Issue link: https://digital.shearman.com/i/1265921
ENFORCEMENT ACTIONS AND STRATEGIES FCPA DIGEST July 2020 5 STATISTICS In the first half of 2020, the DOJ and SEC resolved six corporate enforcement actions. Consistent with the trends and patterns over the past years, the DOJ apparently deferred to the SEC to bring civil enforcement cases in the less egregious matters, which has resulted in the SEC bringing two enforcement actions without parallel DOJ actions and typically with lower penalty amounts (Cardinal Health and Eni S.p.A.). The DOJ and SEC brought only one joint enforcement action in 2020 so far. Regarding the FCPA enforcement actions against individuals in the first half of 2020, the DOJ charged or unsealed charges against five individuals, while the SEC brought a case against only one individual. Charges against three of the individuals stemmed from the investigation into alleged corrupt conduct by Alstom S.A. and Marubeni Corporation in Indonesia, which means only three unique cases have been filed or unsealed against individuals in 2020 so far. We discuss the 2020 YTD corporate enforcement actions, followed by the individual enforcement actions, in greater detail below. CORPORATE ENFORCEMENT ACTIONS DOJ ACTIONS The Airbus enforcement action, brought by the combined prosecutorial efforts of the DOJ, PNF, and the SFO, was announced on January 31, 2020. It immediately vaulted to the top of the largest combined penalty list, with a staggering global sanction of around $3.97 billion. The previous holder of the unenviable number one spot was Petróleo Brasileiro S.A., Petrobras, with a combined penalty of over $1.79 billion to be paid to U.S. and Brazilian authorities. The Airbus penalty is especially significant considering the company obtained at least partial self-disclosure, cooperation, and remediation credit in all three of the investigating jurisdictions. Given its import (and for lack of other significant enforcement actions to discuss), we dedicate an entire section below to the Airbus enforcement action and the significant growing cooperation between the DOJ, SFO, and PNF. In the Airbus enforcement action, the DOJ investigated attempts by the company, which is headquartered in the Netherlands, to secure contracts with Chinese state-owned and state-controlled enterprises for the sale of its aircraft. The company had designated a business division as specifically responsible for third-party partnerships, and that business division directed bribes to Chinese officials and brought those officials, and occasionally their families, to attend all-expenses-paid events in China, Utah, and Hawaii. The DOJ also investigated the sale of Airbus aircraft to the Vietnamese Ministry of Defense and a failure to accurately record those sales, in violation of a separate statute, the International Traffic in Arms Regulations (ITAR). To resolve allegations it violated the FCPA and ITAR, the company entered into a non-prosecution agreement with the DOJ in which it agreed to pay a monetary penalty of $587,224,475. This settlement includes a penalty of $294,488,085 for a violation of the FCPA in China and $287,736,390 for its ITAR violation. Airbus received a twenty-five percent discount off the recommended sentence for the company's full cooperation and remediation efforts. As the global bribery investigation was initiated by the SFO, Airbus did not receive any self-disclosure credit. However, Airbus received a discount of more than fifty percent for the ITAR-related penalty for, among other factors, its voluntary self-disclosure to the DOJ and its cooperation with respect to the inaccurate recording of aircraft sales in Vietnam. While the DOJ focused only on FCPA-related conduct by Airbus in China, the scope of the investigations by SFO and PNF covered similar bribery schemes in Malaysia, Sri Lanka, Taiwan, Indonesia, and Ghana. As part of a global settlement, Airbus entered into a deferred prosecution agreement with the SFO to pay approximately $1.09 billion and settled with the PNF for approximately $2.29 billion in a Convention Judiciaire d'Intérêt Public, or Judicial Public Interest Agreement. Both the SFO and PNF settlements represent a fifty percent discount off the original penalties.