  • From Vol. 4 No.21 (Oct. 21, 2015)

    Regional Risk Spotlight: John Vincent Lonsberg of Baker Botts Helps Untangle the U.A.E.’s Web of Anti-Corruption Laws

    The Middle East is an increasingly attractive place to do business, particularly for the energy and defense sectors.  It can be tempting to consider the region as a uniform block with the same laws and cultures.  However, local anti-corruption laws can vary drastically from country to country in the area.  The United Arab Emirates is not the largest country in the region, but due to its federal structure, it has one of the most complicated anti-corruption regimes.  Its web of federal laws, local laws and ministry policies can make it difficult for foreign companies to identify anti-corruption risks.  For this installment of the Regional Risk Spotlight series, The FCPA Report spoke with John Vincent Lonsberg, a partner at Baker Botts based in Dubai, who has more than three decades of experience doing business in this part of the world.  Lonsberg discussed, among other things, how the U.A.E.’s conflicts of interest laws and economic offset programs complicate working with local third parties, the difficulties of determining who is a foreign official and changing attitudes towards gift-giving in this wealthy federation.  See “Mitigating Corruption Risk in the Middle East (Part One of Two),” The FCPA Report, Vol. 4, No. 15 (Jul. 22, 2015); Part Two, Vol. 4, No. 16 (Aug. 5, 2015).

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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.15 (Jul. 22, 2015)

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

    The Middle East lures businesses and investors with eye-popping wealth, rich natural resources and an almost insatiable appetite for growth.  But the region presents a panoply of challenges for those wishing to do business there without running afoul of both American and local anti-corruption laws.  A prevalence of state-owned entities and business-minded royal families; laws requiring third-party facilitators in transactions; and a culture that embraces gift-giving are only some of the corruption risks in the region.  These challenges were recently addressed at a Strafford Publications panel featuring 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.  This article series covers some of the insights from the panelists.  This first article addresses the diverse cultural and legal factors that a company needs to be aware of when doing business in the region.  The second article will focus on three specific areas of corruption risk and strategies for mitigating those risks.  See also “Corruption and the Arab Spring: Compliance Implications for International Companies,” The FCPA Report, Vol. 1, No. 4 (Jul. 25, 2012).

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  • From Vol. 4 No.3 (Feb. 4, 2015)

    In Rare DPA, SEC Resolves FCPA Claims with PBSJ over Middle-Eastern Bribes

    Florida-based engineering and construction firm PBSJ Corporation (now the Atkins North America Holding Corporation) has agreed to pay $3.4 million to resolve FCPA claims with the SEC relating to bribes in Qatar and Morocco.  The claims were resolved via a Deferred Prosecution Agreement – an unusual settlement tool for the SEC.  The SEC also settled claims with Walid Hatoum, PBSJ’s former international marketing director, through an administrative proceeding.  We summarize the case and draw compliance lessons.  See also “SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting,” The FCPA Report, Vol. 2, No. 9 (May 1, 2013).

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  • From Vol. 3 No.8 (Apr. 16, 2014)

    Former Special Inspector General for Iraq Reconstruction Discusses Middle East Anti-Corruption Compliance Strategies

    “Oversight under fire” is how Stuart Bowen, who served as Special Inspector General for Iraq Reconstruction from January 2004 through October 2013 and currently serves as a Senior Advisor at the Center for Strategic and International Studies, described his team’s role in discovering and fighting corruption in Iraq during and after the war.  In his remarks to the Momentum Global Anti-Corruption Congress in Washington, D.C. in March, he discussed the lessons learned from those successes and provided advice to American companies looking to do business in the region.  Bowen also emphasized the need for reform in how the U.S. manages its stabilization and reconstruction efforts in areas of military conflict.

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  • From Vol. 3 No.3 (Feb. 5, 2014)

    Gibson Dunn Attorneys Take the Pulse of Anti-Corruption Risks in Emerging Markets

    The anti-corruption enforcement landscape is changing and emerging markets, with their endemic cultures of corruption and vast economic opportunity for many multi-national companies, are at the forefront of that change.  Many are implementing and enforcing their own laws, but the deep-seated risks of corruption still exist.  A recent panel of emerging market experts from Gibson Dunn & Crutcher LLP highlighted the current anti-corruption initiatives and trends in key foreign markets.  The presentation, “FCPA Trends in the Emerging Markets of China, the Middle East and Africa, Russia and India,” featured Gibson Dunn partners F. Joseph Warin, Benno Schwarz, Kelly S. Austin and Peter Gray.  See also “Lessons from the Latest Anti-Corruption Developments in the U.K., Brazil and China,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 2 No.18 (Sep. 11, 2013)

    Anti-Corruption Professionals from GE, Abbott Laboratories and Navistar Share Proven Strategies on Third-Party Due Diligence, M&A, Training, Nepotism and Regional Risk

    Anti-corruption compliance can feel like a battlefield, with potential landmines at every turn.  But what do practicing in-house compliance professionals view as their biggest challenges?  What issues keep them up at night?  And, most importantly, what have they done to address those issues?  In a panel hosted by the American Conference Institute, three in-house compliance experts shared their practical experience.  They discussed specific challenges they have faced and outlined the strategies they used to effectively address those challenges.  The expert panelists included Matthew Hsu, Senior Counsel, Global Fraud and Anti-Corruption at Abbott Laboratories; Shannon Masson, Senior Counsel at Navistar, Inc.; and Kevin Matthews, Associate General Counsel at GE Oil and Gas.  See also “Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).

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  • From Vol. 1 No.4 (Jul. 25, 2012)

    Corruption and the Arab Spring: Compliance Implications for International Companies

    To paraphrase Mao, a revolution, not being a dinner party, is a messy and unpredictable affair with winners and losers emerging in chaotic and sometimes haphazard fashion.  For international investors and businesses, the prospects are rarely bright, at least in the near term.  Foreign commercial interests were notable losers in some of the last century’s most important revolutions.  During the Russian Revolution, foreign investors lost their wallets; in Cuba, Americans lost their sugar and their casinos; and after the Islamic revolution in Iran, international oil companies lost their wells.  The recent wave of Arab Spring upheavals that continues to ripple across the southern and eastern shores of the Mediterranean may present the threats common to foreign businesses caught in the midst of revolution, including extortion, nationalization, expropriation, and physical violence against executives and employees.  These modern revolutions also pose new challenges to international firms, as evidence or allegations that they engaged in corrupt behavior may be made public through documents in a ransacked government ministry building, or through an incarcerated former official, an enterprising journalist or prosecutor in the new regime, or a whistleblower within the foreign company itself.  If such allegations come to the attention of U.S. authorities or other governments, the company could face severe criminal and civil penalties for violations of the FCPA, the U.K. Bribery Act, and similar anti-corruption laws, in addition to significant business ramifications.  In a guest article, Peter B. Clark and Bradley J. Bondi, both partners at Cadwalader Wickersham & Taft LLP, and James A. Treanor, an associate at Cadwalader, provide a comprehensive discussion of the corruption risks companies face in the Middle East, North Africa and elsewhere in the world; summarize noteworthy FCPA enforcement actions involving the Middle East and North Africa; and detail strategies companies can employ to protect themselves from the Arab Spring fallout.

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