Vigorous Enforcement Continues
The Department of Justice (DOJ) and the Securities Exchange Commission (SEC) continue to vigorously enforce the Foreign Corrupt Practices Act (FCPA). During the last year, the agencies brought enforcement actions against a number of U.S. and foreign companies, including companies in the oil and oilfield services businesses, a medical device manufacturer, a pharmaceutical company, an electronics company and a clothing manufacturer. In addition to the settled cases, it is believed that there are at least 100 companies that are currently under investigation by the DOJ and SEC for FCPA violations.
The DOJ has also continued to pursue criminal prosecutions of executives and others actively involved in bribery schemes, with 14 individuals charged during the last year. These prosecutions are consistent with the DOJ's stated goal to ensure that business leaders understand that a bribery prosecution against their business could lead to a prison sentence and should not be regarded as a mere cost of doing business.
Prosecution of a Food Processor
In one of the most recent settlements, on Dec. 20, 2013, the DOJ and SEC announced a settlement with global food processor Archer-Daniels Midland Company (ADM) for FCPA violations involving bribes to government officials in Ukraine to speed up tax refunds. The government's settlement documents indicate that ADM subsidiaries in Germany and Ukraine paid $21 million in bribes through intermediaries to secure the release of value-added tax refunds. The ADM businesses then sought to conceal the payments by falsely recording them as insurance premiums and other business transactions, according to the SEC. ADM's Ukrainian subsidiary plead guilty to a criminal violation of the FCPA and paid a criminal fine of $17.8 million while ADM signed a non-prosecution agreement admitting it failed to have adequate internal controls needed to prevent bribery in Ukraine. ADM paid an additional $36.5 million to resolve SEC charges for failing to prevent the illicit payments.
The DOJ and SEC said they took into account ADM's cooperation and "significant remedial measures, including self-reporting, implementing a comprehensive new compliance program, and terminating employees involved in the misconduct." The agencies have repeatedly emphasized that a company discovering misconduct should self-report the misconduct and take real steps to prevent a recurrence if they hope for leniency from the agencies.
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