Issue link: https://digital.shearman.com/i/1265921
COMPLIANCE GUIDANCE FCPA DIGEST July 2020 23 investigating authorities tasked with reviewing the adequacy of such programs. MONEY LAUNDERING COMPLIANCE CONCERNS FOR FINANCIAL INSTITUTIONS In recent years, there has been a significant convergence of anti- corruption and anti-money laundering efforts. As part of the DOJ's efforts to reach both the demand-side and supply-side of specific bribery schemes, it has increasingly used non-FCPA statutes to prosecute conduct beyond the reach of the FCPA. In 2018, the FCPA unit within the DOJ pursued more corruption cases under non-FCPA statutes—anti-money laundering statutes being chief among them—than under the FCPA itself. Although the numbers reversed in 2019, the FCPA unit still brought 19 criminal enforcement cases under non-FCPA statutes. We expect the trend of the DOJ using non-FCPA statutes to bolster its FCPA enforcement efforts to continue through 2020 and beyond. The use of anti-money laundering statutes to prosecute corruption alongside and, increasingly, instead of the FCPA reflects an obvious and natural relationship between the conduct they proscribe—where there is a bribe, there is a need to launder that bribe. This relationship is evinced in the money laundering statutes, themselves. They criminalize nearly any kind of transaction involving the proceeds of certain "specified unlawful activities," including any activity that violates the FCPA. The use of anti-money laundering statutes to prosecute corruption is also attributable to their broader reach. The FCPA is widely interpreted as not applying to public officials, meaning that it is difficult to prosecute a foreign official for accepting a bribe. However, money laundering statutes enjoy extensive extraterritorial jurisdiction, generally bringing these foreign officials within reach of U.S. prosecutors. And the DOJ's increasing reliance on money laundering statutes underscores its aggressive approach to pursuing corruption cases. Notably, this reliance on anti-money laundering statutes to prosecute international corruption creates a new and less understood FCPA risk for banks—prosecution under anti-money laundering statutes. A bank's exposure to FCPA risk is significant and wide-ranging. A bank is exposed to FCPA risk through its international operations and relationships with foreign governments and regulators; providing banking and brokerage services to foreign government officials, senior employees of state-owned enterprises, or sovereign wealth funds; underwriting offerings involving foreign issuers; and acting as a correspondent bank for foreign financial institutions. Over the years, banks have adapted their business practices and compliance regimes to account for these risks. For example, banks perform FCPA due diligence, and any underwriting agreement contains representations and warranties certifying the issuer's compliance with the FCPA. Moreover, banks are certainly no strangers to money laundering statutes. Under the Bank Secrecy Act, they must maintain extensive and costly risk- based AML programs—the cornerstone of which is the same for the bank's ABC compliance: Know-Your-Customer programs. Nevertheless, the use of anti-money laundering statutes in corruption cases heightens a bank's exposure to FCPA risk and will require further integration of AML and ABC compliance programs within banks. Regulators' expectations for integrated AML and ABC compliance will likely grow too, as, undoubtedly, the United States has a significant interest in ensuring that its financial system is not used to launder the proceeds of international corruption.