United States: Top Ten International Anti-Corruption Developments For February 2017

In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: What is the latest guidance from the Department of Justice (DOJ) on corporate compliance programs? What did a newly-appointed DOJ official say about the future of FCPA enforcement efforts? What was the outcome of a foreign bribery prosecution in Canada? The answers to these questions and more are here in our February 2017 Top Ten list.

1. DOJ Publishes New Guidance on Evaluating Corporate Compliance Programs.

On February 8, 2017, DOJ's Fraud Section published an "Evaluation of Corporate Compliance Programs." The stated purpose of the guidance is to provide a list of "some important topics and sample questions that the Fraud Section has frequently found relevant in evaluating a corporate compliance program." The guidance provides a list of 11 topics that DOJ finds relevant in assessing the effectiveness of compliance programs when undertaking an investigation. The list includes such topics as Analysis and Remediation of Underlying Misconduct; Senior and Middle Management; Confidential Reporting and Investigation; and Incentives and Disciplinary Measures. The guidance contains 119 specific questions a prosecutor might ask in the context of an investigation, for example, "[h]as the company reviewed and audited its compliance program in the area relating to the misconduct, including testing of relevant controls, collection and analysis of compliance data, and interviews of employees and third-parties?" The guidance focuses not just on remediation procedures in the context of misconduct, but also relevant policies and procedures and their operation prior to any misconduct having occurred. As such, it can provide useful direction for companies not only undertaking or responding to investigations but also designing or enhancing compliance programs, or simply wishing to benchmark an existing compliance program against the government's expectations. This is the first guidance publicly issued by the Fraud Section since President Trump took office. The content is consistent with prior guidance, such as the factors listed in the FCPA Resource Guide and Pilot Program, and also reflects the influence of the Fraud Section's Compliance Counsel, Hui Chen.

2. Former Executive of Hungary-Based Telecom Company Resolves FCPA Claims with SEC.

On February 8, 2017, Tamas Morvai, a former executive of Magyar Telekom Plc, agreed to pay a $60,000 civil penalty to settle civil FCPA charges brought against him and two other Magyar Telekom executives in 2011. According to the SEC complaint, Morvai, along with Elek Straub and Andras Balogh, violated the FCPA by authorizing €4.875 million in bribes to Macedonian officials in 2005 and 2006 to prevent the introduction of a competitor to the Macedonian telecommunications market and to receive other regulatory benefits. In September 2016, Southern District of New York Judge Richard J. Sullivan rejected the defendants' claim that SEC had failed to allege a sufficient jurisdictional nexus for the charges, ruling that the defendants' actions in connection with Magyar Telekom's EDGAR filings satisfied the FCPA's jurisdictional requirements. In reaching the settlement, Morvai neither admitted nor denied the allegations. Straub and Balogh are scheduled to begin trial on May 8, 2017. In 2011, Magyar Telekom resolved related allegations with SEC and DOJ by agreeing to pay $31.2 million in disgorgement and prejudgment interest and a $59.6 million criminal penalty.

3. Fugitive in Haiti Teleco Case Appears in Miami Federal Court.

On February 24, 2017, Amadeus Richers, the former general manager of Miami-based Cinergy Telecommunications, appeared in the Southern District of Florida to answer to FCPA and money laundering charges brought against him in a January 2012 superseding indictment. Richers and two other former Cinergy executives, Washington Vasconez Cruz and Cecilia Zurita, are accused of paying bribes to a series of Haitian officials in order to receive favorable treatment from Teleco, the state-owned and state-controlled telecommunications company of Haiti. All three have been considered fugitives since they were first charged in July 2011. The circumstances of Richers' arrest were not readily apparent on the face of the docket. In March 2012, a Miami federal jury convicted former Teleco official Jean Rene Duperval of laundering bribes that he received from Cinergy and another Miami-based telecommunications company in exchange for various benefits, including reduced telecommunication rates. The Supreme Court denied Duperval's petition for certiorari in January 2016. Eight other individuals were also convicted in connection with the Haiti Teleco investigation.

4. Austrian Appeals Court Approves Extradition of Ukrainian Billionaire to United States in Connection with India FCPA Allegations.

On February 21, 2017, an Austrian appeals court approved the extradition of Dmitry Firtash to the United States to face accusations that he conspired to pay at least $18.5 million in bribes to government officials in India to allow the mining of titanium minerals, in violation of the FCPA and other statutes. The decision reverses an April 2015 lower court ruling that extradition was improper because the charging decision was politically motivated. Firtash was indicted in 2013 in the Northern District of Illinois and was arrested in 2014 in Vienna, where he has resided ever since. Shortly after the appellate court decision, Firtash was taken into custody on a European arrest warrant related to a separate request by Spain, apparently on money laundering charges. Firtash's arrest on the second warrant raises the possibility that he may be extradited to Spain rather than to the United States.

5. Texas-Based Oil Exploration Company Announces DOJ Declination in Angolan FCPA Investigation.

On February 9, 2017, Cobalt International Energy, Inc. issued a press release announcing that it received a letter from DOJ advising that the Department had closed its FCPA investigation into the company's Angola operations. The investigation, along with a related SEC investigation, began in 2011 following allegations of a connection between senior Angolan officials and two Angola-based companies assigned to Cobalt's exploration group in Angola. Despite having received a Wells Notice in August 2014, Cobalt announced in January 2015 that it had received a termination letter from SEC.

6. Jury Awards Life Sciences Company's Former General Counsel nearly $11 Million in Whistleblower Retaliation Suit.

On February 3, 2017, a jury in the Northern District of California found that Bio-Rad Laboratories, Inc. violated the Sarbanes-Oxley Act's whistleblower protections when it fired its former general counsel, Sanford Wadler, for reporting possible FCPA violations. According to Wadler's June 2015 retaliation complaint, Wadler reported to the company's audit committee in 2013 that he suspected the company had violated the FCPA in China. He was fired later that year. Wadler argued that he was fired for blowing the whistle, while the company argued he would have been fired anyway due to frequent outbursts, a lack of understanding of the company's operations in China, and poor FCPA compliance in general. The jury agreed with Wadler, finding that his report to the board was protected whistleblower activity and was a substantial motivating reason for his termination. The jury awarded Wadler $2.9 million in back pay and stock compensation, and another $5 million in punitive damages. Because back pay damages are doubled, the total award amounted to $10.8 million. Prior to trial, United States Magistrate Judge Joseph Spero rejected the company's October 2016 motion to exclude evidence and testimony by Wadler on the grounds that his claims are "inextricably intertwined" with its privileged and confidential information.

7. Foreign Bribery Prosecution Ends in Acquittals in Canada.

On February 10, 2017, two former SNC-Lavalin executives and a Bangladeshi-Canadian businessman were acquitted in Ontario Superior Court of charges that they had violated the Corruption of Foreign Public Officials Act by scheming to bribe Bangladeshi officials in connection with a multibillion-dollar contract to build the Padma Multipurpose Bridge. In January 2017, the Superior Court excluded evidence derived from a wiretap that the Royal Canadian Mountain Police had obtained based on information provided by the World Bank, which the court found amounted to uncorroborated speculation, gossip, and rumor. The prosecution elected to present no other evidence against the defendants, resulting in their acquittals. In 2014, the same Superior Court justice had ordered the World Bank to produce its investigative file in connection with the defendants' motion challenging the wiretap. That order was reversed by the Canadian Supreme Court in April 2016 in a strongly worded opinion extolling the importance of cooperation between the World Bank and national law enforcement authorities. Canadian prosecutors had previously dropped charges against two other defendants. Although clearly a setback to Canada's foreign bribery enforcement efforts, Canadian prosecutors were successful in their first ever COFPA prosecution, securing the conviction of Nazir Karigar in 2013 for plotting to bribe Indian officials to win a contract to provide security technology to a state-owned airline.

8. "Panama Papers" Lawyers Arrested in Panama.

On February 9, 2017, Panamian authorities reportedly raided the offices of Mossack-Fonseca, the law firm at the center of the Panama Papers controversy, and on February 11, 2017, reportedly arrested the name partners of the firm. Jurgen Mossack and Ramon Fonseca were taken into custody and formally detained in Panama City on money laundering charges related to "Operation Car Wash," a sweeping investigation into alleged bribery involving Brazil's state-owned oil company, Petróleo Brasileiro S.A. ("Petrobras"). Panama's Attorney General reportedly highlighted that the one-year investigation that led to the arrests has been aided by prosecutors in Brazil, Colombia, Ecuador, Peru, Switzerland, and the United States, demonstrating the continued international reach of what began as a domestic corruption investigation in Brazil.

9. New Deputy Assistant Attorney General Discusses the "Continuity and Evolution" of FCPA Enforcement.

On February 16, 2017, Trevor McFadden, the newly appointed deputy assistant attorney general (DAAG) of DOJ's Criminal Division, delivered keynote remarks at a conference in Washington, DC, in which he "highlight[ed] the continuity and evolution" of FCPA enforcement. After tracing the history of FCPA enforcement through the 1980s and 1990s, McFadden, likely seeking to underscore the bipartisan nature of FCPA enforcement, noted that the "most robust period of FCPA enforcement" began under President George W. Bush and continued under President Barack Obama. McFadden also stressed the institutionalized nature of FCPA enforcement, pointing to DOJ's FCPA Unit (which he noted had grown to 31 attorneys since its formation in 2005), the FBI's dedicated FCPA squads, and increased international cooperation. McFadden made three points regarding the future of FCPA enforcement: (1) Attorney General Sessions has said that DOJ will continue to enforce the FCPA and corruption laws generally; (2) Attorney General Sessions has said that DOJ will continue to hold individuals accountable, meaning that DOJ will continue to prosecute individuals for FCPA violations; and (3) three mitigating factors—self-disclosure, cooperation, and remediation—will continue to guide DOJ's prosecution decisions and its efforts to further compliance goals. Although President Trump has yet to nominate anyone to lead the Criminal Division, McFadden's responsibilities as DAAG include oversight of the Criminal Division's Fraud Section, which has sole jurisdiction over criminal FCPA enforcement. For those wondering what FCPA enforcement will look like under the Trump administration, McFadden's remarks provide at least one data point suggesting that FCPA enforcement may change at the margins but is unlikely to go away.

10. SEC Resource Extraction Disclosure Rules Repealed.

On February 14, 2017, President Trump signed into law a joint resolution of Congress that vacated SEC's rules requiring resource extraction disclosures. The rules, mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and announced by SEC in June 2016, required resource extraction issuers to disclose payments made to governments for the commercial development of oil, natural gas, or minerals. (An earlier version of the rules was vacated in 2013 by the U.S. District Court for the District of Columbia.) The rules, similar to Canada's Extractive Sector Transparency Measures Act (see our client alert) and several European initiatives, were designed to increase transparency and decrease corruption in the extractive industry. Critics argued that the rules went beyond SEC's core mission and put American companies at a disadvantage. During a February 24, 2017 speech, SEC Acting Chairman Michael S. Piwowar said that he had asked the SEC staff "to take a fresh look at the rule mandate to determine how we can comply with our statutory obligations in a manner that better aligns with our core mission."

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

James M. Koukios
Duncan Grieve
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.