FCPA

ENFORCEMENT ACTIONS AND STRATEGIES FCPA DIGEST January 2021 4 STATISTICS In 2020, the DOJ and SEC resolved eighteen 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 four enforcement actions without parallel DOJ actions and typically with lower penalty amounts (Cardinal Health, Eni S.p.A., Alexion, and World Acceptance Corp.). The DOJ and SEC brought four joint enforcement action in 2020 (Novatis, Herbalife, J&F Investimentos, and Goldman Sachs). Interestingly, the DOJ also brought an enforcement action against Beam Suntory, which stemmed from conduct separately penalized by the SEC more than two years ago. Regarding the FCPA enforcement actions against individuals in 2020, the DOJ charged or unsealed charges against fifteen individuals, while the SEC brought a case against only one individual. The number of individuals charged represents a significant departure from past years. In 2018 and 2019, for example, the DOJ and SEC charged forty-three and thirty-seven individuals, respectively. Indeed, until this year, the SEC has charged more than one individual with FCPA-related charges each year since 2005. We discuss the 2020 corporate enforcement actions, followed by the individual enforcement actions, in greater detail below. CORPORATE ENFORCEMENT ACTIONS DOJ ACTIONS The DOJ brought ten FCPA-related enforcement actions this year. The Airbus enforcement action, resulting from the combined prosecutorial efforts of the DOJ, PNF, and the SFO, was the first of the year and 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 credit for at least partial self- disclosure, cooperation, and remediation in all three of the investigating jurisdictions. 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 deferred-prosecution agreement with the DOJ in which it agreed to pay a net monetary penalty (after offsets related to other enforcement agencies) 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. 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 include a 50 percent discount off the original penalties. Nearly five months after the Airbus enforcement action, the DOJ announced two DPAs on June 25, 2020 against two previously affiliated companies, Novartis Hellas S.A.C.I. and its former subsidiary, Alcon Pte Ltd. The parent company, Novartis AG, a Switzerland-based multinational pharmaceutical company, sold Alcon Pte Ltd to Alcon Inc., a multinational eye care company, in April 2019, well after the alleged misconduct occurred. The DOJ accused Novartis Hellas of bribing employees of state-owned hospitals in Greece and falsely recording such improper payments, while Alcon Pte Ltd engaged in similar conduct in Vietnam. In settling these FCPA-related charges, Novartis Hellas S.A.C.I and Alcon Pte Ltd agreed 0 5 10 15 20 25 30 35 40 45 50 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Aggregate Corporate Cases: 2011 - 2020

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