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Foreign Corrupt Practices Act and UK Bribery Act OSB Corporate Counsel and Business Law Sections Corporate Compliance Roundtable April 26, 2012. Alex M. Duarte OSB No. 020459 Alex.Duarte@stanfordalumni.org . Key Anti-Bribery/Anti-Corruption Laws . US Foreign Corrupt Practices Act.
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Foreign Corrupt Practices Act and UK Bribery ActOSB Corporate Counsel and Business Law Sections Corporate Compliance Roundtable April 26, 2012
Alex M. Duarte
OSB No. 020459
US Foreign Corrupt Practices Act
UK Bribery Act 2010
Most other countries have their own anti-corruption laws
FCPA (15 USC §§ 78dd-1, et seq.) generally prohibits
FCPA also prohibits
DOJ (Department of Justice) enforces this part of FCPA
“Anything of value”
Anything of value (cont.)
Broad interpretations, and includes:
Narrow Exceptions and Defenses
The FCPA requires a corporation to:
Penalties can be severe (corporations/individuals)
$3 billion since 2009)
FINES US: Corporation = 2x profit
Individual = $100K per violation
PRISON US: Up to 5 years/violation
UK: Up to 10 years
The past four years have seen the 11 largest FCPA settlements, totaling more than $3 billion from 11 companies
Costs of FCPA InvestigationsCompanies are devoting significant resources (attorneys and accountant fees) associated with FCPA investigations (often much more than the amount of bribe)
Broader than FCPA:
Country- country known for corruption (“BRIC” countries)
Agent and Governmental/Public Official Red Flags
Compensation and Invoice Documentation Red Flags
1. New Zealand
16. United Kingdom
24. United States
57. Czech Republic
Last Sunday- blockbuster article in the New York Times about a $24 million bribery scandal by Wal-Mart’s Mexican subsidiary
DOJ and SEC now investigating- this won’t be the last you have heard about Wal-Mart de Mexico and FCPA/anti-corruption
Fines and penalties- possibly tens/hundreds of millions of dollars?
Moral (learned from Watergate)- Cover-up is worse than the crime