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Hughes Hubbard Releases 2022 FCPA Alert


Hughes Hubbard Releases 2022 FCPA Alert

Hughes Hubbard & Reed today released its 2022 FCPA Alert, a comprehensive review of the global cases, trends and enforcement actions that impacted anti-corruption law, multinational corporations and individuals to date this calendar year. For the 13th consecutive year, the highly respected and anticipated annual FCPA Alert highlights the most important trends and lessons for in-house counsel and compliance professionals.

The FCPA Alert’s contributors, led by Laura N. Perkins and Kevin T. Abikoff, co-chairs of Hughes Hubbard’s Anti-Corruption & Internal Investigations practice group, expect enforcement to surge – due in part to the Biden Administration’s recent memorandum on combatting corruption. Their analysis of recent enforcement actions suggests that going forward:

-The Department of Justice and Securities and Exchange Commission will be cooperating with an expansive number of domestic agencies and divisions to conduct complex bribery investigations, as well as a growing number of non-US enforcement agencies.

-Companies that have resolved FCPA matters through NPAs, DPAs or plea agreements should expect increased scrutiny and attention to compliance with ongoing obligations under such agreements.

-While commodities traders, in particular, can expect greater scrutiny, enforcement will continue in a diverse array of traditional and non-traditional industries and in high-risk jurisdictions, with special emphasis on the independence and authority of corporate compliance functions and complete and timely cooperation with enforcement agencies.

The 153-page Alert provides detailed descriptions of key matters from 2020 and 2021 that support these and other key takeaways.

“As enforcement leadership has evolved this year under a new administration in Washington, we’ve witnessed renewed vigor in the investigation and prosecution of bribery and corruption in the United States and abroad,” said Abikoff. “As the regulators continue to leverage greater resources and reach into new industries, it is vital that companies and compliance departments remain vigilant in enforcing their compliance programs.”

The Alert also contains a deep dive into anti-bribery enforcement and developments in France, Brazil, United Kingdom, China, Mexico, and by multilateral development banks. For the first time, the Alert includes a discussion of the rapidly developing intersection between transnational corruption issues and international arbitration. This discussion highlights examples of how tribunals and courts have treated corruption claims in arbitration in recent years and provides insight into key questions raised by bringing claims in arbitration proceedings, regarding the burden of proof, the identification and treatment of red flags, and the impact of government investigations.

“An effective compliance program is more than words on paper,” said Perkins, a former supervisor in the DOJ’s FCPA Unit. “Prosecutors will pursue companies that have established but ineffective programs in place. It’s critical that companies adequately staff and empower their compliance departments, conduct due diligence, address red flags and allegations, and follow-though on their obligations.  Every year, our analysis cites example after example of the downsides to a lack of vigilance. Especially given the expected surge in enforcement now is not the time to take your eye off the ball.”

The complete report is available for download here.


About the Anti-Corruption & Investigations Practice Group

Hughes Hubbard’s Anti-Corruption & Internal Investigations Practice Group handles the full range of matters across the anti-corruption and compliance spectrum. It has conducted investigations in more than 90 countries involving the FCPA and other anti-corruption laws, resolved investigations and won landmark decisions for clients before U.S. and international authorities, and has served as compliance monitors approved by the Department of Justice, the Securities and Exchange Commission, the U.K. Serious Fraud Office, the Department of the Treasury’s Office of Foreign Assets Control and the United Nations.

Lawyers in the group include former senior government enforcement officials, corporate compliance counsel, foreign-trained attorneys and certified public accountants located in the United States and France. The group has many longstanding relationships with leading local firms in countries across the world with which it works closely on cross-border matters, including a strategic cooperation agreement with leading Brazilian anti-corruption firm Saud Advogados.

About Hughes Hubbard

Hughes Hubbard & Reed is a New York City-based international law firm that offers clients results-focused legal services and a collaborative approach across a broad range of practices. Hughes Hubbard was founded in 1888 by the renowned jurist and statesman Charles Evans Hughes. The firm is a leader in promoting diversity and is recognized for its pro bono achievements. For more information, visit


FCPA Enforcement Under the Biden Administration: Three Areas to Watch

Foreign Corrupt Practices Act (“FCPA”) enforcement under the Trump administration was both remarkable and perhaps unexpected. As a candidate and private citizen, former President Trump had been openly critical of the FCPA, which he had referred to as a “horrible law.” This led many to wonder whether the long run of FCPA enforcement was coming to an end. Instead, the DOJ and SEC obtained record FCPA penalties from 2017 to 2020. In 2020 alone, the DOJ and SEC secured 18 corporate FCPA resolutions, including the two largest penalties ever issued for FCPA violations (against Airbus and Goldman Sachs). Given the results in 2020, it may seem alarmist to suggest that we will see even more FCPA enforcement during the Biden administration. But, that is exactly what we expect.

First, the record-breaking numbers during the Trump administration only tell half of the story. The largest and most noteworthy penalties related to investigations that began years before. FCPA enforcement did not cease during the Trump administration as many speculated, but fewer FCPA-related investigations were initiated year over year from 2017 to 2020. We expect a reversal of that trend under the Biden administration.

Second, Biden and his team appear poised to tackle FCPA violations with renewed vigor. The Biden administration has framed the fight against corruption as a central part of its foreign policy strategy. During the campaign, candidate Biden vowed to “issue a presidential policy directive that establishes combating corruption as a core national security interest and demographic responsibility.”[1]

President Biden’s appointees, ranging from National Security Advisor Jake Sullivan to Attorney General Merrick Garland and SEC Chairman Gary Gensler, have confirmed a commitment to focus on combating corruption around the world. This focus, bolstered by the hiring of seasoned lawyers to fill key roles within the DOJ’s and SEC’s foreign bribery units, as well as new enforcement tools authorized by the U.S. Congress, all but ensures that the FCPA will be a key enforcement priority for the Biden administration.

Finally, the freshly equipped and motivated DOJ and SEC should have no shortage of opportunities to prove their mettle. Since early 2020, companies have been dealing with financial stress caused by the pandemic, while compliance departments have been dealing with layoffs and limitations associated with remote monitoring. History shows that financial stress creates incentives for fraud as companies and employees face pressure to meet financial targets. In other words, the DOJ and SEC, eager to demonstrate a commitment to combating corruption, maybe meeting a wave of potential corruption cases.

There are three areas we suggest watching as the Biden administration’s anti-corruption approach takes shape:

Impact of new tools authorized by Congress – Biden’s FCPA enforcement agenda may be bolstered by new enforcement tools recently authorized by Congress. In particular, in January 2021, Congress enacted the Corporate Transparency Act (“CTA”) as part of the National Defense Authorization Act. The CTA requires companies that are registered in the United States to report their ultimate beneficial ownership to the Treasury Department’s Financial Crime Enforcement Network. The information, though not public, will be available to law enforcement and banks.

The CTA is designed to prevent individuals from hiding transactions behind shell companies to circumvent anti-corruption, anti-money laundering, and other laws. The impact of the CTA on FCPA investigations remains to be seen. Given the international nature of the activities involved, wrongdoers have historically utilized shell companies outside of the U.S., often in jurisdictions that allow for more opaque ownership arrangements. The CTA will have no effect on these companies. However, the CTA could limit corrupt funds from finding safety in the U.S. market and may make it easier for investigators to “follow the money” when U.S. companies are involved.

International Coordination in FCPA Investigations – The largest and most significant FCPA resolutions often demand coordination between the U.S. DOJ and SEC and foreign regulators. In 2020, the DOJ and SEC coordinated with foreign regulators in the resolution of the four largest enforcement actions: those with Goldman Sachs, Airbus, J&F Investmentos, and Vitol. The extent to which the Trump administration’s combativeness toward traditional allies may have affected these resolutions or active investigations is hard to quantify. Nevertheless, given the Biden administration’s pointed emphasis on working closely with allies on most of its foreign policy goals, we expect that coordination with foreign regulators in the FCPA context will only increase, with new partners brought into the fold.

This is a view apparently shared by Daniel Kahn, Acting Fraud Section Chief (DOJ), who indicated during a March 2021 International Bar Association webinar that he expected an increase in multi-jurisdiction investigations and resolutions, including with foreign authorities that U.S. enforcers have not previously coordinated with. In addition, improving relations and cooperation generally could lead to greater efficiency in the way that regulators share evidence and coordinate resolutions. This could potentially significantly reduce the time it takes to conclude these complex cross-border investigations.

Approach Toward Monitorships – In 2020, none of the 18 corporate FCPA resolutions involved the imposition of an independent compliance monitor. Whether this was a result of the changes made in 2018 to the DOJ’s guidance on corporate compliance monitors (in a document often referred to as the “Benczkowski Memo”) is unclear. However, it does appear that the leadership of the DOJ and SEC during the Trump administration took a more restrained approach toward the use of monitors. We expect that the DOJ and SEC under the Biden Administration will be more likely to rely on monitorships in connection with FCPA resolutions, consistent with the approach taken during the Obama administration.

With all signs pointing to an increased focus on anti-corruption enforcement, the question is less if than when. Both the decrease in new investigations under the Trump administration and the practical limits on investigations imposed by the pandemic will take time to reverse. But when the tide eventually comes in, we expect the waves will be large.


Written by Michael DeBernardis, Benjamin Britz, and Debbie Placid at Hughes Hubbard & Reed.

[1] Joseph R. Biden, Jr., Why America Must Lead Again, Rescuing U.S. Foreign Policy after Trump, Foreign Affairs (Jan. 23, 2020).


The Corruption Index: How it Relates to FCPA

The Corruption Perceptions Index (CPI) is an index published annually by Transparency International since 1995, which ranks countries “by their perceived levels of corruption, as determined by “expert assessments”  and opinion surveys.

The CPI currently ranks 176 countries “on a scale from 100 (very clean) to 0 (highly corrupt)”. Denmark and New Zealand are perceived as the least corrupt countries in the world, ranking consistently high among international financial transparency, while the most perceived corrupt country in the world is Somalia, ranking at 9–10 out of 100 since 2017.

The estimated cost of corruption from Transparency International is over One Trillion Dollars or 2% of GDP. This represents an amount larger than most of the world’s economies

The top 10 least corrupt countries in the latest publication are:

-New Zealand









-United Kingdom

It should also be noted that the top five on the list have some of the smallest populations on the planet potentially skewing the results as the index is not weighted. Additional smaller countries like Syria,  South Sudan and Somalia are at the bottom of the list (178-180). However, they are considered war tourn countries. Larger population countries like China is ranked 77, and  India is 81

Emerging Markets like Brazil is ranked 96, and Russia is 135. It is estimated that one in four people in Asian and Eastern European Societies have paid what is classified as a bribe multiple times in a  year.  It has also been estimated that law enforcement officers and government officials were most likely to receive a bribe where young people (under the age of 25) were most likely to pay a bribe. However, bribing is not limited to Emerging Markets.  It is estimated that 13%  of European Public Works Projects include the cost of bribing. This includes major infrastructure projects such as airport and rail construction, roads and government hospital or administrative buildings

One could argue that there could be a direct correlation between the number of FCPA Violations and how high a country rank on the Corruption Perception Index (CPI). Upon analysis, there is no such association and therefore the reliance by Chief Compliance Officers on the CPI as published each year by Transparency International comes into question

Upon further investigation of the survey developers – Transparency International (TI)  based in Berlin Germany, it becomes clearer why the survey cannot be relied upon

The Corruption Perceptions Index has received criticism over the years. The main one stems from the difficulty in measuring corruption, which happens behind the scenes. The Corruption Perceptions Index, therefore, needs to rely on the third-party survey which has been criticized as potentially unreliable. Data can vary widely depending on the public perception of a country, the completeness of the surveys and the methodology used. The second issue is that data cannot be compared from year to year because Transparency International uses different methods and samples every year. This makes it difficult to evaluate the result.

Another issue is historically funded since its inception in 1993 by large multinationals – Exxon/ Mobil,  Shell, and Hedge Fund KKR being the most significant donors. One cannot help but question the objectivity of the survey with large private donors.

TI’s  International Board of Directors reacted to this conflict of interest by stripping its US affiliate – Transparency International USA – of its accreditation as the National Chapter in the United States.

TI Headquarters reported that  TI-USA came to be seen in the United States as a corporate front group, funded by multinational corporations given the large donor base.

Secondly, the surveys themselves are conducted by organizations such as Freedom House, which have known biases. In August 2019 whistleblower accounts from seven current and former TI Secretariat staff emerged, describing a “toxic” workplace culture under the current Managing Director, Patricia Moreira. Reported in The Guardian, the misconduct reported ranged from gagging orders in termination agreements to bullying and harassment of critical internal voices.

Although the Corruption Perception Index remains popular with its audience as it is unveiled each year, it becomes more clear after digging deeper into Transparency International why there’s not a more robust correlation between FCPA Violations as identified by the SEC and DOJ and the faltered Corruption Perception Index. In addition, the index is not relied on by any public or private enforcement agency for compliance purposes. If anything it brings to light an unconscious or conscious bias against certain developing countries. One can argue its prejudice.


Frank is an accomplished Senior Finance Executive and Board Member with more than 25 years of success in the pharmaceutical, medical devices, contract manufacturing, and healthcare industries. Leveraging extensive experience leading manufacturing, operational, and financial strategies across 35 countries.  Frank has also implemented over 30 FCPA Compliance/ Controls Remediation and Certification Programs across 25 countries.

A Foreign Corrupt Practices Act Case Study


Randall Gausman, former CFO of Arkansas-based Rae Systems Inc., talks with Kirk O. Hanson, executive director of the Markkula Center for Applied Ethics, about the steps he took when he became aware of FCPA violations in a joint venture with China. Arkansas-based RAE Systems is a manufacturer and global distributor of wireless, gas and radiation detection instruments.