The Foreign Corrupt Practices Act (FCPA) spotlight on the Asia-Pacific region did not dim in 2024, as eight of nine Securities & Exchange Commission (SEC) actions were aimed squarely at corporate conduct in the Asia-Pacific region. Additionally, seven out of 17 actions by the US Department of Justice (DOJ) were linked to the region. In fact, the largest enforcement action in 2024 involved an Asia-Pacific country, resulting in a USD 220 million settlement with DOJ and SEC. By region, the majority of ongoing investigations at the close of 2024 cited misconduct in Asia.
This report begins with four FCPA enforcement actions against corporations that underscore the critical need for strong compliance programs, diligent vetting of third-party relationships, and a robust corporate culture that opposes unethical practices. Investigations of individuals continue, with the SEC initiating a rare individual enforcement. Recent statutory, regulatory, and policy developments are expected to influence how bribery cases are investigated and prosecuted in 2025 and beyond.
1. SAP SE
On January 10, 2024, SAP agreed to pay over USD 220 million to settle FCPA violations with the SEC and DOJ, pursuant to a three-year deferred prosecution agreement (DPA). From 2013 to 2022, SAP employed third-party intermediaries and consultants to pay bribes to government officials to obtain business in South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan. The bribery involved cash payments, political contributions, luxury goods, and shopping trips for government officials and their families.
Takeaway: In case you missed it, vetting third parties and monitoring third-party messaging applications are important. SAP's subsidiary in Indonesia worked with a reseller "known for a pattern of corrupt business dealings." Subsidiary employees discussed bribery schemes with the reseller using WhatsApp. DOJ granted a 40% penalty reduction for SAP's prompt cooperation and remediation. However, also discussed SAP's 2016 non-prosecution agreement (NPA) and 2021 settlement with DOJ, the US Department of Commerce, and the US Department of the Treasury for export violations.
2. AAR Corp.
On December 19, 2024, DOJ and SEC announced that AAR, an Illinois-based aviation services company, would pay over USD 55 million to settle FCPA allegations under an 18-month NPA. Two AAR executives, from a subsidiary and a joint venture, were accused of conspiring to bribe officials in order to secure contracts with two state-owned airlines: Nepal Airlines and South African Airways.
Takeaway: In a November 22, 2024 blog post, DOJ clarified that to qualify for voluntary self-disclosure credit, a company must disclose original information that the department is unaware of. In this case, media reports had already brought attention to alleged misconduct in Nepal and South Africa, and an independent source informed DOJ about the activities in Nepal just 12 days before AAR's self-disclosure.
3. Deere & Company
On September 10, 2024, Deere, a global manufacturer of agricultural machinery and heavy equipment, agreed to pay nearly USD 10 million to settle SEC FCPA charges. Between 2017 and 2020, employees at Deere's subsidiary, Wirtgen Thailand, bribed government officials from the Royal Thai Air Force, the Department of Highways, and the Department of Rural Roads to secure multiple government contracts. They also bribed employees of a private company to boost sales. The parent company, inaccurately recorded these improper payments as legitimate expenses in its financial records.
Takeaway: Multinational corporations must integrate newly acquired subsidiaries into their existing internal control systems. Wirtgen became a wholly owned subsidiary of Deere in December 2017, but Deere had not fully integrated Wirtgen Thailand into its compliance program and overall control environment. Although Deere did not knowingly participate in the bribery scheme, the SEC charged the parent with FCPA's books and records violations.
4. Moog Inc.
On October 11, 2024, Moog, a US-based global manufacturer of motion control systems, agreed to pay USD 1.1 million to settle FCPA violations with the SEC. From 2020 through 2022, employees of Moog's Indian subsidiary bribed various Indian officials to secure business. They employed multiple schemes for these improper payments, including routing funds through third-party agents and distributors.
Takeaway: This case underscores the significance of corporate culture, and leadership tone. The SEC pointed out that the subsidiary's employees openly discussed their misconduct, revealing a culture driven by the pursuit of business at any cost.
5. BIT Mining Ltd.
On November 18, 2024, BIT Mining, a cryptocurrency mining company, agreed to pay USD 4 million to the SEC and USD 10 million to DOJ to settle FCPA violations. Between 2017 and 2019, the company bribed various foreign officials, including members of Japan's parliament, in an ultimately unsuccessful attempt to establish a resort casino. BIT Mining abandoned this endeavor upon learning of the scheme.
Takeaway: The DPA with BIT Mining, the indictment of its former CEO, and the SEC's concurrent penalties illustrate both DOJ's and SEC's commitment to hold corporations and individuals accountable.
6. Zhengming Pan
On June 18, 2024, the former CEO of BIT Mining, Zhengming Pan, was indicted for FCPA violations. Pan allegedly directed company consultants to pay nearly USD 2 million to Japanese government officials to secure the casino resort bid. These payments were reportedly concealed through sham consulting contracts and included bribes in the form of cash, travel, entertainment, and gifts.
7. Ongoing Investigations
Cyril Cabanes, et al.: On October 24, 2024, DOJ indicted Cyril Cabanes and three other individuals for their roles in a bribery scheme involving over USD 250 million in payments to Indian officials. This scheme allegedly aimed to secure above-market energy purchase agreements, enabling two India-based companies to generate over USD 2 billion in profits after tax over approximately 20 years. Additionally, on November 20, 2024, the SEC charged Cabanes with FCPA violations related to the same matter.
Roger Alejandro Piñate Martinez and Jorge Miguel Vasquez: On August 8, 2024, DOJ charged two individuals for allegedly conspiring to bribe Juan Andres Donato Bautista, the former chairman of an independent agency overseeing election laws in the Philippines, with FCPA violations. Bautista, along with Elie Moreno, a Smartmatic executive based in the Philippines at the time, was also charged in the same indictment with violations of US anti-money laundering laws. Between May 2015 and February 2018, these two individuals allegedly conspired to pay around USD 1 million in bribes to Bautista to obtain three USD 182 million contracts to supply voting machines for the 2016 Philippine elections.
8. Closure
LM Ericsson Telephone Company: On June 3, 2024, Ericsson announced the conclusion of its FCPA monitorship, and on September 26, 2024, the SEC notified Ericsson that it would not pursue additional enforcement action for its conduct in Iraq. Ericsson's FCPA situation has been discussed in previous editions of this Top Ten report since 2019. See 2019, 2022, 2023.
9. DOJ Whistleblower and Clawback Pilot Programs
On August 1, 2024, DOJ launched its pilot program to enhance support for whistleblowers by providing rewards that build on the existing SEC whistleblower initiatives. This program aims to encourage individuals to report misconduct. Shortly thereafter, on September 23, 2024, DOJ announced significant updates to its Evaluation of Corporate Compliance Programs (ECCP). These updates are designed to offer guidance for both DOJ and corporations, outlining best practices for the design and implementation of effective compliance programs. In a subsequent blog post dated November 22, 2024, DOJ highlighted the positive impact of the ECCP's "Compensation Incentives and Clawbacks Pilot Program" on corporate compliance efforts.
10. Going After "Demand-Side" Bribery by Foreign Officials
In July 2024, Congress passed the Foreign Extortion Prevention Technical Corrections Act (FEPTCA) to amend the 2023 Foreign Extortion Prevention Act (FEPA), which holds "senior foreign political officials" liable for seeking or accepting bribes. Among other amendments, FEPTCA added parallel SEC jurisdiction.
Conclusion
Although concerns have arisen about a potential decline in FCPA enforcement efforts under the second Trump administration, it is unlikely that we will see an immediate decrease in enforcement. FCPA investigations can take years to resolve, ensuring that many cases will continue to be addressed regardless of changes in enforcement priorities, much like what we observed during the first Trump administration.
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