FCPA/Anti-Bribery Alert

561 Pages·2016·6.37 MB·English

by  Houidi, Ismail

Fall 2016
alert
FCPA & Anti-Bribery
Hughes Hubbard & Reed LLP
A New York Limited Liability Partnership • One Battery Park Plaza
New York, New York 10004-1482 • [phone]
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FCPA & Anti-Bribery Alert

Hughes Hubbard & Reed LLP
Fall 2016

For a free download of our complete and unabridged
FCPA & Anti-Bribery Fall 2016 Alert, including summaries of every
FCPA settlement and criminal matter since 2005, pleasevisit our

website: www.hugheshubbard.com

Hughes Hubbard & Reed LLP

INTRODUCTION
I am pleased to share with you the latest edition of our FCPA & Anti-Bribery Alert.
This Alert begins with a short overview of Trends & Lessons (Chapter 1), and then discusses
select international Focus Issues (Chapter 2). For example, the Focus on U.S. Enforcement Guidance
discusses the Yates Memorandum and the new FCPA Pilot Program, while the Focus on Brazil surveys
the status of Operation Car Wash and other Brazilian anti-corruption investigations, which have already
resulted in over 1,000 separate legal proceedings against both individuals and companies, and which
continues to unfold. The Focus on China describes Chinese efforts to inspect SOEs and encourage
whistleblowers, provides an update on Operation Fox Hunt and Operation Sky Net, and explores
legislative and regulatory developments. The Focus on Norway explores Norwegian anti-corruption
enforcement developments, including ØKOKRIM enforcement actions.
Chapter 3 continues our tradition of providing narrative summaries of each FCPA enforcement
action or criminal matter organized alphabetically by year. Our Alert sets out the published facts that
have led to settlements and criminal matters to help readers understand the circumstances and apparent
compliance program failures that lead to enforcement actions. Chapter 4 discusses developments
related to the U.K. Bribery Act, including U.K. enforcement actions of note. In Chapter 5, we explore the
role of multilateral development banks in the international anti-corruption enforcement environment.
These are just some of the highlights contained in this Alert. As always, the full, 500-page
version is freely available for download from our website (www.hugheshubbard.com), and contains (i)
descriptions of all FCPA settlements and criminal matters from 2005 through 2016 (including recent
updates), (ii) a discussion of other FCPA and related developments, and (iii) a summary of each DOJ
Review and Opinion Procedure Release issued from 1980-present. For more information about the
matters discussed in this Alert or our Anti-Corruption and Internal Investigations practice generally, please
contact me or any member of our Practice Group.
Sincerely,

Kevin T. Abikoff
Chairman, Anti-Corruption and Internal Investigations Practice Group
[phone] / [phone]
[email protected]

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ANTI-CORRUPTION AND INTERNAL INVESTIGATIONS PRACTICE GROUP
PARTNERS COUNSEL
Kevin T. Abikoff Benjamin S. Britz
[phone] [phone] / [email protected]
[email protected]
Steven S. DiCesare
Derek J.T. Adler [phone] / [email protected]
[phone]
[email protected] Daniel J. McLaughlin
[phone] / [email protected]
Charles W. Cohen
[phone] Sean M. Reilly
[email protected] [phone] / [email protected]
F. Amanda DeBusk Michael R. Silverman
[phone] [phone] / [email protected]
[email protected]
Marc Henry ASSOCIATES & INTERNATIONAL SPECIALISTS
[phone]
Ayoka Akinosi Clinton T. Lipscomb
[email protected]
Ernesto J. Alvarado Calvin K. Liu
Michael H. Huneke
Rayhan Asat Diogo Santana Lopes
[phone]
Ya’ara Z. Barnoon Katie Gerlach Merrill
[email protected]
Justin Ben-Asher Jonathan Misk
Edward J.M. Little
Gil Ben-Ezra Robby Naoufal
[phone]
[email protected] Richard Bosch Marie-Agnès Nicolas
Salim Saud Neto Megan Buckley Miles Orton
[phone] / [email protected] Alejo R.S. Cabranes N. Tien Pham
Saud Advogados, Rio de Janeiro, Brazil Kyden Creekpaum Mathilde Pardoux
In strategic cooperation with Hughes Hubbard & Reed
Michael A. DeBernardis Marion Patard
Neil J. Oxford
Casey Duffy Debbie Placid
[phone]
Jan Dunin-Wasowicz Landon D. Reid
[email protected]
Clémentine Foizel Mathieu Rossignol
Elizabeth Prewitt
Stephen A. Fowler Melissa Saldana
[phone]
Anne Hukkelaas Gaustad Samuel Salyer
[email protected]
Jaclyn M. Genchi Felipe Rocha Dos Santos
Bryan J. Sillaman
Chloe Gouache Yoshinori Sasao
[phone]
[email protected] Jiaxing Hao Thomas Sisson
Nicolas Swerdloff Ashley R. Hodges Markus A. Stadler
[phone] Elizabeth D. Houghton Jennifer Suh
[email protected]
Maureen A. Howley Joann M. Velez
George A. Tsougarakis Austen Ishii Adam Weinstein
[phone]
Sigrid Jernudd Cindy K. Zapata
[email protected]
Robert Kolick Mei Li Zhen
Marc A. Weinstein
Tamara Kraljic Jonathan Zygielbaum
[phone]
Elena Linde
[email protected]

John F. Wood
[phone]
[email protected]
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Hughes Hubbard & Reed LLP

TABLE OF CONTENTS
CHAPTER 1: TRENDS & LESSONS ........................................................................................................ 1
I. Enforcement Trends............................................................................................................ 1
II. Lessons from Enforcement Activity ..................................................................................... 6
CHAPTER 2: FOCUS ISSUES ............................................................................................................... 11
I. Focus on New U.S. Enforcement Guidance ..................................................................... 11
A. Yates Memorandum ............................................................................................. 11
B. Pilot Program for Voluntary Disclosure of FCPA Violations................................. 13
II. Focus on Brazil ................................................................................................................. 17
A. Anti-Corruption Enforcement ............................................................................... 17
1. Operation Car Wash ............................................................................... 17
2. Operation Zelotes ................................................................................... 20
3. Operation Black Blood ............................................................................ 21
B. Anti-Corruption Laws ........................................................................................... 22
1. New Regulations (2015) ......................................................................... 22
2. Court Interpretation and Enforcement Policy .......................................... 24
III. Focus on China ................................................................................................................. 24
A. CCDI Initiatives to Detect Public Corruption ........................................................ 25
1. Inspections of State-Owned and Affiliated Entities ................................. 25
2. Encouraging Whistleblowers Through Creative Reporting
Channels ................................................................................................. 25
B. Increased International Cooperation Through Operations Fox Hunt and
Sky Net ................................................................................................................. 26
C. Legislative and Regulatory Development ............................................................ 27
1. Criminal Law Amendment and Judicial Interpretation ............................ 27
2. Draft Amendment to the Anti-Unfair Competition Law ............................ 30
3. Regulatory Changes in the Public Procurement and Healthcare
Sectors .................................................................................................... 30
D. GlaxoSmithKline, Mark Reilly, and ChinaWhys Owners Peter Humphrey
& Yu Yingzeng ..................................................................................................... 31
IV. Focus on Norway .............................................................................................................. 32
A. Enforcement Action: Former Yara Executives Kendrick Taylor Wallace,
Daniel Clauw, Thorleif Enger, and Tor Holba ...................................................... 32
B. Investigations of Note .......................................................................................... 34
1. Kongsberg Gruppen ASA ....................................................................... 34
2. Sevan Drilling ASA .................................................................................. 35
3. Telenor ASA and VimpelCom ................................................................. 36
4. Parliamentary Inquiries into Telenor and Statoil ASA ............................. 36
C. Stakeholder Enforcement: Council on Ethics for the Government Pension
Fund Global .......................................................................................................... 37
1. The Fund and the Ethical Guidelines ...................................................... 37
2. Investigations by the Council of Ethics ................................................... 38
3. Formal Observation ................................................................................ 40
4. Considerations for Exclusion .................................................................. 40
5. Specific Cases ........................................................................................ 41
D. Proposed Anti-Corruption Law Reforms .............................................................. 43
1. Corporate Criminal Liability for the Acts of “Associated Persons” .......... 44
2. Absolute Defense for Companies Having Adopted “Reasonable
Measures” to Prevent Corruption ............................................................ 44
V. Focus on E.U. Data Protection ......................................................................................... 45
A. The E.U. General Data Protection Regulation ..................................................... 45
B. E.U.-U.S. Data Transfers: Safe Harbor to Privacy Shield .................................. 48
VI. Focus on the Panama Papers .......................................................................................... 51
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A. Public Reaction and Political Fallout .................................................................... 52
B. Subsequent Reforms ........................................................................................... 53
CHAPTER 3: FCPA ................................................................................................................................. 54
I. FCPA Elements and Penalties .......................................................................................... 54
A. Anti-Bribery Provisions ......................................................................................... 54
B. The Exception and Defenses to Alleged Anti-Bribery Violations ......................... 55
C. Accounting Provisions .......................................................................................... 56
D. Penalties .............................................................................................................. 56
II. FCPA Settlements and Enforcement Actions ................................................................... 57
A. 2016 ..................................................................................................................... 57
1. Akamai Technologies .............................................................................. 57
2. Analogic, BK Medical ApS, and Lars Frost ............................................. 59
3. Biomet ..................................................................................................... 62
4. Johnson Controls .................................................................................... 65
5. Key Energy.............................................................................................. 68
6. LATAM Airlines, LAN Airlines, and Ignacio Cueto Plaza ........................ 70
7. Las Vegas Sands .................................................................................... 72
8. Nordion and Mikhail Gourevitch .............................................................. 76
9. Nortek ...................................................................................................... 77
10. Novartis ................................................................................................... 79
11. Olympus .................................................................................................. 81
12. PTC ......................................................................................................... 84
13. PTC and Yu Kai Yuan ............................................................................. 86
14. Qualcomm ............................................................................................... 87
15. SciClone Pharmaceuticals ...................................................................... 89
16. VimpelCom.............................................................................................. 91
B. 2015 ..................................................................................................................... 95
1. BHP Billiton ............................................................................................. 95
2. BNY Mellon ............................................................................................. 97
3. Bristol-Myers Squibb ............................................................................... 99
4. Chestnut Group and Dmitrij Harder ...................................................... 101
5. FLIR Systems........................................................................................ 103
6. Goodyear .............................................................................................. 105
7. Hitachi ................................................................................................... 107
8. Hyperdynamics Corporation ................................................................. 109
9. IAP Worldwide Services and James Rama .......................................... 110
10. ICBC Standard Bank ............................................................................. 113
11. Louis Berger International, Richard Hirsch, and James McClung ........ 115
12. Mead Johnson ...................................................................................... 117
13. PBSJ and Walid Hatoum ...................................................................... 119
14. Petrotiger Former Executives Joseph Sigelman, Gregory
Weisman, and Knut Hammarskjold ...................................................... 121
15. PDVSA Procurement Prosecutions: Rincon, Shiera, & Millan,
and Ramos, Gravina, & Maldonado ...................................................... 124
16. SAP SE and Garcia .............................................................................. 127
17. Tenam/Tenex/Rosatom Executive Vadim Mikerin, and Boris
Rubizhevsky (NexGen Security), and Daren Condrey (Transport
Logistics International) .......................................................................... 129
C. 2014 ................................................................................................................... 130
1. Alcoa / Alcoa World Alumina ................................................................. 130
2. Alstom S.A. ........................................................................................... 132
3. Asem M. Elgawhary .............................................................................. 135
4. Avon Products. ...................................................................................... 136
5. Bio-Rad Laboratories. ........................................................................... 139
6. Bruker .................................................................................................... 142
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7. Dallas Airmotive .................................................................................... 144
8. Dmitry Firtash et al. ............................................................................... 145
9. Hewlett-Packard Co. ............................................................................. 146
10. Layne Christensen Co. ......................................................................... 149
11. Marubeni ............................................................................................... 151
12. Smith & Wesson ................................................................................... 151
13. Stephen Timms and Yasser Ramahi (FLIR Systems) .......................... 153
14. Gregory Weisman, Knut Hammarskjold, and Joseph Sigelman ........... 154
D. 2013 ................................................................................................................... 155
1. Archer Daniel Midlands Company ........................................................ 155
2. Bilfinger SE ........................................................................................... 157
3. Frederic Cilins ....................................................................................... 158
4. Diebold .................................................................................................. 160
5. Keyuan Petrochemicals ........................................................................ 163
6. Koninklijke Philips Electronics ............................................................... 164
7. Subramanian Krishnan ......................................................................... 165
8. Direct Access Partners Executives Ernesto Lujan, Tomas Clarke,
Jose Hurtado, Benito Chinea, and Joseph DeMeneses, and
former BANDES Vice President Maria Gonzalez ................................. 166
9. Parker Drilling Company ....................................................................... 169
10. Ralph Lauren......................................................................................... 170
11. Stryker ................................................................................................... 172
12. Total S.A. .............................................................................................. 173
13. Weatherford International Limited ......................................................... 174
E. 2012 ................................................................................................................... 177
1. Allianz SE .............................................................................................. 177
2. Biomet ................................................................................................... 179
3. BizJet .................................................................................................... 181
4. Data Systems & Solutions .................................................................... 183
5. Eli Lilly and Company ........................................................................... 184
6. Marubeni ............................................................................................... 186
7. Nordam Group ...................................................................................... 186
8. Oracle .................................................................................................... 187
9. Orthofix International ............................................................................. 188
10. Garth Peterson ...................................................................................... 190
11. Pfizer ..................................................................................................... 193
12. Smith & Nephew plc .............................................................................. 195
13. Tyco International ................................................................................. 196
F. 2011 ................................................................................................................... 201
1. Aon ........................................................................................................ 201
2. Armor Holdings & Richard Bistrong ...................................................... 203
3. Ball ........................................................................................................ 205
4. Bridgestone ........................................................................................... 206
5. Comverse .............................................................................................. 207
6. Diageo ................................................................................................... 209
7. IBM ........................................................................................................ 211
8. JGC ....................................................................................................... 212
9. Johnson & Johnson .............................................................................. 213
10. Magyar Telekom and Deutsche Telekom ............................................. 216
11. Maxwell Technologies ........................................................................... 218
12. Rockwell Automation ............................................................................ 220
13. Tenaris S.A. .......................................................................................... 221
14. Tyson Foods ......................................................................................... 222
15. Watts Water .......................................................................................... 224
G. 2010 ................................................................................................................... 225
1. ABB Ltd., Fernando Basurto & John O’Shea ........................................ 225
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2. Alcatel-Lucent ....................................................................................... 229
3. BAE Systems ........................................................................................ 239
4. Daimler .................................................................................................. 243
5. Dimon and Universal ............................................................................. 248
6. General Electric .................................................................................... 251
7. James H. Giffen and Mercator .............................................................. 252
8. Innospec ................................................................................................ 255
9. Charles Paul Edward Jumet & John W. Warwick ................................. 255
10. Lindsey Manufacturing, Enrique & Angela Aguilar ............................... 257
11. Military and Law Enforcement Products Sting ...................................... 259
12. NATCO Group....................................................................................... 261
13. Panalpina-Related Oil Services Industry Sweep .................................. 262
14. RAE Systems ........................................................................................ 274
15. Technip and Snamprogetti .................................................................... 275
16. Terra Telecommunications (Haiti Teleco) ............................................. 276
17. Veraz Networks ..................................................................................... 281
H. 2009 ................................................................................................................... 281
1. AGCO .................................................................................................... 281
2. Avery Dennison ..................................................................................... 283
3. Control Components ............................................................................. 284
4. Helmerich & Payne ............................................................................... 289
5. ITT ......................................................................................................... 290
6. William J. Jefferson ............................................................................... 291
7. KBR/Halliburton Company .................................................................... 292
8. Latin Node and eLandia International Inc. ............................................ 293
9. Nature’s Sunshine Products, Douglas Faggioli, and Craig D. Huff ...... 295
10. Novo Nordisk......................................................................................... 296
11. Jeffrey Tesler & Wojciech Chodan ....................................................... 297
12. United Industrial & Thomas Wurzel ...................................................... 298
13. UTStarcom ............................................................................................ 301
I. 2008 ................................................................................................................... 303
1. AB Volvo ............................................................................................... 303
2. AGA Medical ......................................................................................... 304
3. Aibel Group Ltd. .................................................................................... 305
4. Ramendra Basu .................................................................................... 306
5. Con-Way ............................................................................................... 306
6. Faro Technologies ................................................................................ 307
7. Fiat ........................................................................................................ 308
8. Flowserve .............................................................................................. 309
9. Gerald and Patricia Green .................................................................... 310
10. Misao Hioki............................................................................................ 312
11. Nexus Technologies ............................................................................. 313
12. Shu Quan-Sheng .................................................................................. 314
13. Siemens ................................................................................................ 315
14. Leo Winston Smith & Martin Self (Pacific Consolidated Industries
LP) ......................................................................................................... 326
15. Jack Stanley .......................................................................................... 326
16. Westinghouse ....................................................................................... 327
17. Willbros Group ...................................................................................... 328
J. 2007 ................................................................................................................... 332
1. Akzo Nobel ............................................................................................ 332
2. Baker Hughes ....................................................................................... 333
3. Bristow Group ....................................................................................... 334
4. Chevron ................................................................................................. 335
5. Chiquita Prosecution ............................................................................. 336
6. Delta & Pine Land Company................................................................. 337
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