Mike Koehler: FCPA as a Foreign Policy Stick and Another Iraqi Oil-for-Food Enforcement Action

We have three new updates from FCPA Columnist Mike Koehler today from his blog FCPA Professor. Let’s get right to them:

The FCPA As A Foreign Policy Stick

Michael Jacobson’s piece (see here) about using the FCPA as perhaps a way to increase pressure on Iran has been discussed elsewhere (see here). 

Below are some additional issues to consider.

The suggestion that the FCPA “gives the government extraterritorial reach over non-U.S. companies” and that “any foreign company listed on the U.S. stock exchange falls under FCPA jurisdiction” is not entirely accurate. 

True, the FCPA’s books and records and internal control provisions apply to non-U.S. companies which issue stock on a U.S. exchange, and true the books and records and internal control provisions contain no specific jurisdictional requirement. If a company is an issuer (including a foreign issuer) it must comply with the books and records and internal control provisions.

However, the jurisdictional reach of the anti-bribery provisions as to foreign companies is a different story. 

>>>read the entire article by Mike Koehler at FCPA Professor

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“We Don’t Want The Auditors Raising Any Questions on Iraq Business”

Yet another Iraqi Oil-For-Food enforcement action.

Yesterday, the DOJ and SEC announced resolution of an enforcement action against AGCO Corp. (a Georgia-based manufacturer and supplier of agricultural machinery and equipment) as well as AGCO Limited (AGCO’s a wholly-owned subsidiary headquartered in the United Kingdom responsible for AGCO’s business in Europe, Africa, and the Middle East)(see here,here, here, here, and here). 

Big picture, AGCO acknowledged responsibility for improper payments made by its subsidiaries and agents to the former government of Iraq in order to obtain contracts with the Iraqi Ministry of Agriculture under the United Nations Oil-For-Food program. 

DOJ filed a criminal information against AGCO Limited charging one count of conspiracy to commit wire fraud and to violate the FCPA’s books and records provisions. 

According to the DOJ, AGCO Limited paid approximately $550,000 to the former government of Iraq to secure three contracts. DOJ and AGCO entered into a three-year deferred prosecution agreement under which DOJ will defer prosecution upon, among other things, AGCO’s payment of a $1.6 million penalty. According to the DOJ, the basis for the deferred prosecution agreement was, among other things, AGCO’s cooperation in the DOJ’s investigation, its implementation of remedial measures, and its settlement with the SEC (see below).

Why no substantive FCPA anti-bribery charges in this case and other Iraqi Oil-For-Food cases (Novo Nordisk, Fiat, AB Volvo, etc.)? The anti-bribery provisions apply to payments to “foreign officials,” not foreign governments. Thus, in this and the other cases, conspiracy to commit wire fraud and to violate the FCPA books and records provisions were charged.

>>>read the entire article by Mike Koehler at FCPA Professor

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North of the Border

We point the compass north in what has become “comparative law week” here at the blog and take a look at Canada’s “FCPA-like” domestic statute – the Corruption of Foreign Public Officials Act (“CFPOA”).

Saddle up, the Royal Canadian Mounted Police “have established a special unit dedicated to investigating international bribery and enforcing the CFPOA” according to a Canadian law firm which recently released a bulletin titled “Canada’s Corruption of Foreign Public Officials Act: What You Need to Know and Why” (see here).

>>>read the entire by Mike Koehler at FCPA Professor

 

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The above post was contributed to Corporate Compliance Insights by Mike Koehler, an Assistant Professor of Business Law at Butler University. It was reprinted from his blog FCPA Professor.

Mr. Koehler is also CCI’s Featured FCPA Columnist. He has a wide range of experience and expertise on this emerging topic, and he contributes regularly to our discussion of current FCPA matters.

Follow the link to his bio page to learn more about Mike Koehler.

Tags: AGCO, CFPOA, corruption of foreign public officials act, DOJ, fcpa, foreign corrupt practices act, Iraqi Oil-for-Food program, sec