The FCPA: Two New Record Settlements Serve As a Reminder To Carefully Monitor Practices
The renewed emphasis on enforcement of the Foreign Corrupt Practices Act (FCPA or the Act) by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) recently resulted in two record-breaking settlements — a warning that should be heeded by all companies doing business abroad. Siemens AG and three of its subsidiaries agreed to pay the largest amount ever ($1.6 billion) to authorities in the U.S. and abroad in a settlement with DOJ, the Munich Public Prosecutor's Office, and the SEC. Shortly thereafter, former Halliburton Company subsidiary Kellogg Brown & Root LLC agreed to pay $560 million in settlements to DOJ making the largest combined FCPA settlement paid by U.S. companies. Spokespersons for the DOJ and the FBI emphasized that the Act is a key area of emphasis and warned that they will continue to work with enforcement authorities around the globe to root out violations.
As set forth in the attached Law Alert, companies doing business abroad (including those acting through subsidiaries or joint ventures) should consider the following steps to reduce the risk of liability: (1) establishing and consistently applying effective compliance procedures; (2) making periodic education of employees a priority; (3) engaging in careful assessment of "country risk"; and (4) conduction thorough due diligence when hiring agents and completing mergers.