In the first article of a multi-part series in Anti-Corruption Report examining the Deferred Prosecution Agreement between the Department of Justice and Scoular, White Collar Crime & Government Investigations Group Co-Chair Adam Safwat broke down the significance of the settlement and what it may signal for DOJ's Foreign Corrupt Practices Act (FCPA) enforcement going forward.
The Scoular settlement illustrates DOJ's 2025 guidance on FCPA violations that potentially involve cartels or transnational criminal organizations. Safwat noted that it sends a signal to companies about FCPA enforcement: "[DOJ] sent a warning that the existence of indirect payments through a company's intermediaries to affiliates of cartels and TCOs – even without the knowledge of the company itself – will result in DOJ treating an FCPA violation as serious and worthy of prosecution under its current FCPA policy."
Yet despite the settlement and the greater emphasis on trans-border commerce with Mexico forcing companies to "significantly upscale their third-party due diligence and diligence on their operations," Safwat expressed concern that DOJ had "not defined how a company is expected to investigate all the possible permutations in its lines of commerce and supply chains to understand where TCOs may be operating."
As a result, Safwat said companies should pay particular attention to their supply chains and interactions with third parties: "Companies need to do a deep dive and understand where the weaknesses are in the flow of commerce for their goods and services that cartels can exploit."
Read the first part in the Anti-Corruption Report mini-series here.