FCPA Digest_Trends & Patterns-Jan2022_Shearman & Sterling

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1 EXECUTIVE SUMMARY/INTRODUCTION In 2021, the overall number of corporate enforcement actions dropped significantly from recent years, even compared to the COVID-related slowdown in 2020 with only four combined actions brought by the DOJ and SEC. The number of individual enforcement actions dropped significantly as well, with twenty-three individuals charged or indictments unsealed in 2021. As a benchmark, U.S. officials brought twelve and fourteen corporate enforcement actions and charged (or unsealed charges against) thirty-one and forty-six individuals in 2020 and 2019, respectively. The past year, therefore, provides a significant departure from past enforcement trends, due perhaps to the lingering impact of the coronavirus outbreak and, likely more importantly, a change in administration. Of the four corporate actions in 2021, three were brought following the inauguration of President Biden in mid- January. In that same time period, the SEC filed no actions against individuals, while the DOJ announced charges against twenty-three individuals in ten separate enforcement actions. Whether FCPA enforcement actions resume their normal frequency in 2022 remains to be seen; for the moment, a dearth of publicly announced FCPA cases may presage the release of a slew of prepared indictments and charges—or it may indicate that last year's cases emptied the pipeline and the DOJ and SEC are recharging. After a record year of FCPA enforcement in 2020, in which the DOJ and SEC assessed more than $8.2 billion in penalties against corporate entities—albeit mostly from two enforcement actions, the Biden Administration has gotten off to a slow start. U.S. enforcement agencies assessed only $659 million in corporate penalties in 2021—the lowest since 2015. Though the actual number of cases brought appears to have slowed to a trickle relative to previous years, the Biden Administration and enforcement officials, both domestic and international, have promised they will be reinvigorating their efforts to crack down on corruption. While the Biden Administration has publicly taken a strong anti-corruption position—calling it a core national security interest concern—its policy proclamations have not provided a clear indication what a new vision for enforcement might entail. On the other hand, public statements made by key enforcement officials at the SEC and DOJ do seem more likely to presage changes in enforcement such as more severe penalties for recidivists and revitalizing the use of corporate monitorships. Whether these proclamations will produce meaningful change in enforcement is still a matter of conjecture, however, it is worth noting that anti-corruption enforcement has been at the forefront of political and regulatory discussions, and we are already seeing evidence that such emphasis will spur some changes in the approach taken by line prosecutors and enforcement attorneys. As we explain in this year-end Trends & Patterns, among the highlights from 2021 were: • a change in presidential administration, coupled with public emphasis by the new Biden Administration on increased anti-corruption enforcement; • four combined DOJ and SEC corporate enforcement actions with total sanctions of approximately $659 million, the lowest amount since 2015; • charges announced by the DOJ against twenty-three individual defendants, while the SEC did not bring any FCPA-related individual enforcement actions; • a judicial decision further questioning the DOJ's jurisdictional assertion of agency status to haul defendants with limited interaction with the U.S. into court; • a legislative proposal to expand anti-corruption penalties to bribe recipients, individuals that until now have faced almost exclusively conspiracy to commit money laundering charges – a development supported by OECD's updated anti-corruption recommendations; • a number of significant updates to private lawsuits filed in the aftermath of corruption-related investigations and enforcement actions, including in securities fraud and restitution cases; and • the U.K. Serious Fraud Office manages to secure a number of corporate settlements and convictions this year, amidst a sea of bad publicity.

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