FCPA

On February 19, 2016, the UK Serious Fraud Office (SFO) convicted Sweett Group plc (Sweett), a London-based construction and professional services company, under Section 7 of the UK Bribery Act. This is the first conviction under Section 7, which requires companies to prevent bribery in the course of business, and the penalty imposed against Sweett – the company had to pay a total of GBP 2.25 million – was minimal in the context of penalties paid under the U.S. Foreign Corrupt Practices Act (FCPA). Yet this action provides further evidence that the SFO may really be able to meaningfully enforce the Bribery Act.

Under Section 7 of the Bribery Act, a company can be found liable if it – or any associated person, subsidiary or entity, anywhere in the world – engages in bribery with the intention of obtaining or retaining business or some sort of commercial advantage. Liability can be established even if company management does not authorize or encourage, and is not even aware of, the illicit conduct. (While a company will have a full defense if it can show that it maintained adequate procedures to prevent bribery, as appears evident from the resolution in this matter, Sweett was unable to present such a defense.)

According to news reports, the SFO began investigating Sweett, which is listed on the Alternative Investment Market (or AIM) in London, in July 2014. Through its investigation, the SFO found that a Sweett subsidiary in the United Arab Emirates (UAE), Cyril Sweett International Limited (Cyril), had made corrupt payments to the Vice Chairman of Al Ain Ahlia Insurance Company (AAAI) to help secure a contract to build a hotel in Abu Dhabi. After pleading guilty in December 2015, Sweett was ordered to pay a GBP 1.4 million fine, a GBP 851,152 confiscation amount and GBP 95,000 in SFO prosecution costs.

The SFO reportedly is continuing its investigation of individuals involved in the scheme.

Lessons Learned. We derive several interesting lessons from this action.Continue Reading SFO Convicts UK Company for Middle East Bribery

On August 18, the Bank of New York Mellon Corporation (BNY Mellon) agreed to pay $14.8 million to settle allegations that it had violated the U.S. Foreign Corrupt Practices Act (FCPA) by providing internships to family members of foreign officials affiliated with a Middle Eastern sovereign wealth fund the bank sought to manage.

According to the settlement order, which is available here, BNY Mellon provided the internships at the request of the foreign officials, even though the prospective interns failed to meet the bank’s hiring criteria and were less than exemplary employees. In so doing, the bank violated the FCPA’s anti-bribery provisions and demonstrated that it lacked internal controls sufficient to ensure its hiring process would not be used to improperly obtain or retain business.

This settlement highlights two essential FCPA-compliance points.Continue Reading When Intern Season Gets Hot: the Perils of Improper Hiring Under the FCPA

I recently co-authored an article with my colleagues John Kelly, Bryan King and Robert Platt discussing the vital steps that government contractors should take when conducting an internal investigation. As outlined in the article,  the following measures are key components of any internal investigation:

  1. Assembling an appropriate investigation team
  2. Preserving privilege
  3. Preparing an investigation

…

On June 16, the U.S. Justice Department (DOJ) announced that it had concluded a non-prosecution agreement (NPA) with IAP Worldwide Services, Inc., a Florida-based government contractor, related to apparent violations of the Foreign Corrupt Practices Act (FCPA). DOJ also announced that a former vice president of IAP pleaded guilty to conspiracy to violate the FCPA. IAP agreed to pay more than $7 million to resolve the matter; sentencing for the former vice president is scheduled for September 2015.

Background. IAP provides facilities management, contingency operations, and professional and technical services in contracting capacities to U.S. and non-U.S. governments. According to DOJ, the violations occurred in connection with a surveillance program the government of Kuwait sought to develop. An agent of IAP contracted with the Kuwaiti government to perform services under the first phase of the program. DOJ alleged that, when the agent was paid for its services, it transferred money to IAP, which in turn steered funds to a Kuwaiti company to kickback to Kuwaiti government officials.Continue Reading Government Contractor Fined for FCPA Violations; Former VP Enters Guilty Plea

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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